Can we really kick our Starbuck's (SBUX) addiction?

Starbuck's has really been beaten down over the past year as investors have become weary that the economic slowdown might impact coffee drinkers. Really? Do you think that many people will just stop buying their coffee from Starbuck's and choose to buy their coffee from somewhere else just to save $25 - $50 bucks a week, $200 bucks a month?

I'm all for frugality and saving money. I certainly don't consider myself to be a BIG SPENDER by any stretch of the imagination. Especially now that I've found myself unemployed and my wife's part-time salary is our sole source of family income.

If I'm looking to really buckle down and reduce my expenses, I'm not sure that my Starbuck's coffee is the first place that I'd start. I REALLY, REALLY LIKE my coffee. Maybe I would switch from some of the fancy lattes or espresso to just regular dark roast, but I'm certainly not going to forgo my Starbucks all together.

My family will likely stay home at not dine out for a while, we will go out to fewer movies, we will do more of the work around the house ourselves rather than hiring out, but I AM NOT GOING TO FORGO MY STARBUCKS COFFEE!

Starbuck's stock price is 60% lower than the highs set back in November of 2006. The company is trying to transform themselves by closing some under performing stores and introducing new products such as their line-up of cold coffee beverages that will be available this summer.

I think Starbuck's provides a great investment opportunity at current levels.

Controlling health care costs with EHTH

eHealth (NASDAQ: EHTH) is a web based health insurance broker. Essentially, the company collects a monthly commission of 15-25% of the annual premiums for their customers.

EHTH is really the only company with this type of business model, as far as I can tell. This is a tremendous competitive advantage for EHTH in terms of lower salaries and wages costs necessary to sell these health insurance policies.

Type "health insurance" into Google, and the first hit is www.ehealthinsurance.com. EHealth takes pride in maintaining that position… And it reflects the company's position as the only significant provider of health insurance over the Internet.

EHealth established itself in 1997 and began selling health insurance online a year later. The company currently maintains partnerships with 175 U.S. insurance carriers and offers customers in all 50 states a choice of more than 7,000 different policy options. It's sold policies to more than 1 million people and counting.

Today, 80% of eHealth's products are major medical insurance plans, including many alphabet-soup options touted by human resources departments across the U.S.: HMOs (health maintenance organizations), PPOs (preferred partner organizations), and high-deductible HSA (health savings account) plans. The company also offers dental, vision, indemnity, short-term coverage, and small group packages.

As you would expect, eHealth's members are primarily self-employed, unemployed, short-term or part-time workers, students, and small-business owners. EHealth has accrued more than 560,000 members, and this number has grown 30% or more each year for the last five years. Best part is, eHealth still has a huge untapped market. And the insurance business can use the exact help that eHealth can offer.

I don't need to tell you the insurance business is messy, characterized by mountains of paperwork and complicated language. If you've ever sat in a local insurance agent's office or had dozens of brochures strewn across your dinner table during a presentation in your home, you know what I'm talking about.

One of the biggest growth drivers for EHTH is the trend towards individual health insurance policies. Just like the change from a company sponsored defined-benefit pension plan to a defined-contribution 401K plan (large corporations are transferring the risk of saving for retirement away from themselves and onto employees) I think we are going to see a similar trend with health insurance. The large corporations can no longer afford to pay health insurance premiums for their employees when health insurance premium costs are increasing at a rate of 14% per year.

A realistic solution is the newly created Health Savings Accounts (HSA's) that involve an individual family policy with a high deductible of $2,500 - $5,000 per year in exchange for much lower monthly premium costs. Once your expenses increase beyond this high deductible, your insurance policy kicks in and pays 100% of any additional cost. Sure, spending up to $5,000 per year in health care costs might sound like a lot of money, because it is. However, think how much your deduction for health insurance is from your bi-weekly pay check. That money is gone whether you need a lot of health care in any particular year or if you need relatively little.

You can contribute the annual deductible into a tax-deferred retirement account. If you don't use all the money that you have set aside in a particular year, then that money carries forward and can be used to pay health care costs in future years. This money can also be invested to try to grow the principle balance, just like a 401K plan.

All of this spells a lot of opportunities for EHTH.

Buy dividend stocks at a discount thru BDV

You have probably heard that stocks that pay a regular dividend can make a very good investment. This is especially true if you don't need the dividend income right away and can reinvest the dividends to buy more shares. Many of the online brokerage firms such as Charles Schwab and E*Trade will allow you to do this for free.

The longer your time horizon, the more time that the reinvestment of dividends has to work it's magic by compounding your investment returns. Dividend reinvestment works on the principal of dollar cost averaging which allows you to purchase more shares after the share price has fallen and fewer shares after the share price has risen.

If you're investing in dividend paying stocks, then chances are that you have a pretty solid investment to begin with. The Board of Directors of dividend paying stocks wouldn't authorize a dividend payment to shareholders unless they felt that the company's prospects were solid and the company would be able to continue to maintain that dividend payment, or increase it, for the foreseeable future. Companies that pay dividends tend to be larger and more established and well beyond the initial start-up and development phase that consumes usually all of the free cash flow of a young growth company.

Even better than owning one dividend paying stock is owning a portfolio of dividend paying stocks. As the saying goes, you don't want to hold all of your eggs in one basket. Holding a diversified portfolio of dividend paying stocks simply reduces your risk of any one stock investment performing poorly. Diversification is a great way to improve your investing returns while reducing risk.

The BlackRock Dividend Achievers Trust (NYSE: BDV) is a closed-end fund that trades on the stock market similar to an exchange traded fund (ETF). The fund manager of BDV has to maintain a portfolio with no less than 80% of the funds invested in with "Dividend Achiever" status - stocks that have raised dividends for at least 10 years in a row. Roughly 300 companies out of 20,000 publicly traded U.S. stocks meet the requirement for Dividend Achiever status.

BDV currently pays a dividend yield of 7.89% AND trades at a discount to net asset value of nearly 12% and the closing share price was $11.40 as of May 23, 2008. As of 12/31/07, BDV's top 5 holdings included Chevron, AT&T, General Electric, Altria Group and Pfizer.

Take a closer look at BDV to gain exposure to large capitalization, dividend paying stocks.