November 2017 Dividend Income And Expenses


Wow, it’s December already?  The month of November absolutely flew by this year.  Time flies when you’re recovering from a tiring month of overseas travel I guess.

At the beginning of every month, I write this regular post to review our expenses, dividends and investment changes for the prior month.  Not only is this post a great opportunity to peek at all our gory spending details, but it’s the perfect opportunity for me to review our progress against annual goals.

Unsurprisingly, this year is going smashingly well because of the ongoing stock market party

 

Activities In November

November was a month of frugal-fun family activities.  As you know, we maintain a economic garden at our home.  Few things grow in the colder months of the year, but some garden tasks must be done in the fall.

Due to our travels, we missed many fall gardening activities… the most important of which is planting next year’s garlic crop.

We were late, but finally found a dry day in mid-November to get the planting done.

The Tako crew planting next year’s garlic crop. Ultra-ridiculous poses are to be expected with this lot.

Garlic is one of those funny things planted in the fall, not in the spring.  We were late this year, so I’m not sure if we’ll have a long enough growing season for a good crop.

The kids were finally old enough to help with the planting this year, and they had a great time digging holes and filling them with bulbs.

Our garlic bulbs were from last summer’s harvest, as they have been for many years.  This is part-and-parcel when operating an economic garden — The last harvest seeds the next one.

Who needs to buy “starts”?  The original bulbs for our garlic crop were free from a family friend. With care, this line of garlic has fed two generations of families without a dollar spent.

Late November also means the start of the holidays.  We enjoyed a potluck Thanksgiving dinner with some friends, and the kids were super excited to setup this year’s Christmas tree.

tako christmas tree.
Christmas trees don’t need to be expensive — Our tree, ornaments, lights and everything you see on it, was completely free.

 

Expenses In November

Expenses in November amounted to $5,959.17.  Compared to what we spent in October, this was a refreshingly low(er) cost month.  We haven’t had a sub-$6k month since July, so I’m very pleased to see our monthly expenses return to ‘normal’ after the big trip to Japan.

november expenses

Food

Food spending in November was higher than usual at $642.93.  Normally our monthly food spending is about $500.

Why the higher food expenses?  Did we suddenly start shopping at a more expensive stores? Eating more expensive food?

prawns for sale
After eating TONS of extremely good food in Japan, we returned home to an empty fridge.

Nah!  In September (before we left on our Japan trip), we avoided buying any unnecessary food.  (No point letting food rot in the fridge.)  Once we returned from the trip, that empty fridge and pantry needed some serious restocking…. thus our higher than average November food spending.

 

Fuel

Fuel expenses were also higher than usual in November at $137.  We didn’t drive any more than usual, so I’m attributing this increase simply to the timing of our gas-ups, and slightly higher fuel prices in November.

 

Mortgage & Childcare

Mortgage and Childcare expenses were normal for the month at $4,450.  Yes, these are our largest two expenses for the month.

We consider these two expenses entirely optional.  Why?  We could eliminate both of them at any time — We could take the kids out of daycare and keep them home with me (I’d probably have no time to blog), and our mortgage could be paid-off at any time with unused cash.

In time, I expect both of these expenses will disappear or be greatly reduced.  For the mortgage, our long-term plan is to sell our home in this HCOL location (realizing significant appreciation) and relocating to a location with a better quality of life.

The cost of daycare will begin to decline next year when our oldest son (Tako Jr. #1) starts kindergarten, and will be eventually eliminated when both kids are in school.

 

Utilities & Internet

Utilities and Internet expenses came in at $321.83 and $49.99 respectively.  The utilities paid this month were our bi-monthly garbage and water bills.  Both were expenses were higher despite our usage remaining roughly the same.  (Utility monopolies… ugh!)

November would normally see a big seasonal swing in our power bill due to colder temperatures, but we haven’t had to pay a power bill this fall.   We pre-paid $300 back in August to collect some credit card rewards, and some of that balance is still outstanding.

 

Insurance

Insurance for November was $0.  We paid our annual car insurance bill in September, and that was a doozy!  We pay our insurance costs in one big annual lump sum to save money.

As long as you’re good at saving for that big annual bill, paying in one big lump sum can be a good way to save money.  Check with your insurance provider to find out if they offer this option.

 

Other

The Other category in November came to $356.59.  Normally we try to keep our “Other” category small, but November included several small holiday gifts and a very large car licensing fee.

Car tab licensing fees increased by a HUGE amount this year (essentially doubling) to $292.75.  The increase in 2017 was due to a voter-approved increase of RTA taxes.  (Yet another reason why driving old-beater cars is just a better way to live.)

