I wish I could say, “I like Winter.” But if we’re being totally honest with each other, I really don’t. Not even a little bit.
Our little corner of the Pacific Northwest had 28 days of precipitation in January (out of a possible 31). That’s 28 days of measurable rain and snow under a blanket of dark clouds. Woohoo!! The other 3 days had ‘trace’ amounts of rain or snow.
Temperatures were either freezing or at very low temperatures (40F -ish). To put it simply, our January weather sucked! We had snow storms, rains storms, wind storms, and even had a couple hail storms!
With this bad weather the Tako family was stuck indoors for a lot of January. More often than I’d like. Boring! It felt like cabin fever was setting in.
(Note: If you’re the kind of person that actually enjoys getting drenched in freezing cold rain for 28 days straight, then you will love it here in the Winter.)
That was my January. I spent the entire month working on indoor home repair projects, cooking, cleaning, and taking the kids sledding on snow days. On the bright side, it was a very good month for spending time with the kids and getting some books read.
I also had plenty of help in the kitchen on snow days…
What about the financial side of January? I’m glad you asked! That part of January was a little more interesting…
Dividend Income In January
Dividends in January added-up to $2,104. A solid showing after a fantastic December. I love passive income, even when it’s a smaller month like January!
January is a “middle of the road” month for us. It’s not our smallest dividend month, and certainly not our largest. (March, June, September, and December tend to be the biggest payout dividend months of the year.)
Either way, I’m happy to see that passive income come rolling in every month!
As I’ve mentioned in previous months, 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 buffer to deal with the “off” months when dividend income is lower.
With only one month in 2020, our dividend income has a long way to go before we reach our 2020 Passive Income Growth Goal. I’m somewhat optimistic we can reach the goal by the end of the year, but it’s very possible some unforeseen event like the Wuhan Coronavirus could cause significant global economic disruption that might hurt our passive income.
As usual whenever something bad happens, everyone likes to send me email to remind me that “your dividend payments are going to be cut when X happens.” Okay…. maybe! But, that possibility doesn’t really bother me.
You see, we maintain a large cash buffer to deal with exactly these kind of situations. That’s WHY it’s there!
As someone smarter than me once said, “You don’t begin building the Ark when it starts to rain.”
Expenses in January were a positive $1556.30. Yes, a POSITIVE cash flow month! More money came-in than went out!
Typically this happens when we get a giant check in the mail. In this case, that “giant check” happened when I sold my old car for $6500 (covered in this post). This amount more than covered our January expenses.
Here’s our January’s spending, broken down by category:
Groceries in January totaled $409. That’s about $100 less than we average for groceries. I honestly don’t know why our grocery spending was lower than usual — maybe I was bummed out by the weather!
What can a family of four eat for a total of $3.30 per person per day?
Well, some nights we got a little fancy and made a some Japanese recipes. Such as this “low carb” chicken katsu (breaded with almond flower), stir fried snap peas, and wakame miso soup.
Another day I had a craving for a delicious Bahn-Mi sandwich (it’s a Vietnamese style sandwich), and decided to put in the crazy amount of time it takes to make a decent Bahn-Mi. It turned out pretty good!
Other meals were much much simpler — such as the dinner where we did “DIY lettuce wraps”. It’s a super simple meal idea. Just wash and prep all the goodies on a plate, and place them on the table for everyone to wrap their own. This outsources most of the wrapping labor and makes for a easy dinner.
Some nights when I’m feeling tired, I do admit I ‘cheat’ a little. I occasionally use prepared food to complement scratch-made food… like the night I made a “cheater” version of Japanese katsu-curry using panko-breaded chicken tenderloins.
Yes, I cheated! I bought the prepared Panko chicken on-sale for about $2.99/lb (if memory serves). Surprisingly, the prepared chicken even tasted OK! Certainly not as good as scratch made, but it cut the cooking time for this dish in-half!
Other days are more “experimental”. We like to try out completely new recipes and new ingredients. They don’t always turn out great, but occasionally they’re really incredible! Like this “low carb” home-made version of a “Chicken Bacon Ranch” pizza, using almond flower for the crust. It was awesome!
Sorry the pizza has a bite taken out of it…I couldn’t help myself! 🙂
Fuel costs in January were $102. Normally we spend around $120 per month on gas for our cars. January was lower than average because we really didn’t drive anywhere. The weather was horrible all month. Either we stayed indoors or walked to our local park.
