Category Archives: Experiment

Dividend Stocks, Lunch Experiment Update #5

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Not much has happened since my last Dividend Stocks, Lunch Experiment #4 update, at least from a dividend yield perspective!

For a background on how I’m going this experiment and why it’s free, click this article: A Lunch Experminent

Actually the weekly dividend amount I get for lunch dropped a bit because ANH dropped their dividend payout amount, again (they have done so for the last few quarters). 

On the gains/losses in stock values, EVEP continues to tear up the market by now appreciating up to 60%!  I wish I had more in this stock and less in ANH.  The newest stock purchase, CIM, has performed very well and I’m fairly happy with it.

I made the purchase in CIM over 3 months ago, and over a year ago for ANH and EVEP!  I don’t know if I would buy that same stocks today…

Here is the latest numbers from my spreadsheet:

           
  Stock Name Anworth EV Energy Chimera  
  Stock Ticket ANH EVEP CIM  
  # of Shares 260 45 600  
  Orig. Price $7.84 $23.25 $4.01  
  Curr. Price $7.01 $37.46 $4.10  
  Orig Cost $2,038.14 $1,046.25 $2,404.80  
  Curr. Value $1,822.60 $1,685.70 $2,460.00  
  Annual Yield 13.12% 8.08% 17.56%  
  Quart. Dividend $59.80 $34.07 $108.00  
      Total  Dividends $807.48  
      52 weeks 52  
      Dividends / week $15.53  
           
      Total Gain in    
      Stock Increase $479.11  
           
      % Change 8.73%  
           
           
      Amt owed to me: $1,726  
           

 

I borrowed $2,000 from myself to purchase CIM, but it’s been whittled down to $1,726.

Other than the money I borrowed from myself (which at this point I could easily pay back by selling the stocks I have in the experiment), I don’t have any other money contributed to this experiment, so that means that it’s like free money! 

So how did money get into the fund?

By skipping on going out to eat with friends at work, I was able to fund this experiment with lunch money!  So I took my lunch money from myself (lol).

So, in my eyes, the money in this experiment is literally just play money, because it would have been money that I would have wasted by going out to eat with my friends at work everyday (which they still do, by the way!).

I’m now at the point where I can go out with friends at work at least twice a week.  And since I telecommute once a week, I’m really able to go out with friends half of the days that I’m at work!

Not bad considering it hasn’t been a full year that I’ve run the experiment yet!  Nov 12, 2010 will have been 1 year of doing this experiment!

What do you think?  Is it crazy that I”m in such high yield risky stocks? 

 

Related:

Dividend Stocks, Lunch Experiment Update #4

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It’s time for my Dividend Stocks Update on my Lunch Experiment!

For the first 2 stocks in my experiment, I borrowed money from my checking account so I could seed the money for the initial investment.  But since I fully paid myself back on the first two stocks (ANH and EVEP), I decided to take borrow more money from my checking account so I could purchase some shares of another dividend stock. 

This time I chose a dividend stock called Chimera (another REIT).  It’s dividend yield is a ridiculously high 17%.

Initially, I was only going to borrow $1,000, but I decided to bumped the amount up to $2,000. 

Since I’m getting money from my other dividend yielding stocks for lunch, I decided to bump up my weekly savings rate to $60.  So I should be able to pay myself back in less than 33 weeks (sometime in mid-May 2011).

Here is my Dividend Stocks for my Lunch Experiment Spreadsheet:

Stock Name Anworth EV Energy Chimera
Stock Ticket ANH EVEP CIM
# of Shares 260 45 600
Orig. Price $7.84 $23.25 $4.01
Curr. Price $7.16 $34.26 $4.14
Orig Cost $2,038.14 $1,046.25 $2,404.80
Curr Value $1,861.60 $1,541.70 $2,484.00
Annual Yield 13.87% 8.85% 17.27%
Dividend / year $258.20 $136.44 $428.99
    Total Dividends $823.63
    52 weeks 52
    Dividend / week $15.84

 

Overall, I’m pretty please with the outcome of this experiment, but now let me explain some things about my experiment:

  • The money used in this experiment is basically “Free Money” because it would have been spent on lunch going out with the guys!
  • Since it’s “Free Money“, I can afford to lose it all of it if it came down to that!  Yes, I would cry a bit at first, but its money that would have been wasted on eating out anyway.
  • Since I can afford to lose this “Free Money“, I can take risks that I normally wouldn’t take.  I usually don’t recommend anyone buy a stock with a 17% annual return.  This dividend yield will come back to earth eventually!
  • This is purely for fun, that’s why I call it an experiment 🙂

And now for some interesting facts about my experiment results:

  • EVEP is up almost 50% from where I bought it at!  To bad I only bought $1,000 dollars worth.
  • ANH is down 8% from where I bought it at!  To bad I bought $2,000 dollars worth of this stock (booo)
  • CIM recently raised it’s dividend payout for the quarter by 1 cent.
  • The guys try to convince me to go out to eat with them more, but I’m content on doing the library thing.  Occasionally, I’ll go with them for sushi!  Sushi is my kryptonite when it comes to eating out…
  • I get a huge kick when I see the dividends hit my online brokerage account. 
  • Yes, I am nervous about the tax cuts expiring though!  Perhaps I’ll have to move my lunch experiment to my roth ira account…
  • Doing a real documented experiment like this has been a great experience!

