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Author: goobersam Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 41629  
Subject: Intro, and Request for Advice/Suggestions Date: 10/10/2005 5:28 PM
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Hello Everyone! I'd like to introduce myself, as well as ask some advice. This may get a little lengthy so that you understand where I'm coming from, so please bear with me. If I get too boring, please feel free to skip ahead to the end. :)

My name is Sam, and I live apparently not too far from one of the longtime members on this board, (I believe RaptorD though I may be mistaken... I'm about 80 miles from Lincoln NE), on a farm outside of a little town called Logan Iowa.

I currently work managing one of the computer networks at Union Pacific Railroad (UP) in Omaha. I have to say that anyone who ever gets the chance to work for UP should jump at that opportunity. It is an excellent place to work, good pay, great benefits. I consider myself extremely fortunate. Many people may have a job they love, but it doesn't pay all that great. Or they have a job that pays very well, but they dread going to work every day. Not me. UP pays me pretty decent money to do what I would probably be doing for fun if I weren't at work. So each day I count my blessings.

About seven years ago when my wife and I first moved to Logan, there was one Internet company and only one Internet company in this entire county. And they were not very good from what I'm told. One could never get logged on (due to the busy signals), and if you *were* fortunate enough to get logged on, there was a great chance you'd get booted off. Nevertheless, I called them to sign up.

Bear in mind that I moved here from a larger town (Kansas City), and was used to paying something less than $18.00 a month for unlimited Internet access. Imagine my surprise when they told me they wanted $24.00 a month for 100 hours of service, and $1.50 an hour for anything over that. Now, with my job at UP, I will go through 100 hours in a few days working from home after hours. I told them I needed unlimited hours. They said that was not possible, but that they would sell me 200 hours a month for $34.95, and $2.00 an hour if I went over.

I bet they would.

I complained, and said that was not right, that being a network engineer I had somewhat of a working knowledge about how much these things cost, and that while I had no problem with someone making a fair profit for their work, that I felt they were taking unfair advantage of their monopoly. What happened next is the stuff that dreams are made of. The lady on the phone said to me "Well Mr. Morris, if you don't like the way we run our business, you can start your own."

Recall what I do for a living.

Eight months later, my wife and I owned 80% of the Internet market in the Logan area. Two years later we owned 90% of the Internet market in Harrison County.

Fast-forward to 2005. Despite what any sensible person would perceive as rampant antitrust and questionable business practices by our local phone company (after they decided to enter into competition against us), Loganet (my Internet company) had grown to nearly 1000 customers. We had also expanded into high speed Internet. Recall we live in the country. Offering high speed Internet to rural America isn't as simple as throwing in a DSLAM and installing a filter on the phone line. My wife and I were offering service to people five to ten to fifteen miles from the closest inkling of civilization. We had to use a different (and arguably better, though more-difficult to deploy) technology to reach these folks. The good part of this technology is that we owned the infrastructure and paid nothing to the phone company. We replaced all our expensive T1 lines with wireless backbones. Loganet was doing well for itself. However, having Loganet and still working at UP was taking its toll on me. The combination was like having two and a half full time jobs. And we have six small children.

Then this past summer (2005), along came an opportunity to sell our company. Although it was like selling one of my kids, I really felt I had no choice. We were offered a very good price, and knew the gentleman who was wanting to buy it, having worked peripherally with him for a couple of years (he owned a similar company near Omaha, and like me, had a day job working for HP.) He wanted to quit his day job and do this full time. I on the other hand, love my day job (and with six kids, couldn't really give up the benefits). It was a perfect fit for both of us, and my customers would benefit from having a full-time support guy to call rather than having to wait for me to get home from work to help them. So we completed the transaction, which brings me to the point where I'd like to ask advice.

I've been off work for a couple weeks due to surgery, and have been bored out of my mind. During one particularly dull moment, I stumbled across Hidden Gems, and became a subscribing Fool. I started perusing the HG boards and came across someone (I believe it was freethinkerkeywe) talking about this "BMW" method. Now, I'm by no means a stock genius, or anything close to it. In fact, about all I knew about the market is that I lost about $5k by getting into the market just as the tech crash started. (Talk about getting a bad introduction!) But the only thing I knew about anything called a "BMW" is that it was a car that I couldn't afford to drive, not a market terminology, at least as far as I knew. So I searched around to find out what this “BMW” thing was, and found this board. Having been off work recovering, I've since spent nearly every waking hour reading all 9300 some-odd posts on this board. I have to say that I am beyond impressed with the folks on here. Your willingness to help each other and people that you don't even know (and ask for nothing in return) is nothing short of spectacular. I have to say that I would feel like a real moron trying to talk shop with any of you. I would be way out of my league, so I will probably choose to just sit back and learn for now.

In the relatively short time I have been reading, I have developed a real respect and admiration for your opinions, which is the point of this entire rambling post. After selling our company, we were able to pay off everything we owed (except our house, and could pay off most of that if we chose to do so with the remaining cash from the sale - if that would be smart). I'm not sure what capital gains are going to be yet, as the final sale price (of our business) depends on how many customers (if any) quit (called customer churn in the business) by a given date. My best guess is that if we do not pay off our home, we'll have about $60k - $70k in cash after paying the CG taxes. I'm also contributing the max allowed by law (pre-tax) to my 401k at work. Aside from that, I have Roth IRAs for both my wife and I that into each I've put $4k, half into Vanguard Small-cap Investor Index Fund, and half into Vanguard Strategic Equity Fund. I have two Vanguard mutual funds worth about $2.5k each (Vanguard Wellington Fund and Vanguard STAR fund). Keep in mind I have no idea if any of these Vanguard funds are good - I picked them myself from the funds I was offered, and (especially now after reading the Fool Forums), feel like I was the blind being led by the blind. Aside from this, I should be able to invest about another $2k each month from my salary. This will vary of course as monthly expenses vary and things break and have to be fixed, etc. I also have 75 shares of MSFT at $26.10, 90 shares of FDO that I got at $21.31, 100 shares of NOVL that I got at $7.37, and 50 shares of BUD that I got at $21.60. (Except for the Novell, I bought the others after reading through this board.) I didn't want to go all-out, considering how the general advice on here seems to be to buy some and watch, buy some more and watch, depending on price, etc, but I did want to get into a couple of those positions that seemed to be favorable to most everyone on here who had an opinion. Recall that I place much value in what you all think.

My question is, what should I do with the extra cash from the sale of my business? I thought of putting it into a mutual fund, but after reading all the posts on this board, I feel like that would be blasphemy. But I also know that leaving it sit in a checking or savings account isn't smart either. Additionally, what should I do with the $2k or so I have leftover after paying bills each month? I assume that's what you guys refer to as "dry powder". But where should I put it? I've read you mention (but don't yet understand) something called EFT. Lastly, should I sell the two Vanguard mutual funds and use them to buy BMW stocks, or perhaps Hidden Gem small cap picks? I realize ultimately the choice is mine, but as I've tried to convey, I place great value in your opinions, and would be very grateful if you have a couple of minutes to share your thoughts.

I apologize again for the length of this introduction, and want to say again how honored I am to be in the presence of you people. I cannot recall a time in my 43 years in either my personal or professional life that I have had the great pleasure of "meeting" a group of people whom I so admired. (I wish I could get to the get-together later this month but there is no way I can on this short of notice.) I'll try to keep the dumb questions to a minimum and hope that I can contribute something along the way.

Respectfully and humbly yours,
Sam
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