Alt Investments

$100 Invested in Politics

Forever Stamps Investment
($100 invested in politics)
 

Investment Idea: $100 invested in Barack Obama for President.

Total Investment: $100

Total Time Cost: 00:05:00

Extra Costs: $0

Total Time Spent on Investment: Five minutes going to Barackobama.com and donating.

Research and Preparation:

To complete this investment I just had to find where I could donate to the Obama campaign. I typed in BarackObama.com. And was welcomed by a great splash page. Simple and to the point it asked for my email and zip code the two most crucial things to any political campaign.

BarackObama.com
(Clean and sleek if it had asked for my SS number I’d have given it)
Obama since 2008 has been great at the splash pages and the sign up forms. The little details matter. Note the green “Donate now” button. It isn’t red for a reason. If it were red people actually would not want to press it as often (Think stop signs and red lights).

Since I had found what I needed I went ahead and filled in my email and zip code and pressed donate now.

The next page I was taken to had all types of denominations you could chose from or enter your own. I chose $100

$100 donation selected
($100 donation selected)
Note again that my selected “$100” donation is highlighted in green not red. Also note that the lowest amount on the selectable donations was $15. $15 isn’t quite $20 so it seems like a bargain but at the same time it is still at least an amount of money that could make a difference in this campaign. The central amount on the selectable donations was $250. A nice round number not too outrageous but which could actually do some good in the scheme of the campaign.

The next steps were simple putting in my address and credit card information. Straightforward and simple. The last step was bit odd I had to put in my employer and job.

Enter employer
(Political donations require your employer and job information)
This step came with a note:
“If you are retired, please enter “retired” in both fields.

Federal law requires us to use our best efforts to collect and report the name, mailing address, occupation, and employer of individuals whose contributions exceed $200 in an election cycle.”

I wonder how many people wrote down Bain Capital as their employer.

And that was that. I had just invested $100 in the campaign for Barack Obama for president. Good luck Barack!

Reason for Investment:

With the upcoming presidential election just two weeks away and with the end of the debate series last night I decided it was finally time to take out my wallet and give to a cause I believed in. In this day of Super PAC’s and billion dollar campaigns its now more important to give what you can to make sure the outcome is what you want and what you think is best. Since an investment at its purest is a bet on risk and an attempt to make sure you are safest, I believe Barack Obama will keep this country safest. He will make sure this country continues to grow not just the wallets of Republican billionaire cronies.

Obama’s policies on education (cough student loans cough), ending of the middle east wars, tough on banks, and universal health care are the exact things we need most to grow and maintain our dominance as the worlds last super power.

We don’t need more ships in our navy, I’m not rich enough to benefit from any capital gains BS, and cuts to education sounds horrible.

Take a step FORWARD, binders full of women is so 1940’s.

Returns:

Super rare and collectible bumper sticker.

Forever Stamps Investment
($100 bumper sticker)
This investment also helps to provide peace of mind that I could help in some way to make sure this country doesn’t return to the Bush era war spending and tax cutting.

As well this is an investment in this country continuing its course of recovery over the next four years to make sure my other investments continue to grow.

To find an up to the minute price of this investment and my other investments click here!

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$100 Invested in Collectible Coins

1993 United States Silver Proof Coin Set
($100 of Collectible Coins)
 

Investment Idea: $100 invested in collectible coins.

Total Investment: $100

Total Time Cost: 00:01:00

Extra Costs: $0

Total Time Spent on Investment: I spent over an hour talking to the owner of a local collectible’s store, as well as some time running to the ATM to withdrawal cash for the investment. This investment was bought at the same time as my investment in Morgan Silver Peace Dollars, which you can read about here.

Research and Preparation: As far as research goes, as a child I had been given mint sets of coins every year for Christmas by a family friend. I knew some coins were really collectible but I a lot weren’t, especially since most batches of mint coins were made in issues of millions making them worthless as far as rarity go, so a lot of the collectible coins value comes from the content of the coins i.e. what metal is in it. While I had stumbled into a collectible coin store in my town, I had offered a deal for four Morgan Stanley dollars for $25 (below their market price) but as a condition of the deal I would buy some other coins worth $100, so that way I would spend a total of $200 for two different investments.

The owner of the store Howard, when I told him what I wanted to do selected a couple of combinations of coins for me to pick from to get the value of $100 I needed.

He ended up putting in front of me a 1993 United States Silver Proof Coin Set. It was a pretty standard set of coins, containing a penny, a nickle, a half dollar, a quarter, and a dime. The special part of this set was the fact that the half dollar, quarter, and the dime were actually made of silver instead of their standard metals making them exceptionally shiny and worth more than a regular mint set. The whole set was then sealed in a case that comes in a box, see below.

1993 United States Silver Proof Coin Set Box
(1993 United States Silver Proof Coin Set Box)
As you can see the price tag on the box was $38. Howard then showed me in a price guide for the coins how this price was actually on the more whole sale “dealer” price end of the price spectrum for this piece.

