Monthly Investing Recaps: November 2014 to August 2016

Catching up from my year away from blogging today I’ll review all of my investing activity over the past year plus.  I decided to not invest any money into my Roth IRA these past years so I could focus on building up my taxable accounts.  In addition, I continued investing a small amount each month in my Thrift Savings Plan (TSP).  The TSP is basically a 401K plan for federal employees including the military.  It only offers index funds but does have probably the lowest expense ratios around.  Right now I’m investing in the C Fund (mirrors S&P 500) and the S Fund (small caps).

Note:  All total invested numbers include commissions.  All transactions are buys as I had zero sells during the time period.

 

November 2014

Taxable Brokerage

36 shares of BP @ $40.44 per share=$1464.79 invested.

Loyal3

1.0566 shares of McDonalds (MCD) @ $94.65 per share=$100 invested.

1.0878 shares of Disney (DIS) @ $91.93 per share=$100 invested.

.5518 shares of Disney (DIS) @ $90.62 per share=$50 invested.

2.4976 shares of Unilever (UL) @ $40.04 per share=$100 invested.

1.2892 shares of Walmart (WMT) @ $77.57 per share=$100 invested.

November 2014 Quick Hits:  November marked the beginning of me focusing on raising the overall yield of my portfolio to provide a larger base of slower growing, high yielding stocks.  Hindsight being 20/20 this was probably not a good time to load up on BP as the price of oil would soon decline.

 

December 2014

Taxable Brokerage

50 shares of BP @ $39.59 per share=$1988.45 invested.

18 shares of Chevron (CVX) @ $109.00 per share=$1970.95 invested.

22 shares of Exxon Mobil (XOM) @ $90.40 per share=$1997.75 invested.

12 shares of International Business Machines (IBM) @ $161.75 per share=$1949.95 invested.

December 2014 Quick Hits:  Again, not the greatest timing for loading up on the oil majors looking back but overall I think some good buys using fulfilling my Christmas stock shopping spree of 2014.

 

January 2015

Taxable Brokerage

63 shares of AT&T (T) @ $33.74 per share=$2134.57 invested.

Loyal3

.6002 shares of Unilever (UL) @ $39.99 per share=$24.00 invested.

 

February 2015

Taxable Brokerage

73 shares of AT&T (T) @ $33.36 per share=$2444.95 invested.

 

March 2015

Taxable Brokerage

30 shares of Kinder Morgan (KMI) @ $40.92 per share=$1236.55 invested.

25 shares of BP @ $39.69 per share=$1001.20 invested.

16 shares of Johnson & Johnson (JNJ) @ $100.92 per share=$1623.67 invested.

Loyal3

.5626 shares of Microsoft (MSFT) @ $40.88 per share=$23.00 invested.

March 2015 Quick Hits:  Continued investing in some high yielders (KMI/BP) as well as building up a core position in JNJ.  The majority of small Loyal3 purchase beginning in March were the result of reinvesting dividends.

 

April 2015

Loyal3

4.9517 shares of Microsoft (MSFT) @ $40.39 per share=$200.00 invested.

.2866 shares of Microsoft (MSFT) @ $41.87=$12.00 invested.

12.216 shares of Coca-Cola (KO) @ $40.93 per share=$500.00 invested.

 

May 2015

No investing activity.

 

June 2015

Taxable Brokerage

22 shares of Johnson & Johnson (JNJ) @ $97.66 per share=$2157.47 invested.

 

July 2015

Taxable Brokerage

12 shares of Chevron (CVX) @ $94.95 per share=$1148.35 invested.

59 shares of Kinder Morgan (KMI) @ $34.98 per share=$2072.76 invested.

Loyal3

.5567 shares of Coca-Cola (KO) @ $39.52 per share=$22.00 invested.

.3445 shares of Coca-Cola (KO) @ $40.64 per share=$14.00 invested.

1.0861 shares of Hershey (HSY) @ $92.99 per share=$101.00 invested.

 

August 2015

Taxable Brokerage

46 shares of BP @ $31.65 per share=$1464.85 invested.

Loyal3

1.0892 shares of Hershey (HSY) @ $91.81 per share=$100.00 invested.

4.878 shares of Coca-Cola (KO) @ $41.00 per share=$200.00 invested.

1.7351 shares of Apple (AAPL) @ $115.27 per share=$200.00 invested.

.0151 shares of Google (GOOGL) @ $664.28 per share=$10.00 invested.

