As you may know, I recently signed a $260K/year contract last week which I negotiated hard for.
I have a secret.. not to secret…goal to increase my own income and salary by asking for more money each and every time so that I stop undervaluing myself (not that I ever have), and I really stay FIRM on my rate because money talks.
You all know I keep a higher-than-usual emergency fund because I am a very conservative freelancer. I have roughly $100K for my business and $100K for myself personally, which is plenty.
WHAT I DO WITH MY EMERGENCY FUND
How it works is that once I get a contract, I plow that money of about 75% or more into investments, and use the money I earn in the coming months to shore up my emergency fund again, slowly buying in small increments each time I get paid, so that I am invested in the market ASAP.
If I feel the contract is very solid, I put more money in, but generally speaking I like keeping a healthy $50K float as an emergency fund because YOU NEVER KNOW.
You never know when a client will go bankrupt, pull the plug, change gears… it has all happened to me before.
Thankfully, I have also been really assessing my life and money choices/decisions and I have come to the conclusion that I would like to creep back towards the frugal bandwagon now.
I have had a good run, spending $20K a year on clothes at one point, and really splurging on myself, but at the end of the day, what’s all of it for? I won’t cut myself off, but I have rather enjoyed giving myself a strict budget because it has given me a real run for my money (no pun intended) to try and stick UNDER that amount.
I originally gave myself $200 and now it is at $225.
But on to the shopping spree!
I am on a dividend warpath of getting $12K of dividends a year, and right now am at about $7500. I am very heavily weighted in bank stocks (they’re just so GOOD with a nice yield), and I have been wanting to diversify a tiny bit out of them because I don’t like putting my money all into one basket so to speak.
In the past week or so, I have put $50K into the market and this is where it has gone:
STELCO (STLC): $5K (Steel)
I have been eying this stock for a long time now. They have zero debt, assets, and are definitely dependent on the market economy doing well (hello, they sell steel), but in the past month or so, they have gone from about $15 down to under $10. I picked up a small position in them because I like their dividend yield of about 4%.
I do suspect we will head into a recession around 2020, and only time will tell if this pick was a good one. I bought it pretty much at the bottom of the curve, around $9 or so, so I am holding it for now. $5000 also isn’t a lot of money in the grand scheme of things, and I am not putting it into something super risky like Bitcoins.
ALGONQUIN POWER (AQN): $15K (Utilities)
Not much to say here, but I really do love utility stocks. Obviously.
People live in cities. People need energy. Who gives energy? Utility companies. Algonquin has a 4.17% dividend yield which is nice, and they are generating and selling energy in Canada and the U.S.
I put a big position in Algonquin ($15K) because I see this as a very long term hold. The maximum I’d hold in any given stock is $25,000, to minimize any losses. I am not a fan of putting more than that into any one company as … if they go kaput, so does your money.
POWER CORP (POW): $10K (Financial – but not banking)
I know I said I wanted to get out of BANKING but I was talking more bank stocks. I have held and still like Power Corporation for their dividend yield of 5.43%. I have a position in them before of about $17,000 which brings them up to $27K in my portfolio.
It is a little more than the $25K benchmark I set, but now I am good. I won’t be buying any more POW shares, and will move on to my other dividend stock picks / research list. You can see my Canada and U.S. Dividend Stock list here.
FORTIS (FTS): $5K (Utilities)
Another utility company operating in the U.S. and Canada. Dividend yield at 3% and does electricity and gas. I am planning on putting another $10K into this by the end of the month, so it will bring me up to $15K.
COUCHE-TARD: $10K (Convenience Stores)
People love Couche-Tard here in Québec and convenience stores are EVERYWHERE, making lots of money, by charging $5 for a stick of butter because you forgot to buy some at the grocery store for $3 last week.
In Quebec, they also sell alcohol, making it very accessible for lots of people to pick up a 6-pack on the way home, and junk food isn’t about to disappear soon.
I have a larger position in them because they are unlikely to go bankrupt for a very long time. $10K is a good start and their dividend yield is at 7%!!! This is very high.
RESTAURANT BRANDS: $5K (Fast Food)
Dividend yield at 2.83%, they own Tim Horton’s, Burger King and Popeyes.
Tim Horton’s is a Canadian coffee chain here, and an ICONIC one at that. People are loyal to it the way others are loyal to Starbucks, and it is a real money maker. People live in these places.
I have a small position in them because I find their price a bit high, but I thought better get in now than to wait.
S&P 500: $550 (Index)
This is just some leftover money I threw into the S&P.
INVEST ANOTHER $15K INTO THE MARKET?
I am also debating on plowing another $15K by the end of this month into purchasing more stocks to bring the total invested this month up to $65K.
I haven’t decided if I will or keep it in cash, as a recession is likely in 2020 and my emergency fund may be too drained.
I also haven’t decided if I will do another $15K dividend buying spree or just put it into some index funds to balance out my portfolio.
WAIT, DIDN’T YOU ALSO BUY THINGS?
Did I also really go shopping-SHOPPING?
As a treat, I did in fact, set aside an additional $500 (above my $225 Fun Budget for the month) for myself as a contract celebratory bonus and picked up a $200 Mason Pearson hairbrush (arriving NOVEMBER!?!? WTF), and a few pieces of jewellery (2 necklaces, 1 ring).
Example of one necklace I LOVE:
I am still debating if this hairbrush is considered ‘necessary’ or ‘wanted’, only because I don’t actually own a hairbrush and do in fact, need one. For now I will pretend it is a Want so I don’t spend more money pretending it isn’t.
So for now, I am debating planting another $15K in the market, or waiting until I see how things go next year and if I get extended or not.