January 2018 Dividend Income And Expenses
Yes, it’s time once again for our regular monthly “Dividend Income and Expenses” post. In this post, I’ll lay out our January 2018 dividend income and expenses in excruciating detail for the world to see!
These kinds of monthly expense reports are very common on personal finance blogs, but I believe they are extremely instructive for readers. There’s tons of financial lessons to be learned just by watching how other people spend their money.
Spend money one way and you could find yourself under mountains of debt. Spend it another way and you might find yourself financially independent.
Activities in January
January tends to be a extremely wet, stormy, and cold month in the Pacific Northwest. The Tako family stayed indoors for much of January. (In contrast to our summer months, where we get absolutely NO rain.)
The terrible weather doesn’t mean we don’t have fun of course — we socialize with friends by holding potluck dinner parties, and playing a few rounds of our favorite board games.
Until recently, our kids showed little interest in board games. Now, they seem to be finally getting old enough to follow game rules, take turns, and enjoy board games themselves. This is a HUGE development!
Family-friendly titles like Tipover, SushiGo, SpotIt Jr. and RushHour are now played by the entire Tako clan!
Expenses For January
Expenses in January totaled $5,561. This monthly number is extremely similar to January of last year — the difference was only 17 cents. I’m not making that number up, I swear!
Overall, the similarity we’re seeing month-to-month is probably indicative of a “normal” baseline level of expenditures.
We’re planning a vacation in March, so this trend will break when the travel expenses finally hit our credit card.
Outside of mortgage and childcare costs, our “core” expenditures were $1,111.
Food
Food expenses in January were slightly lower than normal at $457. This lower cost month was nice to have after a pretty expensive December. Primarily I attribute this lower cost to shopping more grocery store sales and taking advantage of the deals.
Grocery deals were plentiful in January, and I made off with large hauls of bargain priced eggs, milk and other food staples.
This reiterates one of the main points I write about on this blog — despite having a net worth over $3 million dollars, I remain a very opportunistic person. When I see a good deal, I’ll exploit it.
Sometimes that means we eat a lot of eggs, avocados, or whatever else happens to be on sale that week. Oh well! Avoiding packaged food and employing a little menu creativity goes a long ways toward making this opportunistic eating enjoyable.
Meals in January were filled with delicious family favorites.
I’m also big on creating as little waste as possible in the kitchen. Wherever I can, I try to use up ingredients before they spoil. In some cases this leads to very unusual menu choices.
For example, in January I made this Amish dish called Wash day dinner to use up a leftover summer sausage.
Fuel
Fuel costs amounted to $64 in the month of January. This is lower than our typical monthly fuel expenditure, which averages around $100. I attribute the lower fuel cost mainly due to seasonality — The weather is cold, wet, and nasty in the Pacific Northwest during winter, so we travel a lot less.
Where possible, I’ve also been trying to walk to the grocery store on my “coupon runs”. While trips to the grocery store are not huge consumers of fuel, it probably saved us a couple dollars in January.
Mortgage & Childcare
Mortgage and Childcare expenses were the usual amounts for the month at $4,450. These are our two largest monthly expenses, but we consider them entirely optional.
Why? We could eliminate both expenses at any time — We could take the kids out of daycare and keep them home with me (I wouldn’t have time to blog), and our mortgage could be paid-off at any time with unused cash.
Thus, we are choosing these large expenditures on purpose because of the advantages they provide — The kids are becoming fluent in a second language at their daycare (which should provide benefits later in life). For the mortgage, I’m betting I can find investment returns greater than the interest on our home loan.
So far, both optional expenses are working out as planned.
Utilities & Internet
Utilities & Internet expenses were fairly typical in January, at $495 and $49 respectively.
If you follow this blog regularly, you’ll notice that our utility bills tend to be lumpy — this is due to bi-monthly billing cycles from the local utility companies.
I suspect these larger and less frequent bills are more cost effective than a monthly billing cycle for the utility company. They end-up making our monthly cash outflows look a bit lumpy however.
Other
The other category amounted to $42 in January. This amount included the purchase of some hand moisturizer for Mrs. Tako, a take-and-bake pizza dinner (I was feeling lazy), and a returned/repurchased item to Amazon.