On “snow days” I walked the kids to our local sledding hill. No need to drive. Gravity did most of the work to entertain my kids, with the occasional push from me:
Mortgage & Childcare
Like most months, mortgage and childcare expenses were our two largest expenses. These two expenses totaled $3,945 in January. This is where we spent 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 also 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.
Our internet expense in January was $49.95. It’s been that price for two years, but Comcast (our internet provider) recently notified me they’re going to raise prices. Darn!
Our contract is ending in February, so I expect to see much higher internet prices starting in March. Maybe I shouldn’t have blabbed so loudly on this blog about how much we pay!
(Someone at Comcast must have hunted-me-down and decided I needed to pay more.)
Utility bills were $403. This included a monthly power bill ($165) and a bi-monthly water bill ($237). They seem really high to me, but we do our best to keep expenses low — We turn the lights off, we converted to LED bulbs, we keep the thermostat down, we take quick showers, and so forth! All the usual money-saving tactics.
Yet, the utility bills always seem to rise. Hmm…maybe I should consider investing in local utility companies…
Insurance was a positive $259 this month. I received a insurance refund for this amount after I sold my old Honda. Occasionally when you change cars (like I did), you’ll get a refund from the insurance company.
Usually this means you’re switching to a much cheaper car, that costs less to insure. This doesn’t seem to be the case with my ‘new’ 2011 Honda CR-V.
Let me show you what I mean with some simple mental math:
- Newer car that is clearly larger and more expensive — check.
- Newer car has a less distinctive color that won’t stand-out as much — check.
- Fancy features on the new car will obviously cost more to repair — check.
- Same brand. Same safety features. Both are Honda’s, with many similar parts — check.
Considering these facts, my insurance company somehow decided the newer car will cost almost half as much to insure with the exact same coverage levels.
OK sure, I’ll take a refund check!
‘Other’ spending in Jan was a positive $6,206. I threw the car check into the ‘Other’ category because it didn’t fit anywhere else. If we back-out that check, we spent $293 on a few miscellaneous items:
- $40 – Paint, and a few other home repair supplies from Home Depot.
- $175 – A dual-channel dash cam for Mrs. Tako’s car. I went with the Viofo A129 Duo.
- $20 – Foam crafting supplies for the kids, and a socket adapter from Harbor Freight Tools.
- $21 – A Japanese corner cutter and some Amazon Basics transparent laminating pouches.
Really it wasn’t a very exciting month when it came to ‘Other’ spending.
Cumulative Expenses For 2020
With only one month in the books for 2020, it’s hard to make any real financial predictions for the year… especially since we had to deposit that large check. It’s going to make 2020 look a little goofy, but I guess this mirrors the large expense we had in November 2019 when I purchased the car.
What’s notable here is how low our Core Expenses were with the car check backed-out. A mere $997 in spending for the month! That’s the lowest monthly core spending we’ve had since February 2019.
Hmm… February 2019 was also a snowy winter month. Coincidence? I think not! When we’re stuck indoors we don’t spend as much!
January Investing Updates
In January, for the first time in a very long time, we decided to sell stock. In this case, we sold 1152 shares of AHT-PD (Ashford Hospitality series D preferred shares).
Why would I ever sell a security with an 8% dividend yield?
Normally I consider myself a “buy and hold” kind of guy, but there were a couple of reasons compelling me to sell. First, the financial situation at Ashford has been slowly deteriorating for several years, and I was not happy with it. Margins have slipped, debt levels increased, and the share counts has grown. (Although they did managed to keep paying all preferred dividends.)
Second, I noticed a lot of “self-dealing” by management at Ashford, and I’m not a fan of that kind of corporate behavior. Having the CEO of the company buy another private company he owns, seems a little off. I can’t prove any wrongdoing of course, but I prefer not to need to worry about this kind of stuff.
So, rather than waiting for something horrible to happen and the share price to drop, I decided to take my long term capital gains and 10 years of dividend income and find someplace a little less risky to invest.
In my Growing Passive Income in 2020 post, I talked about 2020 being a “de-risking” year, and this is exactly what I meant — Trimming assets that have grown riskier over time, and moving that capital into less risky assets.
Our income might drop a little because of this move, but it seemed a prudent move to make. After-all, if a company’s financial situation is deteriorating during this booming economy, then something is obviously wrong.
When a recession finally does happen, I don’t want to be around to see the kind of financial havoc it creates.
That’s it for January! Thanks for reading!
[Image Credit: Flickr]