I’m having a great time with this experiment, so far I figure that if the dividend yield rate stays the same (which is highly unlikely), I would be able to go out to lunch twice a week with the guys! 

Ironically, I no longer have a desire to go out to eat at lunch and spend so much money.  In fact, now I mainly go to the library at lunch and read other personal finance blogs and work on this blog!

What do you think of my lunch experiment and my progress?  Do you think I’m crazy for going with such a high stock dividend yield?

-MR

 

Related:

Check out the next update in my Lunch Experiment, #5.
Or go back to the previous update via my Lunch Experiment #3.

Sometimes Getting Exactly What You Want Isn't The Best Experience

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The experience was almost like this... relaxing...

Today, the weather forecast stated that althought the day was very cloudy, There was only a 30% chance of rain.  It was hot and humid, so logically even though it’s not sunny, it’s still a good way to cool off and have some fun with my son.

So I thought “hmmm, this is almost the middle of the week, we’ll go wave running early, beating the crowd (which should be less than typical since it looks like it might rain).”  I thought what a great idea!!!

Well, my idea worked a little too well.  Hardly anyone was out on the lake at all (I think I counted… maybe 5 boats).  It was eerie!  It kind of felt like the lake was closed and we were intruders that shouldn’t have been there.  With the clouds darkening the day, I expected a lot of bug to be over the lake, but luckily they weren’t!

So, as I claimed once we were in the water…  We owned the lake that day!  But you know what?  It wasn’t as fun as I thought it would be. 

The following are the Reasons that our time was less than optimal:

  • The lack of sunlight made it feel very strange!
  • The lake was so calm, there weren’t any waves to jump over and ride on.  This is half of the fun of wave running.
  • No people watching (albeit a brief encounter at best on the wave runners anyway, but still…).
  • Kind of lame experience, like singing in the shower… Nice but not like singing in front of other people (not that I can sing, blah).

It’s funny, how the almost total lack of people made wave running such a so so experience.  Surprisingly, a lot of things in life are similar to my experience with wave running and nobody being there.

Was it worth it?  Yeah, but it could have been better!

What do you think?  Have you planned something, then with the lack of background noise or other people, realized the experience wasn’t quite a good as with that noise or people?

-MR

Lunch Budget Experiment Update #3

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I haven’t talked about my Lunch Experiment or Adult Allowance for quite a while, so I thought it was time for an update!

The REIT stock “ANH” dropped 11% since I bought it, but surprisingly with the dividends received so far, I’ve still even on the amount invested overall…  I also purchased a small position (only 1/2 of what I put in ANH) in a stock “EVEP” (an energy stock) that also provides a dividend. 

The EVEP dividend only pays 8%, but the stock is up almost 40%, so from a total stock evaluation stand point I’m up a combined total of a little over $200.

Okay, to summarize, the valuation of the stocks are actually up which is great, so I can count the dividends from both stocks entirely.  The amount the dividends per week comes to $8.00 (I can only buy soup when I eat out, but it’s a start).

So my experiment so far is successful.  I now generate enough income for 1 day out of the 5 work days for a lunch paid for by the dividends (yes, I know I’m not considering taxes…)!  I decided to keep doing the experiment!  I also decided to diversify into other dividend yielding stocks.  I know that the stock ANH will probably decrease their dividend in the near future, so the more I can diversify the better!

To “prime the pump” I borrowed money from my account to start this, and I’ve been slowly paying myself back.  I still have 8 weeks left, then I will start saving money again for investing in more stocks for my Lunch Experiment!

While the amounts may seem trivial, all great things start out small, and so did this!  You see, this is my first true “Dividend Fund“!!!

Eventually, I plan on creating a Christmas, Vacation and “Real Estate Tax” Dividend Funds!

Have you considered creating such Dividend funds or do you have alternative ideas? 

-MR

Related Posts:

Dividend Stocks, Lunch Experiment Update #4

Lunch Budget Experiment Update #2

Lunch Budget Experiment Update

Paying An Adult Allowance