.0736 shares of Berkshire Hathaway (BRKB) @ $135.89 per share=$10.00 invested.

 

September 2015

Loyal3

5.123 shares of Coca-Cola (KO) @ $39.04 per share=$200.00 invested.

3.0257 shares of Walmart (WMT) @ $66.10 per share=$200.00 invested.

.0967 shares of Disney (DIS) @ $103.36 per share=$10.00 invested.

.4466 shares of Apple (AAPL) @ $112.47 per share=$50.00 invested.

.1088 shares of Hershey (HSY) @ $91.88 per share=$10.00 invested.

.2467 shares of Unilever (UL) @ $40.53 per share=$10.00 invested.

.5861 shares of Coca-Cola (KO) @ $39.24 per share=$23.00 invested.

6.3939 shares of Coca-Cola (KO) @ $39.10 per share=$250.00 invested.

.0776 shares of Berkshire Hathaway (BRKB) @ $128.94 per share=$10.00 invested.

.0153 shares of Google (GOOGL) @ $652.28 per share=$10.00 invested.

September 2015 Quick Hits:  Starting in September I began to use Loyal3 as my primary investing account investing smaller amounts as I focused on saving up money for my post-military transition in 2017.

 

October 2015

Loyal3

.3633 shares of Microsoft (MSFT) @ $46.79 per share=$17.00 invested.

4.217 shares of Walmart (WMT) @ $58.80 per share=$250.00 invested.

.8811 shares of Apple (AAPL) @ $113.49 per share=$100.00 invested.

.0147 shares of Alphabet (GOOGL) @ $681.23 per share=$10.00 invested.

.0741 shares of Berkshire Hathaway (BRKB) @ $134.94 per share=$10.00 invested.

.8685 shares of Walmart (WMT) @ $57.57 per share=$50.00 invested.

 

November 2015

Loyal3

4.4279 shares of Walmart (WMT) @ $56.56 per share=$250.00 invested.

2.9544 shares of Hershey (HSY) @ $84.62 per share=$250.00 invested.

.0732 shares of Berkshire Hathaway (BRKB) @ $136.56=$10.00 invested.

.0128 shares of Alphabet (GOOGL) @ $781.70 per share=$10.00 invested.

.1668 shares of Walmart (WMT) @ $59.96 per share=$10.00 invested.

.232 shares of Coca-Cola (KO) @ $43.11 per share=$10.00 invested.

1.2213 shares of Starbucks (SBUX) @ $61.41 per share=$75.00 invested.

.1863 shares of Microsoft (MSFT) @ 53.69 per share=$10.00 invested.

.0753 shares of Nike (NKE) @ $132.88 per share=$10.00 invested.

 

December 2015

Loyal3

.8573 shares of Hershey (HSY) @ $87.48 per share=$75.00 invested.

.2024 shares of Walmart (WMT) @ $59.28 per share=$12.00 invested.

.0131 shares of Alphabet (GOOGL) @ $762.50 per share=$10.00 invested.

.0767 shares of Berkshire Hathaway (BRKB) @ $130.37 per share=$10.00 invested.

.1646 shares of Walmart (WMT) @ $60.77 per share=$10.00 invested.

 

January 2016

Taxable Brokerage

35 shares of AT&T (T) @ $34.00 per share=$1198.95 invested.

 

Loyal3

.1125 shares of Apple (AAPL) @ $97.81 per share=$11.00 invested.

.0137 shares of Alphabet (GOOGL) @ $730.40 per share=$10.00 invested.

.0794 shares of Berkshire Hathaway (BRKB) per share@ $125.91=$10.00 invested.

 

February 2016

Loyal3

1.5787 shares of Apple (AAPL) @ $95.02 per share=$150.00 invested.

.0138 shares of Alphabet (GOOGL) @ $723.00 per share-$10.00 invested,

.0761 shares of Berkshire Hathaway (BRKB) @ $136.37 per share=$10.00 invested.

 

March 2016

Loyal3

.2653 shares of Hershey (HSY) @ $90.45 per share=$24.00 invested.

.8204 shares of American Express (AXP) @ $60.36 per share=$50.00 invested.

.0131 shares of Alphabet (GOOGL) @ $761.85 per share=$10.00 invested.

.0702 shares of Berkshire Hathaway (BRKB) @ $142.54 per share=$10.00 invested.

