Credit Card: AAvantage Aviator World Elite MasterCard – NEW Sign-up Bonus!

Today, American Airlines and Barclaycard have increased the sign-up bonus on their co-branded credit card. You have until November 30th to apply for the offer and receive the bonus.

The new sign-up bonus is 60,000 American Airlines points, up from 50,000. But, the real benefit comes from the fact that you do not have to meet any minimum spending requirements to receive the bonus. You must pay the yearly $95 fee up front though and you must make any purchase with the card within the first 90 days of membership.

The 60k points are worth about $840.00, but if you are smart and use the points wisely you can squeeze out even more value.

Some of the additional benefits are:

  • Free 1st Checked Bag + up to 4 travel companions on the same ticket.
  • Preferred Boarding + up to 4 travel companions on the same ticket.
  • 25% In-flight savings (movies, drinks, food, etc)
  • 2x Points on all American Airlines flights + 10% points back on point purchases

I plan on using this card one time, and maybe once more to make an actual flight purchase, then cancelling it before the yearly fee renews.

Barclaycard & AAvantage Aviator World Elite MasterCard (Link Opens In New Window)

Note: I was approved with a 777 FICO score with a $12,000 line of credit on 8/29/17.

 

Recent Buy – HRL (Hormel Foods)

Recent Buy: 8/24/17

Today, I purchased 21 shares of HRL (Hormel Foods) for $31.99/share or $671.83 in total capital. I had 0 shares of HRL prior to this purchase, so my total shares are 21. This increases my forward dividends by $21.53/year.

Hormel Foods released their earnings report for the 3rd Quarter before the market opened this morning and people weren’t pleased, to say the least. The stock immediately dropped about 6%, creating a great level to start or add to a position.

Revenue for Q3 came in at $2.21 billion, a 3.9% decrease from the same time last year and $30 million less than expected by analysts. Hormel also announced a $425 million acquisition of Fontanini Italian Meats & Sausages.

Dividend Yield: 1.98%.        Total Forward Dividends: $668.07

Peru – Christmas on Machu Picchu

 

In December of 2016, me and my partner along with 2 mutual friends set forth to visit the country of Peru in South America. Obviously, the main purpose of this trip was to get to Machu Picchu  (5 days of traveling), but we also missed out on seeing the Amazon rainforest when we were in Brazil a year earlier. This was the perfect country to kill two birds with one stone.

Flights:

We paid cash for our flights for this trip to help accumulate more rewards points. GC also picked up the new (at the time) Chase Sapphire Reserve credit card so he used that card to purchase the flight and I used my older Sapphire Preferred card for my flight. Because GC signed up for the Sapphire Reserve credit card, he was immediately refunded $300.00 for the flight purchase because of one of the great perks on the card that will refund $300 as a statement credit for any travel purchases 1 time per year.

Hotels:

Because there were 4 of us traveling, we decided that we would put all of the hotel spending on one persons credit card, GC’s to maximize point accumulation. Everyone else would just Venmo or pay him back with cash. Awesome. Most hotels were around $40-$70 / night, so after 15 or so nights, we had received quite a large amount of points, especially because the Reserve credit card offers x3 points/$1 spent on travel. Our plan was to save points up so we could make our next planned trip to London, Barcelona & Amsterdam almost 100% free.

To explain the awesomeness of this trip is impossible. So, please take the time to watch a few of the videos from our travels. My partner, GC, is the editor for all of our travel videos. Also, take a look below the videos for the exact itinerary we used for our 2+ week adventure for inspiration for your own future travels.  Enjoy!

* I’d like to give a shout out to Maniti Expeditions for making our 4 nights in the middle of the Amazon rainforest absolutely a delight. Thanks so much to Edwin for being our host and guide throughout the experience. He also assisted the Shaman during our spiritual ayahuasca ceremony.