1993 United States Silver Proof Coin Set Front
(Front of the 1993 United States Silver Proof Coin Set)
1993 United States Silver Proof Coin Set Back
(Back of the 1993 United States Silver Proof Coin Set)
Howard then also proceeded to take out a “graded” Morgan Silver Dollar coin from his case. I already was buying four Morgan dollars as an investment, but this one was different. This was a graded uncirculated mint Morgan dollar.

Uncirculated coins mean it was never used in my case Howard had taken out a graded 1883 Morgan Peace dollar. It had maintained an eerily perfect appearance even though it was over a hundred years old. The grading process costs about $15 per a coin, and makes the graded coins worth more than just the standard “melt” price I would get for my circulated Morgan peace dollars from my other coin investment.

1883 Graded Morgan Peace Silver Dollar Front
(Front of the Graded 1883 Morgan Peace Silver Dollar)
1883 Graded Morgan Peace Silver Dollar Back
(Back of the Graded 1883 Morgan Peace Silver Dollar)
The price tag for the graded 1883 Morgan Peace Dollar was $62. Add this to the $38 I would be paying for the silver coin set it would be come a perfectly round $100 price tag.

Reason for Investment:

As economic uncertainty continues and people flock to more physical investments the coin market has been booming. It is now a $5 Billion a year industry.

Returns:

To find an up to the minute price of this investment and my other investments click here!

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$100 Invested in Morgan Peace Silver Dollars

$100 Invested in Morgan Peace Silver Dollars
($100 of Morgan Silver Dollars)
 

Investment Idea: $100 invested in four Morgan Peace silver dollars.

Total Investment: $100

Total Time Cost: 01:00:00

Extra Costs: $0

Total Time Spent on Investment: Around an hour spent in a coin store talking to the owner and then running to the ATM to withdraw money to purchase the coins.

Research and Preparation:
In the weak economy we now live and a world rife with struggle and uncertainty. Many people like to flock to investments that they they believe will hold value even if they economy and world at large falters. This has caused the price of both gold and silver to sky rocket over the past few years. I wanted in on this action as an investment to hedge against my more immaterial stock investments I had already made.

For a while I had been talking about trying to buy gold and silver. I had even gone into a place that said “We Buy Gold,” only to find out that the display cases were filled with items for display only and that they did not actually sell anything in their store. I was a little distraught and even told my sister how annoying it was when she had come back to visit for a weekend. As she left I got a text, I thought maybe she was texting because she had forgotten something but instead it said this:

1879 Morgan Peace Silver Dollar
(A very helpful text)
Wow — this must have been a sign: a store had opened in my own town that claimed to sell gold, silver, and collectibles. A couple of weeks went by before I had enough time to actually stop in and visit the store but finally on a Saturday I went in.

The store was unassuming and barren of any items except for three display cases near the back and behind that a desk with a man reclining in a chair. His name was Howard. I said hi to him and told him I lived in the town and ran a website called Alt Investments, where I made $100 investments, and that I would like to buy $100 worth of gold if possible. Howard was nice and understanding and I think was happy to see such a young person interested in something as boring as gold and silver collecting. He had just recently opened his store in my town but made the bulk of his money from going to coin shows instead so he wasn’t too bothered yet by the limited foot traffic.

Over the next hour we talked about a lot of things: he discussed the importance of saving, how kids aren’t into it, how he had a plan to hand out little Indian pennies to all of the school children in town to get them interested, and perhaps get their parents to come to his store to buy more expensive items.

He mentioned how he too lived at home until he was twenty five and instead of moving out into an apartment went right on to buying his first house, something I wish I could do one day also. This led us to an in-depth discussion of the housing bubble and why the prices should have dropped at some point.

After talking for a while I broached the subject that I wanted $100 worth of gold, but unfortunately the smallest amount he could sell was a tiny speck of a coin, the size of a dime, and that was worth $250 on the spot price of gold, far outside of my $100 per investment cap. Howard also told me that the tax was a killer, since due to New York laws there is tax only on gold purchases of $1,000 or less. Meaning that the more gold bullion I bought the better off I would be.

So with gold being out of the question I asked about the rest of his wares. The sparsely filled cases had rolls of silver coins and a couple of coins in protective plastic cases. The big coins were Morgan Peace Silver Dollars. Howard took a couple out and placed them on the counter in front of me.

“This is a Morgan Peace dollar,” he said as he picked up one of the comically large coins. “They weigh 26.73 grams, and are made up of 90% silver and 10% copper.” Meaning 24.057 grams of silver. Since there are 31.10 grams in one troy ounce, that means that 24.057 grams of silver is equal to 77.345% of one ounce of silver. Take the price of an ounce of silver which on the day I went to Howard’s store was about $31.74 (August 31st 2012 closing price). So 77.345% of that is about $24.54. Each Morgan Peace Dollar had $24.54 worth of silver in it.

Also, each Morgan Peace Dollar contains 10% of its weight as copper. For a total of 2.673 grams. Since copper is sold in pounds we need to multiply it by .00220462262 to convert grams to pounds. The price of a pound of copper on the day I went to the store was $3.47. Meaning the total amount of copper was worth $0.0205025. An almost unnoticeable amount.

