Full Width Ad

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

Thursday, April 28, 2016

DFG April 2016 Watchlist

My April top 10 watchlist has some new companies in it that I have not looked at before.  The DFG stockscreen was updated this month (actually I modified it some time ago but forgot to update the page.)  The biggest change is the additional filter of looking at only Dividend Champions and Contenders.  Anything less than that ups the risk factor.  Since I am trying to create a sustainable income stream companies over 10+ years of growth have survived the great recession (or at least 1 cycle in the stock market.)


I am already long on several companies in this list including ORI, ADM, NUS and IBM.  They have also appeared on my screen on and off for a year it seems. ORI stock price has been going up even though it is a slow dividend grower.  I guess the fear from late last year caused people to put their money in safety.  Another safe bet is ADM who has taken a beating but has been paying increasing dividends for over 40 years.


IBM I wrote a little about in my last post.  I see nothing wrong with them that would cause me any concern regarding a dividend freeze or cut.  They are shifting towards the big-data & cloud models just like Microsoft (also long on MS) and other tech companies.  They are selling off stagnant parts of the company and are on track to start growing overall revenue in a few years.  Sure it takes time to change a company that big but I have faith they can do it.

 


Nu Skin is one of the first DGI stocks I bought.  That was back when they were facing some legal issues.  It has not slowed and continues to grow at a fantastic rate.  Looking at The Chowder Rule also included in Dave Fish's Spreadsheet shows a remarkable 27.5.  This is the highest out of my top ten.  The only others above 12 where ADM and SPAN.

Speaking of SPAN I think I will have to do some additional research on this newcomer to my watchlist.  Based on what I see it looks very appealing especially since it is healthcare related.  I will take a closer look at them and let you all know what I find out.

Do you own SPAN?  Send me links to any reviews you have done of them.

Thanks and have a good day,

Dividend Family Guy

Wednesday, April 20, 2016

Burgers for Dinner Earns me Dividends

Mmm delicious!
I posted earlier on my Twitter (@DividendFamilyG) account a picture of some burgers I was grilling for the family.  It cost me $12 for 12 Angus burgers.  These were a whopping 1/3 pound each and did not shrink down when I cooked them.  To top them off I put not one but 2 slices of American cheese on them.  I do love McDonald's (food and stock) but there price for a quarter pounder with cheese is way more than the dollar I spent.  To top it off I played with my kids on our swing set while they were cooking.  Couldn't ask for a better evening.

Why am I talking about burgers?  Well it also got me thinking about the cost of eating out.  I know there are some guys at work that eat out lunch every day.  Mind you this is lunch and not dinner.  It may be a little cheaper than dinner but a high end burger place will easily cost you $12 bucks for the burger (with cheese), fries and a drink.

I eat out maybe once a week so my savings compared to the other guys is (12*5)-12=$48 dollars.  That $48 dollars saved every week will total 48*52=$2,496 dollars in potential savings a year for those that eat out.

If you were to put that money to work in a company like IBM  the dividends from this dividend contender (20 years of paying out increasing dividends) would reward you.  The reward would be $2496/144=~17 shares or  $265.2/year of income from dividends. 

IBM took a drop this week and is looking pretty appealing.  I like the new model they are driving towards and the fact they have reinvented themselves over the past 100 years as a company.  If you can last that long you are a survivor.  The 3.61% yield (and other statistics) is attractive as well and your 17 shares reinvested would compound and reward you further.

What do you think about IBM?



Have a good day everyone!

Dividend Family Guy

Saturday, April 16, 2016

March 2016 Budget and Savings

Sure March is still technically winter but it is one of my favorite months.  Not only is it a great month for dividends but it is also usually when I get my tax refund.  Maybe next year I will also get to include any raises or bonus from my new job I started this year.

Expenses
Looking at my expenses for the month it was a good month on that end as well.  My total needs were kept under budget with just a few minor hiccups.  The first hiccup was groceries.  $156 over budget there.  Again depending on where the first or last week of shopping lands it bumps that months budget by an extra week (to 5) or lessens it to 3 weeks.  I don't sweat this category as it evens out over the year.



The second bump was in the Guilt Free Spending Money or wants category.  I blew over my budget by a good $750!  Almost $400 of that went to pay off money I owed to my daughters fund raiser.  The cash given to me when I sold the candy bars was pocketed and used to eat out and other miscellaneous wants.  This was a bad idea and I should have saved it so it wouldn't have hit my budget in the end.  I think I did something similar last year and really need put the cash into the bank so it can be tracked.

