Good Stock Market Tip; Good Return!Written by Charles M O'Melia
You have permission to this article either electronically or in print as long as author bylines are included, with a live link and article is not changed in any way (typos excluded). Please provide a courtesy e-mail to charles@thestockopolyplan.com telling where article was published. (Word Count 1000) Good Stock Market Tip, Good Reward! Forget making a profit; instead focus on income provided from your stock portfolio. That’s right! Forget making a profit. The burden is now lifted - no more pressure on making a buck in stock market. (Instead of trying to bend spoon, that is impossible, instead just think of spoon as – omigosh! - I’m in Matrix!) When you focus on amount of money your holdings are providing in dividends – and when those companies selected have a history of raising their dividends each year – a lower stock price allows dividends that are being rolled back into stock to accelerate your income. The total value of your portfolio may go lower, but your income from that lower priced portfolio would increase dramatically. Profit by income! To demonstrate this tip, I’m going to take you back in time, but strategy of that time is just as viable today, as it was in past. The year is 1990, stock for demonstration is Comerica, and amount of money invested was $3,333.34. Comerica (CMA) was selected for one simple reason – in 1990 CMA had a historical record of raising their dividend for past 21 years. Today’s CMA has a 36 year history of raising their dividend every year. In January 1990 Comerica was selling at $48.38 a share, paid a quarterly dividend of 65 cents a share, with a dividend yield of 5.37% (.65 divided by 48.38 x 4 x 100 = 5.37%). The result of just holding this stock through years, never taking a profit, and simply having dividends reinvested each quarter (commission-free) back into stock is chronicled below: These are actual returns based on closing prices of stock on company’s dividend payout date (the date a company purchases their stock on open market for investors enrolled in their stock dividend reinvestment plan; The figures were taken from research I did, and is from an excerpt from my book The Stockopoly Plan – Investing for Retirement.) Comerica: (with dividend each quarter rolled back into stock) $3,333.34 into CMA in January, 1990 at $48.38 a share: Shares purchased, 68.90 shares. Total Amount of shares at end of 1990: 72.92 shares. Total Amount of shares at end of 1991: 115.01 shares. Total Amount of shares at end of 1992: 118.85 shares. Total Amount of shares at end of 1993: 245.78 shares. Total Amount of shares at end of 1994: 256.96 shares. Total Amount of shares at end of 1995: 268.78 shares. Total Amount of shares at end of 1996: 277.83 shares. Total Amount of shares at end of 1997: 285.32 shares. Total Amount of shares at end of 1998: 436.65 shares.
| | Why Look At Mobile Homes For Sale?Written by Steve Gillman
There are mobile homes for sale, for much less than stick-built houses, in most areas of country. Despite persistent predjudice against them, and sometimes against their residents, mobile homes are cheap housing choice of millions. The advantages are not always obvious, but they are real. First of all, let's acknowledge big "truth" about mobile homes and appreciation or depreciation. It is true in most areas that mobile homes in parks go down in value over time. That's why I don't recommend buying in a park, unless you absolutely can't buy real estate, and you have done math to see if you are better off than renting a nice apartment. To "do math" consider lot rent, payment, and remaining value of mobile when you put it up for sale, minus what you will still owe, when you are likely to move. These are guesses, but still better than nothing if you are as objective as you can be. Mobile Homes For Sale With Real EstateWhen looking at mobile homes for sale on land, however, you are looking at an entirely different investment. My mobile home in Michigan doubled in value in twelve years I lived in it. That's because even as home deteriorated a little over time (don't all houses?), value of land continued to rise. You also can do what you like with home when you own land. For example, I took in more money from my home than it originally cost, by renting out a room or two over years. As mentioned, mobile homes usually sell for much less than other houses, and this means not lower payments. Also, because of shortened amortization and lower loan amount, you will often build equity faster in a mobile home than in a more expensive house. A quick example follows, for skeptical among you. Equity Building With Mobile HomesIf you buy a house with a $100,000 mortgage loan amortised over 30 years at 6% interest, you'll have a payment of $599.60. Of first payment, $500 will go towards interest, $99.60 towards principal. In other words, you only built equity of $99.60 (I'm ignoring appreciation, but only for moment). Second scenario: Find a nice mobile home for sale, and borrow only $30,000, at 8% interest, amortised over 10 years. Note higher interest - this is always case with "factory built home mortgages." The shorter term is normal too, but least you'll own your home free-and-clear in 10 years instead of 30. Despite higher interest and shorter term, payment will be only $363.99, first month only $200 will go towards interest. That means other $163.99 goes towards principal. You bought more house (built more equity) in this scenario.
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