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Thursday, June 23, 2016

May 2016 FrugalMaster Results

May was mostly quiet here in the DFG household.  My daughter was baptized and we celebrated that.  My older daughter had a birthday slumber party.  That is always interesting to see how teenage girls act these days.  They were all good kids and even went to bed at a reasonable hour.  Even on the finance side it was mostly quiet.  I will write about some of changes in another article that in the long run will benefit my family and I.  Now let's get on with the show and see if I came out ahead this month.

Income
I posted my dividend income already.  It was lower compared to last year due to some changes and dividend cuts.  Nevertheless it was still income I did not have to work for.

On my paycheck side it was steady Eddy.  The only difference was I started my investment in my company's employee stock purchase program.  It is a great deal as long as you hold the stocks long enough to avoid short term capital gains taxes. 

First they take out a percentage of your income from each paycheck.  At the end of a fixed period of time they take your money and buy company stock at a 15% discount.  The best part is they take the lower of the 2 stock prices that are measured at the start and end of this time period.

For example, May 1st starts the period and it ends on August 30th.  If the stock on the 1st is $20/share and in August it ends at $40/share you get it for $20*.85=$17.00 per share.

You can't beat that so I am currently sinking 1% of my pay into this program and may increase it the next period if I think the company is heading in the right direction. 

Expenses
This month was pretty good.  I came in under budget on all my "needs" categories.  However my wants category was about double what I had budgeted.  First of all I didn't plan on (oops) the expenses related to the celebration from my daughter's baptism.  That was ~$150 dollar expense I categorized under wants.  Sure I could have just sent the family home with no lunch but it was the least I could do for having them travel the distance to our church.

Again I just want to point out to everyone that my house is still the largest monthly expense I have.  Especially when you factor in maintenance and utilities for the beast of a large home.  I am still working on aligning my simple lifestyle goal with my wife.  I hope once we are on the same page it will lead to a downsize in possessions and home but NOT the quality of life.



If we look at my cost of living over time versus my income the downward trend YOY continues.  I attribute that to my salary increase this year as well as continuing to life a frugal life.  My goal is to get that down to 50% one day.  I highly recommend to any of you who are just starting out in life to set that goal as well.  It will teach to live well within your means and allow you to invest early and often.



Summary
Well we did it.  Another month of savings.  Not as kick butt as last months but still double digits.  In the end it was a cool 28% saved.  Lower than last years's 36% mostly due to going over budget in my wants category and a decrease in taxable dividend income.  Still this makes 4/5 months of being in the green. 



With that said I was able to funnel the full amount into my emergency fund and vacation and holiday funds.  I didn't purchase any new stocks this month as I continue to build up my emergency fund.  At this time those 3 savings goals consume all free cash after my expenses.

Next month will be different though as I shift my money around.  This will cause me to have to pick some new companies to invest in which is always fun.  I look forward to sharing what I have done and what I will buy soon.

Until next time,
Dividend Family Guy.  

Wednesday, June 22, 2016

DFG June 2016 Stock Screen Top 10

I had set this up earlier this month and forgot to share my stock screen with you all for the lovely month of June.

If I had bought The Gap Inc. I would have been in a great position.  GPS is already up 12.6% for the month.   See what happens when you have a family and no time :-)

There are a couple other companies that are up this month as well and would be great investments for my portfolio if they continue to show up in my screen.

Meredith Corp. (MDP) is up 7.1 %
Bar Harbor Bankshares Inc (BHB) is up 9.6%
Cummins Inc. (CMI) is up 7.2%. 

Cummins keeps showing up on the screen so I keep increasing my position with them. 

Of course Best Buy was in the screen but has continued to deteriorate and is down 7.1% for the month.

Target makes the list and is pretty steady this month.  I see nothing wrong at this time that would stop me from buying more. 



 

I am long on ORI, CMI and TGT.

Anyone worried about TGT long term?  

Happy investing,
Dividend Family Guy

Thursday, June 16, 2016

May 2016 Dividends and Quick Account Update

This month was the start of some major changes in my banking systems.  I have decided to move all of my checking, savings and investment accounts to Bank Of America/Merrill Edge.  This was initiated after I realized I am not taking advantage of companies that provide you with free trades.  My balance with them will allow me to do 30 free trades a month.  The rewards program will allow me to purchase more often and take advantage of dollar cost averaging for companies I like.

With that said I am moving some assets and selling others, moving the cash, and then repurchasing in my new accounts.  Yes there were some fees but the gains from the sales far outweighed them.  So for the next couple of months I expect less dividends as I rebuild my portfolio.

