January 2017 Dividend Income And Expenses
It seems like the older I get, the faster time passes. January went by in the blink of an eye! One minute it was New Year’s Eve, and now… mere minutes later, it’s February!
How the hell did that happen?
Perhaps this is for the best though — being busy doesn’t give us much of an opportunity for wild and crazy spending. Beyond the mortgage, food, utilities, and daycare expenses we didn’t spend a lot of money in January…
Expenses For January
Expenses for January totaled $5561.60, which isn’t terribly unusual compared to our last few months of spending — which includes higher monthly daycare costs. Outside of our optional daycare costs, core expenses totaled $3426.60.
Here’s the category breakdown:
Fuel and Utilities were slightly higher in January — probably due to the colder temperatures we experienced in January. Colder temps mean higher heating costs in the Pacific Northwest.
Food spending was right in-line with our target – $500 a month. Besides food, this spending also included more Eneloop batteries from Costco.
The month of January included the usual abundance of fantastic food — my Pho recipe, Shrimp Phad Thai (recipe coming soon), Slow-cooker Chicken Tacos, a Surprising side-dish, Butter-Chicken curry, Rice-cooker lentils, Agedashi Tofu, and many more!
We love to eat delicious food, and January was no exception. $500 can go an incredibly long way when you do most of the cooking yourself.
The Other category had a couple interesting things going on in January. First, my driver’s license needed to be renewed in January. The renewal cost was $27.
Second, apparently we were overcharged for a dental bill last year. The difference was returned to us in January in the form of a check. (Yay!)
Being the big spender that I am, I deposited the check and promptly forgot about it.
We also took the kids to our local pool. For $8 it makes for cheap entertainment for the kids.
Dividends For January
Dividends for January amounted to $4,048.16. This more than covers our core expenses. Please remember, we’re only counting dividends from our taxable portfolio here. Dividends in our tax deferred accounts are reinvested.
Compared to last year, our dividend income appears to be $337 lower. But this lower income is unintentional.
In 2016 one of our preferred share issues was redeemed. This resulted in the lost $337 in January. But the funds from the preferred redemption were already re-invested last year. The new investments pay-out on different months (i.e. NOT January).
In other words, our income wasn’t really lower, it’s just been shifted to a different month. We expect the same great dividends (and more) this year.
Our dividend goal for 2017 is to increase our dividend income by 10% to $53,000 — partially from dividend growth and partially by investing new capital.
So far in 2017, we haven’t received any dividend increases, but I expect several increases in the following months.
Next, let’s see how we’re doing on that “investing of new capital”…
Why We Didn’t Invest In January
Despite our plan to invest $80,000 of new capital in 2017, we didn’t make any investments in January.
Why?
Mainly, because of the election. No doubt as you may have heard, a new president was recently sworn in. While this is not a political blog, we’d be foolish to believe the investment climate won’t change in response to the political environment. It will.
Just like living organisms, investments have to adapt to a changing climate. This change will create new winners and losers. Unfortunately that’s not going to be an easy thing to predict.
This might mean new winners in the domestic energy industry, or lower corporate taxes. There’s also a lot of talk about protectionism and new trade barriers. How will it turn out? Who knows! Volatility is going to be a popular word in 2017.
I expect a large amount of stock price volatility this year, as cautious investors (like myself) take stock of the changes. While generally frowned upon by most investors, I see volatility as a positive thing. It creates opportunity for long term investors.
So we decided to wait out January. Caution is the better part of valor, as they say. Thus far, a little caution seems like a wise decision. The new administration seems quite serious about following through on their campaign promises.
Now, we just have to pick all those winners and losers.
Looks like you had a pretty good January with the wins you got down, despite the increase in costs for daycare, fuel, and utilities.
1. Keeping the food spending in line.
2. Getting a refund for the overpaid dental check.
3. Making that delicious Pad Thai (mmm)!
It seems that you’ll still be able to make the $53,000 dividend income mark once you start investing the $80,000 after identifying the winners that would be boosted up with Trump’s policies.
Looking forward to see how it all plays out! Keep up the great work and thanks for sharing, Mr. Tako!
Nice job on the expenses, Mr. Tako. I love that you can minimize costs, but maximize flavors!
