Take home pay of $699 is about the least income I have seen in a single paycheck in a long time. The reduced income is partially a result of increasing my 401K deduction to 15%. $235 was deducted and deposited into the 401K. In addition $235 was deposited into the 401K by the employees match!
Just because the budget was small I still had high expectations to enjoy the Fall weather. Mrs. MBG and I drove to Lake Tahoe and circled the lake. We ate out at Cabo Wabo in South Lake Tahoe and had a ton of fun with only a little bit of money.
If you looked at the final budget above you may notice the Other category appears to put me about $395.57 over budget. I bought a beach cruiser bicycle on Amazon.com. The bike has been on my wish-list since we sold my last bike to help get out of debt almost a year ago.
Not noted in my income is a settlement check I received from a lawsuit that had been in the court system for nine years. A past employer had wronged many employees in California and I represented them in a class action. The $540 check makes me question the legal system but it also helped me pay for the bicycle that I plan to enjoy for years to come.
In the epic argument about renting verses owning there are many factors. Sure renting has its advantages. But now we are homeowners. We became homeowners on September 16th 2015. And all the expenses that come with home ownership are descending upon us.
No regrets. In the long-term I believe home ownership will be the right decision. In the short-term it's costing a shit ton of money. Between taxes, HOA dues, changing over the utilities, adding new bills like sewer and trash it kinda feels like bailing out a sinking ship with a dixie cup of an income.
The biggest win in this budget is squeezing out enough bacon fat to buy a new pair of shoes. I am hard on my shoes so I need to replace them about every three months. The biggest loss in this paycheck is the utilities. Because we are in a new property I didn't estimate the utility costs. I just waited till they arrived and let them hit me in the chops.
comments: What do you prefer; rent or own? What reasons do you have for the opinion?
Investing in single stocks is not something that I will do nor will I recommend for others. With that said, I do like to evaluate single stocks and pull apart the services offered by a company. Today I breakdown Apple from my perspective.
Looking at Apple now and into their future: from my view as a consumer
Apple provides me with three things. Hardware is the first product. This blog is typed on an Apple 13" MacBook Pro. I also have an iPhone 5 and iPad that I use daily. The hardware sales requires new users to grow their business. There is a big market currently lead by Microsoft. Apple is winning that market over slowly.
Software built by Apple is running on all of my hardware. The software is stable and always improving. Do you remember iOS 3.1? It was stable but had a small fraction of the features that are included in iOS 9. Did you know that I use Apple Numbers to do my budget every payday? Yup Numbers has a budgeting tool.
Services like the new Apple Music may be a great up-sell from the many other services offered by Apple. Are you familiar with iTunes and iCloud? Apple provides incredible value in these products. With one login called an AppleID you have access to all of apple's services.
Apple income equation Income=(x)$.99
As Apple builds more services they are scaling up their income from every user. Apples income is equal to the number of services you use multiplied by $.99
Apple Music will be hanging a three month free trial out in front of customers. Many of them will take advantage of that. If satisfied with the service then they will enter the income pipeline. Paying $9.99 per month is quite a bit for music. For a few dollars more I could be getting big daddy bacon delivered to my door every month.
Why Apple will be successful
As the music has progressed with technology, so has Apple. Content delivery has stabilized and digital media is becoming the standard format. Gone are the days of selling cassette tapes out of your creeper van down by the river. It's all online.
iCloud is an income stream that will progressively increase in profitability over time. Using iCloud is seamless and the ability to have all your data on all your devices may seem priceless. Apple puts a price on the service and I am happy to pay them.
iCloud is a cash cow. iCloud stores and syncs your data across Apple hardware using your AppleID. Occasional users are provided a free account. Monthly pricing for iCloud varies between $.99 and $19.99USD for 5GB-1TB of storage.
iTunes gains a sibling
iTunes has matured nicely and is not only walking on it's own it is playing football with the big kids. iTunes is on all of Apples devices. What iTunes lacks is a monthly subscription. If I don't buy a song, album, app, book, movie or TV show from iTunes then they don't get paid.
With the new Apple Radio app there are sure to be kinks to work out. I will voice some of my concerns. Has apple priced their service right? Will iTunes Radio be phased out. Does Apple Music really create a better experience for users than existing services like Spotify Premium and Pandora One?
