December 2019 Expenses And Dividend Income


Oh what a difference a month makes!  Back in November the Tako family was blowing the doors off our regular monthly budget due to the purchase of a “new to me” car.  Weak dividend income in November didn’t exactly help our cash-flow situation either.

December was a complete turn-around story however.  It marked a return to normal spending and a chance for our cash to replenish itself with a very dividend heavy month.

How great was our December?  Read on to find out!

 

Dividend Income In December

Dividends in December added up to a total of $12,500.  While is  not a personal record (September 2019 was slightly higher), I was still very happy with our passive dividend income in December.

The vast majority of this passive income comes from stock dividends, but there’s also a little from preferred shares and interest income from money markets.  Every penny counts in my book.

While this might appear to be a high monthly dividend payout, it’s not unexpected.  March, June, September, and December tend to have the biggest quarterly payout months of the year.  December was no exception to this pattern, providing a very nice passive income.

As I’ve mentioned in the past, we don’t try to “smooth” our dividend income.  We simply let our investments pay dividends on their regular schedule (usually quarterly), and then maintain a small buffer to deal with the “off” months when dividend income is lower.

december 2019 dividends

For 2019, we received $58,576 in dividends.  Our dividend growth goal for 2019 was to reach an annual dividend income of $57,000 and we achieved this.   Year over year, dividend income increased by 14.4%.  That’s a good increase, but please remember our portfolio is NOT organized around capturing high-yield.

Make no mistake — I don’t target high yield investments.  Our dividend income is the product of fairly normal stock yields.  Last time I checked, our portfolio only yielded about 2.6%.  (It’s probably even slightly lower now.)

 

December Expenses

Expenses in December totaled $5,344.  Essentially this is a return to normal after a ridiculously expensive November.  This time around we didn’t have a new car purchase to contend with, but December tends to be an expensive month due to the Holidays, holiday parties, and gifts for friends and family members.

Here’s the spending breakdown in December by category:

Groceries

Grocery expenses in December totaled $639.  Normally we spend about $500/month on groceries.  December had an exceptionally high monthly grocery total because we stuffed our faces with luxurious food for most of the month.  We also had more mouths to feed in December because we hosted my family for Christmas.

I don’t think we sent them away hungry.  They ate all kinds of fancy meals like this medium-rare ribeye roast I prepared:

ribeye roast

It wasn’t a completely carnivorous Christmas dinner however — we also had a green salad, mashed potatoes, gravy, and a green bean casserole for our Christmas spread:

christmas dinner

It was a great Christmas meal, and my visiting family definitely enjoyed it, but it was also pretty expensive.  As I discussed in a previous post, the ribeye alone was $75.   It’s also a lot more red meat than we’re used to eating.

Normally I try to prepare meals with a lot more vegetables and a lot less artery clogging red meat.  Take for example this DIY springroll meal from December.  Lots of veggies, herbs, and leafy greens to be found here:

fresh spring roll

That’s much closer to the “normal” in our house.  Vegetable heavy versions of popular dishes (like phad thai) also made an appearance in December:

phad thai

Mrs. Tako got into the cooking game this December, and cooked-up some wonderful meals like this bacon-cabbage stir-fry and lotus root burgers drizzled with a miso sauce.  Mmmm…. yum!

rencon burger

They were so delicious I must have eaten about 8 of those lotus root burgers.  There was no actual meat in the “burger” of course, it was entirely lotus root!

I also made several crowd-pleasing izakaya dishes like Izakaya Cucumbers, and one of my favorite noodles dishes ever: Yaki Udon!yaki udon

In the end, was all this fancy food worth the $639 we spent on groceries?

Probably.  The extra $139 spent this month won’t break the bank, but it will leave some lasting memories of good meals spent with family and friends.  That seems like money well spent.

 

Fuel

Fuel costs in December added up to $109.  We didn’t travel anywhere during the Holidays, so this kept our fuel usage slightly lower than normal.

Under “normal” conditions we spend around $120 per month on fuel for our cars.  Mrs. Tako did a little less commuting in December, but we still did plenty of short trips to Christmas parties and other gatherings, so fuel spending was roughly similar to average.

 

Mortgage & Childcare

Just like every preceding month, mortgage and childcare expenses were our two largest expenses in December.  These two expenses totaled $3,945.  This is where we spend the bulk of our money.

Unlike many families however, we consider these expenses optional.  Using spare cash we could easily pay-off the mortgage.  If I wanted to, I could take our youngest son (Tako Jr. #2) out of daycare, and wipe-out that cost too.

For now, we’ve decided to keep these two expenses as-is because of the flexibility they provide us.

On one hand, not paying off the mortgage means having plenty of spare cash to invest (should good opportunities arise).  On the other hand, Tako Jr. #2 also gets to attend his language immersive daycare (It’s a completely non-English daycare).