What is of note is that we had just calculated the MELT price. Which is the amount you could be paid based on the spot price of the metal in the coin if you melted the coin and sold the metal.

Howard explained that most coin stores buy the coins at about $2 below melt, and then sell them for $3 or $4 above the melt price. Meaning the Morgan Dollars he had in his case he would sell to me for about $28 or $29 each, and would be them from me for about $23.

Of course that is just the prices on circulated unrare Morgan silver dollars. On the rarer and uncirculated ones you get them rated by a third party service (PSG) and then they are sealed in plastic cases. Rated coins are priced by a buying and selling guide that coin merchants can subscribe to. They typically sell for $60 to $90 each. I ended up buying one. You can read more about that in my article on my investment in coins. (HERE)

While we continued to talk Howard gave me a quick history lesson on Morgan Peace Silver dollars. They were first minted back in 1878 and production continued 1904 and then they were on hiatus only coming back for one more year in 1921, to celebrate the end of World War I. The rarest issue of the coins came from the 1895 Philadelphia issue, which only minted 880 coins.

The design for the coins was by George T. Morgan, hence the name Morgan silver dollars.

On the front of the coins is the phrase “E PLURBUS UNUM,” meaning “out of many, one.” This is a reference to the original states coming together to form one nation. This was especially important since the Civil War had only just ended in 1865, and a Congressional Act from February 12th 1873, had required all coins to contain the phrase.

Also, the woman on the coin has a head band with the word “Liberty.” She also has cotton and grain stuck behind the head band, both of which reference the two cash crops of the North and the South respectively. What a lot of people may notice is the weird hat on top of the female’s head, this is actually a pileus. Or a symbol for Libertas, Latin for liberty. The pileus was a felt cap worn by freed Roman slaves. This too was a subtle reference to the just ended Civil War and the freeing of the slaves.

On the reverse of the Morgan silver dollar is an eagle clasping arrows and an olive branch in its talons. Symbols of war and peace respectively. Above the eagle is the famous “In God We Trust,” since as Howard mentioned “we are a religious country.”

After seeing the coins and holding the coins I wanted them. Unfortunately the retail price per a coin was $28, which would have made my total cost for four of them $112. However after talking to Howard for so long I got creative and offered him $200 for a total of two investments $100 for four of the Morgan dollars, and $100 for a coin set and a graded Morgan dollar. The other coins would become my investment in coins which you can read about here.

Howard agreed to the deal even though he meant he was selling me the coins at his dealer price, he was happy to help me out and he even ate the tax on the deal, so the total cost to me for both investments was just under $200.

So I ran to the closest ATM and withdrew $200 in cash to buy the coins.

Receipt from the coin store
(Receipt from the coin store)
Morgan Dollars Receipt
(Four Morgan dollars please)
If you aren’t as lucky to have some one at the store cut you a great price try buying your coins from a coin show. Howard said the majority of his business happened there. Also, don’t ever buy online, as they will charge you such a high premium that it would be almost impossible for you to ever profit from the coins.

Below are closeups of the four Morgan peace silver dollars I purchased.

1879 Morgan Peace Silver Dollar
(1879 Morgan Peace Silver Dollar Front and Back)
1881 Morgan Peace Silver Dollar
(1881 Morgan Peace Silver Dollar Front and Back)
1884 Morgan Peace Silver Dollar
(1884 Morgan Peace Silver Dollar Front and Back)
1904 Morgan Peace Silver Dollar
(1904 Morgan Peace Silver Dollar Front and Back)
Reason for Investment:
Chock full of history and composed of 90% silver, the Morgan peace dollar has become a highly collectible and in recent years valuable coin. With the price of silver per an ounce sky rocketing from $6 per, to $30 today, it has provided a great return to those who have owned it during the past risky and uncertain years. And with the economy still uncertain I decided to buy some of my own. I was able to buy four of them for $100 or $25 each. Around the MELT price. This investment provides a good balance to my other stock investments, since even if the market tanks silver and other precious metals should continue to go up.

Returns:
The return on this investment is a bet that the economy stays bad, and people continue to flock to precious metals and other material investments. This investment is valued at the current melt price of a Morgan silver dollar multiplied by four, for the four silver dollars I own.

To find an up to the minute price of this investment and my other investments click here!

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$100 Invested in a Direct Purchase Plan

Forever Stamps Investment
($100 invested in Kelloggs direct purchase plan)
 

Investment Idea: $100 invested in 1.962 shares of Kelloggs stock using a Direct Purchase Plan.

Total Investment: $100

Total Time Cost: 00:20:00

Extra Costs: $0

Total Time Spent on Investment: Ten minutes researching about what a Direct Purchase Plan is, and ten minutes signing up and crediting a new ShareOwner.com account.