 

April 2016

Taxable Brokerage

24 shares of Johnson & Johnson (JNJ) @ $108.82 per share=$2620.63 invested.

 

Loyal3

.4611 shares of American Express (AXP) @ $60.73 per share=$28.00 invested.

.1675 shares of Nike (NKE) @ $59.69 per share=$10.00 invested.

.1672 shares of Starbucks (SBUX) @ $59.81 per share=$10.00 invested.

1.6304 shares of Apple (AAPL) @ $110.40 per share=$180.00 invested.

3.9507 shares of American Express (AXP) @ $63.28 per share=$250.00 invested.

5.2748 shares of Hershey (HSY) @ $94.79=$500.00 invested.

.0129 shares of Alphabet (GOOGL) @ $776.01 per share=$10.00 invested.

.0687 shares of Berkshire Hathaway (BRKB) @ $145.52 per share=$10.00 invested.

April 2016 Quick Hits:  This month marked the last big stock purchase I had this year as I’ve begun saving up cash for a 2017 transition to the civilian sector.

 

May 2016

Loyal3

2.122 shares of Apple (AAPL) @ $94.25 per share=$200.00 invested.

.0139 shares of Alphabet (GOOGL) @ $718.48 per share=$10.00 invested.

.0707 shares of Berkshire Hathaway (BRKB) @ $141.43 per share=$10.00 invested.

 

June 2016

Loyal3

1.4497 shares of Target (TGT) @ $68.98 per share=$100.00 invested.

1.0066 shares of Apple (AAPL) @ $99.34 per share=$100.00 invested.

.9116 shares of Nike (NKE) @ $54.85=$50.00 invested.

1.2077 shares of American Express (AXP) @ $62.10=$75.00 invested.

.0141 shares of Alphabet (GOOGL) @ $709.34 per share=$10.00 invested.

.0699 shares of Berkshire Hathaway (BRKB) @ $143.03 per share=$10.00 invested.

 

July 2016

Loyal3

.8972 shares of Nike (NKE) @ $55.73 per share=$50.00 invested.

.2642 shares of Apple (AAPL) @ $94.64 per share=$25.00 invested.

 

August 2016

Loyal3

.1804 shares of Starbucks (SBUX) @ $55.43 per share=$10.00 invested.

Is Diversification Important in the Accumulation Phase?

One of the common themes that is included in most investment books is the need to maintain a properly diversified portfolio. Most recommend that you hold a minimum of 5-10 stocks in your portfolio and that no sector account for more than 20% of your total portfolio. A lot of other dividend growth investors prefer to maintain a portfolio size of at least 35-50 stocks so that if any holding cuts or eliminates their dividend, the loss in annual income will not be so great that it isn’t made up by dividend raises from other stocks.

If you have seen my portfolio page, you will see that not only do I not have that many positions but that I also am not very diversified by sector either. REIT’s and oil stocks make up a disproportionate amount of my portfolio and I have received many questions since starting this blog in regards to my diversification. Right now, being in the very early years of the accumulation phase I am comfortable not being diversified.

Instead of adding new positions just for the sake of diversifying into new sectors and balancing out my portfolio more right now I am content to continue adding whatever company presents good value at the moment and fits with my current goals. For example over the past year wanting to increase the overall yield of my portfolio and jumpstart my dividend income I invested a lot in oil companies, adding to my positions in Chevron, BP and Exxon Mobil. With the oil majors all trading at fair and undervalued prices due to the decline in oil prices I was able to both increase the yield of my portfolio while also getting great companies at a fair price.

Personally I believe diversification only becomes truly important as you get closer to actually living off of your dividends. Obviously I wouldn’t want REITs and oil stocks to continue to make up such a large percentage of my portfolio once I’m actually ready to retire early. My tentative goal right now is to be equally balanced in a few years after I have the chance to start some more positions. In the meantime though, I plan on continuing to load up on stocks that present good value and worry about becoming completely balanced out later down the road.

So what do you think? Do you think it is necessary to have a diversified portfolio when starting out or do you think diversification is something you can ignore for a while you build up your portfolio?

Hello World Part 2

Time to hit the reset button and try this again.  I had to put the blog on hold for all of 2015 due to work, school and some unexpected life events.  However, I did continue to invest on a regular basis and have made very good progress towards my ultimate goal of retiring early.  I’ll be updating everyone with some 2015 investing review posts in the coming weeks.

