Saturday, April 1, 2017

March 2017 Dividends

Another month gone, and here we are in April. A great time to summarize my dividend income for March 2017. I've made a conscious effort, to not procrastinate with these updates, as I had a stretch where I was not publishing these until the next month was half over!

Not a good look.

To keep this top of mind, I decided to get on the ball once the month to be summarized ends.

So here we are. As you follow along, you'll see as I did, that this turned to be a pretty good month!

Let's get to the summary:

Taxable Accounts
Intel (INTC) - $2.86
Cummins (CMI) - $8.20
Target (TGT) - $28.80
Emerson (EMR) - $4.80
Compass Minerals (CMP) - $7.20
Flower Foods (FLO) - $18.88
Prospect Capital (PSEC) - $20.05
Qualcomm (QCOM) - $27.98
VF Corp. (VFC) - $7.98
Vanguard High Dividend Yield  ETF (VYM) - $7.37
Vanguard REIT Index Fund (VNQ) - $3.68

Taxable Account Total - $137.80


Roth IRA Account
Vanguard High Dividend Yield ETF (VYM) - $20.34
Vanguard Growth ETF (VUG) - $1.52
iShares S&P Small Cap 600 Index ETF (IJR) - $3.16
iShares S&P 500 Index ETF (IVV) - $11.48
T. Rowe Price (TROW) - $7.98

Roth IRA Account Total - $44.48

Overall Dividend Income for March 2017: $182.28

Forward 12-month Projected Dividend Income: $1,624.59


My March Buys:
Compass Minerals (CMP) - 1 share
Lazard Ltd (LAZ) - 5 shares
Qualcomm (QCOM) - 4 shares
T. Rowe Price (TROW) - 14 shares
VF Corp (VFC) - 16 shares
Williams-Sonoma (WSM) - 15 shares

Major Life News:
I got engaged to my girlfriend of almost 4 years!

It is an exciting time, as we make preparations for a wedding and likely buying a house together down the line.


My Thoughts on the Month:
I always enjoy reporting on progress of the March-June-September-December months, as these are my high income months. February-May-August-November come in second not too far behind, and January-April-July-October continues to lag behind, unfortunately.

Guess what?

The March 2017 income is an all-time high for me!

I was hoping to break the $200 mark, but the ETF payments were a little less than I was hoping for, and unfortunately they vary from quarter to quarter, so you don't really know until Vanguard and iShares make their distribution announcements, about a week before their payouts. One of the reasons I like investing in individual dividend growth stocks, is that you pretty much know what to expect from the payouts, as long as the dividend isn't cut. When it is raised, even better!

Let's take a look at my dividend payment history:


Month2014201520162017
January$14.38$14.42$70.45
February$49.07$50.38$112.01
March$50.22$52.16$182.28
April$10.83$27.91
May$46.52$59.42
June$6.69$47.51$90.97
July0$18.99$51.37
August$33.96$50.11$86.07
September$54.75$55.61$101.70
October$10.94$14.42$72.53
November$48.79$50.11$103.31
December$63.55$49.89$168.03





So now let's do the year and quarter comparison

Y/Y:
My March 2016 dividend income was $52.16, and this was the month I shifted my focus to a DGI strategy. After a year, this income grew to $182.28, which is an amazing 249.5% Y/Y increase!

Q/Q:
Looking back to December, my dividend income was then an all time high at $168.03. After a quarter, this has grown to $182.28, which is a more modest 8.5% Q/Q increase.

It pales in comparison to the Y/Y increase, but some perspective: imagine getting an 8.5% raise every quarter at your place of employment, as opposed to the standard 3% yearly raise.
Wouldn't you take it? I'll definitely take it!


Also, I am very excited about the major life news!

This will however change things in the near future regarding my DGI progress. We will be saving money for the wedding and house down payment over the next 1-1.5 years. Chances are we will be saving the money in a savings account (or possibly a permanent portfolio allocation) just to be more sure that the money will be there when we need it next year. I hope to still allocate some money every month to my DGI portfolio as well, but it will be significantly lower than the current level. Worst case scenario is that I have to deplete this portfolio to help pay for both, and in that case I just rebuild it, with the better knowledge than I had when I started (obviously I'm hoping I don't have to do this). Realistically, I may have to draw some from this portfolio, so that would be a temporary setback, but one I am confident I could come back from once we are married and have enough for the house down payment. Our plan is to reach FIRE by 2025, and the mindset is to do what it will take to achieve that, through side hustles or whatever else, once these big expenses are taken care of.

Back on the dividend front, I, on a high from reaching an all-time high in dividend income for March 2017, remind myself that next month, the income will be substantially lower, as the January-April-July-October months, as previously mentioned, are my lowest for dividend income.

