September was an awesome month. I had another 1K+ month in a non December month, a feat I hope to accomplish every quarter going forward. These huge quarter ending months are awesome to see but I’m back to reality here as October has just one dividend payer; my bond fund which pays monthly.
I’m sure I’ll eventually buy some individual securities that pay in these months but I’m still waiting for more values to arise. That’s despite the negative streak the market has been on in the past few days. There’s a lot of uncertainty that’s driving the small daily drops but I still haven’t seen anything emerge as an obvious must buy although a few companies are getting pretty close and will require some closer analysis. There’s a lot of value in some healthcare names but the uncertainty around the next administration’s handling of healthcare makes it hard to pull the trigger there.
We are definitely in for an interesting week ahead. The election seems to be coming down to the wire and it’s unclear how the market will react to either president. I’m pretty sure a Trump presidency will lead to more short term pain but it’s hard to tell these days. I’ll be sure to keep an eye out either way as there are certain industries that are bound to be punished no matter which candidate wins and that could lead to some solid long term bargains out there.
The key here will be not to panic as there might be some heavy movements in the negative direction depending on the election results. Whatever happens, I’m not too concerned about the long term direction of the market.
Let’s take a look at my modest income for the month.
My dividend employee Steve did a lot of work in September so he decided to take it easy in October. My income in October was $50.70 and almost all of it was from the bond fund in my tax-advantaged account. The rest was just money market interest from all the cash I have sitting around.
There’s certainly a disadvantage from holding cash as the potential for lost income and appreciation is there in a bull market but there are also some advantages especially in a frothy market like this. The idea is to invest the money as soon as possible but my investment plan allows me for up to 10% cash when I feel like the stock market is overvalued. The long term gameplan is to be 100% investment but I do like having some flexibility around this as it allows me to have some fun with my investments and stretch my investing muscle.
Reinvesting dividends is a big part of growing my portfolio and even investing my $50.70 will yield an additional $1.27 in annual income or an extra 11 cents per month.
After hitting over $7/hr last month, Steve’s hourly wage is back down below a dollar and sits at 30 cents per hour.
Adding October’s income to my yearly total brings that number to $4004.69. That means Steve is making $2.40/hr so far this year which is a good deal below my $4.50/hr target.
December will be a huge month for Steve though and will hopefully go a long way to get that closer to that target. Last year December brought in over $3000 in dividends which is well over $1 in added hourly income.
It’s still unlikely that I will hit my $4.50/hr target this year despite a big December. I will hopefully get pretty close once the year is done. December last year did have some one time dividends that may not repeat so I’m not guaranteed to beat my income from last year for that month either and even if I do, it’d have to be a pretty big beat to reach $4.50/hr for the year. I’m not too worried about hitting my target as it wasn’t based in any realistic projections – just a number I pulled out of thin air. I’ll make sure to get a more realistic goal in mind for next year that I can hit if I stretch myself. I don’t want it to be too easy but I also want it to be possible.
That’s it for October guys; not a great month compared to September but any money above 0 reinvested is money that’s working for me and will serve to improve the next months and years.
I’ll see you guys in a week with a portfolio update which may be the scariest thing around this Halloween season if the market doesn’t like how the election turns out!
October Total : $50.70
2016 Total : $4004.69
Portfolio monthly hourly wage : $0.30/hr
Portfolio annual hourly wage : $2.40/hr