 

The Trip Itinerary

Saturday, December 17, 2016

6:20am Depart LAX

9:35pm Arrive in Lima

STAY IN: Padama Hotel, Lima

Sunday, December 18, 2016

10:00am Hired car from Padama Hotel to Airport (1 mile away)

11:30am Depart Lima by Plane

2:25pm Arrive in Iquitos

STAY IN: Stylus Hotel, Iquitos

Monday, December 19, 2016

8:00am Depart Iquitos & begin Day 1 Maniti Expeditions Tour

Arrival to camp / Monkey Island / Dolphin Spotting / Nocturnal Hike

STAY IN: Maniti Expeditions Camp

Tuesday, December 20, 2016

5:00am Sunrise over Amazon River

Animal Observation Excursion / Piranha Fishing / Ayahuasca Ceremony

STAY IN: Maniti Expeditions Camp

Wedmesday, December 21, 2016

6:00am Morning jungle hike

Day Excursions / Nocturnal Excursion

STAY IN:  Maniti Expeditions Camp

Thursday, December 22, 2016

7:00am Morning Jungle Hike

Visit with Natives / Belen / Depart Camp

STAY IN: Stylus Hotel, Iquitos

Friday, December 23, 2016

11:05am Depart Iquitos by Plane

1:45pm Arrive in Lima – Layover

2:30pm Depart Lima by Plane

3:40 Arrive in Cusco

STAY IN: Pirwa Posada del Corregidor, Cusco

Saturday, December 24, 2016

*Bus/taxi to Ollantaytambo from Cusco (2 hour drive)

11:15am Depart Ollantaytambo via Train ($55 per person)

12:45pm Arrive Aguas Caliente

STAY IN: Gran Paititi Hotel, Aguas Caliente

Sunday, December 25, 2016

MACHU PICCHU

STAY IN: Gran Paititi Hotel AGUAS CALIENTE

Monday, December 26, 2016

2:30pm Train Departs Aguas C. (to Ollantaytambo) ($63 per person)

4:04pm Arrive in Ollantaytambo

*Bus/taxi from Ollantaytambo to Cusco

STAY IN: Yabar San Plas, Cusco

Tuesday, December 27, 2016

Day off in Cusco – DRINK THE TEA!

STAY IN: Yabar San Plas, Cusco

Wednesday, December 28, 2016

10:55am Depart Cusco by Plane

12:15pm Arrive in Lima

2:30pm Depart Lima to Ica by Bus ($115.60 Total)

6:45pm Arrive in Ica then Taxi to Huacachina

STAY IN: Mossone Hotel, Huacachina

 

Thursday, December 29, 2016

Day off in Huacachina – SAND DUNES!

STAY IN: Mossone Hotel, Huacachina

Friday, December 30, 2016

6:30am Depart to Paracas by Bus to see Penguins

8:00am-12:00pm Islas Ballestas Boat Tour

1:30pm Depart Paracas to Lima by Bus ($117.64 Total)

5:20pm Arrive in Lima

STAY IN: Casa Wayra Miraflores, Lima

Saturday, December 31, 2016

Day off in Lima

New Years in Lima

STAY IN: Casa Wayra Miraflores, Lima

Sunday, January 1, 2016

9:10am Depart Lima

7:30pm Arrive at LAX

Brazil – Our First Trip with Points

In order to save you, and (mostly) myself time, I am going to do a few super fast overviews of the last two years-ish of traveling me and my partner, GC, have done using a combination of credit card reward points and cash (credit card spending – of course). Brazil First!

December 2015 – Brazil

Brazil was what I considered to be my first “real” international trip. I have been to Mexico countless times, but that was long before US citizens needed a passport to travel across the border. I will start by saying, Brazil is NOT the place to go if you’re looking for a “touristy” destination. It felt like some of the rougher parts of Mexico most of the time. This isn’t to say it’s not a friendly place, because it is, it’s just not geared towards a non-portugese speaking crowd. Even with my partner being of Puerto Rican decent and with fluent Spanish, we had some trouble figuring things out. Disclaimer: Portuguese is NOTHING like Spanish. I’m not sure why we just assumed it would transfer even sort of okay, because it didn’t. Spanish served almost no purpose throughout our entire 2-week stay and may have actually hurt since many words sounded similar but had absolutely no correlation to each other.