Enjoy the coming volatility. 🙂
Isn’t it funny how the months melt by when you keep your nose to the grindstone? Ouch, that utility bill sucks! I’m glad we live in a warm climate. We actually had a $0 energy bill for the past 2 months because we got a rebate with our energy company on our Nest thermostat. Woop woop.
I’ll have to make that Pad Thai! I love the dish but it’s naturally expensive to buy at a restaurant. I’d love to make my own affordable version. 🙂
Looks like a good month of food, fun, and money!
I’m with you on waiting to see what the market’s going to do. I’ve been sitting on a little bit of cash in my Roth (~$3,500) that I’m holding steady on investing until the market takes a dip. This year’s definitely going to be a roller coaster of fun!
— Jim
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Great month, and i hear you on the volatility. Currently not sure anymore what sector to invest in….more homework to be done!
Looking good. I got tired of waiting and just invested. It wasn’t a huge amount for us, around $20k… I just don’t like sitting on the sideline.
Your Pad Thai looks good. Do you put tamarind paste or ketchup? It needs a little sour/sweet. 🙂
Tamarind. Just trying to find the right mix of sour and sweet right now.
That’s a nice looking Pad Thai, I’ll be looking out for your recipe 🙂
Thanks for the detailed run down. Your dividend income is quite nice. Almost covering all expenses. I hope that one day my dividend in come can cover all my expenses. A long way to go for me.
Normally I’m a Time in the market type of investor but I must admit some of the money we set aside in December to invest is sitting idle while I wait for a dip or a settling. It’s peanuts compared to my auto investing and my overall account balance so it’s largely psychological.
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Nice start for the year! In terms of new investments, have you ever considered looking into abroad, or you want to stick to US stocks?
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Oh yes, I have owned a few international stocks from time to time… but it’s far from my focus.
I have a conservative estimate of 6% annual organic dividend growth. If you reinvest those dividends at say a 3% yield ( assuming the valuations were decent), you will be very close to hitting that 10% figure even without putting in new cash to work.
I personally don’t drip, but reinvest dividends selectively into the best opportunities I can find at the moment. Many investors do DRIP regardless of valuations..
As your spouse is working, I would assume you are spending here income and just padding the investment accounts, right?
Yeah, I’m not big on drip investing either. I prefer to invest in the best opportunities of the moment, same as you.
6% organic growth seems a little high given an environment with sub 3% growth, but I suppose it’s possible. I thought my 5% was optimistic!
To answer your other question — our spending is a mix of both incomes.
That Shrimp Pad Thai looks really authentic! Good work! I can’t believe you only spend $500/month on food! We used spend over $1000/month before we started travelling even though we cooked a lot. I guess groceries in the States are cheaper than Canada.
Okay, so in terms of your dividend income,$4,048.16 covers part of the expenses of $5561.60 in January, where does the rest come from? Capital gains? You mentioned that you reinvest the rest of your dividends so I’m curious about how you cover the rest.
I dunno about groceries being cheaper in the states…we visit BC pretty frequently and it seems pretty much the same. Maybe a little bit more expensive, but Vancouver is a pretty expensive city.
As far as our income — It’s a mix of investment income, capital gains, Mrs. Tako’s income, and income from my side-projects. Mrs. Tako primarily covers the daycare costs.
Impressive total for your passive income in January. Do you publish your portfolio holdings somewhere?
Not usually. I do occasionally talk about some of our holdings on the blog, but I’ve never published a concise list.
I have toyed with the idea of providing it to blog email subscribers though. So far, I’m undecided.
Another impressive month! And the pad thai looks delicious. I’ve not perfect that yet, but think there will be more cooking in my next three years due to changes in my family life.
Amazing, amazing month. $8 for a day full of entertainment and fun times is definitely worth it. I love you compare your dividend income to your core expenses. It is insane how low you are able to keep most expense categories outside of the optional child care.
You are right, time flies by. It is insane. That’s why we have to take the time to enjoy what is going on around us and make sure we aren’t taking it for granted.
Thanks for the great read!
Bert
Amazing work! Where is the difference between your expenses and dividends coming from?
I must say that I find your expenses a bit imbalanced. So much on mortgage and child care and so little on Food 🙂 Anyways keep up!!