November was something of a rough month for the Tako family. We all caught a bad cold and were feeling “under the weather” for most of the month. It wasn’t a pleasant sight. The family went through literal truckloads of tissue.
I’ll spare you the disgusting details, but there were actually a couple of days when I didn’t even bother to get out of bed in November. I was that sick. Thank goodness for the sick-day advantage. Being able to do nothing and just recover from illness makes a huge difference in recovery time.
It’s also a huge win when one parent can stay home to take care of sick kids without the other parent needing to worry about taking unscheduled days-off from work.
We’re still not quite at 100% recovery levels yet, but we’re mostly feeling better now.
Dividend Income In November
Dividends in November were a minuscule $588. This was expected. As I’ve mentioned many times in the past 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 small buffer to deal with the “off” months where dividend income is lower.
March, June, September, and December tend to be the biggest quarterly payout months of the year, which means we have one big payout month left for the remainder of 2019.
For the year so far, we’ve received $46,076 in dividends. That should put us on track to slightly exceed our dividend growth goals for 2019. Year over year, dividend income is up by 13.7%. That’s pretty good, but please remember our portfolio is NOT organized around capturing high-yield.
Make no mistake — I’m NOT a high yield investor. That said, I do believe an important piece of portfolio return should be a growing dividend income. As long as that income is growing significantly faster than inflation, I’m happy as a clam. Or an octopus eating a clam.
We seem to have easily achieved this hurdle in 2019.
Expenses in October were $16,282. Yeah, we blew the doors off in November. It was a wild orgy of spending, and I was primarily responsible because of the new car purchase. If we remove the new car expense from the equation, November spending was actually more inline with our regular levels of spending. (The adjusted spending amount would be $5882.39)
Here’s the spending breakdown by category:
Food expenses in November totaled $568. This is higher than average for our family, but I confess a Christmas present or two may have been included in the shopping cart at Costco… and I’m way too lazy to separate out those individual items here.
As we’ve done for most of 2019, our meals are cooked at home and we skip eating out. This has the immediate and dramatic effect of lowering our monthly food expenses. I’m actually surprised more people aren’t doing it.
I guess the allure of overcrowded restaurants, sub-par food, and large meal checks is a big draw. For me, I’m just happy with good food… which is why I keep doing most of the cooking at home.
I say “most of the cooking” because occasionally Mrs. Tako cooks too… like when I fell ill in November. She whipped up a couple of wonderful meals for the family when I was sick in bed.
Like these delicious oven-broiled bacon-brussels sprouts…
Another night she whipped-up a really nice vegetarian meal for the family — which included pumpkin soup, brown rice, homemade nametake, asparagus, and fried onion medallions.
After a couple of delicious meals like that, I found myself feeling a lot better. To return the favor, I made a classic New England clam chowder for the family. There’s nothing like a hot chowder when your feeling ill.
I’ve also been working on my Panang Curry recipe lately (that’s a kind of Thai curry), and think I’ve finally reached ambrosia levels of goodness with this one. It might be spicy, but the kids love it!
I also decided to make one of my personal favorite recipes in November — Japanese style Mabo tofu! I even have a recipe posted for this one!
Clearly there were plenty of delicious meals eaten in November, despite being sick. And nary a restaurant in site. A lot of people think you have to “go out” to get a good quality meals, but every month I try to show evidence to the contrary — You can absolutely spend less and eat better quality food at home!
Fuel costs in October added up to $143. This is a higher than average amount of fuel used, primarily because we have 3 cars right now. Yes, I know, that’s too many cars! I haven’t sold my old Civic yet, and it needed a fill-up in November (after no fill-ups for nearly two months).
Hopefully I’ll get the Civic sold very soon and it won’t require anymore fill-ups before that time. I expect our fuel spending will return to “normal” levels again in December.
Mortgage & Childcare
Just like every preceding month, mortgage and childcare expenses were our two largest expenses in November. These two expenses totaled $3,945 in November. This is where we spend the bulk of our money.
Unlike many families however, these expenses are optional. Using spare cash we could easily pay-off the mortgage. If I wanted to, I could 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.
On one hand, not paying off the mortgage means having plenty of spare cash to invest (should good opportunities arise). On the other hand, Tako Jr. #2 also gets to attend his language immersive daycare (It’s a completely non-English daycare).
