Tuesday, April 11, 2017

What do you consider an appropriate emergency fund?

Hi Everyone,

If you had no debt, no one taking money from you every month, what would you consider as an appropriately sized emergency fund?

This is exactly the situation that my wife and I are in.  We have just recently paid off our house, we have no car payments, no student loans and no credit card debt.  If we were to run a lean month, I firmly believe we could be at the $2,000 level for spending.  I completely understand that we could trim some fat but here is what our monthly expenditures look like:

Real Estate Taxes - $215
Homeowners Insurance - $75 - I should really shop around for this
Car Insurance (two cars) - $95 - And this.
Cell Phones - $100 - And this.
Gas & Electric - $120
Cable & Internet - $120 - We should definitely get rid of this! Or at least just have internet!
Water & Sewer - $30

Total for all *mandatory bills:  $755 per month

That leaves $1245 per month to spend for all other expenses.  These would include gas, maintenance, food, vacations, etc.

I think its realistic to assume $400 for food for two people each month - down to $845 to spend.

According to most rental websites, you should expect to spend between 1 - 3 Percent of home value on repairs.  With upgrades to our home, I'm going to go with 3% or $625 per month  - down to $225.

So, we have roughly $225 or $2,700 a year to spend on vacation, gas, presents, etc.  in order to reach our $2,000 per month spending goal.

Let's be real, that's not going to happen...

We most likely will not be able to hit that level month in and month out, but it gives us something to shoot for.  We could easily get rid of $60 a month for cable TV.  We could shop around for cheaper insurance.  We could reduce our monthly phone bill and if we were more cognizant of gas, electric, water & sewer, we could realistically reduce that as well.

But lets get back to the point of the article.  With roughly $2,000 to $2,500 in spending per month, what would your emergency fund look like?

We are building up an emergency fund right now after paying off the house and completing some home renovations but at some point, we will have to flip the switch to investing again.

We are both maxing out 401K's so our net income is definitely lower and we are definitely dollar cost averaging into the stock market with each pay check.  But I can't help but think we are going to get a market pullback eventually and that's when we should start buying again. 

The thing is, the emergency fund might grow quite large at that point.  Would you invest now or later?  Would you have 1 month saved up, 2 months, 6 months, 1 year? 

Let me know in the comments!

ADD

Sunday, March 26, 2017

Portfolio and Dividend Income Pages - Up to date

Quick post:

Just wanted all the readers out there to know that the Portfolio, 401K portfolio and Dividend Income pages are up to date!

You will notice the drastic changes from the August 2016 time frame to the current month. My wife and I paid off the mortgage and did some extensive remodeling to our home which put a pause on investments for a while.

The 401K did not suffer from these financial changes however.  The portfolio is being maxed out every paycheck which is why there has been such an increase.  In a couple months, I believe my wife and I will start back on the investing trail! We need to build up the emergency fund a little bit to make us feel comfortable and then investing will commence!

At the current time, we are looking at about $2,000 a year in dividend income.  This should theoretically pay for one month of expenses if we keep things under control. 

Basically, every dollar we save from this point forward is one step closer to retirement.  We do not owe anyone any money so there is no guessing from this point. 

We save money, We invest money, We retire...

Its as simple as that!

ADD

Sunday, March 19, 2017

I'm still here

Hi Everyone,

It has been a wild few months since my last post.  I am still lurking around the interwebs, reading all blog posts that Dividend Diplomats, MMM, Mr. Free at 33, Captain Dividend, etc have been publishing.

Long story short  --  We took extended vacations, Enjoyed time with family and friends, renovated our house and most importantly for a financial blog....

We are completely debt free!!!

My wife and I took a 15 day roadtrip from Seattle to San Diego in early December which was incredible.  The only thing I can say is that I now completely understand why people who move to the west coast never move back.  Oregon was by far my most favorite location.  The redwoods, the driftwood on the beaches, the shear size of the wildness, was breathtaking.  I could easily go back there for an extended stay.

