This labor day weekend has been quite beautiful in the northeast. The heat of the last few months has been replaced with cool springlike weather just tailor made for long walks. I always treat these expended weekends(and for me it was a four day weekend since I took Friday off) as a sort of test drive for what life might be like in early retirement.
It seems silly to look at just four days in that regard but even four days can tell you a lot about your outlook on the matter. Are you dreading returning to work like it’s the worst thing ever or are you simply enjoying the few days off and using it as a way to recharge for the shorter work week? Are you utterly bored and looking for something to do or are you perfectly OK just spending a few days vegging out and doing nothing?
Questions like these are something I ask myself often on the path to early retirement. The answers I get from them are often the primary drivers of the decisions I make while on this journey.
If I hate my job and dread returning then I’d certainly be more driven to save more and move up my early retirement date and also to search for new employment if possible. If I’m perfectly OK just spending four days on the couch without feeling guilty or bored about it then I’m probably the type of person that will do well in early retirement.
There are a ton of personality types out there and for some of them early retirement without some sort of plan to start a new business or do a side hobby to earn income just might not be the right path and taking these long weekends to delve into those questions for yourself is a good idea.
I’m not doing anything special this weekend beyond the usual things I do any regular weekend. There’s brunch coming up later today and my nephew just had his 2nd birthday this weekend so I had to spoil him a little bit(savings rate is suffering!). Other than that, I’ve played some video games, went on some walks, saw some friends and haven’t thought about work much and it’s been freaking great. I could totally see myself doing this full time if I had the means to do so right now.
However, if you’ve been following my portfolio and dividend posts then you know that I’m still a good deal away from that point. Fortunately I’m not really dreading the return to work which is a good place to be in life. Even though it’s busy season at work and there’s likely a big pile of pressing issues for me to deal with on Tuesday, I’m not all that concerned about it because it’s work I enjoy doing and don’t mind doing for the next few years while my dividends pile up and my portfolio grows.
I know I’m lucky to be in this position and hope some of the readers here are as well. If you’re not then maybe take this weekend or the next extended one to start thinking about how you can get there and what you can change about your life to make that happen.
To me, that’s what this whole early retirement lifestyle is about. It’s not just about saving a ton of money and quitting work. That’s certainly a big part of it for sure but so is using that money and newfound freedom to find your place in the world and giving yourself the flexibility to do that.
The reality is that having money in bank and investment accounts opens a lot of paths to you that might not be available if you were spending too much and living paycheck to paycheck. The stress that comes with that spend/no save lifestyle wasn’t something I wanted to deal with and that’s why I’m on this path with the rest of you guys.
I might like my job right now and not dread going to work but a lot of people aren’t in that predicament and just want to get out. If I ever find myself in that situation and want a change then I want the freedom to do that and this lifestyle of high saving and dividends lends me just that.
Seeing money flow into my account each month is a big part of that. Once I get to a certain point where my dividends start to cover even a small part of my expenses then things life starts looking a lot more flexible. Knowing that I have savings I can tap and dividends that can cover some of my bills while I look for a new job or take a break really makes you feel better about your possibilities and worry less about life in general.
I’m still far from a point where my dividends cover all my expenses but I know I’ll get there some day if I stay on this path. Any of these dividend month updates still excite me because its money I can count on and is also money I can reinvest and put to work for me so that I don’t have to work for anyone else in the future.
Now that I’ve said all that, I just want to wish you all a happy labor day and take a look at my dividends for August.
These quarterly etf/mutual fund dividends really make these off months hard to see on the graph but you can clearly tell that August was another slow month on the dividend front just like July. However, I hear Steve my dividend employee is already hard at work in September after taking a bit of a break these past two months so I’m expecting solid September results.
For August, my monthly dividends totaled $81.26! Apple was the only one of my individual holdings that paid out in August so over 60% of that was in my tax-advantaged accounts(bonds). I don’t own a ton of Apple shares since that holding is already well represented in my large cap mutual fund holdings but I do like the company as a solid long term income producer and a good value in a market where those are hard to find.
I’ll take any number above $0 here as reinvesting is a great way to generate long term dividends. Putting this money back into my portfolio at an average yield of 2.5% will generate an additional $2 in dividends per year. That’s not huge but every little bit helps and those additional income via reinvesting numbers are a lot bigger in those big quarterly months.
Steve hit nearly $7/hr in July but has been on a downward spiral of laziness since then. For August, his hourly wage is just around $.49/hr but he should be back well above one dollar in September. That’s the deal with seasonal work that Steve does, it only seems to come around every three months. Hmm, I wonder why that’s the case!
Adding August’s total brings the yearly total to $2688.90. That means Steve’s hourly wage for the year so far is $2.02/hr. That should bounce again in September but see a reduction in the months after while we wait for December which as you can see by the graph is my biggest dividend month.
The goal I set earlier in the year was $4.50/hr which I’m not so sure I can hit now as I project my dividends out towards the end of the year. Last year’s December had a lot of special dividends that might not repeat this year so I’m not so sure I’ll even beat last year’s December total this year.
That would really put a damper on my ability to hit that goal but that’s no big deal. If goals were easy to beat then they wouldn’t serve a good purpose and if I miss then I’ll have incentive to try harder next year. I’ve had some unexpected expenses this month that will really hit my savings rate in the next few months which will put me behind on purchases that drive my dividends which won’t help with my dividend goal either. In any case, I didn’t spend a ton of time analyzing data to set that goal so I won’t be too upset if I miss, it was just a number I threw out there that seemed somewhat reasonable at the time. Hopefully, I can come close to it but I’m certainly not giving up right now and maybe with some luck and good contributions in the next few months, I’ll still be able to hit it.
That’s it for July! See you guys in a week for another portfolio update.
August total : $81.26
2016 total : $2688.90
Portfolio monthly hourly wage : $.49/hr
Portfolio yearly hourly wage : $2.02/hr