Stock Sold For Kindle – BKG and GSK

Image result for berkeley holdings
Image result for gsk

Selling Shares for Kindle

You won’t see a lot of these posts, but I decided to sell shares in two companies that I own. The main reason behind my decision was based on raising capital for my Kindle Project. I assigned myself enough money to publish at least 10 books on Kindle. I’ve currently published 9 books, and I have 11 others in various stages. I wanted to see what income it would make before I invested any more money into it. For those of you that have been reading my Monthly Goal Updates you’ll be aware that I managed to make a 18% ROI in my first whole month of doing it. This caught my attention and gave me the motivation I needed to progress further with the project. I decided to invest in another Kindle course to increase my knowledge further. I’m now learning how I can eventually outsource my work to other people all over the world, and have other people to do the jobs I don’t enjoy (and are time consuming) like editing and promoting. The course, and the additional books have all cost money and before I get into a situation where I don’t have anything left in my Kindle ‘stash’, I decided to look at my share account for some additional capital.


Berkeley Group Holdings

I purchased shares in this company back in September 2014. I was drawn in initially by the high dividend payment (currently 5.65%). It just so happens the housing sector in general has experienced a nice increase in the last 6 months and all of the investments I made back in my Investing Experiment back September have gone up in value. 
I sold approx 40% of the shares in this company at the start of the year to help fund my Kindle Project. I decided to sell the rest of them now whilst their share price was closing in on an all time high, and I had already received their first dividend payment (£36.90) for the calendar year. This decision left me with a small capital gain after fees. The remaining shares cost me £576.16, and after I sold them I received £642.58 after charges (11.5% gain), not including the dividend payment. The price at the point of sale was 2,677.4p per share. 

It wasn’t an easy decision to make as I didn’t own this company in my NISA account, they were doing very well, their yield is still high, their PEG (which is an indicator of growth) is at 0.3, and a P/E (at the time of writing) of 11.99. I see plenty of growth potential in BKG, but the election could slow that down, with the rest of the housing sector. As always with shares, who knows!

My decision was made clearer when I was comparing the two investments side by side. If I stayed with BKG, I’m in line to get £21.60 dividends in September, and the possibility of some capital gains between now and then. Could I earn more than at least £21.60 if I invested in Kindle between now and then?*

The answer is a resounding yes. I earned the equivalent of the future BKG dividend payment (£21) in one book that cost me £44.00 to make. I’m sure I can make numerous books and a lot more money with the £642 put towards Kindle. With this logic, you could argue that I should sell all of my shares and just focus on Kindle. I’m not discounting that I’ll sell more shares in the future, but I plan on keeping my shares and Kindle investments separate. They both have their place for me and I’d like them both to fund themselves in the near future. 

The idea with investing in shares is that it’s a one off payment and I receive an increasing ROI over time as the dividends increase. At the same time, I can benefit from the capital gains of the share price going up. 

With Kindle the ROI in cash is higher but there are no capital gains to be made. In a month or two, the one book that cost me £44 to make will be paid off, and it will become a free asset. All future income will be free. I’d like to set up 100’s of these free assets and use the cash to invest in shares!

Overall, I had made a double digit gain with BKG, I wanted the money for Kindle, and they are nearing an all time high, so I pressed the ‘Sell’ button. 

*I’m comfortable forecasting dividend payments in a company but I don’t like to forecast share price (capital gains) as it’s unpredictable and uncertain. 


GlaxoSmithKline

This decision was a little easier for me. I purchased more shares in GSK back in October 2014, in my taxable account, when their share price dropped to a 3 year low. I’ve received one quarterly dividend payment, and I’m due one more next month as I still owned shares on the Ex-Div date (totalling £29.82). My NISA portfolio still has 5% weight in GSK, even after this recent sale. 
I invested £997.46 in October (including charges), and the investment was worth £1,157.39 after the sale and charges. When you include the dividends, that’s a nice £189.75 ROI (19%), which I was delighted with for 5 months work!

Similarly to BKG, I believe GSK are still likely to grow this year but to what extent, you guessed it…..who knows! They are approaching their 52 week high, and their P/E has risen to 28.53 at time of writing. I’ve made a nice profit on them in the last 5 months, so I’m going to take that for now. I still own their shares, and intend on keeping with them in my NISA so I’ll still benefit from any future growth in the company.


What are your thoughts on each sale? What do you think about using capital for Kindle? Did I move too soon?

0 Comments

  • Anonymous

    Reply Reply 27th March 2015

    Huw

    Selling shares is in my opinion much harder than buying them. With the FTSE100 recently hitting an all-time high there is the psychological barrier of the 7000 level to break through and stay above. As I write this the FTSE100 is at 6896, who knows where it will be by close of play tonight.

    You can only deal with what you have in front of you at the time. Given that you are using the money to invest in your eBooks which will give a greater ROI and both BKG and GSK are close to their highs then you have made the correct decision for you.

    We are all on different FI journeys so what is right for one is not necessarily right for someone else.

    The FI journey can open doors that we may not have known, or had even thought about at the outset. My wife (Alison) has a very good job in local Government which over time has changed to become very stressful. Yesterday she was successful in getting a new job in something she has always wanted to do (her dream job). This change means a halving of her salary which sounds drastic; however, our journey to early retirement in 3 years time will be happier. This morning she has gone to work with a spring in her step and with a positive glow knowing that she is working her notice.

    For us this is what investing and being carefully with money is all about is gives us choices on our journey through life.

    Richard

  • theFIREstarter

    Reply Reply 27th March 2015

    Hi Huw,

    Sounds like a no brainer to me although you have obviously considered it carefully anyway.
    The Kindle books sound like they are doing well for you (can't wait for the further info on that still!) and you've locked in some profit on both of the share trades!