Company
Held In
Dividend
Amount Received
Shares of life purchased
May Notes
T
IRA
1.92
53.42
1.3761

WGL
IRA
1.95
52.3
0.7704

NWN
IRA
1.87
50.65


OHI
IRA
1.26
24.08


N/A
IRA

4.43

Interest
N/A
IRA

-75

Transfer Fee
HRZN
Taxable
1.38
7.06


N/A
Taxable

0.45

Interest
F
Taxable
0.6
12


VZ
Taxable
2.26
1.33


PG
Taxable
2.678
0.91


CAT
Taxable
3.08
1.08


AHGP
Taxable
2.2
1.07



As you can see there wasn't much activity this month.  Some of my dividends like T and WGL were reinvested before my transfer began.  More shares purchased and more dividends are always a good sign.  The rest was just cash into the accounts which include my IRA and a taxable investment account.



Even with the fee of $75 dollars I still managed to come out with $133.78 of dividends for the month.  This is only slightly lower than the amount received same time last year.

Well I am off for my birthday weekend camping (which is a very affordable way to vacation when you have a large family.)  It was only $200 dollars for a cabin in one of our lovely state parks.  The kids are super pumped to go swimming and hiking and I am looking forward to being with them.  ALSO the kids will have no electronics the whole weekend.  Their brains are getting a needed rest from the digital world.

Happy investing and hope you have a good weekend,

Dividend Family Guy.

I am not affiliated in any way with Bank of America or Merrill Edge.

Thursday, May 26, 2016

Will Dividends Teach My Kids to Work Hard?

After reading an article about education and learning from Mr. Money Mustache last week I starting thinking about my kids and their upbringing vs. how I was raised.  There was lots of discipline but also a tremendous amount of freedom.  That combined with loving parents taught me many lessons in life that I believe have led me to a great career and the joy of raising a large family.  The one thing that worries me the most is a fear that my children do not value gifts or money they receive as much as I did as a child.

As a child I remember talking with my sister days before my birthday.  We share the same birthday one year apart.  We would spend the time talking excitedly about what we might get for our birthday.  Gifts were usually only on birthdays or major holidays.  Easter baskets filled with candy, or presents on Christmas or birthdays.

Growing up with one TV that didn’t get the best reception left us with plenty of time to day dream about Christmas morning and all the presents we asked Santa for.  We were all so pumped that morning we would race downstairs once our parents gave the ok.  Those memories alone gives me the will power to drop my satellite TV once my contract runs out next year.

I started working as a caddy at a country club when I was 12.  Before that I helped my brother with his paper route and  we did chores around the house but were not paid an allowance.  Things were tight and I am pretty sure all of my parents income went to surviving and not saving.  A family of 9 back in the 70's still incurred costs like a larger home, higher utility and food bills.  That first job as a caddy opened my eyes as I was receiving cash each day for providing the service of carrying around some rich guys golf clubs.

Each day when I got home I would tally up the earnings and record them in a pad of paper.  Most of the money I would save (unfortunately not in a savings account) in a hidden location.  Some of the money I would use to buy things or go golfing with my brothers and friends.  If I had an easy way to buy dividend growth stocks like we do today I would be very well off.  It probably was not as easy back then.  The weird thing is I was never taught about accounting so I only tracked my income in that pad and not expenses.

I think I went off on a tangent there.  The point is I valued the cash I had earned.  Sure I was horrible at managing money and have made many mistakes along the way, but I have always worked hard and am at a good point in life were I can save a good chunk of change.

Now it is my kids turn.  They all have savings accounts, investment accounts and 529 college savings plans.  The problem is the money in all of those accounts came from my hard work or gifts from friends and relatives.

They all have chores and the older ones do get paid an allowance.  However that allowance they never see because it all goes to paying for their cell phones.  I view them as a want and not a need so I do not cover that expense for them.  When the time comes for the younger kids to own cell phones I think I will go with ones that only allow talk and text as that is the main reason any kid should have one. 

Some day after I have enjoyed my retirement I will pass away.  When that happens my wife will take over.  I am pretty sure she will outlive me as she is very active all day long taking care of the kids while I sit at a desk.  That will leave them the great dividend machine I will have spent decades creating.

These dividends are like free money.  The company does all the work (minus your original seed money) and on top of it they pay you the shareholder.  So as long as I teach my kids how to manage these stocks the dividends will keep growing. But for them it will be minimal work and they may not value it like I do.