Hopefully at some point I'll better balance across all the months, but for now it is what it is. I will not prioritize dividend income balance across the months over valuation. We'll see how April will turn out, but for now, I am excited about the future, in dividend income and life in general.

Thanks for reading, so how was your March? Let me know in the comments!



Thursday, March 9, 2017

Recent Buys: Feb 2017 and March 2017

Hello everyone,

I am in the midst of what I expect to be my best dividend month ever, so I am happily collecting the money as it is delivered. What made that possible, however were the buys I made in recent months, so I thought I'd take some time to review them, and go through my reasoning for the purchases. Perhaps others can get some ideas from this to see if they would like to perform further research on these companies to see if they might be good additions to their watchlists.

I keep an extensive Google spreadsheet listing companies I own (24), and companies to keep an eye on (about 70, and adding to this frequently). I record various metrics (P/E, Shiller P/E, P/E histories, Industry P/Es, EPS growth rate, Dividend Growth Rate, Chowder Number, Beta, Payout Ratio, etc), and compute an average fair value based on various valuation metrics (I usually target a price 90% or lower than this calculated value to be a candidate for purchase), as well as provide a combined ranking based on these items to help me determine stocks to target either adding positions to or to start positions. As I write this, perhaps this would be a good future post idea, to go more into detail about my DGI selection system. Food for thought.

Aside from that, I look at the actual business, and see if I feel comfortable with the industry and long term direction.

Below are the companies I've added the most since the start of February 2017.

Target (TGT) - This has become quite the polarizing stock among dividend/DGI circles! It took a hit due to a substantial earnings miss and lowered guidance for 2017. Also the CEO announced that more money would be spent to bolster their online presence. Because of the drop in stock price, it has quite the attractive valuation (P/E of about 12, and 4% yield). Much of the revamping touted by the CEO and management sounds good in theory, but nobody knows for sure if will achieve the desired result. I like shopping in their stores, and it is much better shopping experience, than say Walmart. I do hope they manage to turn it around.

Some investors has sworn them off, others are all in. My portfolio is quite heavy with TGT stock (7.5%), but I am more optimistic about Target's prospects post-2017 than others. Retail is in a tough spot, but I am not as quick to declare all retail stores dead and buried. Also, TGT has been showing improvement with their online sales. Free Cash Flow is still very good, and the dividend is adequately covered by both earnings and cash. Dividend Growth has been good, though it will be somewhat less in upcoming announces than 10-20% we are used to seeing. Even in this case, it is pretty good in comparison with other dividend growers.

So, I decided to nibble on shares of TGT, and be paid to wait for them to get everything together.
I purchased 10 shares since the start of February 2017 to add to my current position, adding $24 in forward 12-month dividend income.

That being said, diversification is important to me as well, and because I am so heavy in TGT, I may build up my other positions going forward to balance it out, before returning to the TGT well.

VF Corporation (VFC) - For the longest, I had been wary of investing in apparel companies, mainly because of the perception of apparel popularity being short-lived, and a perceived lack of brand loyalty. As the VFC valuation became more attractive (P/E under 20, 3+% yield, etc), however, I gave them a second look. I learned that many of their quality brands have a loyal following, and have had that for 40+ years, all the while increasing their dividend every year for just as long. I see their product as less susceptible to the all too common retail narrative these days (ie, that all retail sucks). It is clothing, and to some degree, the "try-on" is still a useful part of the shopping experience, and if people still want to purchase the clothing online, it can be purchased online.

I have recently been paying more attention to the dividend growth rate, and VFC has an impressive 3 yr annual DGR of 18.7%.

Since the start of February 2017, I have purchased 19 shares of VFC to add $31.92 in forward 12-month dividend income.

T. Rowe Price (TROW) - After putting away a little over $100 each week to my Roth IRA account, I had enough this past week to purchase shares (For this account, the commission fee was $6.95, and I like to have $1000 on hand before purchasing shares with that commission fee). I was quite torn among a few choices for this account. I was looking at CVS, TROW, and the REIT WPC.

CVS has an attractive valuation, but some doubts have arisen about them, due to business being lost to Walgreens. I decided to wait and see on CVS.

TROW also had an attractive valuation as well, and has coverage in the financial sector, where I am pretty light with my portfolio. It is a well-respected name in investments, plus the balance sheet is very good, with very little debt.

I had been hearing good things in the REIT community about WPC (WP Carey). What is appealing is that among other REITs, they have very good diversification among different types of real estate. What gave me pause was my own lack of understanding about REIT valuation, and this investment class in general. I feel I will need more research on these types of investments to learn what makes a good investment, as opposed to just blindly following the words of a few experts.

In the end, I was most comfortable with TROW, so I decided to purchase 14 shares to add $31.92 in forward 12-month dividend income.

