You may or may not have seen a few weeks back that I mentioned I was planning on starting another blog. The problem is that I am incredibly busy and would need to rely on writers for generating content since with 6 kids and two other blogs and full-time employment, I am already burning the candle at both ends and through the middle.
So why would I even think about starting another project? I want the experience of putting together a team and creating something very big from the ground up. I want to help follow bloggers while testing my theory that collaborative efforts will enable us to achieve more than any of us could achieve singularly. Finally, I wouldn’t mind making a little money in the process to help pay off some of my debt more quickly. But I really don’t plan on making a killing since if the blog were sold, up to 80% of the sale price would be going back to the authors (find any other site that can say that).
The Past Few Weeks
First, I decided that the blog should be a personal finance type blog. It is much of what many of the PF bloggers are doing already writing about saving money, making money, investing, etc. Personal financial advice through personal experiences shared with those who seek some knowledge and helpful information by those who have been there, done that.
I also decided that if the blog wanted to attract a large audience with a goal of eventually being sold, then it should have lots of content and several voices. I want to publish at least every weekday throughout the year so that there are 260 articles on the site after year 1. Ideally, we could publish more than one article and do so each and every day of the week. Having close to 1000 articles by the end of the first year would be very good and would help generate lots of traffic.
Now I could simply go out and hire staff writers to get to the 260 article point. At roughly $20 per article for a decent writer, the cost would be $5200 for that first year. I wouldn’t be a bit surprised to find that I could make a profit doing it this way. However, I was looking for the project to be a more collaborative effort to see what the results might be. That is why I have developed a somewhat unique compensation scheme for authors that rewards both baseline participation and additional efforts.
I have purchased the domain name and will be putting together the site. The plan is to launch with the first published article going live on Monday, April 2nd. I would love to have a total of 20 authors in place over the next week or two so that everyone can begin writing and getting the articles to me for scheduling. Each author will be expected to contribute one article per month minimum and 20 for the year to participate in any profit sharing for the site. There will be a maximum of 20 authors allowed as contributors so be sure to let me know quickly if you might be interested.
Quick Math on the Possibilities
Let’s assume that you participate as an author and the site does reasonably well over the next three years and ends up being sold for $1 million. Based upon my novel compensation scheme, 50% of the sale price goes to the authors and is split evenly. So in addition to any money made and any benefit to a personal blog that was derived during that time, the writer would get a 1/20th portion of $500,000 or $25,000 in a lump sum upon the sale. There will also be a bonus pool for those going above and beyond the call of duty. Something to think about.
If you think you are interested, shoot me an email at pleben.com@gmail.com and I will send you the full compensation scheme and other materials. I will be limiting numbers to 20 so be sure to contact me. I already have several authors lined up and am looking to get to 20 by March. I will have a stand-by and waiting list to replace those who quit or fail to fulfill the minimum obligations. Requirements for authorship: You should have PF writing experience and be able to point to examples of your writing. You should also have a PayPal account so I can send your compensation when received. You should be nice and easy-going and understand the concept of delayed gratification.
If this time of year and income taxes wasn’t enough fun and excitement for you, it is also that time of year when students planning for college in the fall (but more likely their parents) get to fill out the Free Application for Federal Student Aid, also known as the FAFSA. It has been my wonderful privilege of filling out this form the past two years since this is my oldest child’s sophomore year. And now, I will get to fill it out again this year for her and her sister. Yes, I will have 2 college students in the fall.
Since I enjoy filling out this kind of paperwork almost as much as going to the dentist, I have put it off for most of the month. But since the ideal time to have it completed is before March 1st, guess what I will be doing this coming weekend. I will be having loads of fun filling out the FAFSA. Hopefully, it won’t be all that different filling out the information for two students as opposed to one.
College Financial Aid
The purpose of the FAFSA is to serve as a central depository of information that assesses the financial condition of a student and student’s family through questions on assets, liabilities, and income in order to come up with the amount that the student or family might be expected to contribute toward a secondary education. This information is then used by colleges to help determine eligibility for various federal, state, or institutional programs. These could include grants or scholarships, loans to students, loans to parents, or work programs.
Now I am certainly not an expert on paying for college, but I have learned a little about the various programs over the last couple years.
- Grants–These are often based upon demonstrated financial need and do not need to be paid back. The most well known would be the Federal Pell Grant program which has a maximum award of $5,500 per year. There are other grants available if you meet certain criteria, such as losing a parent in Iraq or Afghanistan, so be sure to check those out.
- Federal Work-Study Programs–These programs will typically enable a student to work at some on campus type job such as in the cafeteria or library and be paid on an hourly basis with the funds being used to pay for college expenses.