At work I became a supervisor in the end of 2014 which I previously wrote about, then became a shift leader for a 24/7 control center in the beginning of 2015 and finally the manager of the same control center shortly thereafter due to several personnel departures in a very short time frame.  Basically went from just an employee to being charge of 15+ people in a less than 8 months increasing my work hours from 45 to 70+ per week along with 1-2 hours of working at home catching up on paperwork each night.  The military, like any large organization can be very similar to a corporate environment once you start moving up in the ranks and my life has become one filled with meetings, briefings, paperwork and dealing with employee issues non-stop.

On top of this I’ve continued working toward my Bachelor’s degree in Business Management and am now over 1/3 of the way done by taking classes online throughout the year and should pass the half-way mark at the end of 2016.  I also got a chance to travel to Texas this past summer for several weeks of training in San Antonio which I combined with some leave days visiting Denver, the Grand Canyon, Albuquerque New Mexico (saw all the Breaking Bad film locations 🙂 ), and Austin, Texas (along with a fun night at 6th Street seeing a ton of live music and drinking way too much beer).

While my workload at my job won’t be decreasing anytime soon, I’ve gotten to a point where I’ve adapted and can manage it better without needing to work so many hours so I’ll be returning to blogging and interacting with fellow members of the DGI/early retirement community online in the coming weeks.

Thanks for reading.

 

-SFZ

Time to Go Christmas Shopping

For stocks that is!  🙂

I recently came upon some new capital to be added to my portfolio via the sale of an old mutual fund account that I plan on putting to work in DGI stocks soon. First, some back story.

While I didn’t get into individual stock investing until last year, I actually started out investing in mutual funds back when I was around 14 years old, kind of by accident. Growing up I always worked during my summer vacations from school and by this point had amassed a nice little amount of cash in my savings account (I think around $4K) from a lot of lawn mowing and odd jobs over a couple year timeframe. Knowing that I didn’t know what to do with it, besides put most in the bank and spend the rest on pizza and soda at the variety store after school, my Dad forced strongly encouraged me to invest it in a mutual fund through our family’s financial advisor/insurance salesman. I ended up putting all of my hard earned cash into a utility sector stock mutual fund that I remember promptly dropping in price shortly thereafter. Between “losing” a lot of money right off the bat and then getting interested in a whole host of other things as a teenager  😉 , I pretty much forgot about the account, just letting capital gains and dividends reinvest since then. Plus since 14 year olds can’t legally have these types of accounts on their own, it was set up as a joint account with my Dad who has paid the taxes on it in the meantime. Thanks Pops!

During my recent vacation home, my father had the account transferred over to my name. The account transfer was completed a couple days ago. After taking a look at the fund’s low yield and lack of consistent dividend growth, I decided to sell all the shares. While I’ll end up possibly having to pay capital gains taxes on it, I plan on reinvesting the cash received into dividend growth stocks which is my preferred method of investing, allowing me to get that much closer to financial independence.

So what to buy?

With the price of oil dropping lately, and sending all the major oil stocks down with it (anyone else see the crazy swings on oil stock prices on Black Friday?), I’ll be turning my attention to that sector first to add to my stake in BP, Chevron, and initiate one in Exxon Mobil. Even though this will put my portfolio very overweight in the energy sector, I’m comfortable not being too diversified right now in the very early years of the accumulation phase of investing. Over time, things will start to balance out. Until then, it makes sense to just buy whatever presents good value.

Looking at the rest of my portfolio, IBM has pulled back quite a bit since the last time I purchased shares back in 2013 so it makes sense to average down on that position which quite a few other DGI bloggers have also been doing lately. While the company is currently struggling with revenue growth, I like the long-term prospects and the company’s commitment toward transitioning for the future into cloud and big data.

With whatever cash is left over, I’ll put into Loyal3 and continue dollar cost averaging into Disney, Unilever, etc. Speaking of Disney, has everyyone else seen the new Star Wars movie trailer yet? Check it out below. Can’t wait until December!

Hope everyone had a great Thanksgiving!

 

Disclosure:  Long BP, CVX, IBM, DIS, UL, and have a current buy order placed for XOM.

What do you think of investing in the oil sector today? Any other stocks on your watchlist?

Monthly Dividend Income: October 2014

My favorite post to write each month. :) This is when I get to share all my dividend income for the previous month. These dividends are what I’ll eventually use to live off of when I become financially independent.