Flights:

Being our first trip, we paid for almost all of our flights with credit cards, namely the Chase Sapphire Preferred Card in order to meet the minimum spend requirements to achieve the 50,000 point bonus offered at the time (and still is available as of 8/22/17). We paid for flights about 4 months prior to the trip in order to accumulate enough points to make all of our hotels “free”.

Hotels:

After regular spending + the flight purchase, we accumulated about 65,000 Chase points. We utilized these points to book the majority of our 1 night says throughout the country of Brazil. For anything that wasn’t covered by Chase points, we also used hotels.com to book our rooms until we were able to reach the “10-nights Stayed” reward of 1 night free. (based on the average price of the previous 10 nights booked).

During the trip, I mostly used my Chase Sapphire Preferred credit card, but I did switch spending to a new Marriott credit card, co-branded with Chase, in order to help reach a minimum $3,000 in spending for another bonus reward of 80,000 Marriott Points. This technique can work wonders when trying to earn points for future travel.

The whole trip was a blast and very hard to put into words. So, enjoy two of our videos from our travels to get an idea for the place. The first one encompasses the entire trip ( 21:05 minutes) The second is a quick 4:00 minute video of a spontaneous sky dive we decided to splurge ~$250 each on.  My partner, GC, is the editor for all of our travel videos and does a fantastic job.  Enjoy!

 

 

 

Cancun – 1 Week of “almost” Free Travel

Almost a full year after traveling to Brazil we decided to try our hand at a full week-long vacation using almost all points accumulated over about 9 months. If you read the previous post on traveling to Brazil, you know that I was also using my newly obtained Chase Marriott Rewards Premier Credit Card for a lot of travel expenses in order to meet the minimum spend for the 80k point bonus. I achieved the bonus points shortly after returning to the states. On top of the sign-up bonus, I was able to slyly use my credit card for about $50,000 in work purchases which helped bring my Marriott point balance close to 160,000 before any additional spending. This in addition to booking work hotel stays for co-workers even allowed me to obtain the coveted “Platinum Status” with Marriott rewards. Hello, free upgrades!

I also picked up the co-branded Starwood Amex Credit card in order to get another sign-up bonus of 25,000 SPG points. After receiving the bonus for this credit card, I called them for a status match to my Marriott status. (A status match is a term used by credit cards and other loyalty programs where a certain company will “Match” your status with another card or loyalty program, usually for a short period of time.) So, now I have the highest status with Marriott and SPG!

Flights

We booked our flights with a credit card, not points because the flights weren’t too outrageous, ~$400/person. We booked using the Chase travel portal and paid with the Chase Sapphire Preferred credit card for maximum point accumulation (x2 pts on travel).

Hotels

We had two hotels that we narrowed it down between for 5 of the 7 nights we would be in Cancun. One was the Casa Magna by Marriott and the other was the JW Marriott. Both are stunning properties and are probably equally amazing on the inside. But, in the end we chose the JW Marriott because it was 10k points cheaper and was right next door. We called ahead and made sure we would be able to go inside of the Casa Magna next door and use their amenities, they said, “of course, no problem.” Best of both worlds? Yes, please. Deal sealed! 160,000 spent Marriott points later, we have 5 nights in the JW.

*One of the great perks to Marriott rewards is the “5th night free” when booking reward/point travel. So you only pay for 4 nights with points and that 5th night is completely free. I’ll take it!

(left) Casa Magna  –  (right) JW Marriott

We still had 2 more nights to book, one near the airport for when we arrive late in the evening on night 1, and another for the final night near “El Centro” or the party district. After spending nearly all of our Marriott points, we switched to the Amex SPG credit card to see what was available to book with points. Luckily, hotels for SPG in Cancun are at the cheaper end of the points redemption value at only 3,000 points per night. We have 25,000 so we booked our first night at the Four Points by Sheraton, and the final night at the Aloft Cancun for 3k points each. That covers all of our hotels for our 7 night trip, which saved us over $1500 in hotel room costs.

Rental Car

We wanted to travel around the Quintana Roo area (the “state” in which Cancun is located) to see some of the infamous Cenotes, the city of Playa Del Carmen and Cozumel, so we decided a rental car would be the easiest way to get around. Turns out, it is! Cars are cheap and driving isn’t a challenge especially since they have mostly the same rules of the road as we do here in the US of A. We used the chase travel portal again to book the rental car through Budget and it only cost us 6,000 chase points, or about $75 for the entire 7 day vacation.

