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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 41594  
Subject: Re: A learning curve Date: 9/12/2012 1:27 AM
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if you're making the money-is-fungible argument

Yes.


But one difference between collecting dividends and making capital gains is that you have to sell in order to collect capital gains.

In practice this is not an issue if you normally have some cash in the portfolio. You pay your expenses from the cash reserve and your ordinary trading keeps the cash at adequate levels. In other words, the selling and the spending don't need to be synchronous. The cash is the buffer. If you don't have cash, you can use margin making sure you pay it off ASAP.

My point is that each position should maximize CAGR and you need a cash management program. I pay things with my credit card and each month I do an ACH transfer from my broker to the credit card account. This gives me the frequent flyer miles and a 15 day interest free float. For expenses that can't be paid by CC, use the broker's checking privileges.

Denny Schlesinger
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