So 3 purchases made in February and March, resulting in a total of $87.84 in forward 12-month dividend income. Not too bad!

I look forward to future dividend payouts, especially when the dividends are raised down the road.

I also look forward to adding more to my accounts, and thus adding more to my dividend income. I will build on this over and over, until I reach financial independence.

What did you buy recently? Let me know in this comments!

Friday, March 3, 2017

Save Money on Groceries, Free Up Money to Invest

A significant part of having your money work for you, is having it not "not work" for you.

What does this mean? It means that if you limit the money that goes to areas that guarantee it won't work for you (ie, won't grow or pay you pack over time), then you can allot more to areas where it will work for you.

One common expense where this can be utilized is in grocery shopping.

We all gotta eat, and so why not be efficient in how we obtain the food we need? The money you spend on food is not working for you, in the sense that it is not appreciating.

The food you buy is there for you to consume to sustain living, and when it is gone, it is gone. You are then left to find more food for sustenance, and thus, spend more money to acquire this food.

The more money you can save grocery shopping, the more that money that can be accumulated, and used in acquiring assets that pay you over time (like, you know, dividend growth stocks, for example)

There was a time when I believed that I was saving money by going to big warehouse stores once a month, and buying my groceries in bulk. It's amazing the things that you can fool yourself into believing.

What I was actually doing was spending over $300 per month to obtain insane amounts of food that I would not even completely consume. So even worse, I would end up wasting food and money.


My Grocery Run System and Guidelines

At some point, I determined that I needed to get more efficient in both respects. After some experimentation, I arrived at a weekly grocery run system
(if you haven't figured it out by now, I am someone who likes my routine and systems).

My system is to make weekly grocery runs, only buying items that I will need for that week. As a single guy living alone, I have established a goal to accomplish this in $40 or less per trip.

The key here is that I buy things that I will need only for the week, not things that I want to stockpile or things that I might kinda sorta want.

These are my guidelines:
  • Vegetables and Meat sources
    • These are the basics for my lunch and dinner. For this I usually get frozen vegetables and chicken or turkey meat to heat up in the Foreman Grille, or other cooking device. I usually add in a savory sauce (ie Asian Sesame, Stir Fry, etc) for marinating/flavoring while heating up.
  • Items to snack on in Between Meals
    • Here I'll rely on trail mix, apples, and some assortment of cookies. Just something to satiate me in between meals.
  • Protein Source for the Morning 
    • Through some reading, I have realized the importance of getting protein at breakfast to set up metabolism for the rest of the day, so I make sure to have something on hand to consume in the mornings just after waking up. Usually this would be turkey sausage to heat up, or bread and peanut butter for a morning Peanut Butter sandwich to get that protein. 
  • Items to Snack on After Dinner
    • I possess a sweet tooth going back to childhood (non-recovering chocaholic here), so usually after dinner each night, I have a craving for something sweet to eat. For this I usually enjoy the cookies mentioned earlier, or I may have a treat like a piece of apple pie or small chocolate cake. When I want to buckle down on dessert cost (and yes, calories), I may do something simple as bread and cinnamon sugar (spreading cinnamon sugar on the bread to satisy my sweet tooth). I try to pick one or two of these things for the week (not all 3!).

You may have similar guidelines, or very different ones, especially for those with families, and those superb cooks in the audience (I am not one of them). The key is to identify what you or your family need for a specific time period. For me that is a week, but for others, it may a 2 weeks, or a month.

Whatever it is, think of necessary food items for that period.


What I have learned that efficient grocery shopping comes down some key points:

1. Focus on Needs vs Wants

What do you really need for your grocery time period? To identify this, focus on the basics.

The trick here is that in most grocery shops, the most essential items from a nutritional standpoint are placed on the outer ring of the place (fruits, vegetables, meats, etc). Usually a lot of what you don't need is in the inner aisles (junk food, sweets, etc.).

I would suggest starting your shopping trip on that outer ring. Also identify for your situation, what are your essential items for the grocery time period?

I think focusing on protein sources and vegetables should fit the bill for your meals, and then items to snack on to get you from one meal to another, with as little expense as possible, but also providing proper nutritional value. Whole fruits and protein snacks come to mind here, where you don't need to purchase a whole lot to get the job done.

2. Create your shopping list and bring it with you

Once you've identified your needs for your grocery time period, write it down!

Carry a list, whether you go old school with a physical piece of paper , or new school with a digital list on your smartphone.

Have a list of your needs, so that you stay focused, and minimize the chance that you'll get distracted, roaming to some other part of the store and getting something that you don't need.

I use a Shopping List App on my phone, where I can list out items and then check them off as I pick them up and put it in my cart.


3. Utilize Rewards

I love rewards.

What's better than earning something on what you would ordinary spend anyways? It's like a form of active-passive income, in a very indirect way.