Here is a video recap of our time at the JW Marriott and some of the sites around Quintana Roo. All editing is done by my partner, GC.  Enjoy!

 

 

Traditional IRA vs. Roth IRA

What are IRA’s anyway?

IRA is an acronym for Investment Retirement Account. The two main types of IRA’s are called Traditional & ROTH. The Roth IRA is the youngest of the two, started by Delaware Senator, William Roth, in 1997 as a part of the Taxpayer Relief Act. IRA’s act like any other type of brokerage account, you can purchase Stocks, CDs, Mutual Funds, ETFs, Bonds or simply just cash.

Traditional IRA

The Traditional IRA allows you to contribute up to $5,500. (The maximum contribution amount increases periodically from year to year to adjust for cost of living) The money you contribute to a Traditional IRA is considered “pre-tax” money, therefore reducing your taxable income. If you make $50,000 a year you would be able to take that $5,500 Traditional IRA contribution OFF of your reported, taxable income. All of that money you put into the IRA will grow in your account until the day you start withdrawing it, at which the money is taxed at your regular income tax rate. Caveat: You are required to start withdrawing from a Traditional IRA at age 70.5. The amount you are required to withdraw depends on your own personal situation. If you decide you need the money before retirement age, you are usually taxed a 10% early withdrawal penalty unless you are pulling it out for a qualified purchase such as a first-time home purchases, college, or medical expenses.

Roth IRA

The Roth IRA also allows you to contribute up to $5,500 each year, but the money you contribute to a Roth IRA is “post-tax” money, therefore you do not get a reduction to your taxable income based on your contributions unlike a Traditional IRA. The benefit to a Roth IRA is that when you pull your earnings out, you pay ZERO taxes on all gains within that retirement account. You also are not required to make withdraws at a certain age, so you can let your money grow for even longer. Another benefit is that if you ever want to pull your money out early, you can take out your original contributions without penalties, but you must remember that you can never make up money that was contributed in past years.

There are some income restrictions when contributing to a Roth IRA. I’ve borrowed this chart from The Motley Fool to help explain the limits.

Tax Filing Status AGI Limit for Full Contribution Partial Contribution Allowed No Contribution
Single/head of household $118,000 $118,000-$132,999 $133,000 or more
Married filing jointly $186,000 $186,000-$195,999 $196,000 or more
Married filing separately $0 $0-$9,999 $10,000 or more

Extra Info

The maximum yearly contribution of $5,500 applies to both the Traditional and Roth IRA’s meaning you can contribute up to a total of $5,500 to a combination of both accounts. So if you put $2,500 into a Roth account, you can only put $3,000 into a Traditional or any combination of such.

After age 50, you are allowed an extra yearly “catch-up” contribution of $1,000 to help make up for missed savings.

15 Months. That’s the actual amount of time each year to max out your IRA of either type. So you have from January 1st until April 18th (tax-day) to contribute to your accounts, but if you max out early, you can start contributing to your next-year’s IRA’s early too.

What to choose? Great Question!

If you are like me, then you are probably still confused as to what type of account you should contribute to and you are not alone and it depends… If you are trying to retire early, the Traditional IRA is probably your best bet. The reason being that you are reducing your taxable income every year which allows for more money to be socked away into investments. Plus, during your early retirement you will most likely have an income lower than your current income and possibly even below the taxable income limit which means you can actually withdraw the money from your IRA at a very low tax rate (10%) if any tax rate at all allowing you to get double the tax deductions later in life.

No matter which option you choose, the most important thing to take away is that you MUST max out one of the accounts every single year. IRA’s are one of the most beneficial retirement vessels that Uncle Sam provides, so take advantage of them immediately!

How I Earn 3x More Money From Stocks

“Dividend stocks” are stocks that pay a set amount of money back to shareholders on a regular basis, usually quarterly, but the regularity can vary. Some REIT’s (Real Estate Investment Trusts) for instance, pay a dividend monthly, such as AGNC.

