Kmart lay-away was a good thing, as if something was put on law-away, I just new that eventually I would get it, if my parents ever paid it off. Money was always tight, especially towards the end of my mom’s pay period. Every other Friday was payday, so by the end of that 2nd week, food was tight and payday was like Christmas - that meant groceries and maybe a few bucks for me and my brother to do as we please.

I used to think my friends or people I knew were “rich” if they had the most popular clothes and toys, their parents lived in nice houses in subdivisions and drove rust-free cars that were brand new. I always wanted to be able to buy the baseball cards, or bike, or just have a phone, or just be given a few bucks when asked, or just be taken to school or practice in a nice car that didn’t announce its presence because of a hole in the muffler. Anyway, you get the point. As a kid, I just wanted to have what I perceived all my friends and kids I wanted to be like had. Just new and nice stuff.

The amazing thing now is that I realize that the majority of those things I thought I always wanted, because it would mean that I was “rich”, well, for the most part, I don’t really care if I have them. Don’t get me wrong, I live a good life and have nice, new possessions. But, I also realize that now, the majority of my friends and people I know, have the exact same thing also.

The sad part to me is that I realize most people buy these possessions to be like their friends, or like their co-workers, to live a similar life as their neighbors, or as people they know, regardless of how much money they actually have. I mean, isn’t this the basis for the current mortgate crisis and isn’t that why people don’t save anything? People make $100, they spend $200. They buy that house and those cars, essentially to be like the others - and that’s exactly what happens, they become like everyone else, in debt with tons of financial obligations. Just because people have a nice house, and the new cars, and go on these nice trips, and “appear” to be “rich” - they aren’t. They are in debt, they are one mishap away from being financially screwed and needing to buy more debt to survive. All they have bought, is more years worth of stressful working to pay these bills. They will never get ahead, but, they will live as good a life as the next person.

I wonder what % of the people I thought were “rich” when I was a kid, actually had money. I now know those possessions don’t equal wealth. For the majority of americans, those possessions equal debt. But hey, that’s the american way.

Personally, I will feel like I am “rich” when my net wealth grows at a pace that not only sustains a life style for myself that gives me all I would ever want, but also grows itself, to ensure that I only get “wealthier”. So I won’t work because I have to to sustain my lifestyle, I work because it’s something that I choose to do. Based on where I am at today, I have already reached the hopes I had when I was a kid, I have everything I thought I always wanted. So, I have had to re-issue new goals, I don’t want to be on the hook to anyone for anything. Once I am at that place, well, then I will be rich.

So anyway, after wasting about a year not posting much on this blog, I decided to turn it into something that I like to talk about and want to write about for anyone who wants to read about it. Personal finance and investing as an individual. I wrote a few posts over the last year about various stocks I purchased, etc. But I basically want to chronicle the way I handle money as well as the things I do as an investor.

I am not going to lie to you - I am a pretty big tight ass. I have a nice house, a nice suv for me and an accord for my wife, a couple flat screen tvs, basically everything I want, but I don’t overspend, I don’t “desire” to live like I am “rich”. I just want to go about my business, but build one freakin’ big net worth. I am well on my way, and in this blog I intend to discuss my philosophy for how I got here, and what I intend to do to ensure that every big decision I make, is aimed at growing my overall net worth.

So, for the 3 people who actually visited this blog over the last year (that may not be accurate as I haven’t been checking my stats daily) - but for you visitors, thanks for staying so loyal, and hopefully you enjoy the shift in focus. And for any new readers/visitors, hopefully you don’t feel that reading this is a waste of time.

ADM - Archer-Daniels-Midland Company is involved in handling various agricultural products. Basically they process, distribute, sell, etc. corn, oilseed, soybeans and other crops. I was previously familiar with the name as they are headquartered close to my hometown and have a location in my hometown. I purchased the stock at $33.89 and it took a dip after I bought it but I see today that Bank of America just upgraded it. I also purchased this because of all the recent news detailing the rising cost of various groceries, milk, and all things related to corn. I figure if we are going to get shafted at the grocery store - I might as well buy some stock of a company that is going to reap the profits (alot like owning XOM while going thru these high oil prices). ADM also pays a nice little dividend.

USB - I picked up shares of US Bancorp as the company has dropped about $3/share over the last 6 months. US Bank is an obviously recognizable bank along the lines of Bank of America but a bit smaller. What attracted me (other than the seemingly good price) is the nice 4.8% dividend payout. Take that, on top of the stability of the stock, and it seems like a smart buy at this price.

IRFAX - An international real estate fund offered by Cohen and Steers. I like the idea that the fund invests a majority of its money in international real estate equities. This was a move to help me extend more into international holdings and looked like a good time to buy if you check out the graph over the last 6 months. If you check out its main holdings you will see some familiar names.

All 3 of these fit into my strategy of offering regular dividend payouts at a current attractive price.

