Please be sure to check out this weeks Festival of Frugality, which features my article on the financial and envirnomental benefits of buying used.

I really liked this article, with tips on how to sell items on eBay, from “adventures in daily living.” I haven’t sold anything on eBay for a while and plan on incorporating some of these tips next time I sell something.

Philby

For the frugal investor, it is important to recognize when companies with solid foundations are undervalued, and I think that over the next couple of quarters, Citigroup, ticker: C, will present the long-term investor with several good buying opportunities.

It’s true that Citigroup has taken huge losses from their risky investments in mortgage backed securities and currently expects write-offs of up to $15 billion over the next two quarters, but with a equity capital base of over $120 billion, the company has the means to weather this storm. They have a diversified investment portfolio and offer numerous other financial services, most of which are profitable.

Citigroup is trading at a lower price than at any time since 2003 and currently has a dividend yield exceeding 6%. They have increased their dividends every year for nearly 20 years and the key statistics still look solid. If Citigroup were to cut their dividend in order to free up more cash, or even fail to raise it next quarter, then there will likely be an even better buying opportunity for this stock.

While Goldman Sachs, who have played this mortgage crises better than any other major firm, has recently downgraded Citigroup, I think that long-term investors will find a lot to like about this stock. Investors who are looking to increase their levels of dividend income should definitely consider making an initial purchase now, and then look at reinvesting after Citigroup announces their financials results next quarter. For registered shareholder of Citiqgroup, Computershare offers a dividend reinvestment plan.

Philby

Disclaimer: Author is not a certified financial advisor and does not own shares in Citigroup.

Please check out the latest Carnival of Personal Finance, which is hosted by Moolanomy. One of the editor’s picks caught my eye, a sarcastic article titled 5 Reasons You Should Buy a New Car. The author provides five sarcastic reasons, such as ”You don’t think car dealerships make enough money and want to help them out”, which illustrate the financial folly of buying a new car that rapidly depreciates. I enjoy sarcasm, and buying used, so I enjoyed reading this article.

However, I think the standard “Millionaire Next Door” advice on buying new vs. used autos needs to be updated to include a phenomena I noticed recently while shopping for a Japanese sedan. I won’t go into details here, since I want to save this topic for a future article, but do a price comparison between new and one to two year old Accords and Camrys and I think you’ll be surprised…

Philby

PS Check out my article, Top Tip: Check Your Insurance Coverage, which was included in this weeks carnival.