Dividend and Expense Review – November 2020 – Buying All-Weather Tires
All-Weather Tires and Dividend Growth
Ladies and gentlemen, it’s time to talk about all-weather tires.
Yes, you heard that right, ALL-WEATHER TIRES. I know, it shocked me to know that another type of tire actually exists and I’m sure you’re shocked now as well.
I always thought it was all-season, summer and winter and that’s it. However, apparently our friends in Europe created a whole new type of tire to deal with winter regulations that exist in certain European countries.
In those European countries, tires must meet severe snow traction performance which formerly required two sets of tires. People rocked summer tires during the warm months and switched to winter tires during the snowy months.
As someone who lives in the northeast, I knew that was always an option but given my lazy(and dumb) nature, I never wanted to change tires so I stuck with one pair thinking my all-season tires were good enough.
Now I wasn’t the only who found the need to switch tires annoying as our European buddies probably got tired of dealing with the switch and went ahead and developed a whole new set of tires, the amazing all-weather tire.
Now I’m sure you’re all familiar with all-season tire which are the standard stock tires on most cars including mine. These make it seem like they’re good in all seasons but really they’re just good in normal weather and are focused on comfort and fuel economy. Their tread is smooth and small and sucks in the snow. It’s fine in certain states but if big snowy days are ahead then it might not be enough.
Enter all-weather tires which are like a child of the summer and winter tire and can be used all year round. They perform well in both regular sunny weather but also do well in snow and other inclement weather due to their thicker tread pattern. In fact, a true all-weather tire has the three-peak mountain symbol which means these tires are rated to perform well in the snow.
All-season definitely don’t have that and have the much lower mud+snow rating which obviously is much crappier. I mean come on guys, get with it.
Why am I telling you about this in this dividend and expense review? Well, it’s clearly cause my Subaru was in the 55,000 mile range and needed new tires. As such, when I was doing research, I found out about all-weather tires, bought them and am now excited to tell someone. These tires cost a bit more than standard tires but still have a 65,000 mile warranty and will likely make my Subaru a lot better in the snow.
It’s yet to snow yet but I’m totally ready to probably not drive anywhere now when it does!
Sure, the all-wheel drive helps in that type of weather but a shitty tire and lack of grip still makes for dangerous driving in inclement weather even if you have all-wheel drive. Now, I’m glad to have found this new tire so I can be safer in the winter!
Now, you know about them too so definitely check these suckers out if you live in an area where it snows because all-season tires are not that great!
On the dividend side, November is a smaller month but I’m starting to trend towards the $300 mark in these smaller months and will hopefully start hitting that level on a regular basis next year. I’m certainly working towards that by putting more money into some of my M1 accounts.
Companies have also started raising their dividends as well which is nice to see and bodes well for next year.
Let’s start with dividends. Last year’s November total came in at $239.04 so let’s see where I ended up this year.
November came in at $288.97, a 20.9% boost over last year.
That’s a pretty big bump and it’s nice to see growth again after some anemic months in the beginning of the year. The various dividend cuts certainly impacted my ETFs and shrinking bond yields shrunk bond payouts as well. However, since more money has flown into my M1 Finance accounts which pay on a more regular basis, these individual months are starting to get past those drops and show growth again.
On that front, those M1 dividends went from $16.98 last November to $60.38 this year. That’s pretty good growth and a factor of the additional money flowing into those accounts.
However, dividend growth from individual stocks have crept that number up as well. Aflac just raised their dividend 17.8%, McCormick raised their dividend 9.7% and Hormel raised their dividend 5.4%. These are all holdings in my dividend aristocrats portfolio, one focused on dividend growth and it’s nice to see such big increases from some of those holdings. It certainly bodes well for future payouts as that money will just compound over time.
After all, the $288.97 will be reinvested into more dividend paying securities and that means forward income will go up $8.38 annually. It’s not a huge amount but every little bit is important to benefit from the magic of compound growth.
Steve, my dividend employee, had himself a slower month as he got ready for December. He earned $1.73/hr in November and that brings his annual wage to $4.93/hr.
As I said, we’re now into December which is my biggest month of the year as shown by the graph below.
As you can see December is by far the biggest month of the year and will really drive results for the year.
So far, I’m only up 2.8% over last year so it’s unlikely I hit any of my dividend growth goals but a good December will certainly set me up for a solid 2021. I’m hoping to at least see some growth in December.
