February 2018 Dividend Income And Expenses


Yes, it’s that time again — The beginning of whole new month!  Typically I put out a Dividend Income and Expense post at the beginning of every month, but this month I’m a little behind schedule.

I wanted to finish the post on Winning The Thermostat War first, so this post was a little delayed.

As usual, the purpose of these Dividend Income And Expense reports is to provide an in-depth look at how we spend (and make) money as a Financially Independent family.

It’s not all crumpets and tea cakes, but it sure is a fun way to live!

 

Activities in February

February was a busy month — We spent a lot of time socializing with friends, playing board games, and cooking at home.  Oh… and planning our next family vacation!  We’re headed to Texas!

Even though the Pacific Northwest isn’t known for lots of snow, we still had a few solid snow days in February!

snow days
Little shovelers hard at work enjoying the snow.

Snow is great free entertainment for the kids of course — They get super excited when it starts snowing, and immediately run outside to play in the all the frozen white stuff.  Free entertainment is the best entertainment.

Not all activities this month were quite so cheap — One rare sunny day we went mini-golfing with friends.  The cost of this outing was a ridiculous $68.  Who knew mini-golf was going to be so expensive?

mini golf
Tako Jr. #1 pickup up his ball after a successful putt.

The kids enjoyed the experience, but I’m not sure we’ll go again at that price.

 

February Expenses

Expenses in February totaled $6,454.  This was a high monthly total for us, mainly due to the cost of airline tickets.  The additional travel expenses can be found in the Other category.

february expenses

Food

Even though we ate incredibly well in February, our food total was lower than average — a mere $432 for the month.  I attribute this to a slightly shorter month and plenty of good grocery store sales!

Want to know how we eat so well, for so little?  — There’s actually a post about it.

Despite our low food costs, we eat like kings.  February included several (three!!) delicious dungeness crab dinners.

crab in sink
Fresh dungeness crab from Alaska. At our house, Financial Independence isn’t about eating rice and beans every day.

I couldn’t resist the low prices on fresh Alaskan crab ($3.99/lb), so we indulged a little bit.  Yes, it’s a splurge — but what else is financial independence for?

Enjoying life is at the top of my list.

One thing my kids really enjoy in life is pizza.  They’re always asking me for pizza.  Rather than blow a perfectly good $50 on delivered pizza, I make it at home for just a few dollars.

pizza ready for cheese
Another delicious pizza, ready for some cheese.

I really like making pizza at home  — it’s one of those things that turns out WAY BETTER than anything you can order from a pizza shop.

Carnitas tacos were also on the menu in February — pork shoulder was on sale for $1.47/lb!   This is one of those dishes that uses an extremely cheap cut of meats, and it usually takes all day to prepare.

Rather than standing in front of a stove all day, I set up all the ingredients in the slow cooker and come back 6 hours later.

carnitas

Despite being really cheap meat, the pork shoulder is fall-apart-tender after about 6 hours in the slow cooker.

As you can see, we managed to eat well AND remain under-budget.

For the Tako family, financial independence isn’t about denying ourselves the good things in life — it’s about allocating each of our dollars for maximum benefit.

Good food is just one expression of this principal at work.

 

Fuel

Fuel costs were very low for the month of February, at $40.  We usually spend about $100 on fuel in a typical month of driving.

The difference in fuel costs appears to be unintentional timing between fill-ups — One happened right before the first of February, and another happened right after the 28th.  Dumb luck I guess.

 

Mortgage And Childcare

As usual, our mortgage and childcare expenses were the bulk of our monthly spending at $4450.78.  These are our two largest monthly expenses, but we consider them entirely optional.

Why?  Both expenses can be eliminated at any time — We could take the kids out of daycare and keep them home with me (I wouldn’t have time to blog), and our mortgage could be paid-off with unused cash.

Thus, we choose to pay these large bills on purpose because of the advantages they provide — The kids are becoming fluent in a second language at daycare (which should provide benefits later in life).

For the mortgage, I’m betting I can find investment returns greater than the interest on our home loan.  So far this has proven to be true, but I’ve got a good 20 years before the storybook is closed on this one.

 

Utilities

Utilities for the month consisted of a gas/electricity bill of $154.  This is a typical high winter power bill for us because of additional heating and laundry drying. (It’s extremely wet in the Pacific Northwest, so we need to use a dryer in the winter)

Winter power bills are expensive, so we do our best to save money by not keeping the house overly warm.  We keep our extremities warm instead.

In the summer months, the power bill usually drops to $100/month.  I expect that will be the case again this summer.

 

Other

The “Other” category is where all the fun stuff is this month.  The biggest expenses are travel related — we purchased four airline tickets to Texas ($903), airport parking ($106), and a rental car ($224) for our trip to the Lone Star state.

