April Highlights

Hello everybody!  April is over and now it is time to see how I have done.  I haven’t made as many purchases as I would have liked, but I have been busy helping a sick family member.   Additionally, I spent some time investigating a rental property, which slowed down my purchases.

Once again, my month has been rather uneventful investing wise.  Which is pretty great to say the least.

Roth Activity

This account is fully invested and the positions are dripped.

No action here (sells then buys).

Additions

I made one additional purchase of TROW price (15 shares @ ~78). I should have bought a larger position when I began collecting this company in March.

I have been wanting to make one purchase every two weeks, but I slowed down a little bit while I investigated a rental property.   I may end up doing 2-3 purchases in May.

Raises

This month 6 companies gave me a raise.

Company Raise
JNJ 7.1
KMI 9.1 (YTD)
OHI 3.8 (YTD)
PG 3
UL 6
XOM 5.8

KMI and OHI having continued the streaks of raising the dividend a penny a quarter.  KMI raised it 3 cents and is on pace for $2 a share by the end of the year.   I am a little disappointed that PG gave me such a low raise, but they are in the middle of selling off a few brands, so we will see how that goes.  XOM gave me about what I expected with the current market environment.

Dividends Earned

During April I collected $343.56 in dividends, a YoY increase of 38%.

$1677.85 of $5750 (29.2%).

My dividends are higher than they would have been if OHI hadn’t given a prorated dividend after the AVIV acquisition.

Forward Dividends

At the start of the month, my 12 month forward dividend was $5305.32 and ended up at $5401.51.  My future income is 35% higher than this time last year.

My goal is to increase this to $6100 (increase of ~1339).  I am 644.85 of 1339 or 48% of the way there.

Fitness Goals

I gave up running a mile everyday last month and have still been dealing with a strained calf (although I think it is now in the IT band).  Good times!

Squatting/Deadlifting is going well and on track.

Conclusion

Another month of watching paint dry, but the more I think about it, the more I realize the hobbies I like most tend to require long term commitment with small incremental progress overtime.

Have a great May!

Disclaimer: Long all stocks mentioned.

March Mid-month update

March has been full of activity.  I have been busy with snow, cutting down trees, taxes, learning Spanish, researching ideas and I haven’t been reading many blogs! I realized that when I checked out my RSS reader and had over 600 items to read!  It’s crazy how much content is produced in a few short weeks.  Unfortunately, aside from skimming a few topics, when my backlog gets that high I just hit “Mark all as read” and move on.

The weather is supposed to be amazing the next few weeks, so I can’t say I expect to be inside on the computer.

Buys so far

I have been watching the market fairly closely and a few companies that I had interest in purchases where close enough to my buy price that I felt adding some additional shares was warranted.   On March 7th, I made two purchases:

T. Rowe Price (TROW):  This company has been paying a dividend for 20+ years, has a fantastic balance sheet (no debt! which I love) and have a very low cash flow payout ratio(~40%).  They sell mutual funds and manage assets.  It would appear they have been rather popular and several bloggers I follow have bought shares over the last few weeks.  So I guess I am in good company!  Take are read at Dividend Mantra for a solid breakdown of their business.

Baxter International (BAX):  BAX is right around my original entry point and I felt that it was a good a time as any to add to it.  I have been building out my healthcare allocation over the last few buys.  Along with my purchase of JNJ, I still feel a bit under represented in healthcare and I would like to add an additional company or two to the rolls.  No need to get too concentrated in one or two companies!

That’s it for now

Just a short update today.  I have to practice some Spanish now!

¡Hasta luego!

Disclaimer: Long BAX, TROW

Site Changes and a few companies on my mind

I am changing my domain registrar and if I don’t do it right, I might disappear until I figure it out!

Potential Purchases

As I have been looking over the current positions in my portfolio, I don’t have a lot of positions that I would really want to add to at the moment.   I wouldn’t mind adding some more oil, but with the recent surge and already large size of my portfolio, I am planning on looking around in a few other sectors.

