August 2020 Dividend Income And Expenses

August is normally a month for travel… but 2020 is anything but a “normal” year.  Despite the crazy pandemic situation, the Tako family did manage to do a little traveling this August.

With hot temperatures blanketing most of the Pacific Northwest, we first decided to escape the summer heat by heading out to the coast.

Yes, the pandemic did slow us down this year.  Our summer adventures were pretty minor compared to our previous summer breaks, but the fun didn’t end there!  We had two weeks left in August before school started, and I opted to take the boys to visit their Grandparent’s.

We hadn’t visited my parents since before the pandemic began, so this was a long overdue road trip.

The boys had a great time baking chocolate-chip cookies with Grandma Tako…

Grandpa Tako took them fishing at a nearby lake…. but they weren’t lucky enough to catch any fish.  Fortunately, the boys still found plenty of ways to have fun at the lake.

As a consolation prize, we took a small detour to visit a nearby fish hatchery.  We were just random people showing up unannounced, but the caretaker of the facility was super nice.  He even let Tako Jr. #1 feed the fish!

Next year, there should be plenty of rainbow trout to catch when these little guys get release!

Dividend Income In August

Speaking of small fry that eventually compound into big fish, our dividends for the month of August amounted to $3.38.  Yes, I admit that’s a very small monthly total, but this is pretty normal for the month of August.

August is not typically a big dividend month.  Stocks usually pay-out dividends quarterly, so this means most dividend payments are heavily weighted to the months of March, June, September and December.

For the year so far, we’ve collected $30,902 in dividends.  Most of our stocks haven’t cut their dividends, and our passive income sources continue to fund our lifestyle without interruption.

Despite my earlier estimation of poor dividend growth in 2020, I suspect we’ll actually see decent dividend growth this year, due to the effects of compounded money during market lows.

August Expenses

Household expenses in August totaled $3,547.  This was a fairly typical month of spending for us (despite the road trips and a few unplanned repair expenses).

Here’s the breakdown by expense category:

Groceries

Groceries for the month of August totaled $484, which is average for our family of two adults and two children.  (Despite the fact that the CPI for food and beverages appears to be rising)

After a very expensive July, it was good to see our food expenses back to normal in August…and we ate very well on that amount!

What can a family eat on a mere $484?  Pretty much anything we want!

Salmon went on sale at the grocery store, so I made a couple batches of Teriyaki salmon.  It’s a family favorite! (The photo below is teriyaki salmon with baked parmesan zucchini and furikake rice.)

Since the garden was producing plenty of Thai basil this August, I decide to make Thai Holy Basil.  It turned out great!

One of my favorite go-to dinner dishes is Mabo Tofu. We make a Japanese version of the recipe, which is a bit sweeter and a bit less spicy than the Chinese variety.

You can find my recipe for Japanese-style Mabo Tofu here.

Mortgage

As usual, our largest single monthly expense is the mortgage on our home.  Our mortgage amounts to $2360 every month, and this includes all the extra expenses like property taxes and homeowners insurance.

While we could technically pay off our remaining mortgage at any time, we’ve chosen to retain that money and hunt for better investments.

Childcare

Childcare was $0 this month, as it has been during the entire pandemic.  With both kids officially in public school now, I think it’s time I finally retired the “child care” category from this post.  They’re unlikely to ever need to go to daycare again, so I’m happily going to remove this category from future posts.

Internet

As in previous months, our internet expense was $45 in August.  This is our regular monthly amount, and we’ll pay this same price for the rest of the annual contract.

For the curious, we pay for 100Mbps cable internet from Comcast (XFinity) with 5Mbps upload speeds.  It might not be the fasted package out there, but it’s more than sufficient for our needs.

Utilities

Utilities in August totaled $176.  This includes our energy bill ($54) and our waste disposal bill ($122).  During the summer months our energy usage tends be quite low, due to the mild temperatures we experience in the summer months.

Compared to the rest of the country, summers are cool in the Pacific Northwest, so we generally don’t need to pay for air conditioning.  Winters are also fairly mild, which means our utility expenses are quite affordable.

Insurance

Insurance costs in August were $0.  Whenever possible, we try to pay insurance bills for the entire year all in one go, to lower the total cost.  For example, our car insurance is paid once per year.

(For the curious: We do have home-owners insurance.  It’s included in our mortgage.  Call me lazy, but I don’t normally break that number out here in the insurance section.)

Other

The “Other” category is something of a catch-all for all the expenses that don’t fit elsewhere.  Other spending amounted to $370 in August.

Here’s the breakdown of individual expenses:

• $198 — New 1TB Samsung SSD.  I had some bad luck in July, and this was the replacement part.
• $47 — A new garden hose and a few replacement parts for the automatic drip watering system in the garden.
• $85 — 4 oil filters and 10 quarts of oil, for DIY oil changes.  Shell Rotella was on sale.
• $10 — A day pass for Fort Casey State Park.
• $22 — 6 pack of boys athletic socks.  The kids needed new socks.
• $9 — Replacement key for our new Thule bike rack.  The bike rack itself was free, but the key was missing.

Cumulative Expenses For 2020

For the year 2020 so far, the Tako family has spent $26,668.  This works out to an average spend of $3,333 per month.  With YTD dividends of $30,902, our total spending is $4,234 less than our total dividends.  That’s great news!

As long as we keep a good eye on our expenses, I expect this differential to grow even larger by the end of 2020!  If this trend (of having excess cash flow) continues, we’ll have plenty of excess cash to keep compounding!

August 2020 Investing Update

I wish I had exciting news to share in this month’s investing update, but just like last month I avoided buying overpriced shares.  Most stocks looked mighty expensive when considering the recession.  There’s also a high likelihood the economic recovery is going to take a very long time.

While there will always be a certain class of investor that will pay “whatever” for a business, I choose to take a more sensible approach and escape the madness of crowds.  Yes, sometimes this means I miss-out on the big upswings when the market gets euphoric.  I also miss out on the downswings when the mood turns sour.  That’s perfectly OK by me!

Prices for many popular stocks (in particular tech stocks) were downright silly in August.  “Irrational” might be a better word for it, and I try to avoid making irrational decisions.

I happily “sat on my hands” and left our portfolio alone in August.

Will stock prices return to rationality anytime soon?

I have no idea!  I can’t predict the future, but the leap from here to a “full economic recovery” looks like a very bid leap indeed.

Best of luck to all investors!