The trip is happening in March, but we saved a bunch of money by prepaying for items (like parking) whereever possible.

No, we didn’t try to travel hack this trip, so I won’t try to regale you with tales of free travel.  Yes, it was expensive.  Travelling with a family isn’t cheap and there’s going to be more expenses once we arrive (food, hotels, entertainment, etc).

In total I estimate the trip is going to cost us about  $2,000.  On the bright side, this trip is going to be far cheaper than our Japan trip, which totaled $5,690.

 

Cumulative Expenses

We now have two months on the books in 2018, and we’ve spent a total of $12,016.  That’s $6,008 per month.

This amount is roughly inline with last years spending of $73,173.  We’ll probably spend a similar amount in 2018.

net expenses

 

Dividends For February

Now for my favorite part of this post — the dividends!!

Unfortunately, dividend income from our taxable accounts was only $359.60 in February.  Yes, I realize that’s not a lot compared to our $6k in spending.

This just how the dividend game is played — some months are feasts and others are famine.  Our biggest dividend payments usually happen in March, June, September, and December.  Look for the feasts then.

cumulative dividends

For the year so far, we’ve earned a total of $2,380 in dividends.  This doesn’t sound terribly exciting by itself, but our goal is to earn $53k in dividends for the year.

The Tako family makes zero effort to smooth out these lumpy dividend results.  Instead, we maintain a health cash balance in the checking account, which we routinely refill from our brokerage accounts.

 

Investment Changes In February

February brought significant (10%) drops in the stock market, but I didn’t manage to pull the trigger on any new stock.  We didn’t invest any excess cash.  Valuations were slightly better on a few stocks, but in my opinion the market was still very expensive.

Instead, I spent my time looking for good investing ideas, reading the Berkshire Hathaway shareholder letter, and re-reading Joel Greenblatt’s wonderful book on Special Situations.

Meanwhile, Mr. Market kept-on quoting different prices.  Some days were higher, and others were lower — but none were enticing enough to draw out my greenbacks.

Some people ask me, “Don’t you fear missing out on another year of big stock market gains?”

No, because I never attempt to make money from the stock market.  Stock market returns are unpredictable, and I can’t predict the future.  I make my money from owning businesses.  (Small pieces, but businesses nonetheless.)

This means I’m content to sit on the sidelines and wait for my price.  It’s one of the great challenges for any good investor — the waiting.

To quote a section from this year’s Berkshire Hathaway shareholder letter:

“In the next 53 years our shares (and others) will experience declines resembling those in the table. No one
can tell you when these will happen. The light can at any time go from green to red without pausing at yellow.
When major declines occur, however, they offer extraordinary opportunities to those who are not handicapped
by debt.”

Are you ready for a major decline?

 

[Image Credit: Flickr1]

27 thoughts on “February 2018 Dividend Income And Expenses

  • March 7, 2018 at 4:49 AM
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    Gosh, your core expense are impressively low! Nicely done Mr Tako. We are about on par as to the amount of dividends for February (post coming tomorrow).
    As to your question on the major decline, yes please, could use some good opportunities about now! As most of our investment consists of real estate, it would be a great opportunity to balance the overall portfolio and gain some “market” share back in stocks 😉

    Reply
    • March 8, 2018 at 8:03 AM
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      Thanks Cheesy! I can find pockets of decent returns, but it’s a lot of work.

      Reply
  • March 7, 2018 at 5:52 AM
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    February sounds like such a great month for you and your family!

    Mr. FAF and I started talking about our summer vacation yesterday, and I’m already excited. Whenever we go, good food is a must, so we’re thinking about VA beach or the Chinatown in Flushing, NYC. I just can’t wait for the beautiful scenery and delicious food.

    It snowed in DC yesterday night! @_@

    Reply
    • March 8, 2018 at 8:04 AM
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      Summer vacations are awesome, I can’t wait! I think this summer we’re going to do some road trips with the kids.

      Hope you enjoyed the snow!

      Reply
  • March 7, 2018 at 6:21 AM
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    Ouch, sorry about the mini golf! Those places can get pricey super quick. Which is weird, because I always associate mini golf with being cheap, y’know? Not sure if it’s an option for y’all, but we bought a Book of Free for coupons on entertainment/food in our area. I believe it comes with coupons for mini golf. 😉

    And that crab looks sooo tasty! Wish we could score some for under $7/lb!

    Reply
    • March 8, 2018 at 8:06 AM
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      Usually crab is a lot more expensive here too, but for some reason it’s been affordable lately.

      Probably because it’s in season, or as a loss leader to drive store traffic.

