December 2018 Dividend Income And Expenses


December is gone and a new year has begun!  Now that 2019 is here, it’s time I did one of those final “tally-up” blog posts which detail all of our annual numbers.  I’m usually just as curious as you guys to see how much we spent … and earned in dividends for 2018!

This last year was just a blur of activity.  Especially in December, I’ve never felt busier.  Is it just me, or does the time seem to pass faster during the winter holidays?

For the Tako family, we had a great December with the kids — We played a ton of board games, built plenty of Lego structures, and ate WAY WAY too much.

Losing a few pounds is definitely on my 2019 list of New Year’s resolutions!  Wish me luck!

Unfortunately the weather was cold, miserable, wet, and stormy all month.  Hardly a dry day for the entire month!  We spent most of December indoors trying to stay dry, instead of going outside to burn off some of those excess calories.  Oh well, at least we got to spend a plenty of time with the kids.

board gaming with kids
December included plenty of board games with the kids. Board games are cheap entertainment, and plenty of fun for the whole family.

Before the holidays, I spent a large chunk of my December free time completing Christmas gifts (discussed in this post).  Our preference is to make gifts as often as possible.  This gifting philosophy is a little unusual, but I feel like giving a gift made with your own two hands has so much more meaning than just ordering something off Amazon.

Don’t you agree?

 

Dividends In December

December is one of those “big dividend” months, when many of our assets pay-out a quarterly dividend.  December dividends amounted to $10,722.  While this is not a monthly record, the number is higher than last year’s December dividend payout by 2.6%.

december dividends

For the entire year, we collected $51,230 in dividends.  This is a sizable sum, but it did not meet my Annual Dividend Growth goals.  I was hoping for $53k.

Our dividend payouts were primarily lower due to redeemed preferred shares near the beginning of 2018.  Preferred shares work similar to bonds, in that they pay a regular income until a given date when they are usually redeemed by the “borrower”.  Unfortunately it’s just not possible to find preferred share investments in this economy that yield anything close to what we were receiving.

(Imagine getting a low risk 12% yield for years, and then suddenly having to settle for close to 6% on that capital)

Ultimately, this means a lower annual dividend income… despite my attempts to reinvest that cash into intelligent places.

The only bright spot to this situation was the fact that most investments lost value in 2018, and our uninvested capital remained safely in cash (which you can read about in this post).  Silver linings I guess.

 

December Expenses

For the entire month of December, we spent $5,061.  This amount is a fairly average month of spending for us.  While it might sound like a lot, this amount is nearly $400 less than 2017! (You can review the numbers for December 2017 here).

Here’s our monthly expense breakdown by category:

december 2018 expenses by category

Food

Yes, we totally blew the pants off our food budget this December.  Normally we spend around $500 per month on food, but this December we spent $648.  That’s a little outrageous, I know!

Before you click the close box on your browser window, please note that this year we hosted our wider family Christmas celebration.  Every year we rotate who hosts the Christmas celebration, and this year it was my turn to host.

Hence the higher total monthly food spending.  The food was delicious of course, and this would hardly be one of my regular monthly updates without some food photos…

First up is my delicious shrimp and chicken pho (you can find the recipe here).  Perfect for a cold, wet, Pacific Northwest day.

chicken and shrimp pho!

We ate plenty of “comfort food” this December.  This wonderful oyakodon made an appearance on our table, which is a kind of donburi dish from Japan.

oyakudon

With the kids being out of school in December, we also tried to get them as involved in the kitchen as possible.  In this particular photo, Tako Jr. #2 was helping make a cranberry-orange cake with Mrs. Tako.

cooking cranberry cake with mom

For this particular food-item I was merely the photographer, but I happily lent out my tasting skills when the cake was ready.  It was as easy to eat as it was “easy on the eyes”.

cranberry orange cake.

After I finishing the last of the homemade Christmas gifts, I had a little extra time one day to whip-up a more complicated dish — Katsu curry.  This is one of my personal favorites.  At first glance it might not look terribly complicated, but the dish requires preparing both tonkatsu AND a curry… two dishes which are time consuming to make.  I easily spent two hours preparing this particular meal.

katsu curry

Another favorite from the month of December was this hayashi rice and cucumber soup by Mrs. Tako. (You can find her cucumber soup recipe here.)  This is comfort food around our house when the weather gets cold and dark.

hayashi rice and cucumber soup

Speaking of comfort food — Tacos made an appearance in December.  (Of course they did!  They always do!)  I made my classic slow cooker shredded chicken tacos a couple of times during the month.  These guys are super easy to make, and extremely delicious with all the usual toppings.