The second item in this category was a whopping (don't laugh) $200 towards chocolate.  My wife is a stay at home mom and chocolate is her allowance.  We went to tour a chocolate factory with the kids over spring break and stocked up on their chocolates.  Also after Easter another chocolate maker in the area cuts their prices in half so we stocked up to last us through the summer.  The third largest expense was $100 to dining out and going to a home and garden expo.

Savings
I am happy to say even with my over the budget blowout on wants I was still able to save 59% of my income for the month.  This income was mostly from my tax refund.  If I take a look at just my basic living expenses vs. last year I am happy that the trend is now going down for March.



With the extra savings I was able to fund all of my savings goals this month and even put some extra into them since I missed funding them in January.  There was even a few bucks left over for investing so I will be on the lookout for an April purchase.


Summary
Some months do get away from me regarding the GFSM category (wants).  I still find it extremely hard to put a hard stop on the spending once I hit my budget limit.  I even bumped that line item in the budget by $50 and still find myself exceeding it regularly. I highly suggest to anyone who has the same problem to cut up your credit cards and go to a cash only system.  I have not yet mainly because I am still able to save even though I blow the budget.  I am not saving enough yet so I need to buckle down some more.

How was your month?  I hope the tax fairy was kind to you and deposited some cash instead of stealing some.

Happy investing,
Dividend Family Guy




Wednesday, April 13, 2016

2016 Budget version 1

Before I put out my March update I thought I should share with you all my 2016 Budget and any goals I have for the year.

First let's take a look at my adjustments I made to the budget.  These were either because of my monthly average increasing for the line item or adding or removing new items.




Item
Difference Vs. 2015
Notes
Mortgage
2

Water
17
#1 Utility combined with Sewer
Phone
-15

Sewer
20
# Utility combined with Water
Gas
-18
This should go down further next year with my new HVAC
Garbage
-5
City formed new agreement with waste company
Electric
-1
When I bulb burns out I replace it with LED
Cable
-115
Only using it for internet now
Loan
-350
Loan was forgiven.  However it did affect my 2015 taxes
Auto Fuel
24
Should go back down now that I work close to home
Auto Service
-9
No major repairs last year
Personal Care
20
Larger family, more soap
Miscellaneous
-6
Better categorization I guess??
Household
190
Now saving for home repairs
Healthcare
11
This will go down next year now that I have better insurance
Food
-200
Attempting to drop this down
Clothing
-30
Doesn't include kids
Kids
213
#1 expense behind house, who would have guessed
Home Insurance
11

Guilt Free Spending Money (Wants)
50

Emergency Fund
1000

Vacation Fund
400

Christmas Fund
65


Overall my budget is lower this year than last (-191).  With the savings from that and increase in salary I was able to formally create savings goals to track against.  So far I have been able to hit most of the savings goals each month (except January.)  January was a miss because of the higher credit card bill from holiday spending in December (and this why I need a Christmas Fund.)

The Kids line item continues to increase every year.  This was expected with the new addition to the family.  It will be several years before this drops back down (potty training).  All in all kids are a good investment for the future of the human race.  The more kids I have and raise to the best of my ability the better off the world will be.  A friend of mine was telling me we need a test like a driver's test to get a license to have kids.  Interesting concept but I don't see any presidential candidates pursuing that one.

The downside is it leaves about $50 for investing.  Once I have my emergency fund at the 3 month expenses level I can then turn that into the Investing Fund.  This still will not align with what I should be investing each month so I will have to look at further ways to shrink the budget.

With that said I am looking to combine my Auto and Home insurance (especially since my son will start driving this year).  Also my healthcare line item will adjust as my new health insurance has a deductible that is several thousands of dollars lower than my previous insurance.  When my one year of savings with DirectTV runs out I will also switch down to a lower packages to save there.  After the 2 year contract is up we may even get rid of that bill.  With the internet we can watch what we want when we want.

Last but not least is my final attempt to reduce the water/sewer bill will be installing  water efficient toilets.  After the new washing machine failed to reduce it the only other item left is the toilets.  The ones I have now are 24 years old and probably use 5 gallons a flush.  By comparison new toilets use only 1.2.

I welcome additional ideas on frugality from those with many kids.

Have a good day all,
Dividend Family Guy