July 2014 Summary – The good, the bad and the … concert?

King of Leon, Detroit, 2014 Kings of Leon came to our part of the world last night as part of their Mechanical Bull Tour, and we went to see them as a birthday present for Ms DL. The concert was at an open-air stage, it was a warm summer’s evening and they played a frantic number of songs in their set. Supporting bands were The Kongos and Young the Giant. It’s the first concert we’ve been to this year and there are a couple more on our watchlist this year.

The Good

I received $276 in dividend income this month, which makes a year-to-date total of $2,835 or 57% of my target of $4,969. July and August are my lowest two months for dividends this quarter so being 6% closer to my goal is great. You can see the current and project results visually on my goals page.

The Bad

I don’t really have any bad news. As a stretch I could say my Net Worth dropped 0.21% this month; but the drop is in assets that are long-term purchases (my retirement portfolio and my house price on Zillow). So that’s really just of statistical interest for me.

The Concert

See above for a short description and a badly taken photograph of Kings of Leon taken by yours truly. The band are the tiny figures on the stage, not the huge guitar-wielding giant on the video wall background!

The Score

Living Expenses $ 3,975
Security Ratio 6.96 %
Retirement 0
Savings 15 %
Expenses 57 %
Investments 28 %
Wet Worth $ 19,902
Work Freedom Day 18 Nov

Living Expenses – this is essentially how much I pay myself and it includes budget for everything I spend money on, both essential (e.g. groceries, mortgage, insurance), and non-essential (e.g. music, travel).

Of my $3,975 total budget, I actually spent $5,547.25; although the additional expenses this month are part of my budget planning. My yearly auto insurance bill of $2,214 (for both Ms DL and I) is the main culprit there, without that I’d have an excess. I also spent $300 on miscellaneous gardening expenses in our continuing quest for a weed-free garden so I’m carrying forward a $100 debt in my Home Improvements category over to next month.

Security Ratio – this is the percentage of my living expenses that is paid for by dividend income.

The number is actually 6.96% and it’s slowly edging up compared to 6.36% in January and 5.35% in April which are fairly equivalent months. To improve this number I have to either earn more investment income or reduce my living expense budget. In April I had lower dividend income of $255.78 and a much higher budget of $4,780, so the improvement from April to July is due both to mynew lower budget and increased dividends of $276.

Savings % – the percentage of my net income spent on savings.

Nothing to see here this month. I don’t have high savings goals at present, although included in this category is my car payment which is paying an interest free loan for the next 3 years (1 year down, 3 more to go). I’m usually fighting inflation but with this loan, inflation is working for me.

Retirement % – the percentage of net income spent on retirement.

I don’t cover my retirement accounts (a 401(k) and Roth IRA) in this blog. They’re intentionally boring investments that I leave alone, so nothing to write home about – I follow a Boglehead approach for these accounts. They contain several low expense index mutual funds and I pay a total of 16% of my gross income into my 401(k). I wrote about my Roth IRA plans but they won’t affect this scorecard number since I’m not spending money from my current income to contribute for my Roth IRA this year.

Living Expenses % – the percentage of net income that’s spent on living expenses.

This month’s 57% is lower than last month’s record 21% due to the large number of dividend payments that align in June. My living expenses haven’t increased and remain a constant $3,975 that I budget for.

Investment % – the percentage of net income that I invest.

Any spare money left over after savings, retirement and living expenses are paid goes into my current income portfolio.

Wet Worth $ – my liquid assets minus all debt (excluding retirement and assets).

My wet worth increased $1,300 this month. There’s a more detailed breakdown of this amount further below.

Work Freedom Day – the day in the year that I’ll have earned enough dividends to pay for the remaining year’s budget.

This month I estimated my Work Freedom Day to be 18th November, two days earlier than I last calculated based on a revised annual dividend projection of $5,489 and annual budget of $47,700 (12 x $3,975). That’s only 108 days away!

Dividend Income

July is a low month for dividend as few companies I own pay dividends in the first month of the quarter. This month 6 stocks paid dividends: DOW, JPM, UNP, KO, ADP & KMB as shown below.

The yield calculations are annualized, or extended forward a year based on the current dividend payment against the cost basis or market value respectively.

Last month my dividend stock portfolio was valued at $20,714. This month it’s $21,141 – a gain of $427 or 2%. I added $1,260 in new capital but also sold my DAL shares so unrealized capital gains dropped due to the recent stock market dip and I have a 16% unrealized gain, down from 21% last month.

I also hold several mutual funds in my taxable account that I consider part of my dividend income portfolio but buying these is not as interesting as researching stocks. When I first started investing, I felt these were easier and cheaper than individual stocks, but over time I’m pivoting towards individual stocks.

I added a total of $2,900 to my fund investments, $1,750 in VHDYX, $200 in VTIAX and $950 in VWEHX.

In total across stocks and funds, my portfolio increased from $137,592 to $139,623; a gain of $2,031 or 1.4%. I added a total of $4,315 in new capital in July, so my unrealized gains dropped from $14,401 to $12,117 resulting in final unrealized gains of 9.5%.

Wet Worth

I’m showing my Wet Worth in this post – this is the cost of my liquid assets minus debt, I exclude assets and retirement accounts from this number. I prefer this over Net Worth since the equity in large assets (house, car) and retirement funds is hard to get at and not always predictable. I find this is a more honest view of where I’m at on my journey.

Here are the numbers for July – not as good as last month’s due to lower dividend income but I’m happy with them.

The change in Wet Worth is caused by

Cash -$3,487 I’m slowly reducing the amount of spare cash on hand and investing that money instead
Debt +$2,601 Overall debt reduced by $2,601 (mortgage + car loan payment)
Savings +$2,011 Monthly savings plus additional money ($1,595) from my Emergency Fund
Emergency Fund -$1901 I’m reducing the size of my Emergency Fund and moving the amounts into Savings
Portfolio +$2,031 My overall portfolio grew this month as noted above
Total +$1,255

July 2014 Summary

So overall I think it’s been a good month. I’m looking forward to August as I’m predicting an increase in dividends over this month and possibly some good-priced stocks becoming available. My Work Freedom day moved forward which is fantastic too!

Full disclosure: I am long DOW, JPM, UNP, KO, ADP, KMB, VHDYX, VTIAX, VWEHX, VWESX & VFICX.


Quote of the Day

Here men from the planet Earth first set foot upon the Moon. July 1969 AD. We came in peace for all mankind.

9 thoughts on “July 2014 Summary – The good, the bad and the … concert?”

    1. Hey Henry,

      Thanks – I appreciate the support! You’re doing great too by the look of it and increasing your portfolio value despite the recent market dip.

      Best wishes!

  1. That amount of capital invested last month was insanely awesome. As always love the charts and graphs. I may have to switch from Google over to MS. I think they look better and I am more familiar with the apps.

    1. Hi DFG,

      Yes I have some cash on the side from my house sale earlier this year that I’m slowly starting to invest in my Vanguard funds so that’s why the invested capital is higher this month.

      Thanks for the feedback on the graphs; I have shares in MSFT so I say switch over to MS already lol! I’ve not tried Google docs to be honest but Excel works well for me and it’s quite straightforward to use & publish.

      Best wishes!

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