Only time will tell if these two expenses are going to be good value for the money.

 

Internet

Our internet expense in December was $49.95.  This is the normal amount we pay for “80 Mbps down and 5 Mbps up” cable internet access through Comcast.

For the past two years our monthly internet cost has remained exactly the same, and I’m hoping to continue this trend for at least another year.  Cable internet access seems to be our only expense that hasn’t risen in 2019!

While some people might prefer faster internet packages, this Performance package has been plenty fast for our needs.  I ‘m extremely happy with our current speeds/price.

 

Utilities

Utility bills in December amounted to $0!  Yep, zero!  Again, the timing of our utility bills caused us to have no utility bills to pay in December.

Many of our utilities are billed either bi-monthly or tri-monthly, which caused the occasional month with no utility bills to pay.  December was one such month.

It’s entirely a timing thing, so please don’t think I don’t pay my utility bills.  I do!

 

Insurance

Insurance in December was $0.  Whenever possible, we try to pay our insurance bills for the entire year all in one go, to lower the total cost.  For example, our car insurance is paid only once per year.  The only exceptions to this are times when we add or change insurance policies like we did in November.

We purchased a new car in November, so policy additions needed to be made.  Thankfully this means our car insurance is now paid up for another 365 days.

(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

Other spending in December amount to $600.  Over half of this amount ($353.74) was the cost of my new smart phone (covered in this post).

Additional items in the “Other” category included Christmas gifts from a variety of online stores ($147.19), several trips to Home Depot for home repair supplies ($68.91), and three take-and-bake pizzas from Pappa Murphy’s ($21.03).

 

Cumulative Expenses For 2019

For the year 2019, the Tako family spent $74,001.  This includes the purchase of our new car for $10,400.  Outside of our mortgage, childcare and car purchase, we spent $18,508 on what I call “Core Expenses”.  That’s an average of $1,542 per month for a family of four in a high-cost of living area!

Note:  That “core expense” number includes our summer travel and entertainment expenses, which can grow quite quickly when we travel a lot.

net expenses 2019

Despite higher spending in 2019 due to the car purchase, our core expenses remained very similar to 2018 and 2017.  They did not grow significantly YOY.  This means inflation remains in-check and our spending has remained fairly consistent from year to year.

Every year I set the goal of having all core expenses covered by dividend income.  We easily achieved this and more in 2019.  In fact, passive dividend income covered 79% of ALL household expenses in 2019. (Including the car purchase)  The remaining 21% was covered by capital gains, Mrs. Tako’s income, and/or cash savings.

Without daycare costs included, dividends would have covered 106% of annual expenses. Only nine more months to go before I no longer need to write that damn daycare check!

 

December Investing Updates

Stocks continued to be optimistically valued in December, and I chose to primarily remain on the sidelines and watch the expensive show ensue.  The only exception to this lazy behavior was a single option I wrote in late December that generated $213 in income.  Should this option expire worthless in a month, I simply pocket that cash.  In the event that the option is executed I’ll need to buy those shares at the agreed upon value.

While most people will never try option trading, I made it a goal of mine in 2019 to learn how it works.  So far, this endeavor has been fairly successful, generating $3605.97 in income.  That said, I do not consider myself an option trading expert.  I’m simply learning the ropes and keeping my risked capital small while I learn.

I certainly would prefer to be buying stocks with our excess cash, but Mr. Market has decided to keep stock prices high.  Oh well!  I’m perfectly happy to keep our cash sitting on the sidelines earning very small rates of return.  I also prefer to pay reasonable prices for stocks that I have a high degree of certainty in, but these investments are few and far between.

Sometimes in life, we don’t get exactly what we want.  So, I continue to sit on more cash than I’d like.  It’s an “OK” problem to have.

In my next post, I’ll be providing updated net worth numbers so readers can see just how much our portfolio grew in 2019!

That’s it for December!  I hope you had a great Holiday season and a prosperous 2019!

 

[Image Credit: Flickr]

16 thoughts on “December 2019 Expenses And Dividend Income

  • January 8, 2020 at 11:06 AM
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    Wow, huge December and a great year Tako. Your dividend income comes in just under the median family household income in America. That’s pretty amazing.

    Here’s to a great ’20!

    Reply
    • January 8, 2020 at 12:44 PM
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      Thanks Dave! Here’s to a great 2020 to you as well!

      Reply
  • January 8, 2020 at 11:33 AM
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    I notice your March, June, September & December dividends are fairly even. My dividends in December are about triple the dividends in March, June or September. It has been that way for several years. Also your dividends in the middle months of the quarters (February, May, August & November) are about 5% of what they are in the high months. Mine are 50% of what they are in March, June & September. I don’t deliberately try to smooth out the dividends from month-to-month either. I do have a position in Reality Income Corp (Ticker = O) that pays dividends monthly which explains some of it but otherwise I don’t even know the dividend payout schedule of the positions I own.

