Kindle Investment & Stock Purchase – BHP Billiton

OK, I don’t want to give the game away, but after running the numbers from my recent wage (which was my biggest ever monthly wage!), I found out that I had enough capital to invest in my Kindle business and plenty to spare to buy shares in one company. Can you guess who I opted for? Well done you, yes it was BHP Billiton


Kindle Investment
Some of you may be interested to know that I spend approximately £85 (this is a top end number to be conservative) to create and promote 1 x Ebook for Amazon and a paperback for Createspace – The £85 covers both formats. I’m looking to create 3-4 books a week, so I want to make sure I have £1,000 to £1,400 (again, overly conservative numbers) to continue investing in Kindle each month. It’s no good just covering my expenses, and not putting money back into the business in my opinion. 

I received just short of £2,900 in my bank account this morning which is the most money I’ve ever earned in a single month at work – I plan on beating this in the next 12 months going it alone and making it a regular income amount. 

I recently earned £521 from Amazon, and I still had some left over money in my Kindle bank account. I added the sums together and took this amount away from the £1,400 to see how much I needed to invest in my Kindle account to cover my monthly costs this month. It runs out I had plenty left over  to purchase shares in one company, but just short of what I needed to invest in two. I decided to play it safe and invest in one for now and have surplus cash on hand in case I need it over the next couple of months.

I could have used up to £1,600 to invest in BLT, but I already had over £200 in my ISA from AML and DLG dividends this year, so I transferred a much more conservative £1,350 into my ISA instead. This leaves me with yet more surplus cash if required. 

As we move into the month of August, I have plenty of capital to invest further into my business, and I’ve managed to kickstart my ISA investments once again. May was the last month I put money into shares, and I have to say, it feels great to get it moving once again. I have missed the feeling of satisfaction I get from pumping money into my portfolio. The value may go up and down from month to month, but as long as my contributions continue to rise, I know I’m onto a winner long term. 

My forward dividends are now approximately at £1,900 for the year. This would suggest that I’m 2 x investments short of my dividend total for the year. I’ll be making one investment in October with the dividend I receive from my H&L ISA (which currently sits at over £600). I’m not sure I’ll earn enough in between now and then on my reduced hours to invest in a company that will pay sufficient dividends by Dec 15. 

It’s not over until the fat lady sings – my Kindle Income could shoot up which would allow me to invest earlier, I could receive Special Dividends, or significant dividend increases in the autumn. It should be an exciting finish anyway. 


Stock Purchase

On Wednesday 5th August 2015, I bought 128 shares in the FTSE 100 mining company BHP Billiton. The share price at the time of purchase was 1190p. The total cost with charges included was £1,535.82. 

I bought shares in BLT back in December 2014 in my H&L ISA – Click on the click to review my previous write up on the company and my decision to buy shares in them. 

So what’s happened since Dec 2014?

BLT increased their interim dividend in March 2015, and they went ahead with their plans to separate part of their business into South 32 in May. Shareholders were anticipating a drop in share price to the spin off, but both BLT and S32 have continued to slide since May. 

BLT are now trading at a price they help back in March 2009. However, I feel that the company is looking more promising now than they did back in 2009. Their Earnings per share, Revenue and Dividend is higher now than it was back then (prior to their interim results – end August). They’re the biggest mining company in the world, and they’ve continued to increase their dividend since 1999 – Even through the recession.

There’s a possibility that the share price could sink further, but rather than trying to time the market, I decided to take the plunge now as I was very happy with the current price they were offering. BLT are currently paying dividends at over 6% (if they continue their annual dividend increases), they have a P/E of 6.42 at the time of writing, which is extremely low, and a PEG of 0.3. This suggests to me that there is a lot of growth potential in their current price, and I’m happy to invest in them now for the long term (30+ years) to try and benefit from some of that. 

What do you think of BHP Billiton at the moment? Can you hear the ‘Fat Lady singing’ for my 2015 Goal or is there life in it yet?

0 Comments

  • M from There's Value

    Reply Reply 6th August 2015

    This all sounds great Huw. I can't wait to see what your total is for the end of the year… ooo will you hit that £2000 or not?! In re. BHP Billiton – I was just reading an article about mining stocks the other day, which analysed all the main companies on the London market. The article said that BLT and RIO had by far the safest dividends, with RIO slightly pipping BLT. I don't keep much in mining and have never bought either of these stocks, but BLT is always coming up on the value dividend growth plays… It goes ex-div in early September, so you never know, I might make a purchase in late August. There are so many companies to choose from right now!

    See you very soon,

    Cheers

  • weenie

    Reply Reply 6th August 2015

    Great stuff Huw – funnily enough, I was 50/50 about either topping up my BLT holding this month or investing in a new share. BLT won out (the toss of a coin…), although I have some tax reclaim coming into my SIPP so I should still be able to make a small investment in the other stock.

    Hope this helps towards getting to your dividends goal target for the year!

  • London Rob

    Reply Reply 6th August 2015

    Hi Huw,

    Firstly many congratulations on the journey so far! I've now managed to catch up on your blog posts since you started, and its been a fascinating run, especially as, like me, you are UK based, and started around the same time I did (ok, I started in 2011 but I didnt have a clue what I was doing – I like to think I am a little better now!)

