Categories: Investment

Investing Plan

This is my overview post on investing. It is a great starting post for you and in it you will be able to find many links in the future to posts that go into more detail and results of how well the plan is working.

I always enjoy thinking about investing money and I have played with small amounts of money in the past which looking back on it, it may not have been the smartest thing to do. I did learn along the way though and haven’t lost money. In light of this, I want to write out my investing plan for the future and then in subsequent posts, I will go into the details on why I made the decisions that I made.

Overall Philosophy

I believe that I cannot out pick others on which stocks are best to buy. I also believe that 90% of the population cannot do this either. This is why I will invest in indexes (an index is a whole bunch of stocks/companies with certain criteria that you can invest in at once). There will be some picking and choosing on which indexes I invest it.

When I put my money in, I will leave it there because I believe it is almost impossible to time the market. Buying when the general mood of the people is fear and selling when the general mood of people is positive, but this is difficult. Because of this, once I buy into an index I will stick with it. I will skip out on trying to tell when people are overly optimistic about the market and therefore sell my securities. I do figure thought that if I am going to by buy whole indexes anyways, I can at least attempt to pick one that is overly gloom and doom.

Portfolio Allocation

Holding Period1 Year5 Years10 Years30 Years
Percentage of portfolio invested  in Stocks50%61.6%88%116.2%

I will go into the details of how I came to this conclusion at a later date. You will be able to find that link here when I do.

Stock Selection

This probably could be the most fun part, but because all of stocks as a whole beat 80% to 90% of professionally managed funds, I will not be picking individual stocks. Instead, I plan on investing in etfs, or exchange trades funds. These are mutual funds that are traded on a stock exchange. They have certain advantages and disadvantages that I will talk about in the future.

I will be investing in 4 different etfs.

Vanguard Small-Cap Value ETF (VBR)

WisdomTree Emerging Markets SmallCap Dividend Fund (DGS)

WisdomTree International SmallCap Divident Fund (DLS)

SPDR S&P 500 (SPY)

I will lay out why specifically I chose these stocks in the future along with how I will allocate between them.

Bond Selection

When I am investing more on a short term basis, I will follow the allocation listed above and the money I do not have in stocks will be spread evenly in these bond funds. I will add to this as time and situation requires as bond rates change and are at historically low prices right now. These two funds are a good start and you will be able to find why I picked them here in the future.

iShares 20+ Year Treasury Bond ETF (TLT)

Vangaurd Intermediate Term Bond ETF (BIV)

How much to invest

I’ll have to admit that this is the area that I am the most unsure of now and that is because I am still a college student. One thing I do know is that I want to spend my money on assets and not liabilities as I receive money. Once I get to this point in my life, I will re-write this section of my investing plan and maybe a whole separate post expounding on it.

Final Thoughts On My Investment Plan

The goal is not to become rich or to hoard money for myself or to store up treasures here on earth. The goal is to be wise with my money and make use of what I have been given so that I can better help others. I hope I actually do this. Peace out.

What advice would you give me?

Categories: Home Finance

Rethinking Energy: Passive Solar Homes

I want to help you rethink the way you do energy a little bit.

1st: Use high quality energy for high quality purposes and low quality energy for low quality purposes. What I mean by high quality energy and low quality energy is that high quality energy is very dense energy and it has the ability to do a lot of work while low quality energy is not very dense and it does not have the ability to do a lot of work.

Example: gasoline is high quality energy. The energy in one gallon of gasoline can keep your smart-phone running for over 3,000 days. That is a lot of packed energy. On the other hand, the sun is not a form of high quality energy. For example, it takes about 21 square miles of photo-voltaic solar panels to get the same energy as a nuclear power plant that takes up 1.7 square miles of land.

  • We should be using high quality sources of energy like gas for high quality purposes like driving a car.
  • We should also be using low quality energy sources like the sun for low quality purposes like heating our homes.

2nd: I  want to propose a new way of thinking about insulating and heating your home. The conventional thought process for heating your home is to moderately insulate your home and then use an efficient heating system to do the rest of the heating of your home. Any added insulation on today’s standard houses does not make sense economically because the added cost of insulation will not be made up in saved costs in heating. I am going to show you that in the long run, it is worth it to super insulate your house.

Theoretical numbers: The graph below proves that the theoretical numbers I will be using are correct.

Spend the extra money to super insulate your house is worth the extra upfront cost.

  • No need for central heating system
  • Can get to zero heating costs
  • Large upfront costs, but will payoff in the long run with the new way of thinking proposed

Costs below are of initial build of a house. It is difficult to retrofit an old house.

Energy and money saved from new insulation.

  • Cost=$4,555
  • Savings=162
  • Payback=62 years

Under a new way of thinking though, by spending the $4,555 on insulation costs, you can eliminate the need for having a heater in your home. By completely eliminating having a central heating system, real costs savings can be found.

My Pop Can Solar Air Heater

Instead of having a heating system, you could use pop can solar air heaters to heat your home. Right below this you can see a picture of the finished product.

This pop can solar air heater was made of the following materials.

Design

  • Air comes in a whole in the bottom and then travels up through the cans and then out of the top.
  • As it travels through the cans, the energy from the sun heats up the pop cans.
  • These pop cans then transfer the heat to the air as aluminum is a very good conductor of heat.

The Numbers

  • Produced 4.2 GJ of the total 18.33 GJ or 23% of the the extra insulated house’s heating load.
  • 14% of the total heating load in the coldest month.
  • 7 of these pop can solar air heaters to heat the highly insulated house.

Now this is a new way to think about heating a home. Instead of having a furnace, you spend more money on insulation and then use some small form of solar air heating to fill the final gap.

Using this system

  • save $375 a year
  • Payback of 4 years which is fantastic.
  • Using low quality energy in the form of the sun for a low quality use in the form of heating the house.
  • It just makes sense, but it does take a new way of thinking.

To note, having 7 pop can solar panels laying up against your house may not look the best. Also, it would be difficult to find that many used windows for free and to drink enough to get all the pop cans needed. Because of these points, it may not be feasible for people to heat their homes with pop can solar air heaters, but it does show that heating your house with the power of the sun is very possible.

Passive Solar Homes

So instead of using pop can solar air heaters, why not have your home be a solar air heater. The pop can solar air heater is just the sun shining through windows and heating up the air on the inside. If you just put windows on your house on the south side to capture the sun, then there is no need for pop can solar air heaters.

To sum it all up, it makes sense for people to spend the extra money on insulation when they were initially building their house so that their homes are prepared to use a low quality but readily available energy source of the sun.

The Value Geek 2019