 

Cumulative Expenses

Cumulative expenses for the year have now reached $67,715.  This is significantly more than what we spent in 2016, and can be attributed to higher daycare costs and more travel spending in 2017.

net expenses november 2017

Outside of daycare and our mortgage, we’re pretty frugal people — core expenses for the year are a mere $19,489.  This includes all of our travel expenses, including that month-long trip to Japan.

My goal for the year is to keep our core expenses at 50% of our dividend income, and it looks like we’re set to reach this goal in 2017.

 

Dividends In November

Dividends in November amounted to $198.   Compared to previous months this was a weak showing for dividend income — but not an unexpected one.  Most companies and funds pay out dividends quarterly.  It just so happens that February, May, August, and November are the weakest months for dividends in our portfolio.

Some people ask if we try to “smooth” our dividend income from month-to-month.  No, we don’t.  We ride out the ‘bumps’ in income by maintaining a healthy cash cushion.  Currently this cash balance can pay all our expenses for about 5 years.

In total, we’ve received $43,057 in dividends so far this year.  Will we meet our 2017 dividend income goal?  After the December dividend orgy, we should be very close!

annual dividends november 2017

 

Investment Changes In November

In November, our cash balance continued to grow.  Every time I looked away, those little dollar bills must have been reproducing.  By the time November was over, there was $338,872 of those buggers to invest.

Obviously I would prefer to have a smaller cash balance, but equity prices are elevated.  As I mentioned in The Stock Market Holiday Party, the S&P 500 earnings yield is now 3.95%.  That’s historically very low, which means prices are probably high.

Our November investing plan originally included buying more Southwest (LUV) shares… but the stock market went a little insane toward the end of November!  Shares of Southwest went up over 10% in the span of just a couple days!

southwest plane
Like the planes, Southwest’s shares absolutely soared in November.

Why the sudden rise?  Apparently in response to the proposed U.S. corporate tax cuts.

Most investors would be thrilled to see stock prices rise, but I’m a different kind of octopus.  As a net purchaser of stocks over my lifetime, I prefer lower prices over higher prices whenever possible.

That’s OK though, I’m perfectly content to sit on my Smaug-like horde of cash until a better investment or price comes along,  It’s times like this when I pick-up a good book and read instead of worrying about markets.

My current book is something of a treasure in itself…  I was able to borrow a copy of Seth Klarman’s book Margin of Safety.  This book is so incredibly rare that it retails for over $1000 on Amazon.  Yes, really!

I have no idea if the book is truly worth the price, but I’ll let you know when I’m finished.  Maybe I’ll publish a little “book report” if there’s interest.

In the meantime, Happy Holidays!

 

[Image Credit: Flickr]

28 thoughts on “November 2017 Dividend Income And Expenses

  • December 6, 2017 at 5:03 AM
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    $650 for good sounds great to me. Whenever I do my food expense reports, I will think about your good expenses and how nice the number is hehe.

    Our family is traveling for four days in Dec. I’m expecting our food budget increase, but I’m secretly hoping that it won’t.

    P.S. The Xmas tree looks beautiful! How did you get it for free?

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    • December 6, 2017 at 12:31 PM
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      A neighbor was giving it away on our local BuyNothing group.

      Reply
  • December 6, 2017 at 5:36 AM
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    Looks like you should meet your dividend goal for the year. Yes, it’d be great to read a book report about this rare $1000 book.

    This will be my last month in the Pacific Northwest. Driving across country to Chicago after the new year should be interesting…

    We will also be looking to sell our home and rental here and reallocate the proceeds elsewhere. We’ll rent in Chicago until we can find a good place at a decent price.

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    • December 6, 2017 at 12:32 PM
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      Good luck in Chicago! I hope it works out for you!

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  • December 6, 2017 at 6:02 AM
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    Is mortgage part of the core expense?
    Your dividend looks great. Kindergarten will be great for you. Childcare is expensive.
    Great job with the garlic. Mrs. RB40 has spent some time in the community garden this fall, but it’s mostly weeding and cleaning up. Nobody planted over winter crops at our garden. Gardening is no fun when it’s raining.

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    • December 6, 2017 at 12:33 PM
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      No, I don’t include it Joe. We could pay off the mortgage at any time. It’s “optional” at this point.