Research and Preparation:
A lot of my investments (being at the $100 price level) end up having fees and extra costs that cause the investment to almost never end up being profitable. When buying stock I am paying $9.99 per a trade at TDAmeritrade, and given some places offer trades for as low as $5, it would still be another $5, or in my case $9.99, charged when I sold the stock too. This means that all the current stock investments I have would need to earn over $20 just for me to break even!

Luckily there is another way people buy stocks and build a portfolio: a DPP, or a Direct Purchase Plan. DPP’s exist for a lot of the largest companies in America including Heinz, General Mills, CBS, and Kelloggs. I decided to choose Kelloggs as the company I wanted to purchase, because I gotta have my pops.



(I gotta have my pops)
There are couple of ways to buy direct purchase plan shares. The easiest is ShareOwner.com. It is run by WellsFargo and has access to a lot of different companies, so with one account you can buy shares in multiple companies, and help create a diverse and robust portfolio, a key to good investing. On ShareOwner, you can see a sortable list of all DPP companies. DPP’s often come with minimum investments, which were shown in the ShareOwner table. This limited which company’s I could choose from, but then I saw Kelloggs which did not have a minimum and is a company I feel pretty confident about.

As well as having a minimum investment, some companies also force you to already be an owner of that company’s stock before participating in the plan. Kelloggs was not one of these so it made it an even better option.

After finishing signing up for my ShareOwner account, I was given the option to fund my account. Either I could do it by mail or electronically. If you select the electronic option it then prompts you telling you you will need to pay a $15 electronic investment fee.

Electronic Investment Fee BSt
($15 Electronic fee BS)
Nowhere during the whole process did it mention this fee until the last page of the sign up. It gave a couple of options: either you can pay electronically or select pay by mail. When you select this option it does not mention any fee, but it seems like more hassle. Of course I did not want to spend an extra $15, so I chose pay by mail. Only after fully signing up did this fund by mail option also inform me I would need to pay a $15. Talk about hidden fees.

However through some glitch if you select pay by mail it creates your account and you can just fund the account electronically right away. I went ahead and did this and I still have never mailed in my $15 account funding fee. I assume one day they will get mad about it, but until then I saved myself $15.

A week or two later I received an email saying that the account was funded and I now owned 1.962 shares of Kelloggs stock. One of the main problems with buying it via the direct purchase plan was that I had no control over exact timing of my stock purchase. For all I know the moment I bought the stock it could have hit historic highs and I would be stuck buying it at the highend, meanwhile when I use TDAmeritrade I can choose an exact action to trigger when I buy the stock, and guarantee I am purchasing it at a price I want.

Two of the benefits of the DPP are that it allowed me to purchase exactly $100 worth of stock, making it very easy to stick to my $100 investment strategy. Also, the investment is on autopilot now since it is set to have all of its dividends the shares accrue to be reinvested into the buy, allowing my stock to grow.

A similar investment to a DPP is DRIP, or a Dividend Reinvestment Plan, another investment I can make through ShareOwner and another investment I will add to my portfolio very soon.

Reason for Investment:
Tired of being burned by the fees I got from each trade I made on TDAmeritrade ($9.99!) I decided to try out a Direct Purchase Plan, which allows me to buy the shares directly and not have to pay brokerage fees. However it is some what of a hassle and seems to come with hidden fees of its own ($15!). As for the company to invest in, I chose Kelloggs since I believe it is a strong well positioned blue chip company which can help balance out my portfolio. Simply put, I gotta have my pops.

Returns:
The return from a DRIP is based on the continuing growth of the shares and of the reinvestment of any dividend the shares produce put back into the investment. This investment is currently valued at the share price of Kelloggs times 1.962 (The number of Kelloggs shares I own).

To find an up to the minute price of my Kelloggs Direct Purchase Plan investment and my other investments click here!

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$100 Invested in a Series EE Savings Bond

Series EE Savings Bond
($100 invested in a Series EE Savings Bond.)
 

Investment Idea: $100 invested in a US government Series EE Savings Bond.

Total Investment: $100

Total Time Cost: 00:40:00

Extra Costs: $.44 (One forever stamp) and one envelope, to mail in a form.

Total Time Spent on Investment: 15 minutes signing up for a Treasury Direct account. 15 minutes spent at a bank getting a bank seal. 10 minutes spent finishing up signing up for the Treasury Direct Account and buying the Series EE Bond.

Research and Preparation:
The world of investing in bonds is a little bit tricky and it is hard to find easy to understand financial information on how and where to buy them. I normally refer to InvestingEd.com when I need financial help, but for this investment and my other bond investments to follow I needed to find a better source.

After Googling around for terms like “Bonds,” and “how to invest in bonds” I found an interesting piece via Reuters.com on a petition to restore old-fashioned paper U.S. bonds.

The petition was being led by Marc Prosser, founder of LearnBonds.com.

Marc’s biggest pet peeve was the fact of how the simple and lowly US Savings bond had served as an introduction as an idea to saving money and earning interest for many millions of Americans including himself. By doing away with the physical nature of them, millions more kids would never grow up with the joy of learning about investments at such a young age. A real shame.