San Francisco was by far my most favorite big city we visited.  I cannot understand why anyone would have a car in LA.  It took us 35 minutes to go 1.5 miles EVERY single day when we headed out sight seeing.  San Diego was nice, but the weather was not ideal so it was hard to fully appreciate the area.  My wife's family lives in Seattle and that would be one of the only reasons why I would return to that city.  I would love to slow travel the Pacific North West one day, because I think I would enjoy the scenery around there but I would not want to be in the big city.  Other stops along the way included:  Monterey, CA, Grover Beach, CA, Arcata, CA, Williams, OR, and many more.

After that trip, we did five days in New Hampshire/Maine with more of my wife's family.  Once again, the scenery, the outdoor lifestyle, the closeness of friends and neighbors are all incredible. 

From all of our travels, I have definitely figured out that I am an outdoors, slow travel, scenery loving type person.  I loved being able to drive 10 miles without hitting a traffic light.  I loved taking hikes through the woods. I loved the simplistic lifestyle that comes with living outside the city limits.  If I had to do it again, I would love to buy a camper, tow it with my truck and slow travel from San Francisco to Seattle.  Primarily staying in Oregon and the Islands around Seattle.

Switching gears - after traveling for about a month, my wife and I did some pretty extensive renovations around the house.  Such renovations include: ripping up all the old carpet, refinishing wood floors underneath, ripping up all the trim around doors, windows, baseboards and putting up brand new trim including crown molding, all new windows and doors, new - white outlets and switches and I think that's about it.

With all that being said, you can understand why the blog has taken a back seat.

I know I know, I put the only thing you came for till the end...

We are debt free!  It's true, but unfortunately it has currently turned into a great mistake...

In September 2016 my wife and I made the decision to sell about 75% of our stock holdings and pay off our mortgage.  At the time, it appeared to be a wise thing.  Market was up for 7 straight years, and a new president was going to be elected in the US.  Who could have ever imagined that voting in Donald Trump would make the stock market go in a straight line up for all of these months.

We sold half of our holdings in September, more in October and November and finally a bit more in January.  Due to the aforementioned traveling and renovations, we were not able to sell everything in September and pay off the mortgage all in the same month.  Therefore, we made the final payment of our mortgage in the middle of February.

All told, my wife and I would be roughly $25,000 wealthier had we not sold our holdings when we did.  But, we have no debt.  The only bills we have to pay now are self imposed.  Things like food, water, cable/internet, phone, taxes, insurance. 

I have not had the time to update the portfolios but the taxable account is at $62,000 and the 401K is at $65,000.  We have zero in savings so stock purchases will still be a couple months out.

Unfortunately, my company has changed the funds that are available for purchase from Vanguard and they do not give out dividends like they did before.  Everything is "reinvested" back into the fund instead.  Not sure how much I like that but not much I can do.  Therefore, we are only looking at about $2,000 in dividends per year right now.

With no mortgage, $2,000 should cover a full months of expenses if we stay lean. 

The great thing about not having any debt is that literally from this point forward, every single penny we save is going strictly towards retirement.  There is no guessing, there is no large bill looming over us at this point.

Every $50,000 we save, is one month closer to retirement at 4% yield at current spending levels!!

Now that we have no mortgage, please send in suggestions to save on taxes next year!  We are going to max out both of our 401K's, our HSA, and I will open an IRA this year.  Are there any other suggestions?

So that's about it.  You are all caught up.  I can't guarantee I will be blogging more regularly now but I will try my best to get something posted occasionally.

How was your winter!?  Let me know!

 ADD

Monday, October 3, 2016

Financial/Life Update

Good Evening Everyone,

This post is going to be quite extensive so if you do not want to take 10 min to read everything, scroll to the bottom and I'll give you the main points.