Say you own 1000 shares of a company that has a total of 10,000 shares available for purchase (shares outstanding). You would own 10% of that company and would be entitled to 10% of their profits, assuming that are paying out a percentage equal to 10% return. Sometimes a company will pay their investors the profits as a Dividend, or they may simply reinvest back into the company, further increasing the company’s value/expansion.

Over time dividend stocks tend to outperform non-dividend paying stocks. There are a few theoretical reasons for this. Take a look at the chart below from Seeking Alpha 1112099-14705907430085537

It’s pretty easy to see that you would have accumulated over 3.3x more money if you had invested in dividend stocks vs non-dividend paying stocks, over the long term. Dividend stocks don’t always beat non-dividend paying ones as pointed out in the SA article above. “In the 1990’s, low income-earning but high valuation companies shot past dividend paying stocks, but were later crushed when the tech bubble burst.”

The first major reason is that any company that is paying out a dividend to it’s shareholders is most likely actually making money and if a company has a long track record of paying or even increasing dividends every year, you know they are doing something right. Dividends are paid from profits and is a reward given to shareholders for helping the company grow (by buying shares). Almost all of the companies on the Dividend Aristocrats list (Companies paying & raising dividends for 25+Years)  are ones you’d probably recognize as household names. Companies such as; Clorox, ExxonMobil, Coca-Cola, Proctor & Gamble, and Target. You can see that these are names that have stuck around through multiple recessions and market downturns. They have brand loyalty, a large moat (or barrier to entry), and consistent cashflow. If you’re like me, you want to pack your portfolio with names like these because when the inevitable happens and the markets go sour, these companies will be the ones to hold steadfast even in some of the worst economic conditions.

A second reason that dividend stocks tend to beat their rivals is that you are less likely to sell off shares of a company that’s paying you cash to keep them in your portfolio. It’s that simple. Div stocks provide less volatility during market crashes, but tend to grow at less of a clip during rapid market growth. If you are thinking that you should have a combination of dividend and non dividend paying stocks, you are probably right but I have seen people with portfolios of only dividend paying stocks and they seem to fair very well also. My preference is majority dividend paying stocks, with a selection of stocks that although may have higher volatility, have the potential to create huge returns. Think Amazon, which doesn’t pay a dividend at all, although I don’t own it personally.

I think a third reason dividend stocks outperform is the simple reason that companies will usually increase their dividend payouts as time goes on. Take a look at this example from HubPages, they have a simple chart to explain this.

EXAMPLE: Let’s say you are 25 years old and you start off with $10,000 to invest. You earn 5 % yield on your stocks, which pay a monthly dividend. These stocks also increase their dividends by 10 % each year (for example $1 per share paid in dividends becomes $1.10, $1.21, etc.). You invest for a 20 year period. You don’t add any more money to the account, and you choose to re-invest all of your dividends.

When you are 45-year-old, how much will your initial $10,000 be worth? $133,561.01. But it gets better. Remember in year 1, when you were earning 5 % or $500 a year in dividends? You are now making that each month! By year 20, you are now receiving $5,866.32 each year in dividends. You can choose to sell your stock or you can simply take your $488 monthly dividend and do what you please.

Do the math for yourself at Dividend Ladder.

The Power of Dividend Raises

Initial Investment
Yield
Yearly Dividend Increase
Value After 20 Years
$10,000
4 %
5 %
$47,091.97
$10,000
5 %
7 %
$78,290.02
$10,000
6 %
10 %
$153,338.18

 

As you should be able to see, there is huge power to be unlocked from dividends and reinvesting them over the long-term.

Let your money work for you, don’t work for your money.

Reinvesting Dividends without Fees

One of the main pillars of my early retirement is automatic reinvestment of dividends paid out by the companies I own shares of.  Let me explain.

Almost all brokerage companies (Fidelity, TD Ameritrade, Scottrade, etc) all have fees that are added to every purchase and sale of assets through their firms. These fees can range from free to upwards of $9.99 a trade. That can significantly reducer your ROC, Return-on-Capital, while trying to save for retirement.