I share these figures along with monthly income/expenses to not only track my progress towards financial independence but also to hopefully show others that it is possible to get started with dividend growth investing with a low income. The hardest part is weathering the first few years of small dividend payments and allow the compounding snowball to get rolling.

Here is October’s dividend income from my 3 stock investment accounts: Roth IRA, Loyal3, and Taxable Brokerage. I automatically reinvest all dividends in my Roth and taxable brokerage and selectively reinvest dividends, combining them with fresh capital every month or two, in the Loyal3 account. Note: I recently made the switch to dripping all dividends in my taxable account but due to a broker error, the change didn’t end up taking effect until the beginning of November. Mostly my fault, as I didn’t monitor my portfolio too closely over the month of October.

Roth IRA

Coca-Cola (KO): $4.40-reinvested into .105 shares @ $41.91 per share.

Realty Income (O): $2.89-reinvested into .067 shares @ $42.89 per share.

General Electric (GE): $5.91-reinvested into .233 shares @ $25.38 per share.

Loyal3

Coca-Cola (KO): $8.08

Dr. Pepper Snapple (DPS): $1.38

Taxable Brokerage

Altria (MO): $3.64

Phillip Morris (PM): $22.00

Realty Income (O): $19.96

General Electric (GE): $1.76

October Total: $70.02. As expected, October was a lighter month for dividend income but still managed to increase the amount over last October from $23.99. With two months left in 2014, I’ve now received $696.43 in dividend income and estimated forward 12 month dividends now stands at $1,131.29.

 

Full Disclosure: I am long all stocks mentioned. This post is not intended to be a buy or sell recommendation for any stock mentioned and is for entertainment/educational uses only.

How was your October for dividend income (or portfolio gains for any growth investors)? Share below with a comment and thanks for reading!

October 2014 Balance Sheet

Today I’ll be sharing my personal balance sheet, listing all of my assets and liabilities to figure out what my current net worth is. Tracking your net worth is a good exercise in my opinion since it provides you a quick snapshot of your financial life.

Overall October was an okay month with a small gain. Considering most of the losses were due to an expense heavy month being on vacation with family and the continued value decline of my car, I’ll take it. Note: the +/- after each category total represents the change only from the prior month.

Assets

Emergency Fund: $4502.51 (+0.37). Thinking about possibly dropping this amount down a bit to free up some money to invest with over the next few months. Having 6 months of expenses saved up is nice but with a steady job working for Uncle Sam and very low interest rates, it’d be nice to be able to put some of this money to work.

Cash Savings: $2975.96 (-831.91).

Roth IRA: $13,186.12 (+343.87). After maxing out this account earlier in the summer, it’s just riding the ups and downs of the market at this point along with dripping dividends.

Brokerage: $15,166.03 (+1932.22). Bought some more KMI, rest is due to market gains.

Loyal3: $3365.81 (+32.39).

Thrift Savings Plan: $1661.10 (+109.73). I started contributing a small portion of my paycheck to the TSP in March, splitting my contributions between a S&P 500 and a small-cap stock index fund. This is the one portfolio where I’m investing primarily for total return as these funds do not pay dividends. However, they do have some of the lowest expense ratios you can find in a retirement plan.

Auto Worth: $4316.00 (-318.00). The value of my ‘ole Chevy sedan continues to slowly decline as to be expected. The only reason I include it here is that is is the one non-financial “asset” that if I ever needed to sell, could probably get close to its market value. Also a nice reminder each month to not think of cars as an investment.

Assets Total: $45,173.53 (+1,268.67).

Liabilities

Credit Cards: $833.25 (+422.40). As I never carry a balance on my cards and the billing cycles ends in the middle of each month, this is simply my current balance at the end of the month. Like a lot of personal finance bloggers, I’m only in it for the rewards! ;)

Net Worth: $44,340.28 (+846.27). Overall a solid month, especially after a lot of expenses.

 

How was your October for finances? Do you track your net worth and if so, are there any other items you track? Share below with a comment and thanks for reading!

Monthly Investing Recaps: October 2014

At the start of each month I detail all the buy/sell activity here for each of my 3 individual stock portfolios: Loyal3, Roth IRA, and Taxable Brokerage accounts. It’s just one way I am chronicling my journey to financial independence here at Starting From Zero.

