Tag: finance

Debt reduction versus Cash flow and future risk

It’s something I have been thinking about a lot lately, since borrowing money is cheap at the moment and it’s getting easier to refinance existing debt to lower rates this has me puzzling.

Mostly because I have always had a view of getting rid of it as soon as possible. Now that I have reduced most of my debt it’s been tempting to add a bit of debt in order to generate a bigger passive cash flow. Basically to invest more and get a bigger overall return on my investments. Now that brings a new factor to the table. My one and only debt at the moment is a mortgage on my house. The value of the house exceeds the outstanding debt by a fair sum, the interest is low and secure for the coming 22 years. After 22 years I will be mortgage free anyway. The risk is that I can’t generate enough income to pay the monthly cost.

Since I have been sick this is a risk, I now receive a goverment pay out which is not guaranteed , 2 scenario’s can happen. My condition stays as it is today and I will not be able to return to work , which gives me a stable income from the government. Which is lower than that I can make working in my old profession.

The second is that I return to a job , which will hopefully be possible. The people I work with already prepared me for the fact I can’t return full time and working in my old profession. So again a lower income. By reducing my monthly mortgage payment and interest burden even more agressivly I can minimize risk further.

On the other hand I can probably have I higher rate of return by investing the money in other asset categories, and thus create a cash flow that in the future will pay me much of my monthly costs. Meaning the mortgage and including food, insurance, etc.

For some reason I can’t really figure out a course of action where I feel absolutely comfortable. I know that when I would have been working the risks are much the same but my confidence is somewhat less since I have been sick and progress is going as slow. Maybe this is something to worry about later on in the proces. Well Just wanted to write about this little bit of doubt in my mind. If anyone has some useful advice please feel free to contact me.

October 2016 – Dividend

October is nearing the end and I am once again doing a round of dividends, it’s been a good month on the markets for me and I am slowly getting more insight in how to value company’s.
More on that later though. For now just the numbers.

28-10-2016 Dividend (Product: DOW CHEMICAL COMPANY ) EUR 3,91
26-10-2016 Dividend (Product: CISCO SYSTEMS INC. ) EUR 6,19
25-10-2016 Dividend (Product: GENERAL ELECTRIC ) EUR 4,30
14-10-2016 Dividend (Product: WHOLE FOODS MARKET IN) EUR 1,15
14-10-2016 Dividend (Product: W.P. CAREY INC. REIT) EUR 8,37
3-10-2016 Dividend (Product: COCA-COLA COMPANY (THE) EUR 4,46

Total EUR 28,38

Portfolio news – October 2016 changes

New name for the monthly posts , changes instead of additions. Why, well I sold one position in my portfolio. My favourite sneaker manufacturer Adidas. I bought it back in November 2015 and sold it last week. The question is why of course as I am very long term. First the appreciation is very substantial in this period. I can’t really add any more to the position without tipping the balance in the portfolio and as a result also the dividend percentage dropped significantly. For me the valuation just got a bit too high and the payout of selling was very attractive.

I will still follow the company and I am sure to buy it again at lower levels. As for the addition this month it has been BMW the German car manufacturer that will along with the rest of the established auto motive branch , according to all the experts lose from Tesla. But until that happens is a very good investment. It has had some downturn last year and at the beginning of this year and is now slowly getting out of that hole. It’s around 80 Euro at the moment which is not cheap but simply good value. Debt position is average and should increase.

Dividend is 3,20 Euro per share which is around 4%, fair result. Another reason is I am spotting a lot of people looking at BMW as their new car. Maybe not the usual market indicator but one famous fund manager always said, look around and buy what you see people buy and company’s you understand. Along those lines anyway. So it’s all about the Germans this month.

Portfolio news – September 2016 additions

So for this portfolio update I have added a brand new name to the collection. It’s ASML a Dutch company that makes machines to produce all these wonderful chips we all need in our phones, computers and other selected devices of choice. It has been on my list for some time now. It’s been expensive lately and still is, but I simply decided not to wait any more to add this to the portfolio. Also because I suck at timing highs and lows of any stock I wish to buy.

The company has paid out a dividend of Euro 1,05 which is nice , but as makes the current price a bit high in terms of dividend return, nevertheless still good enough. The dividend is not guaranteed , one could say that’s the case per default for any company. But it’s not a member of the dividend aristocrats family. So they will not try to pay out dividends if it doesn’t suit the company’s goals. The company’s debt is slowly decreasing which is always good. One of the other risk factors with these highly expensive and long term products is the problems that can occur with delivery times , but that is the case with all producers of this kind of high tech. For me it’s a solid investment for the future, and I hope I can add to the position in the near future.

