Yup, it’s that time again! Dividend Income and Expense time! For those of you who don’t follow this blog regular-like, this is a regular monthly post where I detail the Tako family’s expenses for the entire month.
I also detail how much passive income we earn in the form of dividends.
Why do I do this? Why not?! I already track our monthly expenses to this level of detail, so why not share it with my peeps?
No, not that kind of peep! I mean the readers of this blog !
Readers of this blog tend to be people well on their way to Financial Independence. Or, they’re simply curious about the dirty details of what makes financial independence possible.
So, let’s dig in…
A Southwestern March
As a financially independent family, we tend to travel fairly often. For roughly half of March, the Tako family could be found traveling around Texas. It was our first visit to the state, and we had a blast!
Yes, we saw the sun again! We soaked up a little bit of that Texas heat too! It felt good to thaw-out from the cold of the Pacific Northwest.
We spent plenty of money, visited NASA, saw amazing caverns, played on the beach, and ate fantastic food! It was a really good vacation. Thanks Texas!
You can read about exactly how much we spent in the trip report.
Some of our trip expenses, (like our flights and rental car) actually happened in February, but most of the trip costs happened in March…
Expenses for March totaled $6,603! This was our most expensive month of 2018 (so far), and the extra expenses can mainly be attributed to the aformentioned Texas trip. (Surprise — traveling costs money!)
Here’s the detailed expense table:
Our food expenses were much higher than normal in March. Normally we spend around $500 per month on food for our family of four.
Clearly this didn’t happen in March! Our higher food spending was almost double our usual amount, at $1024. This was probably due to eating-out more while on vacation…
We also treated our friends (who were hosting us in Texas) to a $160 sushi dinner. It seemed like the right thing to do since we were crashing in their spare bedroom.
There was also delicious Bahn Mi sandwiches, wood fired pizza, sushi, fried chicken, taco trucks, yakisoba, and plenty of BBQ to go around.
Prices were very comparable to what we’re used to seeing in the PNW, but portion sizes were definitely larger.
Once we got back home, I went back into to full-on cook-at-home mode and whipped us up a batch of incredible Spanish-style chorizo-potato soup. Yum!
Now that we’re back home, I expect our food expenses will return to normal levels again. This should show up in our April expense report.
In March, we spent $94 on fuel. This is roughly average for us. But…
Wait a minute! Weren’t we doing a bunch of driving around Texas (which is a HUGE state)?
Afterall, we drove over 1000 miles in Texas and some of that time was just sitting in traffic.
It’s all true — but gasoline is cheap in Texas, and our rental car was of the small and efficient variety. We only spent $66.50 for fuel during the trip.
Mortgage And Childcare
As usual, our mortgage and childcare expenses were the bulk of our monthly spending at $4450.78. These are our two largest monthly expenses, but we consider them entirely optional.
Why? Both expenses can be eliminated 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 with unused cash.
We simply choose to pay these large bills on purpose because of the advantages they provide — The kids are becoming fluent in a second language at daycare, and I get time to do some blogging!
For the mortgage, I’m betting I can find investment returns greater than the interest on our home loan. So far this has proven to be true, but I’ve got a good 20 years before the book is finally closed on this one.
Wish me luck.
Utilities for the month were $386.50 This included a bi-monthly water/sewer bill and a monthly gas/electricity bill.
The start of spring in the Pacific Northwest isn’t warm like other states, so our utility bills are still quite high.
They should really rename ‘spring’ here to something more accurate…. like “winter-spring” or “wring”. It might sound dumb, but it’s a hell of a lot more accurate.
Seriously. We got off the plane from Texas, and had snow at home. Ugh!
The other category for this month ($598) includes a bunch of travel expenses. Our hotel room, rental car, parking, and activity costs were all included in the Other category.
If you want to see a breakdown of the individual trip expenses, I recommend reading our Texas Trip Report. It covers all these expenses in much greater detail.
The month of March also included a trip to our local pool ($10), quarterly HOA dues ($60), some shipping costs ($3.75), and a few household items from Target ($14.66)
(Frugal tip: If you’re shopping at Target, buy stuff online and arrange for in-store pickup. Nearly all of Target’s in-store prices are more expensive than online prices.)
One month of expenses is hardly a trend, so I always like to compare against previous months. For the year 2018 so far, we’ve spent $18,619. This is quite a lot!
Comparing to March 2017, our spending was approximately two thousand dollars higher this year. Ouch! 2018 has been expensive.
This is a disturbing trend, but it’s mainly due to vacation spending. Over the remaining months of the year, I hope to bring our expenses down to more reasonable levels.
It’s time to tighten our belts!
Dividends In March
Dividends are always my favorite part of this post because I love passive income!
When it comes to dividends, March was no slouch either — We received $9,895 in dividends!
This wasn’t a personal record like last December, but I’m still pleased with the result. For the first quarter of 2018, we collected a total of $12,276 in dividends.
This passive income is what we use to pay the vast majority of our regular expenses, and I’m on a mission to reach $53k in dividend income (again) this year.
Can we meet our goal?
It really depends upon how much we manage to invest…
Investment Changes In March
As regular readers of this blog know, we have a large amount of uninvested cash that needs to find a new home. We’ve been patiently waiting for reasonable stock prices before we invest it all.
Well, Mr. Market is finally starting to get the message — The S&P 500 is down 3% for the year and the Dow is also down a similar amount. We have cash to invest, so down markets are actually a good thing!
When interest rates rise, stocks tend to fall … and interest rates are on the rise again! Unfortunately Mr. Market hasn’t yet reach a price level I really like, so our cash remained uninvested in March. We made no new investments.
What price exactly am I waiting for?
Given where interest rates currently are today (the 10 year treasury is 2.79%) and factoring-in a reasonable risk-premium, I feel like the stock market could easily drop another 10%-20% before investing new cash in the stock market makes sense again.
I think we’ve got plenty of room to see further drops!
Frankly, I believe stock prices were inflated at the end of last year, and I’d like 2018 to be a year where stocks finally “return to reality”. A 20% drop from current levels would be great!
Will it happen? Who knows!
In the meantime, I’ll just watch carefully…