    I wait with interest to see how things progress for you, but I suspect if you are able to keep tucking money into your ISA, away from the taxman, as well as your Kindle work, you will be in a very good position – I am truly envious! If you do ever start a Kindle coaching, its something I may well also enrol for – my other half and I have spoken about it, but not ever quite got around to doing anything about it, so well done for having the get up and go! I also only recently started tracking my expenses to the last penny to see where my money was going, but safe to say they are rather higher than yours, but until I have a few months logged I wont be able to do much (to be fair, I know where a chunk goes!).

    All the best, and I look forward to the next update!

  • Hi Huw

    What changes! I have been away from blogging for a couple of months and you are now becoming a publishing mogul.

    It will be interesting to see how you progress, and I would be interested to know how it works e.g what subjects do you write on, do you write the books yourself.

    The income you get from Kindle should allow you to continue accumulating shares in great companies like BHP.

    Best Wishes
    FIUK

  • Huw Davies

    Reply Reply 9th August 2015

    Hi M,

    Ha ha. Can you handle the tension!!!!! It's going to go to the wire.

    Interesting stuff on BLT and RIO. My workings out made it slightly the other way. You're absolutely right on the stock section front. There are a lot of attractive companies out there right now. I'm looking forward to testing my knowledge against Weenie's Stock league selections. I'm going to do one blind draw vs my own specific selection.

    See you later this week!
    Huw

  • Huw Davies

    Reply Reply 9th August 2015

    Hey Weenie,

    The coin toss. I love it!

    As I mentioned above in M's comment. I think there are a lot of companies offering great value at the moment. BLT is certainly one of them in my opinion (and the coins!).

    I hope you're also able to stretch out and invest in another company this month.

    See you this weekend!
    HUw

  • Huw Davies

    Reply Reply 9th August 2015

    Hi London Rob,

    Thanks for stopping by and leaving such a nice message. I really appreciate it!

    It's reassuring and motivating to hear that people are interested in my Kindle course and coaching. I believe I can offer value to others, but it's another thing having people believe in you too. I thought about doing Kindle in Jan 14, and it took me until Dec 14 to go for it, so I know that feeling. Based on how this year has gone, I wish I had started it earlier, but I'm just glad I got around to it.

    Congrat's on tracking expenses. It was a huge turnaround point for me when I started. I have to thank this Blog too, as it helped to keep me accountable to that. Your approach sounds spot on. After you have 3 months in the bank you can cast your eye over your spends, work out averages, and see what areas can be stripped back. I'm intrigued with where the chunk of money goes…….

    Thanks again for stopping by, and good luck with everything!

    Cheers
    Huw

  • Huw Davies

    Reply Reply 9th August 2015

    Hi FIUK,

    How's it going?! I hope you're well!

    I don't know about Mogul, but things have been going really well on that front yes. 🙂

    I outsource work to other people to write for me and the subjects are on almost anything. I'm writing 2 books at the moment, but they're on the back burner at the moment until I can build my Kindle income further.

    You're absolutely right. The income from Kindle is hopefully going to get me more disposable income than I've ever had before and I'm hoping to invest that money into stocks and shares just like BHP.

    Thanks again for stopping by. Great to have you back.

    Cheers
    Huw

  • jiminyork

    Reply Reply 16th August 2015

    Hey Hew
    Firstly, thanks for organising a fantastic meet up in York. Great to meet you and Lou and all the others who came along for the weekend. We did chat about buying shares briefly and I'm following your decisions with interest. I know that you're intending to follow the Buffet maxim of "our favourite holding period is 'forever'", and, if you stick to it, I don't think you can go wrong. I also like your observation that having your blog helps you keep the faith. It helps others too, I'm sure, and I admire your willingness to be public with your finances in the way you are doing. You are literally putting your money where your (blogging) mouth is! Keep up the great work.

  • Huw Davies

    Reply Reply 17th August 2015

    Hey Jim,

    My pleasure. Thank you for saving us from Yates' and offering your advice on local spots. I really appreciated it!

    It was great speaking to you about your retired lifestyle, investing and general thoughts on life. I think I could have talked to you all weekend about that stuff.

    Thanks for the support. Although we're taking a slightly different approach with investing, I think you have a very sound strategy and I don't think you're going to go too far wrong either. This Blog has helped me in so many ways, and I think it will continue to do so.

    Thanks for the kind words on my openness too. I'm a very open guy, and I like share what I'm doing. I hope this transparency will others appreciate that there isn't a magic formula or luck involved. Anyone can do this. People don't have to follow my path, even if it helps them decide their own path, than I'll be pleased with that.

    Thanks again for sharing your thoughts throughout the weekend. I enjoyed hearing your opinion and advice and I'm sure others did too.

    I hope you can make the future gatherings Jim, and I wish you all the very best in the meantime!

    Cheers
    Huw

  • Gentes De Clerck

    Reply Reply 30th August 2015

    Hi there,

    BLT seems a great buy to me. I also bought some stocks last monday. In my oppinion it is a great buy for the long term at these prices.

    Cheers,
    Geblin

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