The general rule of thumb is to try to keep any trade fees below 2% of the entire transaction, although I prefer to keep fees to 1% or less. This means if you are going to be buying “X” number of shares of company “A” and your brokerage firm charges $5.00 / transaction, you should make sure your total transaction is equal to or greater than $250.00 to keep your fees at or below 2%. Although, preferably you would wait until you have $500 in capital to reducer your fee to only 1% of the transaction.

One way to make sure that you keep transaction costs low, is by setting up automatic reinvestment of all capital gains/dividends. Usually this is a setting in your online brokerage account. What you are essentially doing is bypassing the fee that your brokerage would impose on every transaction. So, every time a stock pays you a dividend, say it’s $10/year, your brokerage will automatically reinvest that money back into the stock that paid it. This can mean you end up with only a partial share of the stock, but you also just avoided a $5 fee. WIN! Eventually, and after enough dividend payouts, you may end up with another whole share of stock. That is the magic.

Buy 10 shares of company X today and you may end up with 20 shares in 5 years without doing anything, you just sit back and hold the stock while they pay you consistent payouts.

You won’t be seeing your bank accounts rise when you reinvest your capital gains/dividends this way, because instead of your bank account growing, you are growing your # of shares in X company while reducing your Cost Basis, or Cost/share. And because you are adding more shares to your portfolio automatically, you will start noticing that your dividends will grow also, since you now own even more shares of that company. It’s a truly magnificent part of investing that exponentially increases your savings, all without having to do really much of anything.

As you start to get older or are getting closer to your retirement age, you can start to turn off automatic reinvestments, and start having that money come directly to you as cold hard cash instead of buying more shares. As I get closer to getting ready to “retire” I will start switching off my auto-reinvesting and will have the money supplement my living expenses until eventually it is creating enough wealth for me to live off completely. Ahh, the magic of dividends.

Forward Yearly Dividends (reinvested automatically): $645.44

 

 

 

Recent Buy: OHI (Omega Healthcare Investors) – Re-Purchase

Recent Buy: 8/9/17

Today, I purchased an additional 16 shares of OHI (Omega Healthcare Investors) for $30.67/share or $490.72 in total capital. I had 21 shares of OHI prior to this purchase bringing my total shares to 37. This increases my forward dividends by $40.96/year.

The stock dropped 1.86% on simply a down day for all markets. If I stick to my original thesis just a week ago, this stock is only more of a sale. No reason to not buy more if the reason I first invested in OHI hasn’t changed.

Total Forward Dividends: $645.45

Stock on Watch: DIS (Disney)

If you’ve been following the news lately, you’ve probably already heard the news that Disney has planned to exit its agreement with NFLX (Netflix) by the end of 2019, saying they will be starting their own streaming service by 2020.

THIS IS HUGE NEWS. 

Recent Earnings: Following the earnings report yesterday, Disney showed that is growth was generally flat to slightly down from the same quarter last year. Revenue from Parks came in 12% higher, but it’s studio segment, its third largest source of revenue, dropped 16% off-setting gains from their Parks. But, with the recent decision to pull its content from Netflix, this should become a huge opportunity for Disney to scoop up even more market share.

The possibilities for Disney moving forward are looking as good as ever though as they move to secure even more exclusive rights for their content. Imagine receiving a 10% discount to all parks if you’re a subscriber to their streaming service, or earning a free year of streaming after taking a Disney Cruise. There are many ways that Disney can pull even more subscribers/visitors into their all encompassing universe.

Couple all of this with the fact that Disney just dropped nearly 5% after its recent earnings quarter and it’s in a very desirable price to start a new position. The stock may suffer more over the short term, but as always with Disney, it will recover and should grow its earnings substantially more as it continues to expand its parks and gets its first taste in the content streaming business.

Though DIS doesn’t pay a mouth-watering dividend, it only pays out 25% of its earnings back to shareholders, meaning it has PLENTY of room to increase its dividend in the future.

