Money and Finance

July Review: One Step Forward and Two Steps Back. Nobody gets too far like that.

Oi. It has been a rough month. Stock market going crazy and dividends being cut. So many opportunities so little capital.

July’s Dividend

BAX	$27.04
PNY	$4.62
NRZ	$1.35
KO	$13.90
GE	$11.73
LTC	$3.57
HASI	$13.52
WPC	$14.31
DIS	$1.53
KHC	$180.21
PEP	$3.30
FCISX	$23.64

Total: 298.72

KHC special dividend pushed me over the top.

Cash flow

Salary	3219.97
Dividend	292.84
Interest	8.13
Total	3522.94

Deductions

Gas Bill	38.12
Electric bill	162.34
Water Bill	227.29
QT	69.28
Discretionary	14.91
Car payment	435.45
Total	947.39

June+July water bill.

Calculation

% saved

73%

Safety Net Total

Bank	1478.55
Capital One 360	2811.51
Scottrade Tax	36912.25
Scottrade ROTH	1909.31
Loyal3	5819.55
401k	15664.48
Edward Jones Roth	6434.08
Total	71029.73

Dividend Increase/Decrease

OHI increased dividends by 1 cent.
KMI increased dividends by 1 cent.
BXLT increased dividends by 7 cents.
COP increased dividends by 1 cent.
BAX decreased dividends by 40.5 cents.

Summary

BAX dividend cut was painful. I was in the 1800s forward dividends and now back to the 1700s.

New dividend payout ratio is 35% of EPS with estimated EPS growing at 3% per year. It will take a while to get back to the old dividend.
But the company will reinvest more of its profit which will boost stock price.
For the time being BAX will be a capital gains company over a dividend company. I’ll hold for now.

2. Going forward I am focusing on safer stocks. 40% of my portfolio is in cyclical stocks, 34% are in defensive, and the rest in industries. I need to cut my reit consumption and focus on defensive stocks.

3. Puerto Rico just missed their bond payment. Bring your cash. There will be blood.

Question to my readers.

Would you rather have a stable high paying job with no chance of promotion or take a risk in this economy and take a lower paying job with better chances at promotion?

I was informed last week that there will no longer be any promotion at the DMV. Before it was front desk, senior front desk, and managers. The senior front desk position is being eliminated.

Government work is pretty sweet. It pays a decent wage, lots of overtime, and good benefits. Every 2 years or so we get a 1% pay raise which is more than most Americans. Downside: this job is probably the height of my career if I stay. For those who have worked or is working for government, you know managers are managers for the good part of their lives. 20-30 years. Promotion only occurs at retirement.

On the flip side I could go corporate. I am currently working part time at a telephone company (I’m the guy who schedules your appointments). I was offered a full time position as a phone operator. Benefits are the same and overtime is offered. It pays $5,000 less than my current job but the chance to move up the corporate ladder is phenomenal. Phone operators can become forecasters, in house paralegal, or even members of the board. But again this is corporate. One downturn and I’m fired.

Which would you rather have? The higher paying stable job with no future or the lower paying unstable job with brighter potential?

I am leaning towards the government job.

August Watch List

EMR- high $40s-50.
CAT-$75
KO- below $40.5
ADM-$45.5
HSY-below $90
KMI-$34
XOM-$80
O-$45
UNP-$90
NSC-$80

$2000 across 10 stocks. Let’s do this.

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