I really liked what Marc had to say so I checked out LearnBonds.com and was rewarded with a massive amount of information on any possible questions you could have on investing in bonds.

After reading a couple of articles I decided to email Marc directly and ask him some more in-depth and specific questions on bonds, and recommendations he might have for me.

Marc quickly replied and was happy to talk to me so we set up some phone time and chatted away.

Marc’s background had been in ForEx trading, but after noticing a giant number of ForEx websites and very few bond informational sites he got together with his business partner and founded LearnBonds.

I wanted to learn from Marc what were the best bond investments and what he recommended most. Of course his first statement was definitely don’t invest in bonds for one year. Also, an investment of just $100 was somewhat of a handicap. However using TreasuryDirect, anyone can buy Treasury Bonds for as little as $25.

For the short term the better option is clearly the I Bond, which currently has a set rate of 2.2%. In the long run the EE Savings Bond could be the better option, since it comes with a guarantee that it will double in value over the course of its lifetime. This means that even though its federally set rate is .60% currently, over the next twenty years it should still manage to double in value giving it a real rate of return of closer to 3.0% over the lifetime of the bond, which is higher than the current rate of 2.2% that I Bonds come with.

So in my case $100 invested in Series EE Savings bonds should give me a return of .60% for the current year, which is worse than my CD earning 1.02%. But the series EE’s guarantee that it doubles in value means twenty years from now that same savings bond should be worth $200, giving me a 100% return, whereas on the CD there is no guarantee that it will earn anywhere near that over the course of it’s life.

So I opened a TreasuryDirect account which you can read about here. This process was a little annoying and took two weeks, but once the account was opened the funding process was a quick and easy bank transfer, and before I knew it I had bought my first Series EE Savings Bond.

Treasury Direct Order Screen
(TreasuryDirect order and home screen.)
Treasury Direct Order Set
(Typed in my order and with one click it was done.)
Series EE Savings Bond Order Confirmation
(Series EE Bonds all ordered.)
Reason for Investment:

When investing you should always have as diverse a portfolio as possible. You should have some risky investments, as well as some safe investments, and then you should have some investments that return so little and are considered so safe you don’t even know if it should be called an investment. A Series EE Bond is one of those investments.

In general, Marc recommended bonds for people who aren’t rich but at the same time don’t need money right away. So really any one who is in the middle.

When I asked Marc what had been his best investment in his life he told me it would have actually been one of the paper savings bonds he had received as a kid which had a face value of $50 but had paid out over $350 over the years. I guess he has a really big reason for wanting to bring back those same paper bonds all these years later. I hope my investment in Series EE Bonds does as well for me as it did for Marc.

Returns:

Series EE Bonds accrue interest at a current rate of .60% a year, which is rather low but also is not taxed. There is a penalty for withdrawing a Series EE Bond early, but when buying them you should really be buying them for the long run (twenty years) so they maximize their return.

To find an up to the minute price of my Series EE Bonds and my other investments click here!

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$100 Invested in 100 $1 Lottery Tickets

$100 in lotto tickets
($100 of $1 lottery tickets)
 

Investment Idea: $100 invested in 100 $1 lottery tickets.

Total Investment: $100

Total Time Cost: 00:30:00

Extra Costs: None

Total Time Spent on Investment: 10 minutes spent online finding lottery ticket with the best odds. 5 minutes spent buying lottery tickets. 15 minutes spent scratching off all the tickets.

Research and Preparation: Gambling and the lottery have always held an enticing allure for a lot of people: the idea that you could spend just $1 and be rewarded in prizes that are worth exponentially more, and all it would take is a little bit of luck and all your problems would be over. I knew I wanted to try my luck on $1 lottery tickets because I thought it would be cool to buy 100 of them. I also knew that I could find the odds of winning online at http://nylottery.ny.gov/.

After comparing all of the odds for the $1 scratch off tickets I came to a couple of conclusions:

– There are twelve different $1 scratch off tickets available in New York

– The odds of winning ranges from a best of 1:4.64 (Instant Take 5)

– To a worst ratio of 1:5.09 (Happy Birthday Cupcakes)

Happy Birthday Cupcakes Scratch off Ticket
(Never buy birthday themed tickets)
– The average odds of winning on a $1 scratch off ticket was 1:4.88

– The NY lottery website never refers to odds of winning, but instead calls it “Chances of Winning”

– The $1 scratch off ticket with the worst odds is the “Happy Birthday Cupcakes” ticket (1:5.09), ticket (1:5.09). Also, the other birthday themed ticket “Happy Birthday Presents”, with odds of 1:4.99, has the third worst odds of the batch. If you value your friends and give them lottery tickets for their birthdays please don’t buy them birthday themed tickets to help them increase their odds.

Happy Birthday Presents Scratch off Ticket
(Don’t buy these tickets either)
– The $1 scratch off ticket with the second worst odds is the Gold Rush, 1:5.02. I assume it has such bad odds since the allure of gold suckers people in.

