May 2020 Expenses And Dividend Income

In my opinion, Spring is one of the best times to be alive.  After a long cold winter, when spring finally hits it’s like rocket fuel for my happiness level.  The comes sun out, the plants are green, and the flowers are blooming again.

May also happens to be one of the best months for spring in our area (the Pacific Northwest).

It’s too bad that May didn’t have the same kind of energy this year, probably due to the damper the pandemic has put on our lives.  Rather than being able to get-out and enjoy spring like we usually do (hiking, barbecues with friends, cherry blossom festivals, and so forth), we were stuck at home following the “stay at home” orders for our area.

Financially, this meant our spending was lower than last year, but our passive income was also much lower in May…

Dividend Income In May

Dividend income in May was nearly non-existent.  In fact, I could have almost done away with this section of the monthly blog post… it was that low!  But I’m a sucker for consistency, so I’m posting it here anyway!

Dividend and interest income amounted to $3.10 in May.  A mere rounding error in our annual passive income!

Passive dividend income from stocks is usually paid out quarterly, so certain months are going to be dividend “heavy” months and others will be “light” on dividends.  May 2020 fell into that “light” category as you can guess.

This is all perfectly normal of course, and just something you get used to in the passive income game.  Passive income ebs and flows with the calendar.  Now that it’s June (aka a dividend heavy month) the cash is rolling-in again, and I’m not worried.

Rather than trying to smooth out our passive income, we simply keep plenty of cash on-hand to cover the lean months.

May Expenses

Household expenses in May totaled $3,848.  This total is significantly lower than what we spent last year, primarily because childcare spending was non-existent (due to COVID-19 closures).  Meanwhile, other spending categories were higher due to unanticipated price increases.

Here’s the breakdown by category:

Groceries

Grocery spending in May was $679.  Unfortunately, just like last month, grocery spending was considerably higher than usual, which I attribute primarily to price increases (not an increase in our consumption).

We’re making exactly the same food we usually do (and still eat almost every meal at home), yet our food spending is up 35% from average.  This time last year we spent a mere $387 on groceries!

We haven’t been stocking up either!  I swear!  We’ve maintained the same level of “food inventory” that we usually have — a filled pantry, our full chest freezer, and some shelves out in the garage for food storage.  We didn’t start splurging on fancy meals either!  It was just our typical “fusion” menu that I post pictures of.

One of my favorite dishes this month was a Chinese/Japanese dish called “tantanmen”, which we served over rice…

Tantanmen is a dish frequently served over noodles.  Unfortunately Mrs. Tako can’t eat noodles (due to a wheat alergy), so she makes a version of it using “konyaku” noodles.  Like this:

In May I spent a lot of time trying to clean out the pantry.  This smoked steelhead chowder (below) was the result of finding a jar of canned steelhead in the pantry (caught, smoked, and canned by my father).  Unfortunately the picture didn’t turn out super amazing, but the chowder tasted great and we consumed it for several days!

Mrs. Tako continue to further refine her keto-friendly pizza recipe, and I willingly devoured all the results.  Yes, all the results!  I’m a sucker for a good pizza!  (Yep, those are fresh chives from our garden).

We also tried to take good advantage of what was on sale in May.  Asparagus (for example) is a “spring” vegetable that always goes on sale.  Mrs. Tako whipped up this asparagus dish, which I can only describe as “cheesy gratin asparagus”.

And (of course) there were plenty of “home style” Japanese dishes.  Here’s a yakisoba and miso soup dinner we had one evening:

It’s a pretty simple menu, but it suits us fine!  Unfortunately even a simple menu like ours was considerably more expensive this month!

Fuel

Fuel spending in May was $24.  Big surprise there!  We didn’t travel anywhere due to the continuing COVID-19 lockdown, so our driving was limited to grocery stores and the occasional trip to Home Depot.

Hey, I know it’s kinda boring to report that we didn’t go anywhere or do anything exciting, but we’re in the midst of a pandemic!  We’re staying home and trying not to get sick like we’re supposed to!

As long as we remain under a COVID lock-down, I expect this low fuel spending will continue.

Mortgage

Our largest single monthly expense is the mortgage on our home.  This amounts to $2360 every month, and does include extras like property taxes and homeowners insurance.

While we could pay technically off our remaining mortgage at any time, we’ve chosen to retain that money and hunt for better investments.

Childcare

Childcare was $0 this month!  Most childcare facilities (including the one we were using) are closed during the pandemic.

This means daddy daycare was a fully operational childcare facility that worked the entire month for free.  (Don’t remind me!)