      Reply
  • March 7, 2018 at 8:35 AM
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    Why do I always get hungry while reading your posts? It also doesn’t help that we both have food in our blog names. Travel is the big kicker for us too! Our monthly spending goes way up the months that we purchase flights. Even though it is still money out of our pocket, they are luckily all business expenses and thus a tax write-off.

    Reply
    • March 8, 2018 at 8:07 AM
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      You can write off your travel as a business expense? That sounds like a pretty sweet deal!

      Reply
      • March 8, 2018 at 10:54 AM
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        Come to think about it, you should too since you write about it!

        Reply
  • March 7, 2018 at 9:35 AM
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    Have a great trip to Texas, Mr. Tako! Where about are you headed? I love Dallas and Austin. And, yes, everything is much bigger out there. You can feed your family of 4 on a single plate of BBQ. 😉

    I’m definitely ready for a market decline for the next few years if that’s what’s coming. Who knows, but I’m looking forward to when the real estate markets correct and I can pick up some easy deals then. Until then, I’ll be pounding away on my keyboard and messing around with my FBA side hustle.

    Reply
    • March 8, 2018 at 8:10 AM
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      Mainly we’ll be around the Houston/Galveston area, but will also visit Austin and San Antonio.

      If interest rates start rising, you might just get your real estate market decline! The RE market is very interest rate sensitive.

      Reply
  • March 7, 2018 at 10:40 AM
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    Hoping I am:) Otherwise I may have to rely on side hustles a lot more than planned!
    Looking at your mortgage payment, I was wondering; in the current market, do you ever consider just paying it off?

    Reply
    • March 8, 2018 at 8:12 AM
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      Nah. I’m almost certain to earn more than 3.5% over the next 20 years. Paying it off would mean considerably less money in the long run.

      Reply
  • March 7, 2018 at 1:23 PM
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    Enjoy Texas, there is plenty to do it’s just a very big state!

    We loaded up on pork shoulder too, as like you it was $1.49 a lb, but also BOGO!

    Reply
    • March 8, 2018 at 8:13 AM
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      Yep, the pork shoulder was a great deal. I’ve already gotten 4 meals out of it with plenty more to go!

      Reply
  • March 7, 2018 at 6:51 PM
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    Wow, all those awesome food pictures makes me hungry. 🙂

    Stock market’s been jittery but we’re holding up well! That’s the power of yield and geographic arbitrage. Enjoying $1 wine in Europe (yes, wine really is cheaper than water here) right now and not giving a crap about volatility. It’s a good life!

    Reply
    • March 8, 2018 at 8:16 AM
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      I keep hearing this, that wine is cheaper than water in parts of Europe. How is that possible? All the labor involved has to cost something!

      I usually think of water as being very cheap (almost free), but perhaps that’s not the case in those areas.

      Reply
    • March 8, 2018 at 8:19 AM
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      Thanks Mrs. Smelling Freedom!

      I totally agree with you — trade wars are not good for the economy. We’ve battened down the hatches and reefed the sails just in case. We might not go as fast, but we’re still making progress!

      Reply
  • March 8, 2018 at 7:15 AM
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    The next major decline is coming. It’s just a matter of when. I just keep investing in the market as a whole and waiting. What goes down must eventually come back up.

    Reply
    • March 8, 2018 at 8:21 AM
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      We’re keeping more cash on-hand just in case, but when I find a decent return I’m still open to investing.

      Nobody knows when the declines will occur, but sooner seems more likely than later. 🙂

      Reply
  • March 8, 2018 at 10:12 AM
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    Which part of Texas are you visiting? I’d love to catch up with you if you make to the Houston area!

    Also, I am human or cephalopod and have checked the appropriate box.

    Reply
    • March 10, 2018 at 9:21 AM
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      Our schedule is pretty packed (it’s a big state), but we will be in the Houston area at least part of the trip. I’ll shoot you an email if we have some spare time in Houston!

      Reply
  • March 8, 2018 at 2:17 PM
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    I really enjoyed the Berkshire Hathaway letter too, lots of good pearls of wisdom.

    I had about $300-something dividend income for February too. I like your comment about dividend income being feast or famine. That’s a good way to describe it.

    Texas in March sounds like a great trip! Escaping the PNW rain seems like a good idea.

    Reply
  • March 30, 2018 at 4:02 AM
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    Love your blog!
    How did you have 0$ in insurance expenses? 0$ for car, house, etc?
    Any insight appreciated. Thanks

    Reply
    • March 30, 2018 at 8:55 AM
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      We usually pay annually for these things, so they only show up once a year. In the case of housing, insurance is included in the ‘mortgage’ line item.

      Reply

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