My name is Robert and I am an investor. There, I said it. “I am an investor.” I never really looked at it that way, even though I have been dabbling in the market for well over 30 years. I have been saving and investing for quite some time now. I have been dreaming of early retirement since I was a young boy. I am the youngest of four children and my oldest brother is 18 years older than me. My siblings were basically adults and on their own by the time I was in school. Needless to say, although I was the youngest of four, I have always, pretty much, felt like an only child. My parents were becoming grandparents by the time I came along and my father was always talking about his retirement. He worked for 35 years and ended up retiring at 51 years old. I was 16 at the time and very impressed in his early retirement. I could and will speak of my Pops for quite some time, but for now, just the basics. I consider myself lucky to have had a father such as him. He instilled a work ethic in me that is second to none. When my father retired, he did not sit around. He actually worked harder than when he worked his “job.” All the time, I was right by his side. We worked on projects all the time. Building and repairing houses, fixing cars, landscaping, electrical, plumbing, etc., etc. We never called a repairman we just did it. That is how it was. I wanted to be like my dad. I remember giving it my best no matter what I was doing because I wanted my dad to be proud of me. Sadly, my father passed away. Well, I had 45 wonderful years with my father and I truly miss him. In those 45 years, and in particular the last 20 years, we spoke often about investing in the market and buying and renting houses. My father contributed greatly to whatever success I may have or will have in the future. My parents were products of the depression- The Great Depression, and they were very conservative in their investment choices. My father knew he would get his pension upon retirement, and with the savings and investments, the plan was to work at his leisure and do what he truly enjoyed. I can say, my dad lived his dream. He did what he wanted every day. He worked with me side by side until 2 months before his death. From my mom and dad, I learned to save for a rainy day. I have been stashing away whatever I could because I remember the stories they told me about the depression. Well, a little bit more about me. I am the youngest of four children. I attended catholic school until I graduated from High School. My plans were always to go to Medical School and become surgeon. College was great and I enjoyed it tremendously. I have a Bachelor’s degree in Biology and a Bachelor’ degree in Chemistry. My Master’s degree is in Physiology. I graduated top of my class and was off to Med School. The summer of 1994 was a turning point in my life. I had been working at hospital for the past 2 years in cardiac rehab and it was great. However, some things are not as they seem at first. I became very close to some of the patients and they were now my friends. The day IT happened was a day that will stay with me forever. I was talking to one if the guys who was in rehab and all of a sudden he was gone. Life just left him and he was here no more. The crash cart was utilized, but to no avail. One moment we were just hanging out and the next I knew I could not do the job that I had trained to do all those years. I had a tough time dealing with the passing and I made a conscious effort to work through it. Needless to say, that summer marked a turning point in my life that has led me to where I am today. In some ways, I wish I would have sucked it up and continued the path that my education was going but in the end we cannot go back. I think about how I would not be so physically beat up because of all the demanding labor I performed and have been performing since I was a little guy. Although I had a liking for school work, I always worked with my dad and had my own businesses. Countless days and nights on the Shrimping boats, building and repairing all of the houses with my father even before I started doing my own. The paint jobs and the landscaping- all jobs that were labor intensive were and are nonstop. What a difference between that and the job description of a doctor, but I garnered a lot more than can be seen on the surface of my job history. Well, that summer of 1994 was a turning point for sure. I made the decision to stay out of school for a few months and get some stuff done. I wanted to purchase a house and get my life going. I had plans to build a mansion and my father was willing to build it with me. I ran over the numbers and it seemed reasonable. The lot was about $70,000 and based on the materials cost, I would have had the house of my dreams for $140,000. Only problem was that I did not have $140,000. I had $25,000 in cash and about $17,000 in investments and a few more thousand on the books with my landscaping. I knew my dad was willing to help me and I was very pumped up about making the house happen, however, I could not stand the idea of a mortgage as much as I could not handle the passing of my friend. So, I let the house simmer for a while and focused on having a little more time finishing some of the projects I put on hold because of all the schooling I had just finished. Out of the blue, my brother tells me about this little house that he knows about for $60,000. I went to look at it and fell in love. It was perfect! It was just what the “doctor” ordered. I did not see any of the bad-only the good. It was just what I needed. The yard was perfect, the neighborhood perfect, and it was priced right. However, I did not jump at it. I took my time and kept going back and checking it out. I never talked money and they never really asked. Then about 4 weeks into the process, I was told by my brother that they were willing to take $40,000 and I knew I was on my way. I showed just enough interest to get them to come to me. However, I still let it ride. I knew it was a good deal at $40,000, but I was thinking of paying $25,000 and using the difference to get it redone. Then, the night before I made my move, I saw a movie named “T Bone And Weasel.” If you saw the movie, you know where this is going. I was cracking up laughing during the whole movie until Gregory Hines tried to sell the car to Rip Torn. That was also a turning point in my life. I saw how the deal was handled and took note. That was one sleepless night and the next morning, I got my money together and started on my journey to purchasing a home. The phone call was made and for the first time in my life, I spoke with the same fervor that went into my studies. I offered $25,000 for the house and offered to use my lawyer. She came back with the talk about the $60,000 and the $40,000, but I cut her off by telling her that the $60,000 was not even addressed by me and that they had asked me to buy it for $40,000 through my brother. This moment was the first time money was mentioned. We went back and forth about me being a young guy and not having the ability to handle such a task as rebuilding the heap they called a house. I also mentioned to her about splitting a guaranteed $25,000 between the 5 siblings was better than waiting for a possible $40,000-$60,000 failed bank loan. It was a sure $5000 each or a possible $8000-12000. So, my offer of $25,000 was where we left it and I hung up the phone. 10 hours later, I got a call about the house and she told me they were willing to take $30,000, and to that, I promptly told her that was a good price for someone else, but for me the price was $25,000. I could not believe the words came out like that, but I knew I had her at $30,000 regardless of the outcome of the negotiations. I could hear it in her voice – I knew I had her. I thought at that moment that she called me knowing she would take the $25,000 but made the effort to get the six to see if I would crack. Well, I did not and after what seemed like forever, she said “Well, ok, um uh we will do it for $25,000.” I almost fell out of the bar stool as I asked her when were we going to get this done. After all was said and done, I paid with the title insurance and all the bells and whistles $24,360 – I will always use my own lawyer.
Six months later, the house was finished as it was originally designed with a few modifications. Total cost was just north of $42,000. I had a few 0% Purchases that were being paid as I went and no mortgage was needed. Now, comes the fun part. I used all the money that would have gone to mortgage payments and insurance and taxes and started investing even harder than I was before. I did a lot of trading in the 90s until right before the Great Recession. Right before that, I cashed out all of my speculative positions and bought a ton of GE shares. My plan was to use the dividends to supplement my income and buy distressed houses for pennies on the dollar. I knew the housing market was going to crash, but of course, did not know I would catch the bottom on a few nice purchases. While I caught the bottom on the housing, I got slammed by the GE purchases. My dividend was destroyed along with the stock price. After dusting myself off from the thrashing, I decided to keep trucking along and go after the houses and let the market heal itself. That is what I did and my portfolio has been on the mend ever since.
I never knew about the websites and blogs dealing with dividend reinvesting before about 9 months ago, but reading about each individual’s story and the decisions they make is very thought provoking, and it has allowed me to start to get in touch with people who have some of the same ideas as myself.
More to come….