So where to begin? First, I would like to apologize to all the readers who have stopped by in the past few weeks and have had no new material to read.  Life is always hectic in the summer time and although we have not had weddings every weekend, something has always seemed to take priority over the blog.

Since my last true post back on August 2nd my life has been quite the whirlwind with regards to everyday life, finances and fun.

My wife and I went on a week long vacation like we do every year in the middle of August.  We had weekend trips to Philadelphia, Pittsburgh and the Eastern Shore of Maryland.  My wife started a new job, my work won a much needed contract, the stock market rallied, and dividend checks kept rolling in.  I tried to slow life down a bit by relaxing on the weekends (to no avail), and the blog went silent.  My grandpa past away so the family has been working on his house which took up more time and before you know it, 2 months have passed.

This year has moved faster than any other year previously in my life.  To be sitting here and its already October seems crazy to me.  It still feels like spring was just yesterday, the flowers were starting to grow, the grass needed cutting, and weekends at the pool just around the corner.

With that bit of information out of the way, lets move onto the main topics of the post:

Saturday, October 1, 2016

Dividend Income - September 2016 Update

Hi Everyone,

Once again another killer month for my wife and I!  I might be jumping the gun on posting these results because it is only the first of the month.  Usually I do not see payouts from the 401K funds until sometime after the 1st of the month even though Vanguard counts it towards the month prior.  Check back again for updates!

Getting to the point, Septembers total came in at $548.75!  which is an increase of just 4% compared to last year$527 and a 19% decrease compared to last quarters $674... Bummer.

In the future, you will see my payouts go down pretty drastically so don't get too excited about the larger payouts.  Which is part of the reason I am not taking nearly enough time to write extended blogs for August and September.

Believe me, I am happier than ever with the decisions my wife and I have made regarding finances but dividend posts are not the place to discuss.  A gigantic blog post is just around the corner that will lay out all of the changes.

Hope you all had a great September!

ADD

Dividend Income - August 2016 Update

Hi Everyone,

Way late on this post.  Too busy living life recently....  Sorry!


However, those big investments continue to roll in the huge payouts!   Augusts total came in at $529.65!!  which is an increase of 60% compared to last year$331 and a 54% increase compared to last quarters $345!

No chart this month as big changes have been made to the portfolio and we will get into those in future posts.

Jump over to our dividend income page to see the increases month after month. There is also a nice chart on that page for all you visual learners out there. On that page, you can easily see dividend income investing at work which hopefully one day will be greater than our expenses and that's what we like to call The American Dividend Dream! Check out our complete portfolio here.

ADD

Tuesday, August 2, 2016

Dividend Income - July 2016 Update


Hi Everyone,

As Ray Charles once sung, Let the good times roll!!

All those big investments from extra money "laying" around are really paying off!   This months total came in at $425.20!!  which is an increase of 68% compared to last years $252 and a 23% increase compared to last quarters $345!



July Dividend Income:

 

Total: $425.20


Big positives from last year include new positions in: STAG, RAI, BNS, CSCO, STJ, UVE, CAH & PEB.  Holy cow, that's alot!!

Jump over to our dividend income page to see the increases month after month. There is also a nice chart on that page for all you visual learners out there. On that page, you can easily see dividend income investing at work which hopefully one day will be greater than our expenses and that's what we like to call The American Dividend Dream! Check out our complete portfolio here.


How was your July?


Thanks,
ADD

Sunday, July 31, 2016

Recent Buy - Cisco (CSCO)

Good Evening,

After my wife graciously allowed me to invest $16,000 into stocks back around May, we have been slowly building back up cash reserves and slowly buying stocks.  After we updated our 401K investments to lower our taxable income, there has been less money around to invest into the taxable accounts.  Over the past 2 months, we have only made two purchases:

Monday, July 25, 2016

Waking Up Stress Free

Hi Everyone,

As I have eluded to in previous posts, work has been crazy busy recently. 