Shredded Chicken Tacos

 

Fuel

For the month of December we spent $69 filling up the cars with gasoline.  Normally we spend around $100 per month, but this lower amount reflects the smaller amount of driving we did in December.

Mrs. Tako had most of December off from work, so the driving mostly amounted to trips to the grocery store and trips to Christmas parties.

 

Internet

Yes, our internet bill was $0 again in December.  As I’ve discussed in previous months, we pre-paid our internet expenses to meet a credit card sign-up reward back in May.  This resulted in a $0 internet bill until March of 2019.

Despite what it looks like, we do still have very speedy internet service.  Probably faster than we need.  Normally we pay $49.95 per month for 60Mbps down and 5 Mbps up service, and that more than covers our internet needs.

 

Mortgage And Childcare

As usual, monthly mortgage and childcare expenses were our two largest expenses in December.  Combined, these two items totaled $3694.05.

Unlike many families however, these expenses are entirely optional for us.  Using spare cash I could easily pay-off the mortgage.  If I wanted to, I could take our youngest son (Tako Jr. #2) out of daycare too.

Those actions would completely eliminate our two largest expenses, but at the cost of opportunity — I would no longer have that spare cash to invest, and no time to blog.  On top of that, Tako Jr. #2 would be missing out on his language immersive daycare (The daycare is completely non-English).

For now, we’ve decided to keep these expenses.

 

Utilities

Utility bills in December totaled $113.  This amount is actually just our power and gas bill.  All of our other utilities (garbage, phone, etc) were prepaid earlier in the year to capture that credit card sign-up reward mentioned earlier.

 

Insurance

Monthly insurance bills totaled $0 in December.  Whenever possible, we try to pay our insurance premiums for the entire year all in one go.  This is always a large expense, but most insurance companies will give-out some kind of discount for paying it all upfront.

The last big insurance bill we had was back in October when we paid our annual car insurance bill.

 

Other

Most months we do a pretty decent job at keeping our miscellaneous expenses to a minimum.  I’m happy when we don’t see the “Other” category go over $250, but we gave up on that goal in December.  In total, we spent $536 on miscellaneous expenses.

Eeeek!

Primarily this is my fault.  The tires on my car were getting bare and starting to leak a little.  You know you need new tires when they won’t hold air and the repair shops won’t patch them anymore (for safety reasons).  I don’t drive much, so this wasn’t a huge inconvenience to add a little air once in awhile, but I really did need to get new tires.  This cost me $419.

The remainder of our “Other” expenses were holiday related — Shipping costs for Christmas gifts ($7.67), a gift-card for a friend ($10), and a few miscellaneous Christmas gifts for our family ($98).

We try to make as many gifts as possible, but there are just some things you just can’t make yourself.

new lego set
The boys are discussing the merits of this particular Lego set given to them for Christmas.  (Still in their PJ’s.)  As much as I wish I could make Legos, some things are best left to the experts.

 

Cumulative Expenses For 2018

Despite having a decent sized set of assets, we still try our best to keep household expenses low.  For the year 2018, we spent a total of $66,920.

That might sound like a lot, but this number is $6,252 less than 2017!  Primarily this lower amount is due to Tako Jr. #1 starting kindergarten, which removed his daycare cost for 5 months of 2018.

net expenses dec 2018

Generally, our core expense were quite similar in 2018 as compared to 2017 (you can find those numbers in this post if you’re curious).

Every year I set the goal of having all core expenses covered by our dividend income.  We easily achieved this and more in 2018.  In fact, dividends covered 76% of ALL household expenses in 2018.  The remaining 24% was covered by capital gains, Mrs. Tako’s job income, and/or cash savings.

Without daycare costs included, dividends would have covered 101% of our annual expenses.  I dream of the day when we no longer need to write that damn daycare check!

December Investing Updates

Without a doubt, the markets were volatile in December.  The Fed continued to raise rates, and most economists now are predicting a recession in 2019.  From its peak, the S&P 500 dropped over 20% in 2018, and closed 6% lower than 2017.

It’s the first bad year after many great years.  Not that any of it made any difference to me.  I was way too busy to pay any attention to Mr. Market!

We usually try to hold stocks and index funds for the long term.  This generally means we hold assets for at least 10 years.  For some investors that’s too long, but I’m perfectly comfortable holding our assets through ‘up’ years and the ‘down’ years, and anything in-between.