Since we’re buying a house this month, my savings rate might trend down in the future so these dividend months will be important as any re-invested income will help drive growth.
November Total : $288.97
2020 Total : $9,029.62
Portfolio monthly hourly wage : $1.73/hr
Portfolio annual hourly wage : $4.93/hr
November 2020 Savings Rate and My All-Weather Tires
I already talked about my all-weather tires which are a new expense in November.
However, there’s another change here as my wife has stopped paying me rent as we’re about to have two housing expenses for a few months. We’re purchasing a house at the end of December and we still have our lease so it made sense to split the payments down the middle early so she can save a bit more for her side of the payment as she earns a bit less.
I’m hopeful we can get out of our lease earlier than it ends(cause we might have to pay double for like 9 months if the rental market is soft) but we’ll definitely have at least a few months of overlap here.
That means the next few months will likely be soft on the savings rate side and a bit wonky since we won’t be splitting housing payments due to having two! We’ll also be buying a few things for the house as well which certainly won’t help things.
However, we’re getting a pretty kick ass home in a nice area so I’m excited about that even if it’ll be a fiscal hit in the near-term.
Last November came in at a 69.68% savings rate. However, that was a 3 paycheck month and I was splitting rent at the time so it’s not a good comparable. Let’s see where I sit this year.
My savings rate for November was 39.3%. Adding in employer contributions brings that number up to 46.09%.
On a gross income basis, I saved 30.6% of my income and that number jumps up to 35.85% with employer contributions.
Overall, that’s a pretty damn good month when you consider all the additional expenses I had.
First, I’m paying full boat for my rent and you can see how gross rent would be if I lived alone. I’m hoping we can get this expenses off the plate sooner than later and replace it with my mortgage but like I said before, there might be some double paying coming up in which case I’ll take the rent and contribute a bit to the mortgage(as the mortgage is a good deal higher). That’ll mean the housing expense might be even higher in the months ahead!
One of the things that sucks about living in the Northeast is the high rent and property costs. It’s not as bad as places like San Francisco but it’s still pretty expensive even if you’re not looking at something huge or amazing.
My car expenses were next and those were the all-weather tires. They’re a bit expensive but still a far cry from my rent! Those tires included alignment and installation as well.
After that, I’ve got my health insurance and then gifts. I picked up a few gifts during the sales surrounding thanksgiving and might still get a few more gifts here and there.
Beyond that, my expenses were pretty damn low and that’s one of the reasons this month was still pretty decent despite the full rent and new tires. Since we’re moving, we’ve started working down our food stores so we don’t have to move a bunch of food which has lead to lower grocery bills. It’s lead to less amazing dinners like random soups we bought a while back for some reason.
On the food side, we also ordered a thanksgiving meal which was our singular restaurant expense. We generally spend Thanksgiving at my wife’s aunt’s house and that obviously wasn’t an option today and since I didn’t want to cook much, we ordered a full family meal. It came with a choice of meat(we went with a smoked sirloin roast cause boo turkey) and like 8 sides and four desserts. It was quite delicious and we had a few days full of leftovers. We ate it while we had a google meet chat with the family. I actually kind of enjoyed not having to drive three hours to thanksgiving dinner and the food was great.
I hope the restaurant does a Christmas meal we can eat at our new home cause that’d be awesome.
Overall, November was a solid month on both fronts. I’m happy with 20% dividend growth as that’s the biggest growth rate I’ve seen since the first two months of the year. December looms ahead and I’m hoping to break $4,000 again and see some growth there as well.
On the expense side, those certainly ticked up. Housing expenses will be up for a few months but hopefully our landlord can find someone to take our lease so we don’t have to pay for housing twice much longer. We’ve also got a bunch of housing related expenses that will make the next few months expensive in general. However, moving to a new place is exciting and I can’t wait to see what the new year brings at a home we actually own!
Hopefully your November was solid too and here’s to an excellent December for everyone. It’s been a tough year and I’m so thankful to be in this position still and am hopeful we are turning around towards a better 2021!
What to complain about a 20+% growth rate! You’ll be hitting the $300 mark in this month next year no doubt!
Fantastic month TITM. I really enjoyed reading this monthly summary. Enjoy the new house as well!
Reverse The Crush
That’s a nice chunk of dividend income, Time! Congrats on the YoY growth. Your blog looks fantastic as per usual. That meal looks excellent as well.