  • weenie

    Reply Reply 27th March 2015

    Hey Huw

    When I first saw the title of your post, I thought you meant that you sold some shares to buy an actual Kindle e-reader!

    What you've done makes sense though – sold some of your investments (for a profit) to invest in something else, your ebook writing, that is likely to make you more money.

    As Richard points out, it's a lot harder to sell shares than it is to buy.

    I wish you all the best with the Kindle course and look forward to seeing how you put into practice what you learn!

    Hope you have a great weekend!

  • weenie

    Reply Reply 27th March 2015

    Richard, please pass on my congratulations to Alison – well done, am so happy for her as she spoke so passionately about the job that she was going for (and has now got!)

  • Dividend Legion

    Reply Reply 27th March 2015

    Hello Huw,

    I really liike what you're doing with Kindle publishing. I must admit you've got me thinking about pursuing alternative income streams. Kindle books is one of the ideas that keeps popping up, and you're proof that it works! I'm always quite hesitant when purchasing course books, as I often find the information around the web, but sometimes it's worth paying a bit and investing in yourself.

    As for the stock sales, you've made a very nice profit on both, which you'll reinvest into your kindle project – I'm sure it'll be the right decision, and that it will all be worth it when you're earning royalties in years to come.

    Keep up the good work!

    DL

  • Huw Davies

    Reply Reply 28th March 2015

    Hi Richard,

    Well said!

    Please pass on our congratulations to Alison. That's fantastic news! Much like Weenie has said, you could clearly see how important this work was to her and it's great to hear that she's now doing her dream job.

    I think you're right though – The 7000 mark for the FTSE was a long time coming, and I think we might still be in for some 'tooing' and 'froing' either side of it for a little while yet.

    I wouldn't have sold the shares had I not wanted the money for Kindle Publishing. I'm comfortable with the decision overall. I'm hoping that my decision will result in more income for my Kindle Business which will earn me more money in the long run. This additional income will hopefully get me to FI quicker than the path I was previously on, but only time will tell.

    I hope you enjoy the next three years closing in on retirement!

    Huw

  • Huw Davies

    Reply Reply 28th March 2015

    Hi DL,

    It's great to hear that people are interested in the Kindle publishing I'm doing. I thought about doing it in January 2014, and I'm not sure what happened but I just ended up doing other things. I wish I had done it then as I might be in a very different position now, but better late than never.

    Similarly to you, I've avoided paying for courses until recently. I had difficulty accepting the fee for my education. I suppose I didn't feel that the money ever warranted the potential knowledge I 'could' receive. I had more of a skeptical mind about how much I'd actually learn too. Like yourself, I would encourage myself to search for a free alternative online instead. It's a shame, as I could have learned a lot more by being more open, but once again I'm pleased that after trying a couple of courses I'm already seeing numerous benefits to justify the fee.

    Two digit profits aren't bad for 6 months work. I wouldn't have sold either if it wasn't for the Kindle Publishing business, but the additional capital from the sale will certainly help to get a few more books out. Thanks for the kind words!

    Huw

  • Huw Davies

    Reply Reply 28th March 2015

    Hey Weenie,

    Ha ha. To be honest, I've just re-read the title and I can see why you thought that!

    I agree, I feel much better about buying shares than selling them. I can't help but think 'what will happen to BKG?'. I like to still be with them deep down, but it logically makes sense for me to make some profit from some shares while I have them (as I don't hold a lot of money in cash), and use it to fund the Kindle books.

    Thanks for the support and kind words!
    Huw

  • Huw Davies

    Reply Reply 28th March 2015

    Hi TFS,

    Yes, it was a logical decision and one that I felt I needed to do. I don't like selling stock even to fund other avenues but it made sense for me this time around.

    The kindle project is going well so far. I want to make sure it's a completely legit money making strategy before I discuss it more on here. After two fell months it looks like that's the case, but I can't help but feel it's still a little early. I'd also like to get more experience and knowledge on the subject before advising others more regularly.

    In the meantime, I plan on sharing all of my costs and income to show the steps I've taken, and once the income becomes significant (£250+ a month), I think I can realistically start believing in this process and I'll have a lot more credibility to help people with.

    Cheers!
    Huw

  • No More Waffles

    Reply Reply 30th March 2015

    Haha, I did the same! Until I realised Huw was making a killing with his Kindle e-books. 🙂

    Pretty interesting move here, Huw. You really seem to believe in this business model, so it makes sense that you sell some of your other investments to raise enough cash to (potentially) make more money this way.

    Looking forward to read how this all plays out!

    Good luck,
    NMW

  • Huw Davies

    Reply Reply 31st March 2015

    Hi NMW,

    Ha ha. I'm not quite making a killing on kindle just yet. I hope to be by the end of the year!

    I do believe in the model so far. I still have a long way to go, and this extra capital will help me take it to the next level. The results will be unknown but I'll share how I get on with everyone.

    Thanks for stopping by!
    Huw

  • Done By Forty

    Reply Reply 1st April 2015

    Just learned of your blog via FIREStarter. Our blogs are so eerily similar: same retirement goal (by 40), same blogger template. Maybe we're related? My dad's side of the family is English. 😉

    Glad to have stumbled upon your writing. Best of luck!

  • Huw Davies

    Reply Reply 1st April 2015

    Hi DB40,

    Our Blogs are embarrassingly similar. Similar name, template, and kick-ass writing. Perhaps we are related?!

    Thanks for stopping by and dropping a note of support. Best of luck to you to Blog Brother! 🙂

    Huw

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