Today is the last trading day in January, that means it’s review day. Let’s jump into it because I don’t have anything else to talk about.
First at bat is the Taxable account, now I made some changes recently, and literally while I was writing about it I realised how dumb it sounded and redid it on the spot. The principal stayed the same though, getting more diversified. IBM showed that having all your eggs in one basket carries risk. And while it is turning out not to be a big deal in the IRA accounts it could have been an issue. I am focused on income generation, I want to keep the cash flowing in at a regular pace. Right now, with time constraints and not even really understanding how to properly evaluate a company, I should just stick to dividend stocks, and I decided to stick with weekly dividend stocks because that is what I am narrowing my focus down to. I still like Rule Breaker Investing the podcast that threw out the list of companies and I will definitely look for opportunities to add that in the future. For now I diversified by adding 4 shares of KR and AFL, 3 shares of CAH, 2 shares of PM and SBUX, and a single share of BBY. Altogether I am getting $19.16 (1.97%) a year (on capital invested) in dividends from them plus whatever growth they may give.
Okay, results: The Taxable account made $115.49 (3.58%) for January. That is slightly down from December’s $155.87 (5.34%) but still a great return (Note: percentages are from the time period referenced and are included for comparison; they are not based on current balances). I did a terrible job tracking my options in this account for some reason but my best guess numbers are $45 came from options this month, December was $49. I also had $86 in dividends. I am going to set my goals for this year by estimating my returns based January for the next 12 months. So estimate that out for the whole year and you get $1,385.88 (45.09%) on the year. That is going to be my target return for the year.
Over in the Options IRA, counting the IBM drag, the account made $669.91 (3.50%). Options accounted for most of it, $591.91. It did best December’s $135.43 (0.71%), which had $341.40 in options. I’m not sure how good my accounting is for last year, I’m still working that out. The major point is options income went up, that is good, and that the account increased more than just the options income (at least in January) which means I’m not robbing Peter to pay Paul, or I’m not trading my account balance for options income. Based on my goal formula I should be aiming for $8038.92 (41.95%) on the year as a target.
Lastly over in the humble Rollover IRA, again counting that IBM drag; the account made $1212.49 (4.67%) The reason that is so much higher than the Options account is that I had been acquiring the bulk of my IBM shares in that account since last year and my price per share was a lot lower than it was in the Options account. I’m only down $22 on IBM in the Rollover, options have more than covered that. Roughly half of that, $601.79 was from options. December was a monster for the Rollover, it added $3674.89 (8.34%) and that was all growth since I didn’t start options until January. The goal for the Rollover will be $14549.88 (56.09%).
I feel like these goals may be a little ambitious, I will look at these again next month and then again at 6 months to get a better idea of where they should be. And the only reason I am not using December’s numbers to average is that I was not keep track of things as well as I should have been and I feel more comfortable going with a January/February average as I feel I can be much more transparent about how I got the money, and where it came from.
One last thing to talk about before I leave you, Over in the Taxable I also have a goal of adding $5000 a year, for January it was slightly lagging, I put in $375 (7.5%) of my goal. I’m not too worried about it yet, tax season is coming up (I still get a refund), there is talk about more stimulus checks coming and I am finally going to stop making payments on my student loans, for now, and add that to the Taxable account instead. Now, I have been continuing to pay it down even when the initial pause went into effect because I believed it was just a chance for me to get ahead. With the additional pause I don’t owe any payment until the end of November and the growing talk of student debt cancellation, I feel like it’s a good time to shift the funds and let things play out.
I don’t necessarily agree with the student loan debt cancellation, and I’ve filed for Bankruptcy in the past. Without some other change to either lending or the price of higher education, I don’t follow the issue close enough to know if they are talking about any of that. I am going to take advantage of the situation though, and divert that money to my Taxable account. I do fully intend to resume payments come November if there is no debt cancellation or I do not qualify for it.
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