The thing is, history tells us that the run won’t last. The economy may slow more than anticipated, housing may be in worse shape than expected, oil prices may continue to rise, a crisis may send shock through the financial markets - you know any of these things are possible, some maybe probably. Do we know exactly when? Nobody can predict when or if these things will happen exactly - but, something will that will turn things south for a lengthy period of time. So, are you prepared?

The famous four words in investing “buy low, sell high” - yet why is it, you mostly hear about great stock picks, unbelievable mutual funds, etc. when the market is running well? It seems the majority of newbie investors “hear” about how well the stock market is doing and get in, they buy into stocks or funds that are going good - in other words, they buy high. Isn’t this the opposite of common sense investing? I mean, aren’t you buying at a time when valuations are the highest? Aren’t the odds stacked against continuing high returns if you buy in at a time of optimism and gains?

Think about it, if you have an investment portfolio, and we experience a lengthy downturn, isn’t it human nature to get bummed out, check out how much money you have lost in your portfolio, and just stay away from investing for a while or even consider selling what you have in fear of losing more? Human nature is to “buy high, sell low”. This is a very hard concept to grasp as human emotion plays a vital role in our ability to invest successfully.

I know things have been going well for the last 18 months, my portfolio value is at its peak. However, I am also preparing that things are going to turn south sooner or later. Good bargains have been hard to find. But, I have put myself in a position to have plenty of cash on hand to capitalize on the market, if/when it does pull back. I am going to maintain my investment strategy, look for those established, blue chip dividend paying companies, whose valuation is brought down from investor panic. Maintaining this long-term view, is what makes a successful investor. Understanding the peaks and valleys, and being in a position to buy in a valley, when most people are running for cover.

In early-March, when the Dow dropped over 300 points in one day, followed by another triple-digit loss day, I remember reading an article that kinda put things in perspective because it asked - Do you think Warren Buffet was selling off or was he looking for good buys?

This makes it harder for me to double-up on stocks that I already own. I hate the idea that I purchased X amount of shares of a quality stock at $43, but now, the stock price is at $60, but it still looks attractive. I have a hard time pulling the trigger and buying more of the company’s stock at the higher price. Even though I feel the stock is still attractive, knowing that I will pay substantially more than I previously did per share is a concept I have to struggle to overcome.

This is a good challenge that exists because I have been accruing more cash with which I want to invest. If I only had a set amount of cash and I invested 100% of it in stocks, the opportunity to buy more wouldn’t be there, unless I sold some holdings to acquire others. But, since I have been lucky enough to continually add cash to my investment portfolio, it is the challenge I am faced with.

I need to remember that I am not competing against my initial stock purchase, but rather investing in the company as it stands at the current price. And actually, for any of these situations, you have a track record of knowing how the company has already performed for you. You expect long-term growth stocks to do just that, grow. A buy decision shouldn’t be made because of previous price point purchases, but rather, where you feel the stock stands today.

I originally purchased shares around 18 months ago when the stock was sitting around $48. It made this purchase a bit harder, as sometimes I have trouble pulling the trigger and purchasing stocks that I already own with nice gains. But, after a nice runup to over $75, the stock has come back down around the $60 mark. An attractive P/E of 15.5 or so and a 1.6% dividend make the current price still attractive. Of course I would rather be able to buy more at the $48 price, but I think at $60, HOG still is a quality, proven company that offers upside.

Well, JSM is the preferred stock version that pays around a 6% dividend. When SLM shot up, the preferred stock, JSM, shot down. Opening at $25 in Jan. ‘04, JSM has been lingering in the $21 range. At that discount, I figured purchasing it now is a good idea. It pays a flat $1.50 dividend. So, the dividend at the $25 price was 6%, but now since the price is around $21, it makes the dividend over 7%, the discount on the price makes it pretty attractive. I love to find high-dividend payers at a discounted price, and I think this fits. Even if JSN lingers at this price, the 7% quarterly dividend and potential upside make it look better than any money market or cds.

GRAN has a solid dividend (3.3%) and its P/E ratio isn’t scary (14.43). I purchased it around $15.90, which is definitely towards the lower end of its 52-week price range. In this Q&A,they say that at one point Warren Buffet called GRAN the best run bank in the country - gotta be doing something right to get some props from Buffet. I think I got it at a decent price, there is a bit of jitters with various banks (from all the sub-par lending news) but we will see if GRAN works out or not over time. With the 3.3% dividend, I can handle some price fluctuation, so I will probably hold on to it for a while.

 I intend to post details of my various stock and other investment purchases in this blog. This will allow me to look back over various investment decisions and decide if they were wise or not. I consider myself a fairly conservative investor, who prefers the stability and growth of blue chip stocks, but will always play around with other investment ideas. I have a goal of being able to retire by 40 - I say be able to, because I foresee myself always involved in some type of business even after 40. But just knowing I won’t “have to” work is a goal I want to achieve by 40 - I am currently 31.