Monday, November 28, 2005

Goals and an exit strategy

I'm continuing to think about my next round of goals. I realize my dreams of quitting my day job need to mesh with concrete goals of steps along the way. So now I'm asking myself if people who suddenly lost their jobs had been given a year or two's notice, what steps would they take along the way to prepare themselves for the change?

The steps become obvious - learn to live on one income, start making more money on the side so that another income can be developed, save as much as possible, stop wasting time, learn more skills, write that book, etc. Work much harder during this time of harvest to put back for leaner times. Stop spending so much on junk.

Write down the reasons why I want to quit that job and what I would do instead. Write down each goal and quantify it. For example, "save more money" is good. "Save $25 more each pay period" is better.

It's time to get committed!

I also keep telling myself that we have got to live on budget but it isn't happening. I think it might be better to do it 10% at a time. I can start doing an automatic withdrawl of 10% more each month or two.

I've got to get these goals in writing before January 1.

They need to be evaluated monthly.

We've made a good start by not increasing our Christmas budget this year (we do a good job sticking to our Christmas budget and I'm very thankful for that!) I'm also glad we didn't just wipe it out either. There really is an art to this balancing act.

Saturday, November 26, 2005

What happened to the day by day stock trading commentary?

I found it clouded my thinking and my judgement. I found I was thinking more about how my moves would play in my blog instead of the other way around!

I'll publish a scorecard at the end of the year and summarize what has happened.

I haven't given up on this but am beginning to realize that I'll need multiple streams of income ...

more to come ...

Goals - Making a list and checking it twice!

I found a list of goals that we had made in the early years of our marriage. The list seemed ambitious in view of the large amount of debt we had. We didn't make mucy money back then and had 4 young children.

We were amazed that every goal had been met beyond what we could have imagined. For example - at the top of the page above goals that were broken into financial, education, spiritual, etc. was a scrawled note "save to buy a new car for George?" He now drives a 7! Whoa!!!! I had hoped to finish college and we wanted to buy a nicer, larger home. I earned my B.S. in 1992 and we bought a much nicer larger home five years later - on a 15 year note that we later re-financed at a lower rate of interest for 11 years!

We are so psyched and will be making another list of goals over the Christmas holidays. We plan to include this list in our New Year's celebration and I may post it here.

Consider starting your own list - our only recommendation? Think LARGE!

Wednesday, December 01, 2004

More thoughts on taxes thanks to Leisel

You may recall Leisel had a question about taxes. I kept thinking about her question yesterday with a nagging thought that I was missing something from her post.

I was. I think another point she correctly made was this. Every time I make a trade, I take as much as I can and buy another stock. In theory, I hope to repeat this successfully over and over again.

But what happens when it's tax-time? What if my money is tied up in a position? The questions she raised made me realize that I need to reserve part of the profits so that enough money to pay the taxes is free and available to use. I don't want to be forced to sell at a loss just because it's time to pay up!

Comments are great and very much appreciated!

What's a 6K filing?

I looked at NGPS (my current position) and it was down at the closing. I also noticed an after hours trade that was around 40 cents lower and wondered if something was going on. I was looking at NGPS on Big Charts and there's a link right there for news on the company. They had completed a 6-K filing. I wanted to try to research it but my husband needed the computer. I got busy cooking and honestly forgot about it until this morning.

Professional "money" people are probably either dying laughing or shaking their heads in disbelief. I'm sharing everything that's happening along the way for my own benefit and so others can see the kinds of things you may experience.

A busy day is coming up - Wednesdays are crammed full from early morning till around 10 at night so there won't be any time for researching today. We attend church on Wednesday nights and our housekeeper comes on alternate Thursdays. That means after getting home late, my husband and I perform a ritual called "Room Rescues" that we learned from FlyLady, a free Internet coaching service for homemakers. We set a timer for 15 minutes then work on one room like maniacs straightening up, etc. We always beat the clock and then run to the next room. I know it sounds weird but our Cyntia (and she has become a part of our family - we love her) can't do her job if we have books, toys and clothes strewn everywhere.

I'll check on NGPS from work and if it seriously starts breaking down (price going down on unusually high volume), I'll sell it.

Monday, November 29, 2004


I need to come up with a consistent format for these reports I publish every time a stock actually sells.

I try to deposit cash into my account every week. I don't think it's particularly meaningful - saving money is admirable but not particularly noteworthy.

I bought 50 shares of GCO on 11/18/2004 at 29.20. These 50 shares sold today at 30.23.
I paid $22 in commissions. Doing the math:
50 @ 30.23 = 1511.50
50 @ 29.20 = 1460.00
That's $51.50. Subtract $22 for commissions and I made $29.50 profit. It took 10 days for my price to hit and the trade to execute.

The noteworthy part is that this was a solid 2% profit in ten days. It would have been a 2% profit whether or not I had invested almost $1,500 or $15,000. I just can't say it enough.

This was the 5th time I've sold a stock for a 2% profit this month. By God's grace, there were no losing trades this month. (But be prepared - statistically speaking, it will happen!)

