There is a fairy tale about a goose that lay golden eggs. At first the farmer who received the golden eggs thought it was awful because he used the eggs for food, later he sold the eggs and his table was full as well as having extra spending money. As time went on others around the farmer thought they should find the secret to the golden egg and eventually they killed the goose. The others did not find the secret and in theory the farmer went back to a normal farmer that once had a goose that laid golden eggs.

Many people have heard about the Carnegie Library – they are found in many urban places around the US, because the head of US Steel was Andrew Carnegie. After he made his fortune, one of the many ways he gave back to the US was using some of his fortune to build library buildings. One of the many stories about Mr. Carnegie is as he was learning about investing and the power of dividends, he is said to have cried out “Eureka! Here’s the goose that lay the golden eggs”

Linking to dividend paying stocks, with a steady stream of income through dividends on a year by year basis, you can have your golden goose. The important aspect is the company has to continue to be profitable and well managed.

There are more questions than answers, till the next time – to raising questions

Recently attended a fall festival which involved music and food. This particular festival has been going on for over 10 years and every year the organizers add another feature to continue to attract people. Those that enjoy the music will come back on a regular basis. At this time of the year, fresh harvests from the farms is being picked which means whatever the crop is that is grown – a festival is or will be coming soon. Whether is tomatoes, apples, pumpkins, corn or something else – a festival is nearby and it occurs every year at this time. The food is the attraction, but so is music, nice weather, and people watching.

Linking to dividend paying stocks, one of the attractions of dividend paying stocks is the regular payment of the dividend. The company has been profitable and shares the wealth with its shareholders on a regular basis, often increasing the amount when they have good years and expect to continue. Similar to the annual fall festival is the annual fall dividend and that is something to always look forward to.

There are more questions than answers, till the next time – to raising questions

The name James Bond conjures up many images of movies and books and of a particular image which many have found and continue to find very appealing. In the book Casino Royale by Ian Fleming, Thomas and Mercer, London, 1953, the character of James Bond is introduced to the public. Among the many traits which have remained with Bond is going to the Casino. In the book and the movie, invariably Mr. Bond and the Treasury at the spy agency he works for is very happy. In the book Casino Royale, Mr. Bond outlines his strategy to playing at the casino – he is asked to bet on his favourite numbers, Mr. Bond says I have no lucky numbers I only bet on even chances or as near them as I can get.  There are some things you can deduce from that statement – Mr. Bond is a serious gambler which means he studies the game and reviews his actions after the playing. Also in gambling there is an large element of luck – when the chances are even it means as close to 50% for either a win or a lost. If the odds are two high, it is time to fold. It is important to know the difference.

Linking to dividend paying stocks, when stocks pay a dividend you are protected on the downside for the stock price will move up and down. One of the reasons the stock will tend to move up in the long run is the company is profitable and eventually the market will value profitable companies at higher valuations when compared to the majority of companies on the exchange which have more hope than profits. If you are going to gamble on the stock market, be like the character of Mr. Bond and know the risks and returns going into your investment.

There are more questions than answers, till the next time – to raising questions.

Detroit, Michigan was in the news a couple of weeks ago for its financial problems as it declared bankruptcy. Detroit is a city the author has been and similar to anyone that has read a car magazine over the years, a must see city. The auto plants have mostly left the city and moved to the suburbs or to other states, but Detroit remains the headquarters of Ford, GM, and Chrysler and is also home of the Tigers, Wings and Lions. A city like Detroit has things going for it, even though much of it feels off limits during the night, but during the daytime – there are parks, magnificent old buildings and sections of the city everyone feels comfortable in. In addition housing and commercial rent are low which attracts people, not enough people to replace the people who have either moved to the surrounding area or left, but inexpensive commercial rent means hope for the future. Many start ups including those in the arts are to be found.

Linking to dividend paying stocks, often we think of government as institutions that pay their bills and are stable, as shown in the case of Detroit most of them are; but even a city can file for bankruptcy and hopefully emerge better when it comes out. Just because a dividend paying stock has been paying dividends, you must ensure that management is meeting the needs of the buyers of its goods and services. Processes change, sometimes for the better, but they change and if the company does not change with the processes, then the profit begins to shrink and so does the dividend. For companies that have paid dividends for decades it is a testament to the quality of the people who work there or the degree of monopoly like conditions which exist.

There are more questions than answers – till the next time – to raising questions

Each of us are in different situations, ideally after Labour Day you have various savings and investments. There are plenty of self help books out in the marketplace and all of them have similar suggestions – rule your money or your Money will rule you. Each of us is similar but different, however Gail Vaz-Oxlade in Money Rules, Collins, 2012 offers 261 Rules to ensure you rule your money. It is interesting, each year the quality of the people graduating gets higher, but similar mistakes are made. There are very compelling reasons why, each year the consumer industry gets better and it exists to please us. Agencies or institutions which many people thought would help them turn out to make more money selling their products then not having access, with the banks the prime example. Generations ago, the infrastructure of the bank made it hard to access your money which meant you did not. Now as long as you can make regular payments, the banks have a vested interested to give you want you want and more. However no one wishes to go back to the early years.

Gail’s rules include to stay out of debt, paying yourself first and living a lifestyle which you can afford. If you can do that simple but complex thing, you will rule your money. If you can not, the interest will rule you and at some point has to be paid, for it all likelihood the world would not end tomorrow. If the world is not going to end tomorrow, then calculating your true interest cost before you sign is important. Often times waiting for 6 months or a year, is worth it because then you know you can and will pay off the outstanding balances. There are many companies waiting for you to miss a payment to hike interest rates and then you will have paid double or more for what you bought.