I just finished helping my company put together a large proposal on work ranging in the $100+ million range.  Unfortunately, this has caused me to work more hours than usual and spend less time doing things that I enjoy.  The stress and long hours put a strain on my physical and mental state.  I was tired all the time and the only thing I wanted to do was ESCAPE! 

Monday, July 18, 2016

Saying Thank You to MMM

Where to begin?

If you read my May dividend income post, you noticed that I was quite busy over the past 2 months.  Blogging will always come second to living life but during this sabbatical, I did some of the most eye opening early retirement reading of my entire life.

I read Mr. Money Mustache from the first post to the last in a span of 2 months!!

Friday, July 15, 2016

Dividend Income - June 2016 Update



Hi Everyone,

Quick update since I just gave you all the run down in the post 5 minutes ago...

Absolutely killed it!!!   This months total came in at $689.79!!  which is an increase of 46% compared to last year and a 17% increase compared to last quarter!

June Dividend Income:

Total: $689.79


Big positives from last year include new positions in:  BA, AMGN, PH, STAG, WBA, MMM, UNP.  Holy cow, that's alot!!

I also invested more into:  XOM, ADM, & DOV.

UA paid a special dividend to shareholders due to the C class shares and the 401K funds all increased their payouts from last year!

BOOM!  Almost $700 in one month.  Truly remarkable to see!  To think that All of our guaranteed monthly expenses are paid for, minus the mortgage is incredible.  No longer have to worry about Electric, Gas, Water, Phone, Internet, Car Insurance, and some of our food.  Fantastic.  Now, this is only 4 months out of the year right now but we are slowly creeping up there!

All told, there was an increase of $216.64 from last year, and $98.76 from last quarter!  Gotta love the growth!

Jump over to our dividend income page to see the increases month after month. There is also a nice chart on that page for all you visual learners out there. On that page, you can easily see dividend income investing at work which hopefully one day will be greater than our expenses and that's what we like to call The American Dividend Dream! Check out our complete portfolio here.


How was your June?


Thanks,
ADD

Dividend Income - May 2016 Update

Hi Everyone,

My apologies to everyone stopping by and expecting new material here at the site. 

It has been a hectic two months.  My mother in law was living with us for 1.5 months, work was nuts, my grandfather was having medical issues so he needed extra care for.  His basement flooded and we opened up his pool/took care of lingering maintenance around his place.  Continuing the excuses, we took a long weekend to the beach, we planted a vegetable garden and did spring cleaning on all the windows, doors, garage, basement, you name it.  And finally, the best of all...  we were just trying to live life.  Bike rides/walks/spending time with friends who just had babies, you name it, we probably did it. 

Unfortunately for the readers out there, the blog takes back seat to living. 

After the "My wife is awesome post" below, I'd like her as well as you all out there know that those particular investments are up over $1,000 in less than two months!  If we sold now, it would have taken 35 years to make that in interest from the bank.  If that alone does not give you proof that you should invest, I don't know what will.  Granted, the market could have collapsed over 2 months, but then again we would still have that $1,000 of dividends every year to make up for it.  I'm still a believer of investing!

Any way, lets get down to the numbers....

This months total came in at $344.29!!  which is an increase of 34% compared to last year! 

May Dividend Income:
Total: $344.29


Big positives from last year, I invested heavily into OHI, a purchase of AAPL and HCP.  Losses from GLP and  KMI offset some of the gains or else we really would have had a blowout month.

All told, there was an increase of $87.11 from last year!  Gotta love the growth!

Jump over to our dividend income page to see the increases month after month. There is also a nice chart on that page for all you visual learners out there. On that page, you can easily see dividend income investing at work which hopefully one day will be greater than our expenses and that's what we like to call The American Dividend Dream! Check out our complete portfolio here.


How was your May?


Thanks,
ADD

Saturday, May 21, 2016

A lot of Updates - Part 2 - Recent Buys!

Hello again,

A continuation from the last post results in great information for you guys about what has been going on around here. First of all, the...