Some groceries have their own program where you earn points that can be redeemed for discounts on gas fill-ups for your car. Whatever works to help you minimize your money outflow.

Personally, I'm all about travel and cash back, so I will either use a travel rewards card that gives me 3 points per dollar spent at grocery stores (which can be redeemed later for flights or gift cards), or a 2% cash back card.

I know, I know, 2% does not sound like much, but it certainly adds up over multiple visits. It also beats the heck out of 0%!


In Summary

So there you have it, some ways to have more focus on your grocery runs and hopefully spend less money. The more you save, the more you can invest, and have it grow, helping to build wealth down the line.

These have worked for me in going from a $300 monthly grocery bill to about a $160 monthly grocery bill. Of course it does not end there, as I am always looking for new ways to get the job done with less money when it comes to groceries, and invest the difference, where I can, in assets that pay me.

Once the food is purchased, a big help to make it last, especially with snacks, is to only eat until full, and only eat when hungry (and not just because of boredom). Avoiding the temptation to overeat can definitely help that food stick around a little longer, maybe to the point where you may not have to take that grocery run a certain week.

What are some strategies you use to cut down your grocery spending?

Then, what do you do with the savings?

Let me know in the comments!


Saturday, February 25, 2017

February 2017 Dividends

Hello folks,

I guess I shouldn't be as amazed that another month has gone by. This is, in fact the shortest month of the year. However, I am still amazed how quickly time has gone by, with the fact that it is once again time to summarize my dividend income for another month.

At the time of writing this, February has not quite ended yet, but all my dividends for this month have come in, so I figure what better time than to get a jump on this month's report?

So let's get to it!

Taxable Accounts
Verizon (VZ) - $2.31
AT&T (T) - $13.57
Apple (AAPL) - $3.99
Abbott Labs (ABT) - $9.28
Prospect Capital (PSEC) - $19.91
AmeriGas (APU) - $24.98
William Sonoma (WSM) - $4.81

Taxable Account Total: $78.85


Roth IRA Account
Toronto-Dominion Bank (TD) - $9.36
Abbott Labs (ABT) - $6.71
Omega Healthcare Investors (OHI) - $17.09

Roth IRA Account Total: $33.16

Overall Dividend Income for February 2017: $112.01

Forward 12-month Projected Dividend Income: $1,552.62


My Thoughts
So this was a pretty good month, especially since in 2 of the 3 "month-groups", I am now earning over $100 in dividends each month. These would be the month-groups of February-May-August-November and March-June-September-December.

Since this post is a summary of February 2017 dividends, I think you see where I am going with this.

Most of the usual suspects for this month-group are there, however, a new addition since November has been William Sonoma (WSM), a company specializing in products around the home, especially for the kitchen.

Check here for my reasons for adding this holding.

I've added 14 shares of WSM (13 of which accounting for the $4.81 dividend payment shown above). There is a good chance I will be adding to this holding as long as fundamentals still hold, yields 3%, and it remains undervalued.

Let's take a look at my dividend payment history:


Month2014201520162017
January$14.38$14.42$70.45
February$49.07$50.38$112.01
March$50.22$52.16
April$10.83$27.91
May$46.52$59.42
June$6.69$47.51$90.97
July0$18.99$51.37
August$33.96$50.11$86.07
September$54.75$55.61$101.70
October$10.94$14.42$72.53
November$48.79$50.11$103.31
December$63.55$49.89$168.03


...and that history charted out:





Looking at the dividend payment history table above, my first move is to get a measure of my progress by comparing to the previous year and quarter

So, my February 2016 dividend income was $50.38. In one year of diligent investing (and benefiting from less intensive dividend raises), my dividend income has risen to $112.01, which represents an increase of 122.3% Y/Y !! Definitely something to feel good about!

Looking back to a quarter ago in November 2016, my dividend income then was $103.31. After a quarter, this income has grown to $112.01, as mentioned above. Clearly, this is a bit more of a modest increase. In fact, it is a 8.4% Q/Q increase.

In comparison to Y/Y, it doesn't look like much to write home about, but I think of my full-time job, and it would take 3 years for an increase in pay to eclipse this mark.

I think I'll take this increase in a quarter over 3 years!
Also, a lot of my investment adds over this time has gone to stocks that pay in the March-June-September-December month-group.

So...you know what this means?

It means I'm going to love March 2017!

I'm expecting for it to be my all-time best month to date for dividend income. I'm so looking forward to it!

So there you have it. February 2017 dividends are in the book, and March should be lovely. It brings a smile to my face to be able to write these summaries of increasing income, thinking about the future once I reach Financial Independence, no matter when that happens (the sooner, the better, of course).

I'm hoping you all have similar good stories to tell about February 2017. How did you do? Let me know in the comments!