Net worth Update
Net worth changes
I’ve done a lot of investing over the past 2 weeks. However, I’ve also deleted my traditional IRA and rolled it over to my Roth. I’ll talk about the new investments in a bit, but first, lets get into some employment updates.
Well, I’ve been applying to companies, but I have not yet gotten any offers (or interviews). Ideally, I’m looking to be working by mid June (around when my unemployment benefits will run out). Right now, I’m applying for chemical engineering jobs in Texas and Los Angeles. If things remain bleak, I plan on expanding my search to include the other no income tax states.
However, on the plus side, I was finally approved for unemployment benefits. I’ve received $900 so far, and except to collect a total of $7000 over the course of the next 3 months. Hopefully, I can line up a job offer before then!
There’s an old saying that time in the market beats timing the market. Basically, this means that as long as you can stay in the market for a long period of time, it doesn’t matter if you buy at the top of a large bubble. However, this mostly applies to funds, as single stocks can go to zero. At any rate, I’m now looking to purchase some stocks that pay consistent, increasing dividends. Essentially, I’m looking to purchase blue-chip stocks.
Target Stock: TGT
Recently, target’s stock price fell from ~$80 to ~$55 due to weak sales / earnings per share. At this point its trading at a pretty low P/E ratio of ~12, which I think is undervaluing target. Typically, purchasing a single stock is a fools game, as it opens you up to significant amounts of risk. However, Target has a strong history of increasing dividends and a solid brand, so I think that it will rebound. If not, I’ll accept full responsibility for my folly and take whatever losses I get on my investment. After all, only fools buy single stocks. I plan on investing $2,000 into Target. If Target drops even further, I’m going to purchase $2,000 more.
AT&T Stock: T
I decided to purchase some shares of AT&T because its paying a fairly high dividend right now of ~4.5%. AT&T like target, has a strong history of increasing dividends. So, I decided to purchase $2,000 of this stock. I don’t know if AT&T is over or undervalued at the moment, but it looks like and steady for now.
The Financial Vehicle
Because I’ve already maxed out my retirement accounts for this year, these purchases are going into a taxable brokerage account. I’m also not going to reinvest dividends because I’d like to get some monthly cash flow out of this investment (regardless of how small it will be). However, I expect this cash flow to increase with time as T & TGT increase their dividends. I’m slowly but surely ramping up my passive income.
I’ve also stepped out and invested $2,000 with realty shares on a house flip. If all goes well, I’m expecting to earn a 9% return on this deal. After taxes and stuff I’m expecting the return to be somewhere between 5 and 6%. Depending on how this investment turns out, I’m planning on investing more capital with realty shares. One thing to note is that it is much safer than investing in lending club, as my investment is backed by real estate rather than faith that my creditor will pay me back.
In addition to the above, I’m also going to invest $240 into mortgages. Basically, I’m going to buy a small piece of a fund that purchases non-performing mortgage loans and attempts to do one of the following:
- Get the homeowner to start paying their mortgage again
- Foreclose on the home and sell it
It’s pretty dam speculative and risky, so I’m just going in with a small $240 to see how it turns out. If they deliver on their promises, I’ll receive a 12% return, which will come out to about $2 per month. I’m pretty interested to see how this turns out.
Since I’m unemployed and have a lot of time on my hands, I decided to team up with an old friend of mine to dominate a stock photography niche. We still have to work out the logistics, but the idea is that we are going to make ~30 stock photos and sell them through foap.com. Every time someone buys a photo ($10 is the price), foap will $5, and my friend and I will split $5. Obviously we don’t expect to get rich off this, but it would be nice to have a free burger every month!
I did quite a bit of investing this update. Later on , I’ll probably go over everything in more depth. But for now, lets see if I made the right choices and whether I lose or make money.