I'm going to try to do the scorecards in this same format. Is this helpful to you? Does it help you see what you could do? If you have any other suggestions, please let me know.

I started to cut and paste the courtesy email notifications I got today but they contain a lot of personal information! Maybe I could print them, black out the account numbers and full names (I don't want my boss to find me here - not yet anyway!) and scan them.

If I had found this blog five years ago, I think I would have been skeptical. Even if there isn't a stock report for sale!

Speaking of quitting my day job ...

My husband and I had a great discussion yesterday while driving around the city ...

He's NOT a risk taker! He doesn't like change! He likes it when I work - he even dared me to earn more than he (and he wasn't kidding!)

So I asked him, if this continues to grow, how will we know when I can quit?

I think he's been thinking about it as his answers came quickly. I liked his thoughts and had a few of my own!

Here's what we came up with:

  • No outstanding balances on any credit cards.
  • Will our budget change when I leave my day job? For example, will we still want to have a housekeeper?
  • Should I pay off my car loan first?
  • We need to decide if we want to increase the amount of emergency savings we have and if so, how much should that be?
  • What will be the time frame for which we average the amount of income this account is learning? This may be important as I'm now paid weekly.
  • How much money should this trading account have before I leave my job?
  • We need to shift our budget allocations so that all non-discretionary spending comes from his income (he loves his job and doesn't want to retire early. He's good at what he does, earns a lot of money and gets bonuses.)
  • How do we test our results against down markets as well as up markets?

Fortunately, we usually agree on things like this and it was a great conversation. We know it's way too early to even know if we are asking all the right questions. I'm glad we are beginning though because it's giving us a vision for keeping expenses down and seeing that it's not all about earning more.

Some remarks sparked by a comment ...

850 visitors have come by and some of you are beginning to email and/or leave comments. Thank you so much! It feels good to know that someone is reading! I'm not pretending to be any kind of expert (and believe me - I'm NOT!) I'm not sure why I have a need to write about what I'm doing - I want to talk about it at work so badly I feel I'll explode! I think part of it is bouncing ideas off other people and learning from each other. There's also something exciting about being around people who have a goal to do something more than simply show up for work each day. If I was passionate about my job and felt like it was accomplishing some real work, I don't think I'd feel so frustrated. But (and I know this sounds arrogant but somehow I think you probably feel the same way with respect to yourself) I have better things to do with my time.

Leisel left a comment asking how taxes will affect my earnings. She raised some thoughtful issues such as the fact that I'll be paying higher taxes since I'm not holding for the long term. And she's absolutely correct! I'm not up on the current laws; I know it used to be that you paid a lower rate on gains if you held the stock for 18 months.

I designated the money in this account to hopefully become the funds that will generate enough money so that I can leave my job. Since this is designated for replacing my income, it can handle paying any taxes that are due. As my accountant said, "You only have to pay taxes when you are making money and making money is a good thing!"

Seriously that does mean that I won't be able to quit my day job until this money generates enough income to cover the cash I'll need including the taxes!

I'm also reading up on some ways to channel cash flow in a different way so that taxes will be paid last - not first. The book "Rich Dad, Poor Dad" has some interesting ideas along that line but I'm not sure I agree with them! I definitely won't try anything without checking with my accountant and possibly an attorney as well. Some of his ideas sound too good to be true and some of them sound a little risky to me!

We have other savings and investments including two 401K plans and we live on a budget. I just don't want you to think I've fooled myself in that this is my primary investment plan!!

Plan the work and work the plan!

GCO briefly hit above 30.22 this morning and my sell order for all 50 shares executed at 30.23.

Total cash after the sell (this was my only position in the account):

I quickly checked IBD for the stocks moving up in price on high volume. This is featured on the front page and available to all. I started looking at the stock checkups on each one. PARL was way up and I could have bought more shares (helps you get to that 2% point more quickly as you need to make less money to cover commissions) but I wasn't happy with all the scores. This is for luxury fragrance and the sector wasn't doing that well. Remember, part of my plan is buy stocks I wouldn't mind owning should it it stall. I want to be able to sleep at night!

I liked the fundamentals for NGPS the best so next went to Big Charts to look at the chart. I have been learning a little about technical analysis and probably know enough to be dangerous. I can't get enough of it though. To me the checkup on fundamentals guides me to what stock to buy. The technical analysis tells me if it's a good time to buy this stock. The chart shows a clear uptrend. My husband and I argue over charts like this. He says it's gone too high; the stock costs too much. I say it costs a lot because it's performing. I did look at the MACD and made a note to self to learn more about these indicators. That indicator was up.

The overall market is down. I took a deep breath and decided to buy anyway. I bought 75 shares that filled at 26.14. A couple quick computations gave me the sell price of 26.93 (enough to cover commissions and give me a 2% gain.) I entered a sell order for that amount with a GTC (good until it's cancelled) and updated this blog.

Now time to eat some quick (free) leftovers and head back to the office where things are NOT going as well. Thankfully I'm just a team member and the problems we're having aren't my fault. I hate it anyway and just had my priorities yanked again.
I love the people I work with and recognize that these are things out of our control.
I can't wait for freedom day!

