So I miscalculated this month. When I initially signed up for Exxon Mobile (XOM) using its Transfer Agent, not only did I purchase initial shares of stock, but I also set the auto investment feature to take out $90 the 1st and the 15th of the month. It turns out that was way more than what my budget allowed. I really should have done it only for the 15th of the month. I have no idea what I was thinking.
So, when June 1st came around, the $90.00 came out of my checking account, which I wasn’t expecting. Now, I’m struggling to make ends meet until I get paid again, which won’t be until around the 15th of the month. This mistake made me realize the importance of having a cushion. Mistakes happen. Emergencies happen. Life happens. So, it’s important to have some sort of emergency fund or whatever, in case something like that happens again.
Now, you might be wondering, why I would try to be investing $90 into XOM if that means I’m going to be struggling to make ends meet. I guess I should explain what I mean by struggling. As I’ve written in the past, I waste money a lot, on stupid stuff. If the money is in my checking account, I’m going to use it. I don’t have the discipline to keep hundreds or thousands of dollars in my checking account and not use it. I’m working on getting that discipline, but I’m not there yet.
I tried setting up a checking account online, but transferring the money back to my main checking account is just too easy. Granted, it takes a few extra steps and it takes a little bit longer to get transferred into the account, but because I know it’s readily available, and I have easy access to the funds, then I tend to do poorly with that separate account as well.
However, I’m turning over a new leaf. I AM saving money into that separate account. But now, I try not to think about it, and I try to forget about it. I try not to count that as money I have, so that I don’t go dipping into it again. So far so good.
Money in my brokerage account is definitely different. Even though it’s in a taxable account, I plan on keeping the money there for years, and hopefully for decades. I’m in dividend investing for the long haul. I know that’s easy to say now, and harder to do. But, that’s part of the reason why I started this blog. It’s just one more demonstration of how serious I am regarding dividend investing for the long haul.
So, if I were to take money from my brokerage account, it’s a few more steps, just like the separate bank account, but it would also trigger a tax event that I’m keen to avoid. Although I still have to report earned dividends on my taxes, if I hold stocks for a year or less, then the sale of the stocks will be taxed as a short term capital gain, which is equal to my tax bracket. Mentally, it’s much harder for me to sell a stock to get income than for me to transfer money from separate savings account to my main checking.
The point is that I try to use my paycheck wisely. I pay all my bills on time and have an aggressive savings plan. Because of that aggressive savings plan, I don’t have a lot of spare income. I know it’s kind of silly, but what I’m trying to say is that sometimes I actually over save and invest to the detriment of everything else.
Well, this last overinvestment cost me $90.00. But, it did buy me one share of XOM – so I’m sad on the one hand, but happen on the next. It’s all a matter of perspective. I’m likely never going to make that same mistake again anytime soon.