Yes, it’s that time again! That time of the month when I break down expenses and dividend income for your reading pleasure!
Ever have one of those months where you spent a ridiculous amount of money, but don’t have any outrageous expenses to account for it? April was like that for us.
We had a large number of small expenses that added up to a really big bill in the month of April. April also contained most of our Hawaii expenses, (not including airfare costs).
Expenses For April
The month of April had expenses of $6,587.67. They were way higher than usual. We have a budget goal of $4k per month for 2016. Unfortunately in April we were well over that goal. Ooops!
What happened in April? Did we give up frugality and spend with abandon?
I hope not! We had family visiting in March & April, which means we ate out more than usual, and spent more on food than usual. The Hawaii trip also made April kind of crazy.
April brought our average monthly spend a lot closer to the projected $4k budget we’re expecting:
In case you missed it, I did a series of blog posts about “Visiting Hawaii on the Cheap”. In part one of the series, we saved money on flights, lodging, and rental cars. In part two we saved money by eating delicious food in Hawaii. In part three we covered saving money with cheap vacation activities.
So how much money did we spend on our little vacation in paradise? Outside of airfare, our Hawaii expenses came to $1,392.96. In total we spent $174.12 per day for 4 people. Yikes!
Our largest expense was the rental house for $935.68. We went a little crazy and got a nice house with a private pool. This was a shared expense with other family members, so it represents our half of the lodging for 7 nights (and 8 days) – meaning we paid $133.67 per night for lodging.
We spent $40.45 per day for food, rental car, gas, and entertainment. I know I know…that’s a shameful level of spending. I should be cast out from the frugal multi-millionaire club for that kind of spending! I’ll try do better next time.
While this was a short family trip, we want to do a lot more slow travel once the boys are older. On a $4,000 monthly budget that gives us roughly $133 per day to spend. Clearly we overspent that amount in Hawaii.
If we do decide to take longer trips, we’ll need to do a better job of keeping the lodging expenses lower.
Dividends for April
Our taxable portfolio continues to produce a steady stream of dividend income. We had a solid dividend income in April at $5,443.
For 2016, our intention is to live off dividends from our taxable accounts, without selling equity investments. So far this year we’ve seen our dividend income bounce around significantly:
Currently our average dividend income is below our average expenses. Uh-oh! We’re in the red for the year!
OK OK, I know…but I’m optimistic. We have seven months for the dividend income and our expenses to cross back into the green. We don’t plan on going to any more exotic locales for the rest of the year. That should help.
I’m counting on expected dividend increases, and income from new investments to bring us back into positive territory. This is our first year trying to live off dividends alone, so it’s kind of a best guess.
In April we made no new investments. We had family visiting, so I was too preoccupied to make any new investments. Just like in March, we stayed-the-course and just collected dividends.
That said, I need to get my butt in gear and do something with our excess cash. It’s burning a hole in my pocket; I really need to get it invested. The last time I put any money into the stock market was on February 29th.
I’m looking a several possible investments in the next month or two. The S&P500 is currently up 1.83% for the year, and has a PE ratio of 24.05 (or an earnings yield of 4.16%). While I’m not exactly thrilled with paying even high prices, an earnings yield of 4.16% is still better than the 0% I’m getting from money market funds.
A Sale of Endurance?
Endurance reported earnings today, and the results were decent. I’m still concerned. Return on equity continues to shrink, and the market for insurance and reinsurance has been flooded with excess capital (primarily from hedge funds). On top of that, interest income has been terrible due to low interest rates around the world.
This all adds up to lower returns in the future for insurance and reinsurance companies. The situation shows no signs of resolving itself anytime soon.
What do you think? Did we overspend in April? Some of you readers are far more frugal than I am. Did we blow too much money in Hawaii?
[Image Credit: Flickr]