Long term buy and hold investing (LTBH) would be much easier if I could buy the stocks, sit somewhere for free in suspended animation for a few decades, and then live off the proceeds. Even a 1% return from bonds would eventually pile up enough money if they were given enough time and beat inflation. But bills must be paid and the money has to come from somewhere, and if it isn’t from a big pile of assets, the money has to come from income. Come in income. Come on stocks. The mortgage company has made the call. I must feed their bill.
Five years ago I bought this house, the first house I’ve owned where I feel at home. It’s a small house (840 sq. ft.) with a big view. It would be a million dollar view (in my opinion) except for an extra house or two between me and the water, but I get a good approximation of that whenever I stand on the roof. An early incarnation of this blog (which has been orphaned by iWeb issues) contains a post about the house and why I love it (Living Small). Ironically, the post also includes the week of DNDN’s first major rise. DNDN was up 185% that week. It is a nice reminder that stocks can move more than 15% a year.
DNDN and my house have been connected since then. For a while it looked like DNDN would allow me to pay off the mortgage very early. I wouldn’t be able to sit here for free, because utilities and taxes must be paid too; but living would become much cheaper without a monthly mortgage check. Oh well, it may yet happen. Now, a 185% rise in DNDN brings it to less than half of what I think the stock and the company are worth. Unfortunately I’ve sold more than half my shares in the meantime, and the remaining ones are in my IRA. Sales now include early withdrawal penalties.
I purposely bought the house with financing through a local bank. I’m a fan of local economies and wanted to keep the money as close to home as possible. Within a few months the bank sold the mortgage to another firm, and eventually to Bank of America, which has now passed it along to Green Tree. That last transfer didn’t go so well. My check’s journey to Green Tree through Bank of America has been slowed by some financial quagmire. Green Tree is not happy. They call me about it about once a week. Sorry folks, but I don’t know of any leverage I have over Bank of America, despite having been a loyal customer for years.
Chasing bills, shifting money, timing payments are not relaxing chores. Recent studies have shown that money does buy happiness – if you don’t have enough. Below about $75,000 per year, extra money relieves stress and increases happiness. Above that though, the correlation weakens. I’ve lived on both sides of that line and I agree. I enjoyed making much more than $75,000 per year, but if it involved much more extra work then the extra work came with extra stress and less free time. I’m sure everyone’s line is different. For some the line must be $100,000. I know others for whom the line is about $20,000.
The key I’ve seen is being able to pay the bills without concern or effort. My bills arrive because I’ve used some goods or services. I get a mortgage bill because I borrowed money to buy my home so I have a nice place to live. I’m able to upload this post from home because I signed up for and pay for phone and internet access. I pay taxes because I want someone else to manage most aspects of maintaining our society and civilization. When I had more than “enough” the only way a bill was late was if the envelope dropped behind the desk, or I was gone long enough for the bill to be past due when I returned. A personal luxury I afforded was to pay bills in advance. If a bill was typically $30, I’d pay $300 on occasion and then buy that little extra time, effort, and any worry about it for almost a year. Take the time to add a zero, and buy that time back every month.
I suspect I will return to those days. My friends assure me that I’m working hard enough at it. Regular readers know my mantra: books, photos, speaking, teaching, consulting, and applying for jobs – and buying a lottery ticket on a regular basis. I’ve even heard of some rather innovative and entertaining possibilities that I’ll post about if any of them happen.
Each notch up in DNDN eases my efforts. If AMSC gets out from under its China cloud it too may return to being a significant position within my portfolio. Microvision continues to innovate and may yet redefine our interactions with our electronic devices ala Minority Report. (I’ve seen the demonstration and it is very impressive.) If Microvision survives, then I believe MVIS will be worth a lot (Micro Vision). Those plus a few more, added to my business mantra divisions, and maybe some windfalls easily carry my net worth back above my mortgage balance and probably up to “enough”.
All of those elements come with the same question; “When?”. That’s what someone asked about my $100 estimate for DNDN in my previous post (Whew Good News). I ask the same thing about DNDN, and about AMSC, MVIS, GGOX, my books, my art, and the rest of my business. In a rational market I wouldn’t be dancing with bank balances, floats, mailing times, and due dates. Persistent work pays – as some unguaranteed eventuality that can occur sooner or later. Each trading day could be the day for my portfolio to radically increase. Each email and phone call could be the news or offer that generates more than enough income from my efforts. (Hey! A phone call! Rats. Just an automated poll.)
And each day can also bring bills or checks in the mail. The checks may arrive. The bills must be fed. Can I interest anyone in a kayak ($600 including gear), or maybe a signed first edition of 2001 a space odyssey ($1,655 which just happens to cover my mortgage payment)? Another phone call, and a friend chimed off with “More to be revealed.”