I own shares of both Conoco and Exxon stock—I expect to be a great income holding over the next ten to fifteen years. But what I do not expect is for the company to give smooth, linear annual increases in their dividend each year. With a company like Coca-Cola, you know what you are getting: a dividend every ninety days that eventually gets raised each February and then the process repeats itself until the next February. That is not what you should expect with upstream oil MLPs and corporations.
Because of the spinoff of Phillips 66 and a series of divestitures thereafter, Conoco Phillips is probably the biggest example of an upstream company that often shows up in defensive and conservative portfolios across the country. Now that Conoco is solely an upstream company, it can be useful to understand the implications of its business model if you want to own … Read the rest of this article!
Every now and then, ESPN, Fox Sports, or a major media outlet will provide statistics on the general state of personal finance for professional athletes years after their playing days are over. According to a 2009 piece in Sports Illustrated, over 60% of former NBA players are in “severe financial distress” within five years, and that figure approaches 80% for NFL players shortly after retirement.
That kind of wasted potential makes me sad. I just wish that some of these guys had the right mentor, financial advisor, or whatever term you want to use, to give them guidance during their playing days so that they could create a sustainable lifestyle going forward. It makes me sad because it is so easy to live off the income when you are dealing with that kind of money—it makes me sick to think about how easy it would be to structure a … Read the rest of this article!
IRS wage garnishments are the most punitive form of garnishments that exist of any kind, anywhere. I was reviewing tax law and came across some information garnishment information from the IRS, and could not believe how little an individual gets to keep in the event they owe taxes to the federal government.
When a garnishment is properly filed and sent to an individual’s employer, an enormous chunk of each paycheck goes to the IRS (Publication 1494 provides an overview of the exemptions for each specific situation).
Let’s look at an illustration to underscore the point. Imagine you owe $10,000 to the IRS and earn $4,000 per month post-tax, paid biweekly, at the time that a garnishment is sent to your employer.
The IRS lets you keep a base of only $461.54 each time that you receive a paycheck. If you receive two paychecks that month, you … Read the rest of this article!
Both Milton Friedman and Irving Fisher influenced my view of economics, and consequently, however I view the purchase of publicly traded businesses that we call stock, by calling my mind to the fact that businesses consist of a web of contracts and other required financial obligations that are necessary in order to sell a good or provide a service, and the corporate residue that is leftover after the good is sold or the service is provided is what we call “profit”.
It would follow, then, that the best stocks to purchase are those in which the web of contracts and other required financial obligations can be dramatically curtailed in the future, or alternatively and preferably, where the sale of goods or services can be increased at the maximum rate without a corresponding increase in the costs arising from the web of contracts and other financial obligations that are necessary to … Read the rest of this article!
In the United States of America, there are over 500,000 people that work in the diet and fitness industry. The funny thing about that is the fact that almost all of the advice concerning health could boil down to one sentence: either “exercise more and eat less” or “consume fewer calories than you expend.” Everything else is a derivation or a specific look at that principle. The entire industry is built upon a permutation of that principle.
Personal finance and investing is much the same way. Even though it is a crowded space (I can only imagine how many finance writers and investing advisors exist in the United States alone), the message is not terribly complex. A successful financial life all boils down to one thing: spend less than you earn, and do something intelligent with that surplus. My website is dedicated to advocacy of documenting why high-quality blue chips … Read the rest of this article!