My Personal Finance Strategy
- 9 Comment
As part of my entire personal financial management plan, I have been looking at some of the debt and emergency reserves that I have and want to take action immediately. I have been thinking about it for some time now, but this post over at It’s Your Money really got me thinking about it again. The issue however is that my dividend investments will have to take a bit of a hit to do so.
Every pay period, I put 5% of my gross income from my job in my ESPP account. My original plan with this money was to sell the company stock when it comes due, take the 15% gain I receive through participation in the plan, and simply invested it into one of my CSA accounts. Instead, I have developed a more comprehensive plan for this money that now includes the following personal financial goals:
- To build up a $1000 emergency fund by December 31, 2005
- Action Plan (currently have $100 in Emergency Fund):
- Deposit $156 per month to ING Direct account
- To pay off entire truck balance by August 1, 2007
- Action Plan
- Continue to make regular monthly truck payment
- When monies become available through ESPP (every 6-months), sell stock and use proceeds to pay down loan
- To build up an $12,000 emergency fund by August 1, 2010
- Action Plan
- Continue to deposit $156 per month to ING Direct account
- When monies become available through ESPP (every 6-months), sell stock and deposit into ING Direct account
As a result, I am going to remove the ESPP values from my listing to the left as it will not be contributing to my dividend paying investments for some time. All other contributions (pension, 10% of additional income earned, etc) will still be invested. It hurts to see this drop in value but I know that the money is going to a good cause – increasing my net worth and cash flow through debt reduction and securing my family’s safety through a substantial emergency fund.
To keep track of my progress, I have created a little Excel spreadsheet that will highlight my progress.
9 Comments on this post
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Ken said:
Jeremy,
Thanks for your post on my site. I have been cheking out yours and reading your posts. I must say that you definitely have me inspired to set a similar goal for myself. I will track your progress over the months to come.
Also, I have updated my site since you were last there and have linked to this page.
August 12th, 2005 at 9:45 am -
The Dividend Guy said:
No problem Ken…the formatting looks good. Have you looked at Canadian Shareowners Association as a dividend reinvestment option?.
August 12th, 2005 at 1:16 pm -
Bryan said:
Jeremy,
I have looked at Canadian Shareowner Assoc in the past, and am thinking about it again. Are you using the gold, silver or bronze service. I am looking at having maybe $100/month to invest, and I don’t like the cost/investment ratio for the services. I like to keep it under 5% if possible. What is your strategy?
Bryan
August 13th, 2005 at 11:36 pm -
The Dividend Guy said:
Bryan,
I actually try to keep transaction costs under 2%. I purchase using their Bronze service (lump sum purchase). The cost for this service is $9 per trade – really low by Canadian standards. The tradeoff is that you don’t get to invest in the entire universe of stocks, only stocks that they have “pre-selected”. This tends to be the big blue chip stocks for the most part – which is where I tend to put my money.
I do something similar to you – I ‘usually’ put $100/month into my account – sometimes way less and sometime way more. Once I have $500 or so I make a purchase.
The $29 per month for the Gold service is steep – I would need to invest around $1500 per month to keep transaction costs under 2%
Thanks for commenting,
TheDividendGuy
August 15th, 2005 at 6:14 am -
Ken said:
Jeremy,
No – I have never looked at the CDN Shareowners site. Right now I am concentrating on my portfolio of CDN stocks. The only reason I would look there is to defer any costs for buying American stocks.
Do you hold all your equities through Shareowner? I guess if you are paying for the monthly service you might as well. Personally, I like the no fee DRIPs eg. BCE.
August 18th, 2005 at 8:36 am -
Larrin said:
I really love your blog and your insight to dividend paying stocks. I love Best Buy for that very reason. Take a look at my blog and tell me what you think.
August 31st, 2005 at 9:55 pm -
alex said:
Your blog is great! It’s hard to find blogs with good content and people talking about debt reduction these days! I have a secret debt reduction blog if you want to come check it out!
September 13th, 2005 at 12:41 am -
abigail said:
I really like your conversation on debt help. I have a debt help secrets blog if you wanna come on over and check my stuff out.
September 13th, 2005 at 5:25 am -
Refinance Mortgage said:
Awesome blog you have here, I really enjoyed reading it.
January 13th, 2006 at 10:11 pm