Sunday, November 28, 2004

Learning to trade stocks - a free on-line stock market game

I found Stocks Quest a supposedly free on-line stock market game while surfing the other day.

It looks informative; I tried to check out as much as I could and found the pages were slow to load. I have a fast connection so that was disappointing.

It looks like the game could be fun to play (you get a default 100,000 to trade if I remember correctly but that amount could be over-written.) You make "real" trades and see how you fare.

If anyone has had experience with this site, please let me know.

Perhaps it's better than paper trading.

Saturday, November 27, 2004

Saturday Scorecard

Value of stock: 1492.50
Cash: 602.09
Total $2094.59

The value of the stock I own is as of the market's closing on Friday. The stock is up and close to its selling point. Cash is up as my husband gifted me $500. This rarely happens by the way; I had missed buying a stock waiting for funds to settle. This settlement time could be bypassed if I was approved to trade on margin. Another requirement was a minimum of $2000 in the account. He gave me $500 to bring it up. My husband is tight and his vote of confidence was a real shot in the arm for me.

At these levels a successful trade yielding a 2% increase nets about $35 (you can't trade the entire amount as you can't buy parts of a share - I'm estimating right now I'll be plopping down about $1500 a trade.)

Now when I see an opportunity to save that much money and invest it, I grab it. I guess it's a different perspective of the worth of $35.

On December 31, I'll compute the percent increase of this account after throwing out all deposits.

The financial shows on Fox News this morning were all positive. Everyone is talking about a Santa Claus rally! No matter what the "news" is, I aim to stick to my plan. Find quality stocks that are on the move. Buy and sell as soon as they increase 2% plus enough to cover comissions. Or should the trade go the other way - sell if the stock drops by 8%.

That's all folks! If I don't get on line tomorrow, have a great Sunday!


I watched TV with my husband this afternoon while we shared lunch. I'll bet you can guess what we had! Why is it that the good Thanksgiving casseroles taste even better warmed up? The gravy was incredible this year so we also warmed sliced turkey in the gravy and made hot, open faced sandwiches. It's finally cold here and both of us had just come in.

One of those Mastercard "priceless" commercials aired - $29 for the toy then it flipped to the cute shots of the baby playing with the box. "Playing with the box ... Priceless!"

I thought our meal was priceless - you can't go out and "buy" the good leftovers - the ones that fill your whole house with the smells of good home cooking. Better yet, our lunch was free!

I thought of another priceless day we shared this year - our grandson came over and our plans were to take him to ToysRUs as there was a new game we wanted to get for him. All the whirley bird leaves had fallen onto our back patio and he begged to stay and play with the leaves. He told us they were helicopter leaves and showed us how to throw them up in the air and watch them twirl and they fell to the ground.

We all forgot about the store and played outside for hours seeing the world fresh again through the eyes of a child. Later that night, my husband and I talked and talked amazed that it was becoming clear to us that the one big area we had failed our own children in was taking time to just play.

As we continue to enjoy Thanksgiving weekend, consider leaving a comment sharing your own "priceless" times or experiences. As I continue my work to financial independence, I want to stop spending money on things that wind up enslaving me and find more time to see the priceless things in life. This may be a thought that will make you richer too!

Friday, November 26, 2004

Black Friday in Atlanta

We had a great day with our son and his girlfriend in Atlanta. The day was sunny and clear and spirits were bright.

One reason I try to post about what I'm "doing" on a day to day basis is to make the point that I'm living my life while my method of earning money in the stock market is working away.

Today my stock rose again closing within 20 cents of my sell point. GCO's chart shows a continuing trend line of rising even if it isn't happening as quickly as I'd like. I chose a quality company that I don't mind owning while this plays out. In the meantime, I'm free to work my day job (oh well!), play with my family and even go out of town. I don't have to sit in front of a monitor watching every move the market makes.

Tomorrow, I'll post a weekly score card. I'll have to go in to work; they are powering down the main computers for electrical upgrades and I'll be paged (along with many other IT people in our company) when power has been restored. We'll all go in and confirm that our systems are running so that things will go well on Monday morning when the regular employees return from the long holiday weekend.

Have a great weekend everyone!

Thanksgiving Holiday

I hope you had a great Thanksgiving!

We had a delicious feast yesterday! The book "The Best Recipe" detailed a roasting technique that worked really well for us. The food was fabulous; family gathered around (including my siblings from two different states) the table made the day merry! We're heading to Atlanta to visit my son and his significant other. She received devasting news last Wednesday that her sister has melanoma - a dangerous form of skin cancer. They opted to spend the day with her so we'll visit them today.

This was our second year roasting a free range turkey - they are delicious!
GCO had a decent run Wednesday and I'm hoping that it will sell today (though the trading volume will be light due to the holiday weekend.) I'm also hoping my son has a laptop with wireless access. Knowing him, he'll want to spend the day out and about the shoppers in Atlanta. I used to deal with shopping by finding a mom chair so I could read; now I need a laptop! Maybe I should talk to Santa! (Ladies - the Santa at Lenox is a flirt - wink at him as you pass by and you'll see what I mean!)