Below are some potential ideas that I may purchase at some point in the future.

Healthcare is something that I have very little exposure with.  I currently own JNJ and BAX.  I think that both of these positions are around fair value and might add to one or the other by the end of the month.

Food has been on my mind lately as well.  Owning companies that sell necessities will increase the “sleep at night” factor of my portfolio.  I currently own K and GIS in this space.  I have been considering adding  JM Smuckers (SJM).   I am planning on doing some research over the next few weeks.

I would like to add to the Financial portion of my portfolio.  I am a little leery of this sector and may look north of the border for an addition.  There are several solid Canadian banks including RY, BNS and TD.

Wish me luck!

Here we go! Maintenance time.

Disclaimer: Long JNJ, BAX, K, GIS

2014 Year in Review and onward

Howdy all!  Well the year is coming to a close, with the final trading day of the year under way.  I have had a good year, here’s a recap.

Income Progress

This year I ended up slightly over 4k in dividends, which was a large increase over 2300 from 2013 and 1000 from 2012.  I am hoping to end 2015 with 6k forward dividends and over 5200 in income.

Dividend raises happened in all of the stocks in my portfolio.  The average dividend increase was 7.7% based on weight.  This is right around the target of 8%, so I am happy with my asset allocation.  I will probably look to add to positions that average 6-8 with a decent yield in the next year.

Blogging Lessons

I have had the blog for almost a year starting in February.  I have enjoyed it, but have found that it isn’t necessarily for me.  Or maybe it is just tracking my portfolio through a blog that isn’t appealing for me.  The posts where I wrote about something other than a stock was more enjoyable than the buy or monthly updates.  So maybe a blog with rambling thoughts and poor grammar is something for me =)

I have enjoyed interacting with like minded people and appreciate all the commentary provided by others.

Going forward

Well, I am not sure where things are going from here. I have about a month left before I need to re-up the website, so I have some time to think.  However, I am leaning towards stopping for several reasons:

  1. I work on the computer all day long and have been spending too much time on it at home
  2. Working long hours for the foreseeable future (ties into 1 and 3)
  3. I want to spend more time outside (even in the winter)
  4. I want to learn new physical skills (home maintenance/repair, electrical plumbing)
    1. As an aside, my Grandpa knew how to fix most things around the house.
  5. Side- hustle as a Math/Computer Science Tutor/Personal Trainer
    1. I think I want to be a Teacher once my Software Career is over, this will be a good step.

I think the biggest reason of all is that I am fairly tired of focusing so much on finances.

Financial Independence?

Many bloggers I read are building towards this state.  A state where they can do what they want all the time and live through passive income.  There is nothing wrong with this, that is where my Grandpa ended up upon retirement.  Living off dividends, but he had quite the full life prior to that even while working.  He traveled all over the word repeatedly and did what he wanted.  He was also a Professor, so maybe he had the best of both worlds (work + lots of vacation)

I would love to be at this state, but I don’t know when I will want to be there. Practically, it won’t be for a while because I don’t have enough passive income.  Supposing I was able to at this moment, I don’t think I would do it.

Next year budgeting

I plan on capping my savings for the next year, increasing my budget and spending (or saving) money as I go. I am not going to set any sort of goal with regards to saving. Savings will be purely automated into my brokerage accounts, which I will still spend some time monitoring and investing(on no fixed schedule, I was investing monthly).

Thanks!

Thanks for reading, I appreciate the comments and reading.  Take care!

November Highlights

Well, I have had a busy December.  After returning home from Thanksgiving, I have managed to work everyday!  Not the most exciting thing, but I should be able to leave work earlier and get a good long winter break.  Needless to say, I haven’t had much time to do any research, blogging or blog reading.

I was fairly active investing this last month.  I added substantially to my oil positions and to UL.