How I chose which lottery ticket to buy?
After seeing the spread of the odds and the possible prizes I decided to choose the $500 A Week For Life ticket. It’s overall odds of 1:4.84 wasn’t the best, but it put it in the better half. Also, its namesake price of $500 a week for life was the best possible grand prize out of all the $1 scratch off tickets. Winning $500 a week for life would have provided the greatest possible return for my $100 I can think of. Of course the odds of winning 1:7,938,000 but, “hey you never know.”

Some of the other odds for the $500 A Week For Life ticket:

Prize Odds of Winning Expected Winning Tickets Total Winning Amount
$1 1 in: 10.00 10 $10
$2 1 in: 15.15 6 $12
$4 1 in: 62.50 1 $6
$5 1 in: 125.00 0 $0
$10 1 in: 100.00 1 $10
Total 1 in: 4.84 18 $38

To make the above table I took the total number of tickets (100) and divided by the odds. This left me with “Expected Winning Tickets”. If this number had a remainder, I rounded down since you can’t buy or win a partial ticket. Also, everyone loses when they gamble, so I wasn’t going to give myself the benefit of the doubt.

So it looks like I should have anywhere from 18 to 21 winning tickets, and win a prize amount of about $38 to $40, for a return of at least -60%.

With my ticket chosen and my research done I headed to my local bodega and asked if they had 100 of the $500 a Week For Life lottery tickets, just to check before I bought some. They did.

Counting 100 Lottery Tickets
(Counting 100 lottery tickets)
Counting 100 Lottery Tickets
(Checking all of the tickets)
As soon as I had paid for the tickets with my five twenty dollar bills I couldn’t wait to get home. (Side note: something annoying about lottery ticket buying is it is cash only, so no credit card rewards points here.)

Stack of Lotto Tickets
(Stack of lotto tickets)
All of the tickets were stacked and ready to scratch! Was I about to be the proud recipient of $500 a week for the rest of my life? Or had I just thrown $100 down the drain?

Piles of lotto tickets
(Guess which pile is filled with winning tickets?)
If you said the one on the right then you are correct. After fifteen minutes of furious scratching I came away with twenty two winning tickets and a total prize amount of $41. I had lost $59 on this investment in a matter of twenty minutes, and I had actually slightly beaten the odds that I had found and reproduced above.

Reason for Investment:

Everyday, millions of people in America play the lottery and hope for the best, but more often then not it is just them throwing their money away. But wouldn’t it be great if you could just on a whim plop down $1 and buy a ticket that changed your life? I decided it was worth it to try it a hundred times over and invest $100 in $1 lottery tickets.

Returns: $41. I actually came out ahead of what I had expected on this investment, but even that meant a massive loss of $59.
My Total Winnings Table:

Prize Amount Number of Winning Tickets Total Winnings
$1
13
$13
$2
7
$14
$4
1
$4
$10
1
$10
Total
22
$41

As you can see the predictions from my research were almost spot on.

Big ticket winner
(The big ticket winner was just $10)
The thrill and rush of possibly winning started to wear off after about the twentieth losing ticket. Each card had a couple of “Life” symbols on them, and every time you got a second you just dreamed of seeing the third one under the remaining graphite. However it never appeared and never will and it just kind of turned depressing. How could people put themselves through this humiliation and teasing every day of their lives? This is definitely an investment that is not rigged in your favor and can never really bring you positive returns.

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$100 Invested in Yelp

$100 Invested in Yelp
(Yelp)
 

Investment Idea: $100 invested in Yelp

Total Investment: $100

Total Time Cost: 00:10:00

Extra Costs: $9.08

Total Time Spent on Investment: 10 minutes to set the trade trigger on TD Ameritrade.

Research and Preparation:
In order to get set for this investment I logged into my TD Ameritrade account and searched for stock ticker YELP. It came up and was trading at a price of $24. That seemed to be way too high, and buying four shares for a total of $100 at $25 a share didn’t seem ideal. Instead, I set a stock trigger to buy five shares of Yelp if the price hit $20 a share.

Yelp share buy trigger
(Yelp share buy trigger is set)
 

Low and behold, only a couple of days after setting the trigger a load of bears showed up and shorted the stock.

Yelp five day stock chart
(Yelp share price chart)

As you can see the price is now hovering below the $20 amount I paid for it. Yelp also has an earning call on August 1st, so hopefully they will have some good news and the tide will turn back in my favor.
Reason for Investment:

Excluding the recent bearish trend on this stock, I personally believe Yelp is a great service and is still well positioned in the reviews/restaurant local search market place. This market, which I consider to include such sites as MenuPages and OpenTable, is ripe for acquisition and mergers. After the Instagram deal, a billion dollar acquisition no longer seems like that much of an impossibility. Last year Google purchased Zagat, and ironically, the person who led that acquisition was none other than Marissa Mayer,* who has since left Google and now heads up Yahoo. As the battle for ad dollars continues to grow I feel another attempt at acquiring Yelp is on the way, either from Google, Facebook, or Microsoft. However I wouldn’t rule out a surprise buy out by Apple, who is flush with cash, and looking for ways to better compete with Google, and help soup up it’s Siri voice search app.

