March/April Stock Purchases & Other Investments

In early April I was fortunate enough to get some distributions from my business. I used it to payoff the car, payoff my wife’s student loans, set aside some for taxes this year (ouch! the new tax laws did not help us at all), as well as payoff some of the unsecured loans that I needed to take out to participate in some business buy-ins. Anything left went into investments.

I haven’t talked about it in too much detail, but I am able to participate now in other aspects of my company. These did require fairly substantial investments, but should pay themselves back with a few years. Fortunately we were able to get these loans as an unsecured line of credit from the bank at prime (currently 5.5%). While I hate taking on debt, this is at least the good kind of debt that actually pays for itself! By that I mean that the amount of distributions that will be coming in are higher than the interest payments.

Before talking about the stock purchases, I also added money to a 529 plan.

Educational 529 Plan

Some states offer tax benefits from contributing to one of these, though my state is not. These plans do allow the investments to grow tax free and then be withdrawn tax free at any time so long as they are used for educational expenses. I started my 529 in April of 2017. I created it with Vanguard, which required a minimum initial investment of $3000. Since then I had been contributing $75 per month and upped that to $120 per month for the past year or so. With the distributions we decided to open an additional 529 plan for my wife and sent $5000 to fund it. Moving forward we will be doing $250 per month into each.

We can use these ourselves for educational expenses but will instead let them keep growing until future children can use them. We don’t have any kids yet but will just be able to switch the plan over to them when they need it.

Since the plans are managed through Vanguard there are quite a few good (cheap) ETF options. I went with the Aggressive Growth Portfolio. It has an expense ratio of 0.15% and is made up of 60% Vanguard Institutional Total Stock Market Index Fund Institutional Plus Shares and 40% Vanguard Total International Stock Index Fund Institutional Select Shares.

Stock Purchases

Company Symbol Cost Increase in Dividend Income Current Yield
Abbvie ABBV $4436 $235.40 5.48%
AT&T T $15703 $1107.72 6.36%
Bristol-Myers Squibb BMY $1390 $49.20 3.59%
Chevron CVX $2176 $85.68 3.96%
Gilead Sciences GILD $2275 $88.20 3.96%
Humana HUM $3104 $22.00 0.85%
IBM IBM $8706 $376.80 4.51%
Macy’s M $2956 $180.96 6.03%

Most of these are additional purchases into a stock that I already own. A few, such as Humana, Abbvie, and Macy’s are new. Also, I no longer own L Brands. I sold that to purchase Macy’s. The AT&T purchase is a combination of $6047 in the Roth and $9656 in the taxable brokerage. This year I decided to max out my Roth entirely with a purchase of AT&T. Last year I had split it into some REITs.

Altogether these purchases increase my dividends by $2145.96 putting my forward 12-month dividends to $10298.91.

Hourly wage based on 40 hour work week (2087 hrs): $4.93/hour
Hourly wage based on non-stop work (8760 hrs): $1.18/hour

In addition to these dividend paying purchases, I also bought an additional 10 shares of Berkshire Hathaway for $2119. I own $8680 worth. While it doesn’t pay a dividend, it is a good diversified investment that puts the huge dividends it receives back into growing the company. I would anticipate that they will eventually also start paying a dividend.

That’s it for here! Looking forward to seeing what next month brings.

2 Responses

  1. DSFI says:

    I am using Vanguard, too. Do you think $7 commission fee to buy a stock is too high?
    DSFI recently posted…Quarterly Review: 2019 Q1 taxable accountMy Profile

    • scott says:

      Hi DSFI, $7 is a great price! I pay $4.95 at Schwab but in the grand scheme of things that does not make much difference. Vanguard is a great place to invest! The Vanguard ETFs are commission free so even less to worry about there. The fees only become high if you are only investing small amounts each time, like $20. Then the fees start to add up. If you are paying fees for each $20 investment, I feel it would be much better to throw that money into a commission free mutual fund or ETF and then transfer it if you want into a stock once the lump sum is large enough to justify the commission fee.


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