Monday, January 6, 2020

IRA to Roth IRA Conversion Part 2

Retirement Gremlin here to talk about the long term process I am undertaking to slowly convert my IRA holdings to Roth.  This is the second 'backdoor' account conversion I have initiated.  My first conversion and the underlying strategy can be found here.

Strategy: to avoid unnecessary taxable events, I will move around 1 to 2 "positions" a year.  At this rate I will be able to move the whole IRA to my Roth by the time I am 59. This is of course to maximize growth and minimize taxes.

Process: Since my accounts are all at the same brokerage, I can for no fee transfer single positions after a few mouse clicks.

Part 2:

For my second conversion I moved my entire position in CVS (25 shares - $1876 value) and part of my position in MMM (5 shares - $882.10 value). With this conversion, I am effectively moving $78.80 in forward dividends from my SEP IRA to my ROTH accounts.

Part 3 will happen next calendar year.

All changes will be reflected in my portfolio at the end of the month.

- Gremlin
- Long CVS and MMM

Tuesday, December 31, 2019

December 2019 Review / January 2020 Preview & End of Year Review

Happy End of Year Gremlin here to again discuss the difference a year makes. As 2019 ends I can look around my house and see a second baby who is thankfully home, while thinking forward to a year mostly on one income. Time has flown with lots of great highs, both in my personal and investing life, and plenty of lows. As we weave through the ups and downs, I cannot help but feel stronger coming out the other side in every aspect - except age which is like a golf game (no one wants a higher score).

2020 will feature, hopefully, a new high in terms of investing and earned incomes. It will also feature at least two medical procedures for my daughter, so knock on wood those go as well along with everything else.

December:

This month I added shares to five positions across all accounts.

Last month I brought in a total of $515.51 in dividends ($236.47 taxable, $118.03 Roth, and $161.01 in my IRA).  This is an increase from last year ($408.49 total) by 26%.  This total is my new highest ever, and the first time I have collectively broken $500 in a month.

In terms of dividend increases, I realized 6 raises from My Employer (B**), McDonald's (MCD), Microsoft (MSFT), VF Corp (VFC), WestRock (WRK), and Emerson Electric (EMR). The increases range from just about 1% to more than 17%. This brings my total raises to 63 on the year, five more than last year's final total. I also realized one cut of approximately 33% by KHC.

Next month I will realize two dividend increases from Realty Income (O) and Eastman Chemical (EMN).  The increases range from 0.2% to around 6%.

NOTE: I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.

January:

The mortgage continues and I am putting extra cash towards the principal monthly - not a huge number, but every little bit counts. Our debts currently outstrip our assets, since I do not count my home as an asset until I own it outright.

The buys shall continue until financial independence improves - with monthly rolling buys of course.

Next month should produce around $128 in dividends, which is a 16% YOY increase.

My portfolio page is currently up to date.

2019:

What a year.  So let's look at how I did last year compared to the goals I laid out for myself.

(Results in RED):
  • Invest a total of $13000 across all accounts. Success. $14532.49 total.
  • Receive $1500 in dividends from the taxable account.  Success. $1530+
  • Maintain or reduce weight while continuing to exercise ~ 4x per week and bike wherever I can.  Partial fail. A second child, especially one needing a lot of care and in the hospital means I lost at the end, but its not like I am now twice the person I was, and the road to success is still not far away.
  • Hold the line / reduce total spending (after debt payments) by around 5%.  Fail.  Honestly we got clobbered by medical bills and associated costs with hospital stuff. Had we not had a baby, regardless of medical issues we would have been within range here.
Overall that is a 2/4 success rate.  Well that could have been worse in so many ways.

2020: 

So what will become of 2019?  I have organized a few goals to make sure I stay on target.
  • Invest a total of $10000 across all accounts.
  • Receive $1900 in dividends from the taxable account.
  • Exercise ~ 4x per week.
  • Reduce total spending (after mortgage payments) by 5%.
I have a feeling, no matter what happens 2020 will be another wild ride.

Hope everyone has a great January and a Happy New Year!
- Dividend Gremlin
- Long all stock tickers mentioned

Monday, December 23, 2019

December 2019 Buys

Holiday Time Gremlin here to give you my December buy updates. The holidays are always a busy time of the year, and having young children only magnifies that more for a variety of reasons. Still, I have been able to find time and resources to add some shares towards financial independence. No matter what is going on, it is important to always be able to find five minutes to add shares towards freedom. (Thank you, internet.)

That being said I did rush on filling out one of my positions, MSM, because of a $5 special dividend that I will realize in February.  Considering that, other increases, and the general well-being of those around me - 2020 is looking up from here.

No purchase or account fees were paid this month. I added shares of the following companies by account (* indicates a new position, which will be discussed below):

Taxable:
B** - Fractional share, DRIP purchase of my employer stock.
BNS - 1 share @ $55.44 / share, $2.34 income added
MSM - 10 shares @ $74.37 / share ($743.68 total), $30 income added
Total Invested = $799.12 (not including employee stock)
Annual Income Added (AIA) = $32.34

Roth:
AROW - 3 shares @ $35.69 / share ($107.08 total), $3.12 income added
Total Invested = $107.08
AIA = $3.12

Standard IRA:
FLIC - 6 shares @ $24.56 / share ($147.35 total), $4.32 income added
Total Invested = $147.35
AIA = $4.32

Totals:
Invested = $938.06
AIA = $35.04

*New Positions:
No new positions this month.