At the top of this story I advised against investing in a single stock. $APPL may be seductively priced since it had a 7/1 split last year. The risk of a single stock is more than I can bear in my portfolio.
How to reduce risk while investing in Apple
Investing in a mutual fund that holds APPL as one of its stocks is a simple way to buy apple in a diversified way. MBG invests in 4 Investments that meet guidelines described in Dave Ramsey's best selling book The Total Money Makeover.
By selecting a mutual fund with Apple Inc. included I have reduced risk while investing in a company that I think may return value. When picking a mutual fund you should find a few companies that you use and appreciate. I do business with seven of these top ten companies either directly or indirectly.
Comments: Here I shared a company I like and how I invest in a way that is comfortable for me. How you invest is your choice. Do you use Android and invest in Google Inc.? Are you a dividend investor? Cash in a mattress more your style? Have you seen a company succeed or fail before your eyes? Share anything relevant that you have on your mind. Thank you.
Invest like Dave Ramsey
To stay gazelle intense about saving and investing I am an avid listener of the Dave Ramsey Show Podcast. It airs every weekday but not on the weekends. The stock market is also closed on the weekends. There is very little financial stimulus on weekends. As a result, I have to find alternative solutions to keep me motivated.
Dave Ramsey tells listeners how he invests his money. As a listener I routinely agree and then take no action. Today is different. Today I am taking action to invest like Dave Ramsey. On my weekends when I am low on financial stimulus I play my audiobook recording of The Total Money Makeover. This weekend I took note of the recommended investing categories.
Four mutual fund types for success
Each fund must have a minimum track record of five years or longer. Allocate 25% in each of these four categories of funds. At least this is what Dave Ramsey says. And I am setting out to do the same. I am going to show a before and after snapshot of Money Bacon Guy's personal investments.
Where was MBG investing
I currently have two companies where I am investing in mutual funds. My personal investing is with Vanguard and my employer investing is with Empower Retirement. Accounts can be broken down further into Traditional IRA, Roth IRA, 401k and Roth 401K.
I am choosing to reallocate my investments by adding up all the accounts and treating the sum of my assets as 100%. From that starting point I will begin to break up the current investments into new mutual funds. I will divide the sum of the assets into 25% chunks and select mutual funds that meet the criteria recommended by Dave Ramsey above.
These are the funds I found myself with
Disclaimer: I am doing my due diligence to select funds that I understand and I am not blindly following the advice of an audio book. I encourage you to become familiar with any investments you are considering buying by requesting a prospectus on the account or using any other resources available to you before you follow in my investing footsteps. I take no responsibility for any actions you take based on the advice in this blog.
Where is MBG investing
My Growth & Income fund that I selected is Harbor Capital Appreciation Instl ticker HACAX. Within my employer retirement account the options are limited. HACAX was the only fund that met my expectations.
My Growth fund is Vanguard Mid Cap Index VIMAX. I love the pork burrito at Chipotle Mexican Grill. One of the stocks in this mutual fund is Chipotle. I had to have it for myself.
My International fund of choice is Vanguard Emerging Mkts Stock Idx Adm ticker VEMAX. This was a hard fund to choose. I am not really familiar with international companies. But I do know China Mobile is huge in their cell phone market and that Foxconn makes iPhones. VEMAX has a low turnover rate of 9% which seems low and a track record around 20 years.
For an Aggressive Growth fund I am investing in Vanguard Small Cap Growth Index Admiral ticker VSGAX. The turnover rate is pretty high at over 25% but the fund has a track record of over 15 years. There is an above average amount of real estate in this fund. As a new homeowner to be I like the real estate element of this fund.
Investing rules are made to be broken
My goal was to allocate 25% of my retirement money into four mutual fund categories. Is that how it ended up working out? No, not exactly. With three types of accounts containing various amounts of money I decided that I would just try to get to approximately 25% in each type of mutual fund.
My current actual investments are distributed like this as of March 2015:
Stay current with these investments by checking in quarterly when I report my Net Worth every April/July/Oct/Jan 1st.
I enjoy money and bacon.
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