Black Friday Blowout

Recent Buys

Raises

Emerson Electric (EMR) and Intel raised dividends (~9 and ~6) respectively.  I was happy that INTC raised the dividend and since management tries to peg the payout ratio to 40%, I think that means they see brighter prospects  ahead.

Dividend Income

I began November with 12 month expected dividends of ~4557 and finished with ~4884.  A substantial rise due to the large investment I made on Black Friday. I passed another milestone and I am very close to meeting my goal of 5k by the end of the year.

For the month of November I totaled 285.82 in dividends.  This was a slight increase of about 3 dollars from August and a 77% increase from last November (161.24).

I should be on track to earn over 4k in dividends by the end of the year.

December Purchases

My December action will probably be limited.  I like to fund my Roth account right at the beginning of the year, so I am collecting funds and will probably not a normal purchase before the year is out. I may however make a purchase with my reserve cash if a great opportunity arises.  I would like to put an additional 400 to work in UL, but that may be put on hold as well.  We shall see.

Portfolio Shrinkage

I have about 44 positions in my account and with multiple spin-offs coming in, I may need to look at trimming some of my weaker positions and adding those funds to other companies I own.  A few candidates that I may trim include ARCP, T, VZ, SYY. With the exception of ARCP, the others are in my Roth account and wouldn’t be taxed.  That comes into play a little bit, but if the investment doesn’t fit, it needs to go.  I am negative at the moment with ARCP, so there will be a little tax harvesting there.

Basically, these are companies that do not have a high dividend growth potential and I could replace them with suitable candidates of similar yield (without reaching for it).  Some potential investments include the Oil Blue Chips I own, KMI, VOD or any others that have a solid change of raising the dividend by 8% or more over the next 5 years.

Once I am on vacation, I will do a scrub and see what I can improve upon!

Conclusion

Another solid month all around.  I am pleased with my progress and overall have identified a few areas of improvement and I hope to be able to start executing them by the end of the week.

Take care all!

Disclaimer:  Long all stocks mentioned.

 

My Financial Journey

Looking back on the years, the following is how I managed to save money/invest.  I originally meant for this to be a list, but it turned into a story.

My journey was a combination of good/bad choices, good luck and good timing.  Some of which was out of my control, some not.

I was in debt after leaving college at the end of 2005.  This is probably not a surprise to many people, but I managed to miss the large tuition increases that began in the early 2000s.  Freshman starting when I was a senior paid significantly more than me.  The amount of debt was relatively low (25k) considering I earned both a masters (Computer Science) and bachelors (Applied Math) degree.

I began working as a Software Engineer in January 2006.  The job market during 2005-2006 was much stronger than it is today and that field was(is) growing rapidly.  Having a desirable degree made it easy for me to find a job that pays well.  This wasn’t the case at first, I actually had to continue with a Masters after getting my Bachelors because not many people in the software industry had heard of my degree (Applied Mathematical Sciences, what a mouthful).

Once I began working, my paycheck was larger than any I had received.  Since I had spent the previous 5 years as a poor college student, I was well equipped to not spend money.  Initially, I set 10% of my paycheck aside in my company sponsored 401k.  I didn’t max it, but I had some debt to pay off.  Two months into my career disaster struck.

Well more of a mini disaster.  The car that served me well throughout college was wrecked beyond repair in an ice storm in February 2006.  Fortunately, while I was waiting for a tow truck, a city truck drove by and sanded where I crashed.  The damage to the car was substantial and the cost to repair it was much higher than it was worth.  At the time, I was still building my emergency fund (from 0) and did not have any cash set aside for this type of emergency.

I ended up buying a car that was cheapish.  I spent about 14k after all costs associated with the purchase.  For the most part, I was pretty content to making the payments on both my car and student debt, while saving any extra money I had.  That was until I met one of my friends.