At the time of writing this, Yelp’s market capitalization was hovering at around $1.2 billion dollars, allowing for one of the aforementioned big four to come in and scoop it for most likely a $2 billion dollar price tag.

Returns:

When setting the buy trigger on this investment I intentionally set the price at a low amount of $20. I believe that Yelp has a very real chance of being acquired in the next year or so, and at a price range of $35+ a share. To find the current value of this investment, take the current price of a share of Yelp and multiply it by five. To find an up to the minute price click here!

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$100 Invested in a High Yield 12-Month CD

Investment Idea: $100 invested in a high yield 12-Month certificate of deposit from Ally Bank.

Total Investment: $100

Total Time Cost: 00:15:00

Extra Costs: $0

Total Time Spent on Investment: Ten minutes of research finding the best certificate of deposit price. Ten minutes creating an Ally bank account. Five days for the account to become credited and the certificate of deposit to be funded.

Research and Preparation:
You might be a red neck if you think investing in CD’s means buying five limited edition Garth Brooks Christmas Special CD sets.

However, a CD in the financial sense actually stands for “certificate of deposit” and investing in a CD actually means buying a certificate of deposit from a financial institution with a guarantee that they will pay you a set amount of interest and your initial amount back to you after a certain period of time. Also, CD’s issued by federally insured banks are insured up to $250,000, making them one of the safest, but lowest earning investments in the market.

You might be a red neck if you think buying a Jumbo CD means buying a record. A jumbo CD is actually the term given to a CD which has a very high size: normally a buy price of $100,000 or more. The larger the amount the CD is, the higher likelihood a bank will offer you a better rate on the CD. In my case, I have the opposite of a Jumbo CD. I have what we would call a “mini-CD” (Not an actual finance term) since my investment is only for $100.

In order to find the best price for a certificate of deposit their are some great tools but perhaps the best would be BankRate.com. BankRate offers lots of current up to the minute rates being offered across the country and lets you search them too. They have rates for mortgages, home equity, auto loans, credit cards, and lastly and most importantly for us common CD rates.

So I went ahead and clicked CD Rates.

CD Rates section of BankRate
(CD rates section of BankRate.com)
BankRate then displayed the most common CD rates from around the US in a nice table, and allows you to sort by Institution, APY (Annual Percentage Yield), Rate, Min Deposit, and Comments. I sorted the table by minimum deposit, and only one bank offered a CD which had no minimum deposit.

CD Rates Ally Bank
(Ally Bank had the only no minimum deposit CD’s)
As you can see, not only was Ally Bank the only bank that would allow me to purchase a CD for just a $100, it was also the bank offering one of, if not the highest, APY’s. APY stands for Annual Percentage Yield, and is the amount of return you should expect after a year. I should expect my $100 investment to return $1.02 for the year. It would achieve this amount by earning a rate of 1.01% that is compounded daily yielding a total return of 1.02%. When buying CD’s and making other investments it is always important to check the compounding rate. The difference on the return between an investment that compounds daily, quarterly, or yearly can be huge.

Knowing that Ally bank was the only bank I could even open a $100 CD at and the fact that it’s rate was the highest made it a no-brainer for me to go ahead an open an online banking account with it. (Click here to read about how to open an online Ally Bank account)

Ally CD Opened
(Ally Bank $100 CD)
The process of opening the Ally account was relatively easy. Unfortunately, it took a couple of days for my deposit from my regular checking account to clear, but on July 25th, the money had finally arrived and the CD went live and has been earning me half pennies daily.

Ally CD Opened
(The CD finally opened and earning interest!)
Reason for Investment:
There are a whole lot of alternative investments out there but there are also some classic investments that every portfolio should include. One of the most common and safest investments out there are CD’s. CD’s are issued by banks and insured by the FDIC for up to $250,000. They offer low returns and normally force the buyer into a locked-in time frame. CD’s are a good place to put money you don’t need for six months or more if you don’t want to put that money in too risky of an investment.

The main reason for this investment was to diversify and add a stable and common investment to my portfolio. CD’s are a very common investment and never reap that big of a return, but at the same time they are a safe place to put your money and earn a couple of pennies on the dollar.

Returns:
With my Ally one year CD, I am looking to earn $1.02 for the year. You can check this investments current value here!

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$100 Invested in Oil

Investment Idea: $100 Invested in Oil

Total Investment: $100

Total Time Cost: 00:15:00

Extra Costs: $9.08

Total Time Spent on Investment: 10 minutes of research. 5 minutes spent online signing up.

Research and Preparation:
With talk of ever booming oil prices caused by global warming, and new found global demand, I wanted to get a piece of the action. Unfortunately, I knew that you couldn’t just buy the real thing and store it yourself. There is no easy way to buy oil and store it and then hope to resell it while making a profit on such a small operation. It all reminds me of the great “It’s Always Sunny in Philadelphia” episode titled, “The Gang Solves the Gas Crisis,” in which the gang decides to buy gas and hoard it before the price raises. However, they run into a whole bundle of issues, from trying to store it, transport it, and even trying to sell it. Below is a clip from the episode.