- Federal Loan Programs–These go by different names such as Stafford and Perkins loans. Each of the different loan programs have different requirements. Some interest rates are better than others and there are various rules regarding deferment of payment and whether or not interest adds to principal or not. It can get quite confusing to keep it all straight. I don’t really have a great grasp on it all and have to look up the information.
Personal Bottom Line
For me personally, I have had enough debt and other expenses throughout the years that I am borrowing to help pay for my children’s education, but I am not sacrificing any retirement savings. The interest rates are favorable so I am better off to pay the other debts first. Of course, I will need to eventually pay back all of the college debt as well. That will be part of my debt-free requirement in order to enter retirement.
We have managed to save some of the college cost since my kids have gotten some merit scholarships and some discounts for academic reasons. They surely could be getting through with less expense, but it also could have cost a lot more. I am probably in the middle of the road overall. I am paying back the loans already and have included them in my net worth calculations. I could certainly insist that my girls work two and three jobs during the school year to keep costs down, but I would rather have them get decent grades and get done in 4 years. They can work during the summers and will work plenty over the years for sure.
Advice (If I Had it to Do Over)
So what would I advise if I had it to do over again? I would probably not get in as much debt in the first place and try to minimize costs associated with having the kids in the first place. Then I would have saved more which would have been easier had I not been in debt. In other words, stay out of debt and save/invest as much as possible while the kids are growing up so that the costs of college can be paid from current savings.
Needless to say, it is impossible for me to go back and change anything, and it may be true for you as well. But I am going to make the best of the situation in which I find myself and make the necessary adjustments to improve my financial situation in the future. And that is why I am writing this blog. Not because I am perfect or make the best decisions, but because I am learning.
I hope you enjoy this coming weekend. I have a date with the FAFSA.
It is the third Friday of the month again which, for all practical purposes, means that today is options expiration! They actually expire tomorrow but since the market isn’t open tomorrow, today is the last day for trading with all the contracts getting exercised or expiring worthless on Saturday. Because it is expiration Friday, I need to spend part of the early afternoon looking over my positions and figuring out what I want to do for next month.
Collar Trades
If you have spent any time at all reading this blog, you know that I hold individual stocks in my retirement accounts and use protective puts to help prevent major losses. This is a good strategy with one significant drawback. Puts cost money. If all I did was to pay out money each month on a stock that was moving sideways, I could easily lose quite a bit of any profits that I would make.
So, in order to offset the cost of the protective puts, I will sell covered calls against those same stocks that I own creating a collar. Now I may do this for all the shares or only some of the shares in order to capture some capital gains. It really depends on my optimism regarding the stock which boils down to a gut feeling. Lately, I have been inclined to remain a little on the cautious side. The stock market has rallied quite a bit over the past few months, so I am concerned that it might be due for a correction or at least some consolidation. But who really knows? I don’t which way the market is going so I try to at least get some benefit no matter what happens.
Action for Today
So the trades that I will be looking for today will be to purchase puts on Seadrill (SDRL), Silver-Wheaton (SLW), Onyx Pharmaceuticals (ONXX), Dryships (DRYS), and Intel (INTC). I also own AKS but the position is so small I haven’t worried about buying puts. I am wanting to get out of the stock and into Nucor which pays a higher dividend. I also own Seagate (STX) but purchased some March puts a few weeks ago after the big earnings spike locking in some nice positive gains. My basis is $20.86 per share and the puts are for $25 so no matter what happens, I will get a gain of over 25% guaranteed in only 4 months. I like trading when that happens.
Now I don’t want to spend too much buying the puts since I will have to sell some covered calls as well to pay for them. I won’t be able to with SDRL since I have already sold March calls. I will likely go with deep out-of-the money puts to protect me only from catastrophe. With SLW, I will keep the puts a little closer to the actual market price. The stock is volatile so I want the protection. ONXX will end up being closer since it has been trending downward. DRYS will be the 2.5 strike, and Intel will likely be a little farther away. I sold some calls today that were in-the-money since it seems like INTC has been range trading for the past few weeks. I am concerned that the market will be declining so INTC may go with it.
This is what my day will hold as far as stock market action is concerned. I have the day off, so will likely go to lunch at Chuck E. Cheese with my two youngest kids today. It is a nice treat that we like to enjoy every couple months. I might have to buy these puts before we go so I am not concerned with the time.
Have a great day, and enjoy the weekend. I will be doing some writing, hopefully.
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Investing Tags:
collars, covered calls, INTC, Intel, options, put options, Seadrill, silver wheaton, stock collar, stock trading, stocks, Trade