The returned item to Amazon was a defective tv antenna preamplifier. This was a Christmas gift for Grandma and Grandpa Tako, who are in the process of “cord-cutting” their satellite tv service.
Unfortunately, the device failed after just a couple days in use.
Frustrated by the poor quality, I returned the defective preamp and purchased a cheaper model instead. It has since proved to be much more reliable. Cheaper and better quality! Win!
This return/repurchase transaction resulted in a credit of $15 from Amazon on money spent in December.
Cumulative Expenses
Since this is January, I’m starting a fresh new table for cumulative expenses. With only one month in the books for 2018, there’s no surprises here.
Dividends For January
Dividends in January amounted to $2,020. This is significantly lower than the amounts I reported last year in the month of January. Mainly, I attribute our lower dividend income to preferred share redemptions that occurred near the end of 2017.
As I discussed in my Growing Dividends in 2018 post, our goal is to match last year’s level of dividend income ($53,000). We’ll need to put a significant amount of money to work in 2018 to overcome the effect of those preferred share redemptions.
As you might expect, I started a fresh new table for our 2018 dividends:
January isn’t typically a large dividend income month for our portfolio. We tend to see the biggest distributions happen in March, June, September, and December.
If your curious about the month-to-month fluxuations of our dividend income, I recommend looking at last December’s chart.
Investment Changes In January
I admit it — I was a lazy investor in January. I changed absolutely nothing in our portfolio and let our investments ride.
I just couldn’t force myself to buy stocks at these elevated prices, so I wrote about investing instead — Topics like following insider trades, going completely to cash, and building a dividend snowball were quite popular.
Investing is one of the few activities in the world where sloth can actually be an advantage. Moving funds around means fees get generated, and capital gains get taxed. Doing nothing can certainly have advantages.
Well, I did NOTHING in January and saw a 10% gain in our portfolio value. The markets were very optimistic and stocks rose accordingly in January. This didn’t make buying new shares easy.
Thankfully, most of these gains disappeared in the single largest one day drop in history of the Dow.
Just like a sale on eggs at the grocery store, I’m going to be on the lookout for good sales on stocks. After all, what true investors want is lower prices, not higher prices.
Be on the lookout for bargains!
[Image Credit: Flickr]
Those core expenses are ridiculously low! Impressive feat Mr Tako. So you are well covered with your dividends in that case! Think you can call yourself FI now 😉
P.s. yummy photos as always!
Wow, that was fast! I literally just hit the publish button Cheesy!
Thanks for being such a consistent reader over the years!
17 cents difference? That’s consistency! I challenge you to get that under 10 cents 🙂
Wow, that’s going to be a real challenge! 🙂
How many kids do you have Tako? these core expenses seem to be very low. Good for you 🙂
We have two kids.
Great numbers as usual. I’ve been a lazy investor for awhile now. I watch the markets closely, but I don’t change much.
Our utility bill for Jan was almost $500 too. We just died a little inside *crying*. It’s been a cold winter in DC (record high over the past 10 years), and we can see the impact on our pocket >_<
Your core expenses look absolutely amazing!
Thanks Ms. FAF! We do our best to keep expenses low, but next month it’s going to be larger. We purchased airline tickets, so we’ll blow out the budget in Feb.
Core expenses look great. Keep in mind that as the kids get older, you may replace childcare with a lot of other expenses!
I suspect we’ll have after school activities and higher clothing costs, but I doubt it will be $27k worth.
What’s more, those expenses become controllable — we can put off buying new clothes until they go on sale, or be selective about which after school activities we engage in.
I also expect our food costs will grow slightly in the coming years as well. Growing boys eat a lot.
I have two teenagers, both playing sports. Our grocery bill spiked. They eat more than my husband and I. I mean, it’s pretty unbelievable. My oldest can eat 2 burrito bowls from Chipotle and be hungry again in a couple of hours.
Feeding teenagers from Chipotle sounds like a recipe for an empty pocketbook. Best to be avoided.
Definitely not $27K worth!:)
I have three older kids (16, 19 &21) still living at home and food is a lot more expensive than when they were younger for sure. But we are working on it!
I am always most impressed by your cooking! So many varied options while I eat mostly the same thing over and over :P.
Thanks Olivia. Variety is the spice of life as they say! And I’m *spicy*!
I’m always constantly astonished how you keep your core expenses to around $1000. The best we can do after healthcare is usually around $3000. Maybe I need to have a Miserly March to see how low we can go.
