March 2016 Dividend Income And Expenses
Our regular dividend income and expenses post for March was delayed a little. Sorry folks! We were on vacation in Hawaii!
I ended up writing a lot during vacation! I broke those posts into 4 parts: Part 0 (Packing), Part 1 (Lodging), Part 2 (Food), and Part 3 (Activities). I’m quite happy with how that series turned out, so I hope you’ll give it a read. Now that we’re back to our regular-life schedule, it’s time to give you our regular monthly report….
Expenses For March
Regular March expenses of $4,179.92 were a little higher than usual, and over our stated goal of $4k per month.
The reason? We had family visiting this month, so our Costco visits were a bit more frequent (and larger) than usual. Plus, we pulled out $300 in cash for the Hawaii trip. (Note: Some of this cash wasn’t actually spent, so we need to re-deposit it.)
Other than that, this remained a fairly usual month.
Thankfully, we received a check from our relatives for their shared portion of the Hawaii trip expenses (incurred in February), plus another couple checks that made net expenses in March a positive $920.
Meaning, over the last three months we’ve averaged expenses of $3,231.70 per month….well under our stated goal of $4k per month.
While February and March contained many of our Hawaii expenses (prepaying of flights and lodging), expenses during the trip will fall into April. Look for those expenses in our April expenses post.
Dividends for March
After an uneventful February, dividend income made a big comeback in March!
From the table above, you can see that dividends amounted to $5,352.24. Thankfully, this month’s dividends exceeded our stated goal of $4k per month. It also exceeded March’s regular monthly expenses (not counting the Hawaii trip) by $1,172.32. It looks like we’re back in the green!
As I’ve mentioned in past months, we are not utilizing dividends from our tax-exempt accounts (401k’s, IRA’s, etc). Instead, we are letting those accounts continue to grow while we live off our taxable accounts.
For 2016, our intention is to live off dividends alone, without selling any equity investments. So far this year we’ve seen our dividend income look like this:
As expected, dividend income is quite lumpy. This is completely normal, and mainly due to when assets pay dividends. We maintain a cash account for dealing with months when we run-over our dividend income. This cash account has roughly 6 months worth of regular expenses.
As you can see, our average dividend income ($3,397) is slightly below our goal income of $4k per month, but I’m not worried! We still have 9 months of dividend income to go, and we still have large amounts of cash to invest. As we invest the cash over the remainder of the year, I expect our dividend income to grow.
March Investments
Unlike February, in March we made no new investments. We had family visiting in March (and April), so we’ve been far too busy to make portfolio changes. That said, I wouldn’t have made any changes anyway. We simply stayed-the-course and collected dividends in March.
Good News for April
There is good news on the expenses front coming up in April! First, our daycare expenses will go down! Tako Jr. #1 turned 3 years old in Hawaii, which means we get a reduction in our daycare expenses for him! Congrats Tako Jr. #1! We gain an extra $80 a month, or $960/year! This is fantastic news!
Second, I called Comcast in late March and had our internet package reduced to a lower speed. If you recall, in February, they raised the price of our internet package by $5 to $70/month. The price changes were happening every year, and the latest price increase spurred me to action!
After a quick phone call, I had the slower speed at the latest promotional price. Other than measuring with tools like speedtest.net, I’ve been unable to see a noticeable change in internet performance. This should save us $30 per month, or $360/year during the promotional period.
That’s it for March, but we’ll do another one of these posts in early April!
[Image Credit: Flickr]
Great job keeping expenses down even with the trip! Curious – but when did Mrs. Tako quit the workforce?
She hasn’t quit just yet, and she reminds me of it *nearly every day*.
We’re going about our transition to early retirement nice and slow. I have a projection of where our dividend income is going to be by year end, but there’s no guarantees.
For now, she continues to work, while I prove to her that the numbers are going to work out. I’m still proving it to myself for that matter! I get excited to see these monthly reports too…I want to see how we’re doing! 😉
Great dividend income, and good to see that the books balance 😉
But hold on, why do you still have daycare costs? We were of the impression that Mr. Tako is no longer part of the workforce and would have all the time in the world to entertain Tako Jr.? What did we miss?
Oh! I though I mentioned it awhile back, but I guess I wasn’t clear. Our oldest goes to a daycare (there are pictures of it in the “Expensive Child Myth” post a few weeks back), and the youngest stays home with me.
It’s a language immersive daycare, so he’s learning a non-English language!
At some point, we’ll take him out and have that $1200/month for other stuff, like travel. But for now, I like my sanity.
Gotcha, thanks for the clarification (need to look up that previous post). Seems like a smart thing to do, and we totally get that sanity thing 😉
Interesting… you should write a post on why she hasn’t quit. Does she think your plan doesn’t hold water? 🙂
It’s more like we’re just being cautious. Don’t count the chickens before they’re hatched. That kind of thing!
Your dividend income looks great!
I think putting the kids in daycare/preschool are perfectly fine. I was fine with our kid when he was little. Once he turns 2, he just needs so much attention. He needs to learn how to behave around other kids as well. Just 6 more months until he starts kindergarten. 🙂
Congrats on Kindergarten! That day is still so far off for us!
Can’t wait to have that daycare expense off the books though!
Great dividend month for your portfolio! It looks like the balance between income and expenses on average is their.
Reading the kid in daycare comment: A good idea to immerse a kid very young in another language. Our oldest just did a French camp during the easter holiday. she now teaches her sister 🙂 very frugal!
You’re doing it! If you’re able to sustain your expenses solely on dividends and not even touching the principal, aren’t you already way past the “financial independence” point? That’s quite the safety net you have here 🙂
I think we’ve been pretty lucky the last few months. 🙂 I have a income spreadsheet that projects our dividend income for the year based on a number of assumptions. We should hit 48k, but this is assuming some dividend growth (4-5%), which is kindof a big guess.
The dividend numbers could come out ahead or behind by a few thousand, based upon a couple possible scenarios…so we’re being cautious (at least this first year).
That’s really cool Mr Tako. Thanks for sharing your finances, sounds like you had a good trip in Hawaii!
We are very jealous of your dividends, hopefully one day we can get that amount in one year, let alone a month!
Tristan
You’ll get there some day. It definitely takes a lot of time, and a lot of savings. I should do a post with some tips on how I broke it down into small incremental goals. Sometimes that’s the best way to solve large problems – break it into smaller pieces.
Eventually you get there!
Are you investing in individual stocks or mutual funds? I am guessing stocks. I am currently maxing out my 401K and can’t contribute to IRA’s because of income. I put $2,500 (taxable) per month into what I call an opportunity fund. Haven’t decided what that will go to, but I’m leaning towards a cash purchase of a rental house. But the dividends intrigue me too.
As far as view-ability, I like what RB40 does in that he shows you the total amount of cash it takes to generate X amount of dividend income and he shows the stocks he’s invested in. I’d guess you don’t want your disclosure to be too full though. Like the blog.
Hi Joe – I’m invested in both stocks and funds. The relative amounts you can find in the year end net worth post: https://www.mrtakoescapes.com/2016/01/03/2015-year-end-net-worth-update/
I haven’t yet decided if I’m going to expose individual stock positions. That might open me up to potential lawsuits, and frankly one lawsuit at a time is plenty for me.
Nice post, you are following the steps that I hope to follow one day. Have $X amount in savings so it evens out the odd monthly dividend and it will help to prevent any selling of stocks during a rough stock market drops or dividend cuts.
I was going to ask the same question about daycare expenses 😉
I think it would be more accurate and better to say pre-school expenses, then it doesn’t sound like you are shipping your kid off to be babysat while you’re at home.