Only time will tell if these two expenses are going to be good value for the money.
Our internet expense in November was $49.95. This is the normal amount we pay for “80 Mbps down and 5 Mbps up” cable internet access through Comcast.
For the past two years our monthly internet cost has remained exactly the same, and I’m hoping to continue this trend for at least another year. Cable internet access seems to be our only expense that hasn’t risen in 2019!
While some people might prefer faster internet packages, this Performance package has been plenty fast for our needs. I see no need to upgrade to a faster package.
Utilities in November amounted to $365. This amount included a water bill for $241 and a garbage collection bill of $124. Yes, I know these amounts seem high, but there’s very little we can do to reduce them. We live in a HCOL area, and most of those bills are local taxes, fees, and service charges that are entirely outside of our control.
Even if we stopped doing laundry and flushing the toilets for an entire month we’d STILL be paying nearly $190/month for water (for example). Our actual water usage is typically less than $50 of that bill.
As you would expect, when you buy a new car, it needs insurance. $154 is quite affordable for 11 months of car insurance. Thankfully older vehicles don’t cost much to insure, and I have a clean driving record (no accidents or tickets) and don’t commute to work.
As a result, the car insurance on the new car was pretty cheap.
Other spending in November amount to $11055. This was primarily the cost of our new car, but there were numerous other small transaction that made up November’s “Other” expense. Here’s a sample of the major items:
- New Car – $10,400 (a post about the car is here)
- Amazon orders for some Christmas gifts. – $58
- A new pair of glasses – $119 (These will be eventually be reimbursed by insurance)
- Oil change for the Civic – $44
- Brake job for the old Civic – $351
- Carfax details for the new car – $43
- Random Home repair parts from Home Depot – $14
Clearly November was a expensive month and we need to cut back a little, but some of those car expenses can’t be helped. I’ll have a much better chance of selling our old Honda Civic if there are no major issues remaining. So, fixing the brakes and getting the oil changed is par for the course.
Cumulative Expenses For 2019
For the year 2019 so far, the Tako family has spent $68,657. Outside of our mortgage, childcare and car purchase, we’ve spent $17,110 on what I call “Core Expenses”. I think we’re doing pretty good for a family of four in a high-cost of living area!
Note: That “core expense” number also includes our summer travel and entertainment expenses, which can grow quite quickly if we travel a lot.
November was our most expensive month of 2019 because of the new car purchase. Cars are definitely expensive! We certainly won’t be living just on dividends this year, but I think it’s important to remember that a car is a long lived purchase that only happens once in a great while. We may own the car for 10 years before we swap to a different vehicle.
In cases like this, I believe it’s totally OK to spend a little bit of capital gains — as long as that spending still falls within a reasonable withdrawal rate.
While there’s still another month left in 2019, I think it’s safe to say we will spend less than 3% of our total net worth this year. By most estimations that’s a safe withdrawal rate.
November Investing Updates
Stock prices were quite high in November, so I found myself extremely unenthusiastic about committing additional spare cash into stocks with low rates of return.
Instead, I opted to write a few options in the off-chance that prices might fall or rise in a favorable manner. In total, I wrote 3 options on 3 different stocks (two put options and one call option). Those option sales in November generated $536 in income.
If the options expire worthless, I simply pocket the cash and pay any short-term capital gains when I file taxes next year. In the event that the options do get executed, I’ll of course buy or sell those stocks at the required strike prices… which I’m perfectly happy doing as well.
As a net owner of stock assets I actually *want* to acquire more of them at favorable prices. Unfortunately it looks like that isn’t going to happen and I’m simply going to end up pocketing the option cash instead. Oh well!
Technically I’m still calling this option business an “experiment”, but as someone who started 2019 having never written an option before, I’m extremely happy with the results. In 2019, I’ve made $3,392.74 from option sales. That’s for roughly 1 hour of “work” typing some stuff into a computer.
Originally I started this experiment as a way to force myself to learn something new about investing, and I think I’ve done just that… Through the process however, I’ve learned that options are actually a great tool to earn additional income when the stock market isn’t doing exactly what I want (which is pretty much most of the time).
I feel like an octopus that’s always used a hammer to invest, and now I’ve only just discovered how to use a screwdriver. It’s a whole new world, and I hope I don’t get screwed.
That’s it for November! Happy Holiday’s folks!