I will update my portfolio page at the end of the month.

What do you think of these companies?

Have happy holidays, if you are celebrating any. If you're not, make one up and celebrate it anyway.
- Gremlin
- Long all tickers mentioned

Tuesday, December 3, 2019

November Review, December Preview, 2019

Wow Gremlin here to do a quick review and look ahead. What a crazy month; November might have only been 30 calendar days, but it felt like 60. Tomorrow I go back to work, and its hard just imagining that my wife will be home with our new baby girl, our 2 yr old Lil Gremlin, and we will have 1 paycheck for a almost a year (but we can make it work). Still, even with all of our personal stuff the world kept turning, dividends kept coming in, and dividend raises kept getting announced. DGI really is a great way to invest, where I can tune out for a long period of time and still come out ahead. So lets see how this 'lazy' month went.

November:

This month I made several stock purchases again this month.

I brought in a total of $308.72 in dividends ($86.91 taxable, $69.51 Roth, and $152.30 IRA).  This is an increase from last year (294.85 total) by 4%. This would have been higher, but several payments were pushed back to December.

In terms of dividend increases, I realized* 6 raises from the American Express (AXP), Eaton Vance (EV), the Royal Bank of Canada (RY), Starbucks (SBUX), Omega Healthcare Investors (OHI), and Verizon (VZ).  The increases ranged from 1% to 14%. I have now realized 57 raises thus far this year.  I also realized one cut of approximately 33% by KHC.  My employer (B**) pushed their payout back to early December, otherwise it would have been 58.

Next month I will realize 6 raises from My Employer (B**), McDonald's (MCD), Microsoft (MSFT), VF Corp (VFC), WestRock (WRK), and Emerson Electric (EMR).  The increases range from just about 1% to more than 17%.

* I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.

December:

The mortgage continues and I am putting extra cash towards the principal monthly - not a huge number, but every little bit counts. Our debts currently outstrip our assets.

I will be doing rolling purchases going forward, but I will likely focus on retirement accounts as in case I need to deal with healthcare costs.

Next month should produce around $495 in dividends, which is a 20+% YOY increase.

My portfolio page is currently up to date.

Hope everyone has a great December and Holiday season.
- Dividend Gremlin
- Long all stock tickers

Thursday, November 28, 2019

November 2019 Buys

Home Time Gremlin here to give you my November buy updates. My daughter is home now and it has been a long journey to get her there. She went through two successful operations, one of which was open chest surgery. She will have at least one more surgery, but I am thankful she is home and doing well.

Funny thing, while she was in the hospital and we were spending our time there, I kept getting my dividends deposited. Its really amazing how all of this continues to tick, regardless of my interaction. Shares were also added throughout the month. Making it amazing that I was able to not only monitor, but improve our financial independence situation. We do truly live in amazing times where I can buy shares in excellent companies one day from a phone, and get news from doctors that they were able to successfully patch up a human heart the size of a walnut the next.

Note - I am no longer going to add dates, because I suspect I will not have time for that in the future. Ain't nobody got time for that!

No purchase or account fees were paid this month. I added shares of the following companies by account (* indicates a new position, which will be discussed below):

Taxable:
KTB - 5 shares @ $36.99 / share ($184.99 total), $11.2 income added (I only added 2 last month)
EVR - 1 share @ $77.86 / share, $2.32 income added
KR - 2 shares @ $24.92 / share ($49.84 total), $1.28 income added
O - 1 share @ $76.74 / share, $2.72 income added
Total Invested = $389.43
Annual Income Added (AIA) = $17.52

Roth:
AROW* - 3 shares @ $35.56 / share ($106.67 total), $4.00 income added
Total Invested = $106.67
AIA = $3.12

Standard IRA:
FLIC* - 20 shares @ $22.10 / share ($441.96 total), $14.40 income added
Total Invested = $441.96
AIA = $14.40

Totals:
Invested = $938.06
AIA = $35.04

*New Positions:
Most of my investments went to existing positions, so I will not cover my reasoning on them.  However, new investments are detailed below.

AROW (Arrow Financial Corp): a small community bank north of New York City. This bank has been extremely well managed for years, and has minimal debt.  FLIC is right there along side it in its peer group.  AROW Overview Link

FLIC (First of Long Island Corp): another small community bank. This one is in and around New York City and has been very shareholder friendly.  FLIC Overview Link

The theme of this month is small community banks. Not that each one is great, but there is a large subset of excellent opportunities to be found in this sector. I almost want to make a dedicated small bank portfolio just to house them all on one place.

I will update my portfolio page at the end of the month.

What do you think of these companies?