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  • December 6, 2017 at 6:09 AM
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    Congrats on your sub-6k month! And those orange shrimpy things don’t look like squid to me. You’re supposed to be having squid 🙂

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  • December 6, 2017 at 6:13 AM
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    Planting garlic crop? That’s so cool. I’m sure you can get any garden work done beautifully with the two great helpers … Congrats on the sold dividend income this year!

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    • December 6, 2017 at 12:34 PM
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      Thanks Helen! They love to help with almost everything… for about 10 minutes! 🙂

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  • December 6, 2017 at 7:02 AM
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    Looks like another great month (and year in general!).

    I read this ” I was able to borrow a copy of Seth Klarman’s book Margin of Safety. This book is so incredibly rare that it retails for over $1000 on Amazon. ” and I was like “Say what?”

    How could a book be so rare? Can’t they just reprint more copies if it’s so popular? Well, now I’ve gotta go check it out…

    Reply
  • December 6, 2017 at 7:45 AM
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    Nice garlic patch! I put our garlic in the ground a couple months ago. Already have some green peeking up with with the warm weather we’ve been having. It’s one of my favorite crops because it is unique in the way you grow it, and we use a lot of it 🙂

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    • December 6, 2017 at 12:37 PM
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      Thanks Mr. CK. We definitely use a lot of it too!

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  • December 6, 2017 at 7:50 AM
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    I’ve got a daughter who heads to kindergarten next year as well. It’s the “raise” my wife and I have been looking forward to for years. Enjoy the windfall! Then again, I’m sure we will miss the little ones when they are seasoned elementary scholars.

    Sounds like someone needs to approach Mr. Klarman about publishing another round of Margin of Safety. Then again, after looking him up and seeing his net worth is in the neighborhood of 1.5 BILLION, I don’t think Seth is hurting for money.

    Looking forward to the book report should it come to fruition.

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    • December 6, 2017 at 12:38 PM
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      For our home, I usually take 90% of Zillow’s value. That’s pretty close to what we’d get for it if we sold.

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  • December 6, 2017 at 9:39 AM
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    Nice cash horde! Can you sleep on top of it like Smaug?

    Love the garlic planting pics. I definitely want to do some additional gardening this coming year with my kids and try out some new veggies.

    Congrats on an efficient spending month. Enjoy your dividend explosion this month.
    Michael @ Financially Alert recently posted…Financial Update Report – November 2017

    Reply
    • December 6, 2017 at 12:39 PM
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      Thanks Michael! I hope we break $9k in dividends this December!

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  • December 7, 2017 at 6:10 AM
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    Your monthly expenses are so low once you remove mortgage and child care, that is impressive. How do you manage not to have more discretionary expenses for kids and/or entertainment?

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  • December 7, 2017 at 8:26 AM
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    Hi Mr. Tako!

    I always enjoy reading this blog — hope you do more travel segments :)! I’m jealous of the Japan trip, took one earlier this year and seeing all the pictures reminds me of the heavenly (yet cheap!) food. Onigiri for $1 a 7-11 is the stuff of dreams now. Also, the rotary sushi and Yakitori. Oh my, the food!

    I had a question though, everyone seems to be focused on dividends when doing the monthly income reports. I know LTCG and qualified dividends are the same tax rate, is this why? Then my question becomes, why not focus on LTCG? Curious for when I start withdrawing and being FIRE’d :).

    Best,
    BirdsofaFIRE

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    • December 7, 2017 at 9:07 AM
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      Mainly I don’t focus on capital gains because we don’t harvest capital gains to pay for our lifestyle. We primarily live off dividends from our taxable brokerage accounts.

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  • December 7, 2017 at 12:26 PM
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    “the S&P 500 earnings yield is now 3.95%. That’s historically very low, which means prices are probably high.”

    Has been higher than 4% for 140 years; only in the years 1999, 2000, 2001, 2002, 2003, 2004, & 2009 has been lower.

    Reply
  • December 9, 2017 at 6:19 PM
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    Where do I start right here Mr. Tako? Great results. Heck, despite it being an off month, you are still realizing strong dividend growth compared to August and the other second quarters of the month.

    Great idea with the Garlic. We use it for a lot of recipes and I have a few new areas of weeds in our new house that I want to take care of in the spring. But I’ve wanted to find something easy to plant and it looks like garlic may be at the top of the list. Hopefully I didn’t miss the planting season, otherwise I’ll have to wait until next fall.

    The market is crazy right now. It is hard finding a great deal out there. Trust me, I’ve been searching left and right haha Having cash isn’t a bad thing and you will just need to be ready to strike when the right opportunity presents itself.

    Can’t wait to see the numbers you post in December. It will be crazy!

    Bert

    Reply

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