My oldest son turned 16 this year.  I can start with him.  Trouble is he has no interest in getting a job.  I keep gently reminding him it might be a good idea to save for college.  Or it might be a good idea to save for a car and the insurance that comes with it.  He is happy just doing nothing with his summer.

At this point I don’t know what else to write.  I could go hard core and take away all forms of entertainment from him (TV, Phone, Computer, etc.).  I think that may cause resentment.  On the other hand being bored out of his mind may be just what he needs to get motivated to earn money.  And more importantly to value what he has earned.

What do you think I should do?  Any tips for raising kids in this day and age?

Thursday, May 19, 2016

April 2016 FrugalMaster Results

A second month of above 50% of my income saved.  I don't think I have ever done that before.  It is part result of exercising with the FrugalMaster and part extra paycheck from my day job.  Every product sounds better with Master at the end of it right?  Well my product I was born with and continue to use every day by learning new things and challenging myself.  You guessed the product right, a mind.  You have one too.  It is a muscle and gets exercised every time I bend my willpower not to buy things I don't need.  Sometimes the evil marketers win out and I do make a purchase.  But over the long term I have been winning by saving and learning more about investing.  That on top of my continual drive at work to keep improving and learning new things makes my mind more fit than the rest of my body.  I currently have a sprained ankle being iced as I type.  Ah the joys of getting older.

Expenses

Overall I was under budget on all major categories that aren't fixed.  In fact I spent nothing out of pocket on healthcare last month (unlike the coming month of May).  Like I said earlier sometimes the marketing masters win and cause me to go over budget in the Guilt Free Spending Money (GFSM) category.  That was $167 dollars that won't be generating any dividends. 



My mind lost the battle when I purchased 2 mechanical keyboards for home and work.  I had one of these at my previous job and realized I type faster with them.  I got so used to it that I was typing horribly with the keyboard at my new job.  They were on sale so I also picked one up for home for gaming purposes and writing this blog faster (that is what I told my wife).

The second big ticket item was a trip to the day spa for my wife (mother's day) and daughter (13th birthday).  They get a 1 hour massage, facial, lunch and use of the hot tub or sauna.  It was a great deal on Groupon and couldn't pass up this gift.  I also found a Groupon for my wife for a hair salon.  She colors her hair every once in a while so I usually categorize that as I want and not a need.

Last, I adjusted my budget to account for increases in Satellite TV and Internet.  Both together caused my utilities to increase by $50.  After my last year of my Satellite contract is up I plan on cancelling TV all together.  For the amount of TV we watch (maybe an hour or two a week for my wife and I) it is not worth the money.  My kids watch PBS allot but that is available for free on my Roku or Apple TV.  That plus I need to cancel my old cell phone now that work provides one will save another $40 on utilities.  I just need to get off my lazy butt and call them.


Savings



This month I was able to save 58% of my income.  That beats last year's 21% for the same month.  The extra paycheck combined with $440 dollars under budget was a good feeling.  It allowed me to contribute to my emergency fund and my other 2 savings goals.  Also I have saved enough to max out my Roth IRA for the year.  Next I have to open my wife a ROTH IRA and contribute to hers.  I have read a few articles that details how you can contribute to a spouse's account when that spouse doesn't work.

Summary

Another month of spending less on needs for the family tells me I am heading in the right direction.  The more you save the more you can invest now to start the snowball.  This year so far has seen a drop in every month (besides February) compared to last year.  Part of it is because my income has increased this year vs. last.  The other part comes from continually practicing frugal living and reducing impulse buying.  For example, this year I have defined budgets for Holiday and Vacation spending.  We will need to stay within those guidelines and still have a good time.


I hope you had a good month of April as well and I look forward to reading your journeys.

Take care,
Dividend Family Guy

Sunday, May 15, 2016

May 2016 Watchlist


On my journey to financial independence and early retirement I take a look at stocks every month that fit my screening outlined in the DFG Stock Screen.  Whether my savings allows me to purchase another great dividend growth stock or not I enjoy seeing what companies show up in the list every month.  Some have been in there for many months now and some are brand new.

This month we have a few newcomers to the list. 

Ameriprise Financial Inc.
Ameriprise Financial, Inc., through its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally

Donegal Group Inc.
Donegal Group Inc., an insurance holding company, provides property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. It operates through four segments: Investment Function, Personal Lines of Insurance, Commercial Lines of Insurance, and Investment in DFSC. 