Rather than attempt to time the market and take profits, we did absolutely nothing to our portfolio in December.  We just “let things ride” even though the extra volatility caused 20% drops in some of our newest stocks.

So why didn’t we buy more, given the big market declines?

Frankly, stock prices don’t look all that attractive to me yet.  I’m pricing-in the possibility of a recession in 2019, interest rates rising, as well as continued trade uncertainty with other countries.

All this uncertainty should be translating into lower stock prices, but current prices still look optimistic to me.

Oh, don’t get me wrong — I’ll still probably dribble-in around $100k of cash into stocks during 2019, but at these price levels I certainly won’t be doing anything too crazy.

 

[Image Credit: Flickr]

13 thoughts on “December 2018 Dividend Income And Expenses

  • January 6, 2019 at 7:38 AM
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    Very solid dividend income Mr. Tako. We ended up the year with over $18k, very happy with that. Your core expenses remain very low which is quite impressive.

    Just like you guys, we made a lot of delicious food items and played a lot t of board games in December.

    Here’s to a great 2019!

    Reply
  • January 6, 2019 at 11:23 AM
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    Nice income in December Tako, solid work! I hope to archieve such levels one day 🙂 Always nice to see tasty food pics as well.

    Reply
  • January 6, 2019 at 11:41 AM
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    Congrats for the decrease of the expenses YoY…it is not easy!

    Here the weather is not the nicest as well, so we spent most of our time indoors playing board games, cooking and having a good time.

    All the best in 2019!

    Cheers!

    Reply
  • January 6, 2019 at 12:39 PM
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    Any consideration for charitable donations? Haven’t seen a line item.

    Reply
    • January 6, 2019 at 3:20 PM
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      We donate occasionally, but I don’t create a specific line item for it. Just falls under “Other” in most cases.

      Reply
  • January 6, 2019 at 4:05 PM
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    Solid total dividend income Mr. Tako! I’ve been trying to keep track, but are all your preferred shares redeemed or do you still have some in the portfolio?

    I’ve been finding it hard to balance external compounding (reinvesting cash) with high asset prices. Do you have a process or is it more of an art? I don’t want to be sitting on the sidelines forever. Any thoughts would be appreciated.

    Reply
  • January 7, 2019 at 4:37 AM
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    Nice dividend income Mr. Tako! I’ve been trying to keep track, but are all your preferred shares redeemed or do you still have some preferred shares in your portfolio?

    As a side note, I’ve been finding it hard to balance external compounding (reinvesting cash) with avoiding paying high asset prices. Do you have a more defined process or is it more of an art? I don’t want to keep sitting on the sidelines forever waiting for more favorable prices and miss out on time to compound. Any thoughts you have would be appreciated.

    Reply
  • January 7, 2019 at 11:35 AM
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    That’s a good year summary, Mr Tako. Our December dividends in the US post tax portfolio came in at $10,984 so very close to yours and total year came in at $91.3k so not too shabby.

    We don’t have as huge a cash reserve and have continued to invest regularly during the year and 2019 full year dividend will be sustainably north of $100k USD.

    Time to start dialing down the career work…

    -Mike

    Reply
  • January 8, 2019 at 4:14 AM
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    Great work on the dividends and in keeping your expenses in-line!!

    Those food pics look delicious!! Keep up the great work!!

    Ernest

    Reply
  • January 8, 2019 at 7:31 AM
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    Unbelievable month! Receiving over $10,700 from dividends in 1 month is an incredible haul! And you had an amazing year even though you didn’t hit your goal. Looking forward to your 2019 reports. 🙂

    Reply
  • January 8, 2019 at 2:32 PM
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    “Normally we spend around $500 per month on food, but this December we spent $648.”

    I’m feeling very embarrassed by my food spending right now 😛 Also, feeling very hungry from looking at all the delicious food pictures on this site.

    And yay for dividend income! It’s exactly what’s helping us sleep at night and not give a shit about the volatility in the markets. Yield Shield baby!

    Reply
  • January 15, 2019 at 1:50 PM
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    Love your blog! Thanks for sharing!
    I live in PNW and am amazed at your low core expenses. I feel the same about day care as well. Given the property taxes turn out to be so high in PNW, is it included in your core expense?

    Reply
    • January 16, 2019 at 4:10 AM
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      Property taxes are paid as part of our regular mortgage payment. Technically it could be eliminated, so I don’t bother trying to put it into core expenses.

      Reply

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