Monday, December 19, 2016

Don't Pre-pay Your Mortgage

This past week the old discussion of the pro's and con's of paying of your mortgage early flared up again. While good points were made on both sides of the argument, I'm firmly of the opinion that it doesn't make sense to pay off your mortgage early while you can enjoy a low interest and tax write-offs.

Of course, as all things personal finance, it's personal. In my case, a 3.875% interest rate, and the ability to deduct interest from my income makes it a no-brainer to pay the minimum amount. If I had an extra $1000 each month I could put that in LendingClub or in Dividend Stocks and expect at least a 4% return, very conservatively. My returns are higher than that.

Tuesday, December 13, 2016

Sell: ARLP

In the aftermath of the election the market went all sorts of crazy. I sold my ARLP position when it jumped up several points. It was on my sell list for a while, given their Div Cuts, and uncertain future. The stock has been recovering, and while it may continue to climb for some time to come, this was a good point for me to sell. I used the proceeds and existing cash to invest in a position in O.

This makes a huge dent in my dividend income, as ARLP paid well. I'm selling mainly because I have additional overhead to complete forms for ARLP's special tax structure. This wipes out most of my income. Second, they qualified for a sale after cutting their dividend. I want stocks that can grow their div over time, even if slowly.  ARLP served me well -- while I took a loss on the stock, they paid me around $920 in dividends over the years. I knew they were a high paying div stock and I knew the risks involved. Again, this income helped me get my dividend machine going, and allowed me to get into other positions.

I waited until after their last div payout of the year, and got lucky with a coal industry bump after the election. I'm happy to get this off the books in 2016.

Friday, December 9, 2016

Portfolio Report November 2016

In November I finally sold ARLP and used the proceeds and dividend earnings toward buying O. This checks a long-standing goal of getting out of ARLP. O is my first monthly dividend payer, so my month-to-month and month-year-ago comparisons will be off for the coming 12 months.
My LendingClub experiment is going well. Every loan paid on time in November, and proceeds were automatically re-invested.