September 2016 – Dividend

Another month , another bit of dividend coming in this month, not much to add except the figures. Figuring out how to get a bit more revenue out of the portfolio, but since I’m very slow, this process is also very slow. Totals without tax, which will be deducted and reclaimed again at the end of the year, so irrelevant for this overview.

7-9-2016 Dividend (Product: UNILEVER DR) EUR 3,20
8-9-2016 Dividend (Product: MICROSOFT CORPORATION) EUR 3,10
9-9-2016 Dividend (Product: VANGUARD DIV APPRECIAT) EUR 1,02
9-9-2016 Dividend (Product: EMERSON ELECTRIC COMPA) EUR 4,09
19-9-2016 Dividend (Product: RDSA dvd reinvestment plan) EUR 42,18
19-9-2016 Dividend (Product: ICAHN ENTERPRISES L.P.) EUR 1,29

Total 54,88

Portfolio news – August 2016 additions

A bit late as I an busy taking more time off and balancing my energy, more on that in another post. The addition of August.

Only one addition this month, and yet again a extension of an existing position, namely Microsoft. It was a position that was not in line with the rest of the portfolio so it had to be adjusted. Most of the tech positions in the portfolio are performing well and I think Microsoft has more potential on the upside. The company is producing good results and while this may not be the best way to take investment decisions I love windows 10, it’s an excellent OS , fast and stable. And a lot of people agree. Also their development tools are great and they are doing a lot in the way of education and making people familiar with the software.

I think this can only get better, more and more people getting involved in tech will make for more innovations. Hopefully not only in just another app but also in research and other tech fields where you are bound to need software. All in all I am positive about Microsoft. Next month , well this month in the coming week I will get a brand new position. For the September addition.

August 2016 – Dividend

Dividends again, always a good thing. As always the markets are moody as ever and nobody knows how long this ridiculous policy of low interest and buying huge amounts of bonds will go on. It has led to inflated markets and in the Netherlands , the old crazy pre credit crisis housing madness is back once again. This time with even lower rates. More debt at lower cost is still debt.

People don’t seem to mind and are paying large amounts of money for housing again. But more on that later, back to the dividends. It has been a slow month and I am looking for good ways to even out the monthly income from my portfolio. I am looking into various ways to do this. Maybe incorporate a bit more option strategies during the month. I now sell some for extra revenue. Which works great , so I am looking into ways to extend this.

Well, without further delays and small talk the August dividend result.

9-8-2016 Dividend (NSI) EUR 13,00
4-8-2016 Dividend (AMSTERDAM COMMOD.) EUR 5,60
15-8-2016 Dividend (Product: ONEOK INC. COMMON STO) EUR 5,23
11-8-2016 Dividend (Product: APPLE INC. – COMMON ST) EUR 4,85
16-8-2016 Dividend (Product: ONEOK INC. COMMON STO) EUR 4,63
12-8-2016 Dividend (Product: APPLE INC. – COMMON ST) EUR 4,34

Total EUR 37,65

July 2016 – Dividend

Another month gone and it’s time for the dividends, Ahold had a special dividend of 1,20 Euro per share due to the reverse split. This was because of the merger with the Belgian supermarket chain Delhaize. A bit of a slow month dividend wise. Keep you all posted on the progress.

01 July 2016 COCA-COLA COMPANY EUR 4,01
02 July 2016 WHOLE FOODS MARKET EUR 1,03
06 July 2016 UNIBAIL-RODAMCO EUR 4,85
15 July 2016 W.P. CAREY INC. REIT EUR 7,48
21 July 2016 AHOLD EUR 12,14
25 July 2016 GENERAL ELECTRIC COMPANY EUR 1,76
27 July 2016 CISCO SYSTEMS INC. EUR 5,56
28 July 2016 WALT DISNEY COMPANY EUR 0,54
29 July 2016 DOW CHEMICAL COMPANY EUR 3,51

36,41

Portfolio news – June 2016 additions

June has seen 2 additions to existing positions. First I added to the position of K+S AG , simply to balance the position in line with the rest of the portfolio. It is still a very solid investment in my opinion. Second I added to my position General Electric , pretty much for the same reasons as my initial purchase. Solid earnings, good dividend and a back to basics strategy.

For the most part I am happy with my portfolio at the moment. In the coming months I will add new company’s to the portfolio the last months were pretty much about balancing things out and buying at lower share prices. Which is always good.

Portfolio news – May 2016 additions

The portfolio in May has seen one new addition. Amsterdam commodities otherwise known as Acomo. It’s a trader in all sorts of agricultural products, they trade seeds, nuts, tea and all sorts of other ingredients.

They have a healthy dividend stream and I think the commodities trade will pick up more in the not to distant future, especially food related.

Some further information can be found on their website. Acomo 5 year numbers