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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