We’re so used to spending this amount, it just feels completely normal. Not miserly at all!
Next month is going to be higher because of travel expenses.
Good luck on your Miserly March!
Looking good so far. I contributed to our Roth IRA in mid January. I guess I should have waited a bit, but I’m not worried. I think the stock market will get back up. This is just a blip. And if I’m wrong, it’s not a big deal either. When it comes to retirement accounts, best to just keep contributing.
Absolutely! Always keep things moving the right direction!
Eventually good things happen!
Preferred share etf can work around the date resets since it’s more diversified with steady payout.
Also if u r in US but outside Cali not sure if u can buy Cali muni bonds at 4-5% yield
Yes, they’re definitely more diversified, but the returns would be lower.
A 4% yield on a muni isn’t bad. I’ll look into it. Thanks for the suggestion.
For a family of 4 that food expense is impressive as is overall expense.
Makes my expense for 1 look inflated now, and I don’t even feed kids!
Do you have any suggestions on how I can optimize my expenses?
http://financialorchid.com/2018/02/02/january-expenditure-analysis/#more-224
Love looking at your food expenses–inspiration for our house!! I’m still learning to buy less when we have a lot of food to eat up. Ingrained habits die hard. Those gyros look awesome. Is the bread homemade?
The pita bread is from Trader Joes. They make these mini-pita’s that are just the right size for kids.
mr. tako, i just happened to be looking at my own core expenses. property tax is a big part of ours. how much of that 2k/mo in mortgage will remain as school/property tax once you pay the place off? just curious. if you incur something big like a large repair or maint. project is that just a one off from the nest egg?
good work.
Yeah, that’s the idea. If we have a big one-off expenditure it probably won’t be coming from our dividend income stream. More than likely it’ll be a capital gain kind of situation.
So…any chance I can get that homemade gyro recipe? I may be drooling on my keyboard right now.
I love that you guys still go after deals, even after having a really impressive net worth.
Having a good offense doesn’t mean you stop playing D, right?
Oh sure. The base recipe is Alton Brown’s Gyro recipe: https://www.foodnetwork.com/recipes/alton-brown/gyro-meat-with-tzatziki-sauce-recipe-2047710
I typically finish the gyro meat in a frying pan, much like a Gyro restaurant.
Hi Mr Tako,
Impressive consistency of expenses and it is great to see your core expenses at a low level.
There are some very nice images on your blog- like the drawing at the header and the image at the top of this post. Did you draw those yourself or take them from an image library?
Your photos are nice too. Appealing food shots and a great photo library of your children in action. I will need to check out some of these board games.
-Mike
Thanks for the kind words Mike. For every image you guys see on the blog, I probably take another 20 that get deleted.
Amazing, but I feel like I’m the only person who has appliances that break and shoes that wear out.
Yep, that must just be you! LOL
Naw, I’m always fixing appliances. Dishwashers, clothes dryers, broken computer mice, toilets. I fix it all. I’ve pretty much convinced Mrs. Tako I can fix anything.
Yes, my shoes wear out… but I keep wearing them until my feet touch the road.
Ahhh. I have a job where I stand all day. New trail runners are cheaper than a new hip!
You were only 17 cents off this January compared to last–what are the odds? I guess that’s what happens when you’re good with consistency (as can be seen by your ability to keep blogging consistently). Nice work! Congrats on another great month!
Laziness (patience) is a wonderful skill Mr Tako – but I’m certainly cheering for a few more dips to put some surplus cash to work!
$0.17 difference compared to last year is very very impressive.
Consistency is key!
I would be interested to read where you like to grocery shop, e.g. is the Tako family a Costco family? Or mainly Trader Joe’s? Or wherever there are sales?
I am a one-stop shop kind of person- don’t’ really like to go to many different places to buy groceries (since I don’t have time) but my mom on the other hand, can spend her entire day going to different places for groceries that are on sale.
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Good job on your core expenses! However, I‘m still surprised how expensive childcare is in the US. Full day childcare including food for our 1.5 year old daughter costs us $180 per month in Germany! Do you know how much you would have to pay without the language classes?
– David
The price is roughly the same. Childcare isn’t subsidized by the government or taxes here, so we have to pay full price until they hit school age.