(The gang learns a valuable lesson about buying oil)
Knowing that buying oil directly wasn’t exactly the best option, I looked out for a way to replicate and mimic the price of oil and hopefully get in on it before the price went up even more.After doing some digging, I came across the USO. No, not the USO that Charlie Sheen just gave $1,000,000, but the United States Oil Fund. The USO, ticker symbol USO, “is a domestic exchange-traded security designed to track the movements of West Texas Intermediate (“WTI”) light, sweet crude oil. USO issues units that may be purchased and sold on the NYSE.”

That sounds like a whole lot of gibberish, but basically it simmers down to mean that the USO’s price tracks almost spot on with the current price of sweet crude. To illustrate this, below is a chart of the year to date performance of Oil and USO.

Oil year to date performance
(Oil looks to be tanking)
As you can see, the red line for Oil and the blue line for USO turn practically purple with all of their overlapping.

Anther quick takeaway is that it looks like oil is doing horribly. Perhaps this is a good sign, and that the market is at its bottom, a great time to buy in to it!

After reading more about USO, I went ahead and checked it’s stock price. It had been around $33.40 a share the day I checked. This was perfect. If it could just drop to $33.33 I could buy three shares for a total as close to a $100 investment as possible.

I needed a place to buy and sell stocks cheaply, so I went to Google and found TDAmertitrade. It seemed to have good reviews, so I went and signed up for an account. If you guys want one too, email me ahead of time so I can get some referral money! Unfortunately TDAmeritrade has a minimum deposit of $500, so I placed $550 into the account since I assume that each stock trade would cost around $10 and I would be making five or so total stock investments.

Unfortunately, by the time my account was fully set and funded, a couple of days had passed and the stock price of USO was now hovering at $34.50. I got worried. Had I missed the bottom? Was this stock on the up and up again?

Since I had missed my initial window of buying the stock at my ideal $33.33 price tag, I needed to just wait for it to hopefully drop again. TDAmeritrade has an awesome tool called Trade Trigger, where you can set a trade to automatically occur when a certain condition is met. In my case, I set the trigger to fire when the ask price of a share of USO was $33.33. When this condition was met it would then buy 3 shares of USO at a total price of $99.99. And I would even be sent an email when it had happened.

TDAmeritrade Trade Triggers
(USO Trade Trigger is set)
And then I waited.

This morning when I checked my inbox a new email arrived, subject, “Trade Trigger order activated.” Now that was exciting.

USO shares bought
(USO shares bought)
I logged into my TDAmeritrade account and sure enough a debit of $109.08 ($9.08 fee per a trade) had came from my cash supply, and I was now the proud owner of three shares of United States Oil Fund.

Reason for Investment:
The price of oil and of gas has seemed to be steadily on the rise. Even as people try to turn more green or use hybrid vehicles, there is still a booming market for gas guzzlers in India and China, as people turn in their bikes and reach for the keys. I personally don’t see this trend changing anytime soon and feel holding on to some oil will pay out nicely in the long run, even as oil seems to be down for now due to the slow economy.

Returns:
This investment’s return is based on the stock price of USO multiplied by three, for the three shares of it I own. To find an up to date price click here!

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$100 Invested in 100 People: Follow Up

Investment Idea:

I handed out $100, in single dollar bills on a pleasant Thursday afternoon in New York city. Here is what happened:

The giving started slow, people weren’t really sure what was going on. Lots of people thought the dollars were fake, or a gimmick. Seeing really is believing. Most people wouldn’t take a dollar from me until they saw others do it first.

Over the course of my three-block-walk, I gave away $100, meaning I talked to and interacted with 100 different people. Also, since I was rejected over half the time, it meant I talked to over 200 people on that short walk. It is amazing to think of all the people that are around you and could in a split second become a part of your life.

Many people asked “Why?”

About a quarter laughed.

Another quarter said “Thank you” (often the young people).

I gave $4 to beggars along the way. One had a baby with her so it was a dollar for her and one for the baby.

The happiest recipients were young men, old men, and nannies with kids, but overwhelmingly, the happiest were kids. Every kid who saw me handing out dollars immediately ran up and took one even if they really didn’t know what was going on. I guess these days if you really want to get kids in your van you should offer them money not candy.

Some results by numbers:

– 50+ new visitors to this website. Considering how no one else had been told about it yet it seemed most of them had to have come from my guerrilla marketing ($2 a visitor).

– 10 new sign ups on my websites mailing list ($10 a sign up).

– An awesome experience that put me out there and this website out there (free).

The results and costs I got seemed to be about the same amount as spending on a digital ad campaign, which leads me to ask why don’t people just hand out money on the street over buying Google Adwords? And why don’t people on the street stop bothering to hand out fliers and just start handing out money? As Mitch Hedberg says about fliers “When some hands you a flier its like here… you throw this away” but maybe if someone handed me a dollar next time maybe I’d actually check out what they were selling.

Images from the day below





















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