Yep, with schools and childcare facilities closed, I take care of the kids all day…every single day.  This includes being the homeschooling teacher, the lunch lady, janitor, nurse, and principal (at times).  Daddy daycare is a full service operation.  Hence, this is why I’m blogging less often.

I’m doing my best, but I’m ready for a break.  I’m REALLY hoping schools open-up again in the fall, otherwise I might lose my mind.

Internet

Internet expense was $45 in May, and this is the regular rate we’ll pay for the rest of our annual contract.  While it is possible to get a slightly better rate by signing up for a multi-year contract, but I just stick to the one year contract.

The Comcast representatives always try to use FOMO sales tactics to get me to sign-up for longer-term contracts or TV packages, but I never fall for it.  One year is a long enough contract, and there’s always new promotions available when I need to sign-up again.

For the curious, we pay for 100Mbps cable internet from Comcast (XFinity) with 5Mbps upload speeds.  It might not be the fasted package out there, but it’s more than sufficient for our needs.

Utilities

Utilities in May totaled $482.  This was a very expensive month for utilities, but a few of the bills that hit this month are only annual expenses, so I’m not expecting Utilities to be this bad every month!

Here’s the breakdown of utility bills in May:

• $245 — Water bill.
• $80 – Electricity and Natural Gas bill.
• $122 – Garbage, Recycling, Yard waste bill.
• $12 – Mr. Tako’s annual cellphone bill (after taxes).
• $23 – Mrs. Tako’s annual cellphone bill (after taxes).

Insurance

Insurance costs in April were $0.  Whenever possible, we try to pay our insurance bills for the entire year all in one go, to lower the total cost.  For example, our car insurance is paid only once per year.

(For the curious: We do have home-owners insurance.  It’s included in our mortgage.  Call me lazy, but I don’t normally break that number out here in the insurance section.)

Other

Other expenses in May were $256, which is surprisingly low considering we were stuck at home all month.  We tried to resist the temptation of shopping online to pass the time, and were mostly successful at it.

There were however a few expenses that slipped by:

• $174 — Nvidia graphics card for Tako Jr. #2’s “new” PC build.
• $35 — Amazon birthday gift for our Nephew.
• $47 — Home repair parts and supplies purchased from Home Depot

Now obviously I didn’t need to go out and spend $175 for a fancy graphics card, but I wanted the PC to be a decent machine so I splurged a little and went with a GTX 1050ti low profile card.  It doubled the cost of the PC, but in the end we have a decent little computer for Tako Jr. #2.

Cumulative Expenses For 2020

For the year so far, the Tako family spent $15,997, which works out to be roughly $3,200 per month.  Total spending is roughly the same as our total dividends for the year.  That’s great!  Exactly where we want to be.

Outside of our mortgage, core spending remained very low for the year  — typically between $950 and $1500 every month.

I’ll be the first to admit it’s been a really weird year so far.  Our spending is down considerably from previous years, and my earlier goals for growing passive income in 2020 are going to be wildly off.

There’s not much to say but, “the COVID-19 pandemic screwed everything up.”  Daycare is closed, our travel plans for the summer have been canceled, and many of our summer activities for the kids have been canceled.

At this point I seriously doubt our annual expenses will exceed $40k this year.  Which is a good thing during these difficult times!  We’ll eventually be funneling that saved cash into assets which will spit-off even more passive income in the years to come.

May 2020 Investing Update

In May, the stock market continued it’s incredible rise in the face of a pandemic, and unemployment levels that are setting generational highs.  It looks like the market is experiencing crazy levels of optimism which is juicing the stock market rally.

It looks like a mistake.  Which makes me wonder — Who is putting all this money into the market and why?

I have several theories, which include:

• Lower interest rates pulling yield-hungry people into stocks for cash flow.
• Higher household savings rates, and stimulus due to the pandemic, is getting pushed into the stock market.
• FOMO (Fear of missing out) on the stock market rally is pulling in naive investors into overpriced stocks.
• Higher levels of market speculation and leveraged stock purchases being fueled by ultra low interest rates.

While most people are probably overjoyed about the market recovery, I’m nervous.  I did most of my ‘pandemic’ investing back in March, and have been riding this wave of optimism ever since.  That doesn’t mean I believe it’s right.  Fundamentally the stock market should (roughly) reflect current and near-term economic conditions.  That doesn’t seem to be the case right now, which is why I kept my cash on the sidelines in May.

I  made no additional stock purchases in May, as most of the good deals I saw in March and early April have completely dried up.

Can you blame me?  The bear market came and went in just a few of weeks!  Now we’re back to bull market territory in record time!  It’s a real head-scratcher as to why this is playing out the way it is, and I don’t claim to have the answers.

Still, I wish everyone the best of luck.  I hope you’re seeing great profits from this market rally!  Until next time!