It was at the end of 2006 that I met a good friend who was very knowledgeable about personal finance.  He was a follower of Dave Ramsey, a financial guru, I had never heard off.  I was pretty oblivious to all of the financial ideas.  My goal was to spend less than I earned, but I didn’t really have any negative feelings about having debt.  That changed after meeting him.  After building my emergency fund, I began to aggressively pay off both my student and car loans.  From the end of 2006, it took me about 2 years to pay off both loans.

All the while, my paycheck grew and I got a promotion.  Each time my paycheck increased, I raised my 401k contribution.  It was more money I never had, so I never missed it.  My spending stays pretty level from year to year, so this approach worked well for me.

Here I was, three years into my career debt free and with a high savings rate.  Stepping back a bit, my investing career started at the top of the market in 2007.  I didn’t invest a lot, but I got caught up in the market euphoria at the time. Housing is never going down! Hindsight is always 20/20 and if I had started two years earlier, the result might have ended the same, but I would have been able to pat myself on the back for picking a stock that went up.  Keep in mind I wasn’t investing.

Now I had several goals in mind:

  • Buy a house
  • Become a millionaire!

That was really about it.  I had never thought of financial freedom in the sense that I would stop working and live off investments.  I just figured I would work till I was old, which I am okay with because I enjoy Software Engineering, well more the puzzle aspect of it (which is why my other hobbies fitness/nutrition/investing seem to be puzzles).  As far as I was concerned, I was financially free.  I had a good job and more money than I needed.

This bring us to the end of 2008 and through 2009.  I was debt free, contributing to my 401k, saving for a house and starting to invest.  Having zero financial background, I surfed the internet for ways to pick stocks, talking to friends and even my Grampa!  I ended up getting into a news letter service where, for a fee, they would do the research and tell you when to buy/sell.  It took me a few years, but in the end I realized that the only people who make money with these services are the guys collecting the fees.  I took a beating throughout this time frame in the market, and gave up for the most part.  I had a portfolio and would buy based on the recommendations of the service, but I started to put less and less money into investments.

In 2009, I decided I wanted a new car.  I had gotten into bike riding and wanted a car that would make it easy for me to take my bike to the various places.  After searching for six months, I found it and ended up spending 27k on my second vehicle.  I’m a low mileage driver and my previous car was in great condition, so I was able to get about 6k for it and then I pitched in 3k. For a total loan value of about 19k.  After a few months of paying my loan, my aversion to debt and hatred of monthly payments caused me to raid my house fund and pay the car off.

At the start of 2010, I was back to square zero with the house fund, tired of “investing” and debt free (again).  I maxed my contributions to my 401k, where I was actually making money and decided to focus after tax money back into the house fund.   I still purchased stocks here and there, but put very little new money in.  After the beating I had taken in the market, my house fund would be in a “high” yield savings account.  I didn’t want to risk it, which is a good thing to do. I try to keep money I may need in the next 3-5 years as cash.

Jumping to the middle of 2012.  I can’t remember exactly what snapped, but I remember being tired of my poor performance in my own investing. By that time, I had made a few good “picks”, but still didn’t find consistent performance.   I had reached a point with my house fund where I could lower the contributions and have enough for the down payment by the time that I reached mid 2013.

At this point, I began to read several blogs, revisit my life goals and decided I didn’t want to work forever.  My Grampa was also dying at this time, needless to say, my conversations with him were foremost on my mind.  We spoke at length on how he invested and why.   He loved the safety of dividends from both stocks and municipal bonds.  He loved the tax free interest of munis.  He had never made much money, but his investment strategy(40k+ per year), a modest pension and social security/medicare enabled him to do everything he wanted.

At that point I changed my strategy to dividend growth investing.  I want to be able to have a secure retirement income stream.  Social Security won’t be what it is today and I have no pension.  I believe dividend growth investing will get me to that point.

Well, I have been somewhat vague on other aspects of my spending.  I had originally intended this to be a list instead of a story, but I will discuss more about what exactly I did to achieve the savings rate I do in the near future.

Thank you for reading.