    My total dividends (measured in dollars) went up by 15.1% from 2018 – very close to your increase. Although I did add some to my portfolio, it is essentially the same portfolio in 2018 and 2019 so most of the growth was from dividend increases.

    Is your portfolio 100% individual stocks? Do you have ETFs, mutual funds or bonds? Do you ever purchase preferred stocks?

    re: Options. Are you writing covered call options?

    I apologize if you have covered this in previous posts.

    Reply
    • January 8, 2020 at 12:45 PM
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      It’s a mix of a whole bunch of things — individual stocks, funds, money markets, and preferred shares.

      Some of the options I’m writing are covered call options, and some are not. Just depends upon the situation.

      Reply
  • January 8, 2020 at 1:14 PM
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    Nicely done. And yes, once those daycare expenses stop, it’s like rocket fuel to your savings rate 🙂

    Reply
  • January 8, 2020 at 1:26 PM
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    Hi Tako,
    It’s amazing to see those dividend numbers, and for you to know that hopefully by the end of this year, your dividends will cover all expenses (once childcare has wound up). Massive year ahead!
    Matt / thewahman

    Reply
  • January 8, 2020 at 9:12 PM
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    Hi Mr. Tako,

    Great report. 14+% dividend growth is very solid, especially when you are not doing much buying over the year. Well done!

    i put some fresh capital to work in 2019 but not much since I wasn’t working for much of the year. Dividend growth was up by 20.1% over the prior year and December dividend income was a healthy $12.7K and the full year total for 2019 was $109.7K. That is a healthy enough number and I’ve stopped working full time now. I’m only doing part time consulting projects at present and there is no other household income. We freed up some cash by letting go of a languishing property so that gives us a nice buffer. 2020 dividend income targets are at $120K and it is very likely that we will be well over the number this year.

    Wishing you a great 2020. Keep making great meals and sharing those photos. I’m a vegan so the image of the bloody steak wasn’t appetizing to me but I’m sure my wife would find it enjoyable! Variety is what keeps the world interesting.

    -Mike

    Reply
  • January 9, 2020 at 12:36 AM
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    Nice work, Mr. Tako! Looks like you’ve had a great year. That’s some sweet sweet dividend income. Looking forward to your post about your portfolio gains.

    Oh and also lotus root burgers look delicious! I never thought to use lotus root before. Can you share the recipe?

    Reply
  • January 9, 2020 at 7:32 AM
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    Congrats on a great year. Your food looks awesome, as usual. How about the recipe for the lotus root? Where do you get them anyway?
    I think I need to get into the option game. I wouldn’t mind $3-4,000 extra/year.

    Reply
  • January 9, 2020 at 10:52 AM
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    Congratulations on a fantastic year of income and food! Looking forward to seeing more of both in 2020 🙂

    Reply
  • January 9, 2020 at 8:17 PM
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    $58,576 for 2019.. wow nicely done Mr. Tako! You definitely had a great year. We ended up 2019 with hitting our dividend income goal of over $23,000. Pretty happy about that. 🙂

    Reply
  • January 11, 2020 at 1:56 PM
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    Nice on the options trading. I want to learn about this process too. I feel it is a no lose situation as you basically try to buy the shares you want at the price you want and if the shares don’t get to that price then you get paid for the chance to buy them. At least that is my limited knowledge about how options work, which I admit could be totally wrong 🙂
    I haven’t gone back and looked through all the 2019 posts but I hope that if you haven’t written about how you do options or how you learned about it, you will soon.

    Thanks for all the information you share…..just waiting for the portfolio next….lol

    Reply
  • January 12, 2020 at 3:16 AM
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    Hi Mr. Tako.

    Your end of quarters are really strong on the income received. Almost USD60k for the year is as well impressive. Congratulations!

    The lotus root burger was new to me and looks good. I’ll try to find some recipe on the internet 🙂

    All the best to all of you and an even better 2020.

    Cheers!

    Reply
  • January 14, 2020 at 8:44 PM
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    Nice work, Mr. Tako! $12,500 is a massive haul of dividends in 1 month. Congrats on the YoY Increase! Always enjoy your food photography. Thanks for sharing.

    Reply
  • January 18, 2020 at 3:51 PM
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    Your ability to keep your core expenses flat for years is enviable. That’s some self-discipline. All the best for 2020.

    Reply
  • March 17, 2020 at 9:04 AM
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    In fact, passive dividend income covered 79% of ALL household expenses in 2019. (Including the car purchase) The remaining 21% was covered by capital gains, Mrs. Tako’s income, and/or cash savings. Without daycare costs included, dividends would have covered 106% of annual expenses.

    Reply

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