Stock Purchases and Sells
Goals

...pages have been updated.  Perhaps you noticed the stock purchases and sells page already in the last few days and in that case, you'll see that a lot of purchases were made!!

I alluded to the fact that my wife is awesome in the previous post and now I'll tell you why.  Many years ago, she was given a small inheritance when an aunt passed away.  This inheritance paid off her small student loans, a new car (Nissan Versa), a trip to Ireland and finally it has increased our pursuit of early retirement!

We have had roughly $16,000 sitting in a separate bank account for the past 2+ years.  Over the course of these 2 years, a lot of uses for this money has been talked about but nothing has ever been done.

First, we wanted to update our master bath.  We wanted to knock out a wall, put in a shower (so we have two) but the contractors we had come in to give us an estimate wanted $5,000 or more.  That number scares us both because personally I think I can do all that work for much cheaper.

Then, we wanted to completely redo our kitchen.  It is closed off, old cabinets, no pantry, fridge is in a weird location, etc.  No contractors for this to tell you quotes, but just new cabinets alone were running $5,000.  Our kitchen is perfectly fine the way it is.  It does everything we need it to do and in the 4 years we have owned the house, it has never let us down.  So why change it?

Finally, the big one...   Completely finish our unfinished basement.  I have started this undertaking already.  The studs are up, all duct work is framed out, and some additional pieces (doors and such) have been purchased.  Thing is, we never go down there currently and there is no reason to.  Our living room already has everything we need.  It is just my wife and I in a 3 bedroom 1.5 bathroom house.  The only thing a finished basement adds is more costs to furnish it, more time to keep it clean, and more space that we currently don't use, etc.

So that brings us to two weeks ago.  I received our QUARTERLY statement from the bank account and what I saw was shocking...   We made, wait for it...   SEVEN DOLLARS! in 3 months!  Roughly $2.33 a month in income.  Absolutely PATHETIC!  Reading early retirement blogs have changed my life and this bank statement was just the kick in the ass I needed to try to persuade my wife into using this money to make more money.

Before I go on, can we all admit that the interest the banks pay out...   SUCKS!

Tuesday, May 17, 2016

A lot of Updates!!

To all the readers out there:

Sorry I have been such a lame ass with updating the blog recently!!

I was looking at the pages on this blog and noticed that I had not updated some of them since November 2015...  WEAK.

So, for all my readers out there, I apologize and now the...

401K Portfolio
Portfolio
Dividend Income

... pages have all been updated.  I am working feverishly to catch up with the stock purchases and sells and the goals pages.  I will get a new post out on those two soon!

Sorry,
ADD

Dividend Income - April 2016 Update

Hi Everyone,

Sorry this is so late ya'll...   but man, I think it was worth the wait!!

We have not been able to put away as much income this year due to increasing the 401K contributions but I've got a surprise in an upcoming post --  Hint:  My wife is awesome!

With that being said, our prior investments and additional compounding growth have allowed us to set new records for the month of April.


This months total came in at $345.53!!  which is an increase of 25.88% compared to last year and a 5.80% increase compared to last quarter.

April Dividend Income:


Total: $345.53

As you can see, there were quite a few new investments along with some one time payouts, along with some respectable compound growth.  I sold O (perhaps a bad call since I have not been able to buy it back cheaper yet) and OHI & TROW were one time payouts last year.  Those were all the big negatives.

Big positives from last year, I invested heavily into WPC, a purchase of RAI earlier this year, along with new purchases of BNS, CSCO and STJ.

All told, there was an increase of $71.04 from last year, and $18.94 from last quarter!  Gotta love the growth!

Jump over to our dividend income page to see the increases month after month. There is also a nice chart on that page for all you visual learners out there. On that page, you can easily see dividend income investing at work which hopefully one day will be greater than our expenses and that's what we like to call The American Dividend Dream! Check out our complete portfolio here.


How was your April?


Thanks,
ADD