In addition to these 3 accounts, I also continued investing in my Thrift Savings Plan (TSP) again this month. Right now I’m contributing 4% of my base pay but may adjust this in the future. The majority of my investing will still be in my taxable and Roth accounts. The TSP is basically a 401k plan for federal employees including the military. It only offers index funds but does have probably the lowest expense ratios around, even lower than Vanguard. Right now I’m putting my contributions in the C Fund which mirrors the S&P 500 and the S Fund which is a small cap index fund. Since these deposits typically take a while to reach my account, I won’t be detailing those transactions here.

Loyal3 Account

Buys

.528 shares of McDonalds (MCD) @ $94.69 per share=$50 invested.

Quick Hits: Although I wasn’t able to buy MCD at its low mid-month, I added some more to this position at a decent valuation.

 

Roth IRA

No activity this month.

Quick Hits: Contribution limit maxed out until next year.

 

Taxable Brokerage

Buys

38 shares of Kinder Morgan (KMI) @ $38.92 per share=$1487.91 invested including commission.

Quick Hits: With KMI set up for projected 10% annual dividend growth over the next few years, I decided to double my position in the energy giant. Although I ended up raising my cost basis here, I still think KMI presents good value here when factoring in the upcoming consolidation of Kinder Morgan Partners (KMP) and Kinder Morgan Management (KMR) under KMI.

 

Full Disclosure: I am long all stocks mentioned. This post is not intended to be a buy or sell recommendation for any stock mentioned and is intended for educational/entertainment purposes only.

How was your October for investing? What do you think of my stock picks this month? Share with a comment below and thank you for reading!

Income/Expense Report: October 2014

As I do every month, I’m sharing all of my income and expenses this month in hopes of being as open as I can about my finances here to chronicle my journey to financial independence. Keeping my expenses low each month will allow me to have more money to set aside and invest in high quality, dividend growth stocks that I will use to reach financial independence. I hope that by sharing these monthly updates I can also prove that it is possible to take control of your financial life and invest a high percentage of your income, even on a small salary.

So how’d I do in October? Not so great, but I knew coming into it that October would be an expense heavy month with a cross-country road trip and 3 weeks visiting family and friends back home. Managed to still spend less than what I took home, but no where close to my 50% savings rate goal. That’s okay though since I usually only get to go home once every year or so and I had plenty of cash built up so I could still make some regular stock buys.

So here’s how it all broke down:

Income

Job Income: $2636.51.

Expenses

Rent/Utilities: $532.53. Rent is $500 a month and I’m also responsible for the electric bill which includes heating costs. So far seems to be running between $30-40 a month. We’ll see how much this increases with cold weather coming up very soon.

Renter’s Insurance: $0. I decided to pay this all up front just to take care of it for the next 6 months in July.

Food/Drinks: $139.50. A lot of cheap beer plus my share of the grocery bill while staying with my parents while on vacation.

Dining Out/Fast-Food: $175.85.

Household/Personal Expenses: $326.86. Took advantage of the time being home to take care of some small home improvement projects around my Mom’s new house that needed to get done before winter. Also a pretty good excuse to buy some more power tools (insert Tim the Tool Man’s grunting noise here.) 🙂

Gas: $810.59. That’s what over an over 5000 mile round trip across the U.S will do to you, plus a lot of driving around while I was at home. Non road-trip expenses, my gas total came to $114.59. Going forward I’d like to keep this to about $40-50 a month, not including any travel for weekend trips, vacation, etc.

Auto Insurance: $0. Switched to liability in July after the recommendations of several people here in the blogging community, cutting my monthly bill down to less than $40 a month. Decided to just pay for the remainder of this year so I don’t have to worry about it until January.

Car Maintenance: $66.94. A couple oil changes for the car.

Phone: $43.86. Been looking at various other options, but with the limited service choices in my area and having gotten used to having a smart phone, I’ll be sticking with Net10 for the forseeable future. Still not a bad deal, compared to the monthly rates companies like Verizon charge for their contacts.

Internet: $54.99.

Entertainment: $7.99. Good ole Netflix.

Donation: $25.00. This will be a new monthly category here as I’ve decided to donate $25 a month to start off to Child Fund International, a great charity that my family has been donating to for quite a while and I’ve donated to randomly over the last few years. This month and going forward I’m donating to their “Essentials for Survival” fund which provides basic necessities like access to water, food and healthcare to children around the world.

Other: $367.09. Lots of money spent in tolls (thank you Illinois and New York 😉 ) plus some motel rooms along the way, and misc. expenses while I was home.