Best Buy Company Inc.
Best Buy Co., Inc. operates as a retailer of technology products, services, and solutions in the United States, Canada, and Mexico. The company operates through two reportable segments, Domestic and International. 

Cracker Barrel Old Country Store Inc.
Cracker Barrel Old Country Store, Inc. develops and operates the Cracker Barrel Old Country Store concept in the United States. The company's Cracker Barrel stores consist of a restaurant with a gift shop. 

The Gap Inc.
The Gap, Inc. operates as an apparel retail company worldwide. It offers apparel, accessories, and personal care products for men, women, and children under the Gap, Banana Republic, Old Navy, Athleta, and Intermix brands.

Qualcomm Inc.
QUALCOMM Incorporated develops, designs, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, the United States, and internationally.

Cummins Inc.
(This was not on last's month but in a previous screen.)
Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products.

I understand why GPS, BBY and CBRL have shown up this week.  Consumer spending may not be as strong but this creates a buying opportunity who believe that these companies can continue to grow and increase dividends.  GAP and Best Buy have a tough battle to face though against the online giant Amazon.



The remaining companies have been repeats including ORI, NUS, and SPAN (new last month).  ORI has had a good year as people flock to this champion of 35 years. Even though the stock has gone up it still looks like a good buy looking at the numbers.  The only downside to it is slow dividend and earnings growth (Chowder is at -5.5).

I still need to find time to research SPAN especially as it is still presenting itself in my list again.  It is a smaller company but does have a 17 year history of dividend growth.

Below you can see how the screen has been doing since the beginning of the month.  As of this writing it hasn't done so well but as a DGI I am more interested about the companies long term growth of earnings and dividend.  Being down just creates more opportunities to pick up one of these companies with a decent yield.

 


Well that is all the time I have this Sunday morning before the kids start to wake up.  I am going to cook them scrambled eggs and double chocolate chip muffins for breakfast.  Nothing like eating that and reading up on some good post from other bloggers on Sunday.

Let me know if any of these companies look appealing (or not) to you.

Happy investing all,

Dividend Family Guy

Friday, May 6, 2016

April 2016 Dividends

The dividend wheel turns just like seasons change.  It is spring and the flowers are blooming and the birds are chirping.  What is better than that?  Well dividends of course!  They keep increasing (for the most part) and growing year after year.  This month I saw 4 dividends increase from dividend growth stocks I own. 

Company
Held In
Dividend
Amount Received
Shares of life purchased
April
GPC
IRA
2.63
$7.58
0.0763
Was 2.46 so div increased 6.5%
UBSI
IRA
1.32
$35.12
0.9569

CRWS
IRA
0.32
$6.24
0.6753


IRA

$0.44

FDIC Interest
HRZN
Taxable
1.38
$6.99
0.6005

GE
Taxable
0.92
$6.13
0.1993


Taxable

$0.06

FDIC Interest
KO
Taxable
1.4
$0.94

Was 1.32 so div increased 5.7%
CNQ
Taxable
0.92
$0.49

Was .68 so div increased 26.1%
WMT
Taxable
2
$7.5

Was 1.96 so div increased  3%
GE
Taxable

$0.95



That is right my table is purple.  Purple is said to sooth the soul and invite you in to taste the nectar of dividends.  Most notably are Genuine Parts Company (GPC), Coca-Cola (KO), Canadian Natural Resources (CNQ), and Walmart (WMT).  The fastest grower was CNQ.  I had picked them up last year when the yield was over 3% but now it is hovering around 2.51% which is still good.  The next dividend is safe but we will see after that if the wildfires in Canada affect it in any way.

Besides Walmart the rest are growing at a great rate and I am happy to own a part of such great companies.  As you can see  those dividends were reinvested in my IRA and one of my taxable accounts.  The last chunk of stocks are with Motif Investing and they currently do not offer automatic dividend reinvestment.  In a recent survey they sent me I suggested they offer that as it would attract more dividend investors to their platform.  We will see if they listen.


Year over year there was a decrease in my dividend stream. Most notable last year was my last dividends from Windstream (WIN) that I sold because of the dividend cut.  That one was a purchase before I knew much about dividend growth investing and would never have bought them in the first place.  The dividend was huge but never grew and the balance sheet didn't look that good either.  You live and learn right.  Going forward, with increased diversification, I hope to only grow YOY and any dividend cuts will be minor bumps in the road.

Any thoughts on Walmart?  Are they becoming a utility dividend growth stock?

Long on all stocks mentioned.

Happy investing,
Dividend Family Guy