P/E Ratio: 18.9                              Payout Ratio: 25%.                 Dividend Yield:  1.46%

 

 

Stock On Watch: HRL (Hormel Foods)

One of the stocks I’ve been watching over the past few weeks is Hormel Foods. $33.66/Share as of 8/8/17. The main reason this stock is on my radar is because its a member of the Dividend Aristocrats group. A Dividend Aristocrat is any company listed on the S&P 500, that has paid AND raised their dividends for 25+ consecutive years. In-fact, Hormel has increased their dividend for 50 years, since 1967. On top of that, their dividend has more than doubled in just the last 5 years. 

When a company shows that is has interest in increasing its dividend, (cash paid back to shareholders for holding shares.) it means they are dedicated to and care about their investors. 

Right now, the shares of Hormel aren’t exactly cheap. Hormel Foods (HRL) has a P/E ratio of 20.8. Which is the “cheapest” it’s been in 4 years. 

A basic, yet typical, way to measure how expensive a stock is, is by it’s P/E ratio. (Price/Earnings) You can compare most stocks to the current P/E ratio of the entire S&P for instance, which is currently around 24.6. So theoretically if a stock’s P/E is below 24.6, it could be considered cheap. 

Another reason I’ve added this pick to my watch list is the fact that it’s also  -6.00% below its price 52 months ago. It looks like this stock has found a bottom finally, but obviously only time will tell. No one ever knows when the bottom will be reached, but 

A third reason for keeping an eye on HRL, its long-term debt levels are low enough to be handled over the long term. Hormel only has $250 million in long term debt with over 1 billion in revenue per year, so unless a cataclysmic event occurs or people stop going to grocery stores, I expect this debt to be completely manageable. 

A forth reason, GIS (General Mills) saw a large drop after reports that consumers are shifting away from yogurts and cereals in search of “healthier” options. I believe that this uncertainty also hurt HRL as they have a strong focus on canned & pre-packaged foods. But, on the other side of the coin. Hormel has been aggressively acquiring smaller start-up type companies such as; Wholly Guacamole, Applegate deli meats, MuscleMilk, Skippy’s Peanut Butter and as of last year, Justin’s, an organic nut-butter company. The ability to acquire these companies all while maintaining healthy debt levels shows very good management at the helm of this ship and I expect it to be steered to higher highs in the next 2-5 years if it can maintain low debt and continue to acquire companies to build a wider moat and shift with new consumer trends. 

The current payout ratio for it’s dividend is at 41%, meaning it still has room to grow the dividend in the future without affecting much on their bottom line. 

Current Dividend Yield: 2.02%    Payout Ratio: 41%

 

*I do not currently own any shares of HRL. 

Credit Card: Alaska Airlines Visa Signature – NEW Sign-up Bonus

A few weeks ago, Alaska added an increased sign-up bonus on their Visa co-branded credit card. In addition to the usual 30,000 sign-up bonus after spending the min spend requirements ($1,000 in 90 Days), they have added for a limited-time an extra perk! If you sign-up before Aug 31, 2017, you will be able to redeem Alaska’s famous companion fare ticket for only the taxes on your second ticket (when purchasing together).

This means Alaska is waiving the usual $99 fee that is added onto the companion fare. If you are approved for this card before the time runs out, you can essentially get two companion tickets in your first year of card ownership because Alaska renews the companion fare in your account each calendar year. The companion fare alone makes this card a good addition to your wallet despite the $75 annual fee.

I plan on using this credit card’s companion fare for a flight to Honolulu, HI from Los Angeles, CA.

Click here to Apply for the Alaska Airlines Visa Signature Card (Link Opens In New Window)

Note: I have a 740 FICO and was approved with a $17,000 line of credit on 8/4/17.

Recent Buy: MO (Altria Group)

Recent Buy: 8/7/17
Today, I purchased 23 shares of MO (Altria Group) for $65.73/share or $1,151.84 in total capital. I had 0 shares of MO prior to this purchase. This increases my forward dividends by $56.12/year.

The reason for this purchase was a recent sell-off due to uneasiness in the markets because of a potential vote to limit the amount of nicotine in cigarettes produced in the USA to “non-addictive” levels. This feels like a market over-reaction. The recent drop brings the stock to -1.65% off it’s 52-week lows. This seemed like a good entry point.

Warren Buffett once said, “I’ll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It’s addictive; and there’s fantastic brand loyalty.”

Total Forward Dividends: $604.48