 

Total Expenses: $2551.20.

Expense Rate: 97%

Savings Rate: 3%

How did you do in October, did you meet all of your budgeting goals?

October Recap

Wow, what a crazy month! Huge market swings, lots of earnings reports, and major negativity surrounding the markets. Even after all the crazy (often irrational) market movements, the Dow closed October by hitting an all-time high of 17,390. Good thing I’m an investor and not a trader, and can ignore short-term market noise like this past month and instead just focus on continuing to save a large amount of my income and purchase income producing dividend growth stocks.

On a personal note, I am back home after taking a cross country road trip and visiting family and friends for the past three weeks. I had a great time as I was able to see people back home for the first time in several years. Nothing like a little time off once in a while to be able to relax. Now its time to get back to work and get back to some regular blogging updates as well.

Today I’d like to highlight some of the recent news from companies in my portfolio and watchlist.

Kinder Morgan (KMI)

The energy giant announced a 2.3% increase to its quarterly dividend from .43 to .44 per share. With expected 10% dividend growth moving forward as the Kinder Morgan companies consolidate under one umbrella, KMI, I really like the stock as a long-term holding and recently added some more shares to my portfolio.

Visa (V)

The global payment processing company reported strong 4th quarter earnings that has since sent the stock soaring to new highs. Glad I managed to add some more shares in September around $213 a share and didn’t wait. 4th quarter EPS of $2.18 beat estimates by $0.08 while revenue jumped 8.8% year over year. Payment volume grew 11% to a staggering $1.2 Trillion dollars. With China announcing recently that they are opening their market for clearing domestic bank card transactions, Visa looks primed to continued growing revenues, EPS, and dividends at a strong pace going forward.

Realty Income (O)

The monthly dividend paying company announced 3rd quarter Funds from Operations of .64 per share which missed estimates by .01. Revenue beat estimates and showed 16.6% growth from last year. If I wasn’t so heavily weighted in O (accounts for 23% of my projected annual dividend income), I’d probably pick up at some more shares here in the low $40’s.

International Business Machines (IBM)

What a month for IBM. And not in a particularly good way. Revenue growth continues to stagnate as the blue chip technology company reported a 4% decline in revenues for the 3rd quarter and abandoned their previous goal of $20 in EPS for 2015. In all fairness, the EPS was established by a previous CEO. However, EPS growth continues, albeit at a slower than expected pace as the company has begun focusing on improving and growing its business in key segments with an eye towards the future. From CEO Ginni Rometty on her company’s results, “We again performed well in our strategic growth areas cloud, data and analytics, security, social and mobile-where we continue to shift our business. We will accelerate this transformation.”

IBM also provided guidance for 2015 EPS which falls in  a range of $15.97 to $16.30. Applying a P/E of 13 which is where IBM has traded historically, we can come up with a fair value of $207.61 based on the low end of guidance. IBM also added another $5 Billion to their share buyback plan. While the lack of revenue growth is disappointing, I like that the company is aggressively buying back stock, cutting costs, and increasing margins in order to continue growing profits. IBM is a company in transition as they shed old businesses and focus their efforts in faster growing segments like the cloud. While it won’t happen overnight, I think IBM will turn things around and get revenue growing again in the future. Since the dividend is still well covered by earnings, I’m content to just collect the dividend and let it reinvest at low share prices in the meantime.

Aflac (AFL)

The insurer and dividend champion reported so-so numbers for its 3rd quarter report, earning $1.51 in profits missing estimates by 8 cents a share. Revenue beat estimates but still came in slightly lower than last year by 2.5%. Aflac also announced a 5.4% increase in their quarterly dividend to $0.39 a share and increased the size of their buyback plan from $1 billion to $1.2 billion which I like since it shows management is being smart when it comes to buying back stock on cheap valuations. The company also announced it plans to have a $1.3 billion buyback plan for 2015. Currency issues continue to hamper the company but with a low payout ratio, Aflac is set up to weather times like this without risks of dividend cuts or freezes. With the stock hitting 52 week lows, now may be a good time to add to or initiate a position in the company.

Disney (DIS)

Disney is a stock I’ve been looking at recently after reading a write-up by fellow blogger Brian over at Long Term Mindset. Disney recently announced a large slate of new Marvel movies that are expected to be released over the next 4 years.

