Dividend and Expense Review – November 2019 – Three Paycheck Time

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Ah November, a month of wonder. It’s a three paycheck month, it gets cold and dark early and we stay in all the time. Wait, all of those things except the three paycheck suck.

After we travel, I generally get a pretty good savings rate in the month that follows. The reason for that is simple. We eat a ton of stuff at fancy restaurants and do a bunch of stuff during the vacation. Afterwards, we just want to chill and relax for a bit. Fancy food gets tiring when you do it every day for a week straight and you just want a break. It also helps that we’re introverts so we need time to recharge from all that social stuff.

That means October wasn’t great from a savings rate perspective(great from a fun perspective though!) but I had high hopes for November. It certainly didn’t hurt that November was a three paycheck month. You know those magical months where us bi-weekly check receivers get three paychecks. It happens twice a year and it’s always great.

November was a big hit the past two years as well as I hit 50%+ both times and I’m hoping for more of the same on the savings rate front this month.

On the dividend side, growth has slowed down a bit. Falling yields means lower monthly payments on my bonds and cash. I don’t hold a ton of those but they do make up a good portion of my monthly payments.

After all, most of my money is in index funds or ETF that pay only quarterly. That means lower payments in these off-quarter ending months. I do have an M1 Finance account that I started not too long that’s helping these off-months grow as well.

However, that’s still a small percentage of my overall portfolio so the dividends are small. Still, it’s growing every month and should make these non quarterly months a bit more exciting in the future. Now that I’m making a bit more, I can save extra each year in taxable accounts beyond maxing out my 401k which is super extra neat!

Last month’s dividend growth rate stalled due to some late ETF payments on comparative basis but I’m thinking it gets back on track again this month.

As a reminder, last November came in at $198.14.

November Dividends

November clocks in at $239.04. That’s a 20.64% bump over last year.

Before this month, I sat at a 21.5% growth rate for the year so November trails that a little bit. It’s clear that dividend growth has slowed a bit in these latter months. The reasons are two fold. One is that falling yields means my bonds and cash aren’t yielding as much as they were earlier in the year.

On top of of that, the big dividend increases earlier in the year have started to slow as most companies have baked in the new tax rate into their dividend payouts.

Still, 20.6% isn’t bad by any means. The $239.04 will be re-invested into dividend paying securities and will generate an extra $5.50 annually. It’s not huge but every little bit counts. Combine that with additional dollars flowing into the market and that’ll make for a great 2020. It’s all about compound growth and staying in the market when it comes to growing dividend efficiently.

November brings my total dividend amount for 2019 up to $8786.53 which is great. One of my goals this year was to hit at least $12,750 in dividends. It might look like I’m going to miss but December is by far my biggest month.

In order to hit that, I’ll need to get about $3,970 in dividends in December. That’d be a 14.3% bump over 2018. That’s not a given since the starting point is so high but it’s certainly possible.

Stevie boy, my dividend employee, earned himself $1.43/hr in November. That’s not great but it’s growing! That brings his hourly wage down to $4.79/hr for the year. That’s not quite a living wage but it’s getting there. In fact, if I hit my goal of $12,750, that’d be an hourly wage of $6.38 for good ol’ Steve. That’s getting up there.

I’m a few years away from Steve making minimum wage for me! However, given the power of compounding and dividend growth, he’ll get there quicker than I think.

Overall, things are looking solid this year. December is still ahead and as you can see below, it should be a big one.

Last year’s December grew at 17% and I’m eager to see what kind of growth if any I see this year. It’s certainly harder to grow a ton when the starting point is so high but hopefully we can hit that 14% and meet my goals.

Even if I don’t meet my goals, they’ve been a great driver in getting me to invest as much as possible. I’m certainly eager to get as much money into the market before the year is over to help me grow these numbers. That’s the point of setting goals and I’m glad to see that they’re working to motivate me.

November Total : $239.04
2019 Total : $8,786.53
Portfolio monthly hourly wage : $1.43/hr
Portfolio annual hourly wage : $4.79/hr

Three Paycheck Savings Rate

What’s a three paycheck month do for the savings rate?

Last year’s savings rate was 53.98%. That was actually during our honeymoon where we did a ton of stuff. We had pre-paid a bunch of stuff there so our savings rate wasn’t hugely impacted.

However, it was still relatively expensive due to all the food we ate during our two weeks on the island. It certainly helped to have that third paycheck to offset some of those costs and keep a high savings rate.

That’s why I’m expecting this November to be even better! Let’s take a look at where my money went in November.

I saved 69.7% of my post-tax money this month. That’s a crazy amount and the second biggest month of the year(my bonus month was first). That’s awesome!

Adding in employer contributions brings that number to 76.9%!

On a gross income basis, I saved 51.2% of my income. That number jumps to 56.48% after employer contributions. Any month I can save more than 50% of my gross income is amazing.

The reason for these great results? Well, it’s a three paycheck month, duh! However, the reality is that I also didn’t really do much in terms of expenses this month.

We mostly stayed in after our trip in Atlanta and we rarely ate out. When we did, it was mostly for lunch so it wasn’t too expensive.

Rent as always was my #1 expense followed by health insurances. Groceries were up there too given that we stayed in more often. However, we’ve also started buying more things in bulk at Costco and freezing them making things more affordable in general.

I also spent some money on the blog for the first time in a while! I renewed my website domain registration for 5 years! Woo-hoo, that means I’m committed to this blog through 2024. I also renewed my tailwind subscription for the year. If you’re not familiar with tailwind, it’s an automatic scheduler for Pinterest or Instagram that makes using those platforms to drive traffic MUCH easier. You can check it out here for a free trial.

After that, things drop off and include the regular suspects. I spent a bit on my pupper, teddy. She’s getting old and takes two drugs to help her old aching bones. I certainly want to make sure the old girl is comfortable as she’s one of my top two favorites in the world(the wife is the other). Look at her! She’s the best.

I also got a head start on some holiday gift shopping as well.

That’ll be a trend heading into December which I expect to be a drop off from this three paycheck month in terms of savings rate. After all, less paychecks plus more spending = not as good. Is that how the math works?

In either case, overall this was a great month. The savings rate was high which means good things for the portfolio and future dividend months. Plus, I saw another solid growth month on the dividend side and now we’re a few days into the biggest dividend month of the year. That means the dividends will start to roll in soon and I’m eager to see how this month plays out.

It’s crazy that 2020 is almost here. Winter has come and it’s cold outside which means plenty of staying in and more saving too!

Hope your November was as good as mine and that you’re staying warm. Happy Holidays and a merry year to you all!