Put Your $ to Work

~ my neighbor's sheep ~

We're in the midst of a huge snow storm, expecting ten inches (or more) and are well on the way. Generally, they'll be drifts of three to five feet in the morning and chores are going to be difficult and tricky. There's no wind, thank God, but the temps are dropping quickly and I've done what I can do to prepare the animals, the farm, the house and myself. May God have mercy. 

For some, this money information will come as welcome as rain after a drought; for others, you'll say, “Well, I already knew all this” and my response to you is, “then why haven't you blogged about it and helped out the rest of us?” grin

~ Sam and Sadie ~

I'm not a financial expert, nor a stock broker and don't work for human resources or any of the companies I'm going to talk about. I'm simply someone who was told about all this and have taken advantage. I want to pass along the favor but, as always, you should talk over your money management plans with your spouse or someone else who has your best interest at heart. Let them help you make wise money decisions.

Lately, I've been working on “the book” and thought I'd blog about money. Money is part of “the book”, in fact, a major part of “the book” because you work hard for your money and there are two things that are very true about your money...(1) you want to keep as much of it as you can and (2) you want it to work for you. Money that's not working is money that doesn't have much value other than face value. It's possible for your money to go to work...every single day and, at the end of a few years or decades, you'll have a tidy packet to aid in retirement, help with college expenses, start the grands on a nice nest egg, etc.

First, if you have a 401 at your place of work, run, don't walk to the HR office and announce your intent to participate. Then, participate at the full maximum allowed by your company. Seriously, you cannot afford not to participate; companies vary as to how much they'll match but whatever they match, it's money in your pocket. Give up whatever you need to give up...mani-pedi's (it's not that difficult to paint your own nails), eating lunch out, buying coffee (make it at home and you'll save big!) and a load of other "small" expenses that chew through your wallet. 

One of a parent's primary jobs is teaching your children about money. If you weren't taught about money, the learning curve is going to be difficult but not impossible so better get started.

Putting your money to work means making it earn compound interest. Compound interest means not only does your initial principal work for you, so does the interest. In essence, you've got a double whammy going on which means more money in your account.

Using this investor compound interest tool will give you an idea of how your money can work for you. If you set aside $250 as your buy-in principal, add $25 each month and let it grow for 10 years at 7% interest and compound that interest twice a year, you're going to have close to $5,000 at the end of ten years. 

$250 current principal - initial buy-in

25 monthly addition = $300 per year

10 years to grow

7%interest rate

compound interest 2 times a year

will be $4,739.40

If you add start with more principal and/or add more than $25 each month your figure will grow accordingly. Research the company you're interested in and then plug in the numbers to see how much money you'll save and earn.

So, how do you buy stock? A lot of people think you need a stock broker or an on-line account. Neither is true. If you have a utility service in your name, you can call them and ask, “Do you have a stock buy-in program?” If they say, “Yes” then you ask, “What does it cost to buy-in? Do I buy-in monthly or yearly?” Then, almost the most important question, “Do you have a Dividend Reinvestment Program?”

A Dividend Reinvestment Program, commonly referred to as a DRIP, means all interest made on your money, will be used to make more money...for them and for you. You never opt to receive a dividend check; you always let dividends roll over and purchase either more partial or full shares of stock.

There are many companies that have a stock buy-in and DRIP program. In Virginia, it's Dominion Resources, an electric company, and in Florida it's Southern Electric. Other stock-buy in companies include EXXON, and there are more companies listed at List of DRIP Companies, Direct Investing and Online DRIP Database. A visit to any of these sites will give you companies that allow you to directly purchase stock and enroll in their DRIP program.

Or you could call your utility company and ask about their programs. BTW, utility companies are commonly referred to as "widows and orphans" stock...they aren't very sexy, like tech stock, but they, generally, aren't as volatile with wild swings up and down. Just nice and steady, aren't going anywhere and probably will be around for a long while. 

As with all financial decisions, you should do your own research and make your own decisions based on intelligent decisions. I'm not telling you to invest in any of the companies I've named, but I will tell you, some decades ago I invested in Dominion Resources and it was one of the best financial decisions I ever made.

Blessings ~ buy-in stock programs ~ DRIP ~ compound interest ~ your money at work ~