- Gremlin
- Long all tickers mentioned

Sunday, November 3, 2019

October Review / November Preview, 2019

Roller coaster Gremlin here to review and look forward. My daughter was born less than a week ago, so my focus has been there entirely. On top of that she will need heart surgery, so its easy to imagine how that can weigh on a person. I do plan on scaling back my investments in my taxable account and closely monitoring costs.  My insurance should cover almost everything, but naturally the internet is full of horror stories where the industry fails the captive audience consumers... Might make for a fun / terrible article.

On a much more positive note, our final car loan was paid off, so massive success there.  So with all that said, how did I do?

October:

This month I made several stock purchases this month.

I brought in a total of $128.98 in dividends ($95.43 taxable, $23.25 Roth, and $10.30 IRA).  This is an increase from last year (95.72 total) by 34%.

In terms of dividend increases, I realized* three raises from the Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CM), and Realty Income (O).  The increases ranged from 0.2% to 3%. I have now realized 51 raises thus far this year.  I also realized one cut of approximately 33% by KHC.

Next month I will realize 7 raises from the American Express (AXP), My Employer (B**), Eaton Vance (EV), the Royal Bank of Canada (RY), Starbucks (SBUX), Omega Healthcare Investors (OHI), and Verizon (VZ).  The increases range from just about 1% to more than 17%.

* I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.

November:

The mortgage continues and I am putting extra cash towards the principal monthly - not a huge number, but every little bit counts. Our debts currently outstrip our assets.  Outside of our house, we still have very low interest auto debt (1.5% for our car), which I am aiming to pay off by the end of the year.  I am coming for you next, Mortgage.

I will be doing rolling purchases going forward, but I will likely focus on retirement accounts as in case I need to deal with healthcare costs.

Next month should produce around $347 in dividends, which is a 17% YOY increase.

My portfolio page is currently up to date.

Hope everyone has a great November.
- Dividend Gremlin
- Long all stock tickers

Tuesday, October 22, 2019

Recent Buys, October 2019

Baby Watch Gremlin here to give you my October buy updates. My daughter is due soon, so if my next monthly update is late, you will understand why...  As I noted in a recent post, zero fee investing is allowing me to change the way I invest.  I will rapidly deploy money to attractive stocks in more of a shotgun fashion.  This will enable me to average into one or several positions overtime. I will also use this approach to round up positions in a practical manner.  I don't expect this to be a common methodology, but I thrive in chaos so it works for me.

No purchase or account fees were paid this month. I added shares of the following companies by account (* indicates a new position, which will be discussed below):

Taxable:
MSM* - 5 shares on 10/16 @ $71.21 / share ($356.05 total), $14.06 income added
SON - 2 shares on 10/17 @ $57.12 / share ($115.43 total), $3.44 income added
KTB - 2 shares on 10/18 @ $38.14 / share ($76.27 total), $4.48 income added
EVR - 1 share on 10/18 @ $77.51 / share ($77.51 total), $2.32 income added
KR* - 5 shares on 10/18 @ $24.21 / share ($121.08 total), $3.20 income added
Total Invested = $746.34
Annual Income Added (AIA) = $27.50

Roth:
WBA - 3 shares on 10/14 @ $53.61 / share ($160.82 total), $5.49 income added
XOM - 1 share on 10/14 @ $68.79 / share ($68.79 total), $3.48 income added
MATW - 1 share on 10/14 @ $34.86 / share ($34.86 total), $0.80 income added
KMI - 2 shares on 10/14 @ $20.11 / share ($40.21 total), $2.00 income added
SJM - 1 share on 10/18 @ $108.08 / share ($108.08 total), $3.52 income added
GLW* - 5 shares on 10/18 @ $29.33 / share ($146.63 total), $4.00 income added
Total Invested = $559.39
AIA = $19.29

Standard IRA:
WLK - 5 shares on 10/14 @ $62.47 / share ($312.34 total), $5.25 income added
Total Invested = $312.34
AIA = $5.25

Totals:
Invested = $1618.07
AIA = $52.04

*New Positions:
Most of my investments went to existing positions, so I will not cover my reasoning on them.  However, new investments are detailed below.

MSM (MSC Industrial Direct Co.): MSM is best described in their own words - "distributes metalworking and maintenance, repair, and operations (MRO) products in the United States, Canada, and the United Kingdom. The company’s MRO products comprise cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock products, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components, and electrical supplies". I like this type of repeatable, necessary industry plus MSM is valued very nicely.  MSM Overview Link

KR (Kroger): Here we have a grocery company, that follows on the heels of Walmart (WMT). The grocery industry is changing, and like all the rest so is KR - which is why is a slight bargain. Not everyone, but most people will still want to inspect their food before they buy it. In addition, having a physical store, which doubles as a local distribution center, people can find what they want and easily transition from physical to digital or vice versa. This is a huge market space, big enough for lots of competition.  KR Overview Link

GLW (Corning Inc): They are responsible for making glassware ranging from cookware that goes in the oven to high-tech products for your cell phone.  I like this company a lot, they are akin to the people selling pick-axes and shovels to miners during a gold-rush. They stand to make money regardless of how many ounces of gold are found.  GLW Overview Link

I will update my portfolio page at the end of the month.

What do you think of these companies?

- Gremlin
- Long all tickers mentioned