Check out the list:
The Avengers 3-split into 2 parts in May 2018 and May 2019
Captain America: Serpent Society in May 2016
Doctor Strange in November 2016
Guardians of the Galaxy 2 in May 2015
Thor: Ragnarok in July 2017
Black Panther in November 2017
Captain Marvel in July 2018
Inhumans in November 2018

Pretty impressive, especially since this doesn’t even include the Lucasfilm Star Wars movies (the third trilogy of Episodes 7, 8, and 9 plus spinoff movies) which I am looking forward to as both an investor and Star Wars fan. Although DIS seems to always trade at a premium valuation, I’ve been coming around lately to the idea that this premium is deserved due to their strong growth prospects. I may start dollar cost averaging into a position via Loyal3 soon.

BP

Announced a 2.6% increase to their quarterly dividend to $0.60. While a relatively small increase, I’ll take it as BP’s high starting yield helps make up for it. The stock continues to trade at an attractive valuation compared to their peers and is on my shortlist for portfolio purchases after its recent pullback to the low $40’s. While its easy to get caught up in all the negativity surrounding the company regarding lawsuits over their oil spill, the company is still generating large profits and remains committed to steadily increasing their dividend.

J. M. Smucker (SJM)

Announced a 5 million share increase to their buyback program, bringing their total authorized buyback plan to 10 million shares which will retire about 10% of the company’s outstanding stock if fully executed. How cool is that? Another stock on my short list (I feel like I’ve said that a lot today, so many great stocks, so little capital! 😉 ), I’d prefer to buy it near the 17 P/E mark but may initiate a position sometime during the last quarter of this year or early 2015 if shares continue to trade around 19 times earnings.

 

Disclosure: I am long KMI, V, O, IBM, AFL, and BP and may initiate positions in DIS and SJM in the coming weeks/months.

How about your portfolio and watchlists? Any important news or events this month?

Income/Expense Report: September 2014

As I do every month, I’m sharing all of my income and expenses this month in hopes of being as open as I can about my finances here to chronicle my journey to financial independence. Keeping my expenses low each month will allow me to have more money to set aside and invest in high quality, dividend growth stocks that I will use to reach financial independence. I hope that by sharing these monthly updates I can also prove that it is possible to take control of your financial life and invest a high percentage of your income, even on a small salary.

So how’d I do in September? Pretty good, making it the second straight month of being able to save 50% of my net income. Since I spent most of this month in school finishing up a leadership course for work, I didn’t have a whole lot of time for anything else which definitely helped keep expenses down.

So here’s how it all broke down:

Income

Job Income: $2636.51.

Expenses

Rent/Utilities: $538.05. Rent is $500 a month and I’m also responsible for the electric bill which includes heating costs. So far seems to be running between $30-40 a month.

Renter’s Insurance: $0. I decided to pay this all up front just to take care of it for the next 6 months in July.

Food/Drinks: $246.88. After one of my lower spending months in August, this category jumped up quite a bit as I stocked up on a lot of staple items. Trying to get better at cooking cheaper meals going forward.

Dining Out/Fast-Food: $33.10.

Household/Personal Expenses: $83.08.

Clothing/Shoes: $94.20. Some more misc. uniform items for work.

Gas: $80.00. Sadly the days of $20 or under gas months is over with me living further away from work now. Going forward I’d like to keep this to about $40-50 a month, not including any travel for weekend trips, vacation, etc.

Auto Insurance: $0. Switched to liability in July after the recommendations of several people here in the blogging community, cutting my monthly bill down to less than $40 a month. Decided to just pay for the remainder of this year so I don’t have to worry about it until January.

Car Maintenance: $13.99. One headlight bulb for the car.

Phone: $43.86. Been looking at various other options, but with the limited service choices in my area and having gotten used to having a smart phone, I’ll be sticking with Net10 for the forseeable future. Still not a bad deal, compared to the monthly rates companies like Verizon charge for their contacts.

Internet: $54.99.

Entertainment: $7.99. Good ole Netflix.

Donation: $28.00. This will be a new monthly category here as I’ve decided to donate $25 a month to start off to Child Fund International, a great charity that my family has been donating to for quite a while and I’ve donated randomly to over the last few years. This month and going forward I’m donating to their “Essentials for Survival” fund which provides basic necessities like access to water, food and healthcare to children around the world.

Other: $17.96.

 

Total Expenses: $1242.10.

Expense Rate: 47%

Savings Rate: 53%

How did you do in September, did you meet all of your budgeting goals?