Linking to dividend paying stocks, one of great things about dividend paying stocks is a stream of income, if the company is profitable and has increased its dividends over the years. The money can then be used to buy more stock or something or just give you options to consider. When you have options you rule your money, when the money goes before or just after you receive it, then you have less options to spend your money. Just remember the best and most exciting show is nature and people watching its free outside your windows.

There are more questions than answers, till the next time – to raising questions

In  urban centers there is a wonderful resource called the Library. The library is a magnet for kids and young adults, but sometimes as people get older and make their own money, they forget about the library. The library in my urban area has programs which are free and only cost the time to go and participate in them.  Also in many urban areas there is a post secondary educational institution and while most aspects are oriented to the students, there are free or cost recovery lectures. If you live near one, check it out for your interest and part of your tax dollars go to these institutions.

Linking to dividend paying stocks, all companies which make money have people going through government grants or tax incentives to assist their companies. It makes sense for you to do the same on a smaller scale. Your tax dollars help fund the library and post secondary institutions and you should benefit directly and indirectly. Similarly, with dividend paying stocks you benefit directly from the dividend. If the dividend is not being paid or in danger, switch companies, you can move back if desired. Use the resources near you which are easy to access, it will make your life easier and can be interesting at the same time.

There are more questions than answers, till the next time – to raising questions

The title refers to a book called Glock The Rise of America’s Gun by Paul M Barret, Crown Publishing, NY, 2012. While the book discusses guns and America, part of the book focuses on the companies that make guns. The author has fired a gun before but does not own one and generally does not focus on the handgun issue, however there is a sizable population in the US and elsewhere that does and law enforcement carry guns. You maybe similar to me and not terribly concerned with the type of guns they carry, however law enforcement is government contracts and they buy guns and pay their bills. The industry was dominated by Smith & Wesson, Beretta, Colt and others for a decades. The industry had not changed, the quality of the guns was declining, and Gaston Glock thought he could and did invent a better gun at a lower cost. It was lighter, more accurate, had fewer parts, and what was wanted by the law enforcement industry. Not surprisingly, people bought the better gun.

The book outlines methods which were used to reach out to the public and law enforcement to gain contracts. Also, the denial of the competition plays a key role because one of the components of the Glock gun is plastic. The competition did not believe or could not believe gun buyers would want a Glock. However, in repeated comparison tests the Glock was the better gun for reliability, accuracy and safety. Some of the methods used included (education) training facilities or sending a trainer to the bulk purchasers, direct advertising to distributors, product placement in the media, taking advantage of reports in the media – which spurred sales.

One of the reasons why people tend to avoid the gun companies is even though they can be very profitable, eventually someone does not injured which results in lawsuits and government regulations. One interesting story is Congress passed a law picking a date with pre the date nothing has to be done; after the date, new regulations apply. One method to get around the law was to offer free new guns to any agency which had bought pre. In that fashion, the agency receives the new guns and the old ones can be sold at higher prices to the public. Gun manufacturers thrive on turmoil, when the general public gets scared it buys guns to protect themselves. The industry remains very profitable.

Linking to dividend paying stocks, there are ads on TV which show large screens looking for tooth decay, one would think this type of attention to detail would be in all industries, it is important to see if it actually does. Glock came along and invented a better mousetrap while the competition could not or would not believe the public would buy anything but what they gave them. The public can change quickly and it can decades to bring them back. If you believe the companies you own are getting complacent, shake them up or sell the shares because change comes quickly and last for a long time.

There are more questions than answers, till the next time – to raising questions

This weekend in North America is a holiday known as Labour Day. We trade our labour for money and years back the large unions must have influenced the governments of the day for a holiday to celebrate the working person. For those that work in a paying field, congratulations and thank you. The other part of the long weekend is the next day is back to school for children and young adults. The hope for our society is to become a better educated one and our young people are the hope for the future.

Linking to dividend paying stocks, as the amount of dividend grows over the years, your financial choices grow over the years. One of the reasons to buy dividend paying stocks is this growth in income allows you to have a choice of who you give your labour to. For if you accumulate sufficient dividend paying stocks, how long you work and how stressed out at work can easily change. Thus for labour day, actually the markets are closed, but the next day celebrate your independent ways of thinking with the purchase of dividend paying stocks.

There are more questions than answers, till the next time – to raising questions

In the biography of Hjalmar Schacht – Hitler’s Banker, by John Weitz, Little Brown and Company, NY, 1997, there are many interesting stories in the book. In the 1920’s there are famous pictures of Germans taking wheelbarrows of money to pay for everyday consumer items. Shortly after this period, Mr. Schacht became the head of the German Federal Reserve. In a couple of years through austerity measures the value of the German mark rebounded and Mr. Schacht was a hero both domestically and abroad. When things are going well, a new management style was needed and Mr. Schacht was replaced but he retained good press as he lectured around the world. A few years later, the economy was not working and Mr. Schacht received his old job back. Along comes Adolph Hitler who through the split vote system in the German parliament receives enough votes to become Chancellor. Similar to every federal civil servant, you serve at the request of the leader but neither agree or disagree with the leader’s policies 100% of the time. It was the same with Mr. Schacht, they both wanted a strong Germany – one through high trade surpluses, one through the use of war and other tactics.

Linking to dividend paying stocks, often companies making profits have a love hate relationship with the government. As long as the company is able to make healthy profits the government who supplies that ability is the one the company supports. All democracies are funded by citizens or companies who after a certain size of a cheque expect something back from the government. The company will look at the personnel of both the government and the top people in the civil service to see if the cheques should keep coming. People such as a Mr. Schacht help legitimized the government and extended the goodwill. Eventually, even though Mr. Schacht and Mr. Hitler were for the same end, how Germany achieved its place was the difference. Process or the how always matters whether in a dividend paying company or growth stock.

There are more questions than answers, till the next time – to asking questions