TITM Dividend and Expense Review – January 2019

[This January dividend and expense review may contain affiliate links for which I receive a commission at no cost to you. I only recommend products I use and trust.]

Welcome to the first dividend and expense review of 2019. It’s a new year and I’m combining the two posts! We’re getting crazy up in here. For a time, I stopped tracking my expenses but feel like I should get back to it. I think it’s relevant since a few of my annual goals are savings rate based.

These dividend and expense review posts will still happen monthly. They may also dive into more detail on either dividends or expenses, depending on what I find more interesting that month.

For example, most of my big dividend months are quarterly making these off months less exciting. However, I think with the combined post structure, I can delve into my expenses in more detail when that occurs.

Let’s start with dividends. I’m coming off a great year that saw my dividends grow 28.7% to a new annual record of $10,702. That’s a great number and I’m eager to beat it handily this year.

Last year’s January brought in $80.14 and was my last sub $100 month.

January Dividends

January’s total comes in at $161.49. That’s more than double last year’s total and a 101.5% growth rate.

It’s also the biggest January since 2016, a year where I owned Disney stock which paid out in January. The growth this year is driven by three things.

First is an overall increase in bond yields. My bond funds(primarily VBTLX) are the only shares I own that pay monthly and adding shares to that total or an increase in yields will mean an increase in monthly payouts.

The second is an overall increase in cash yields. I still hold some cash with an eye on additional investments. Said cash is now paying nearly 2% so it’s not dead money anymore!. That cash yield really started to jump as the year progressed and was still quite low in January 2018.

Third is my M1 Finance account which started to see an influx of cash throughout the year. In that account, I own a bevy of individual stocks that pay monthly. Those dividend totals are still low($4.16 in January) but they’ll start to be more significant as more money flows into those accounts.

Overall, I can’t complain about this level of growth. January is still a small month in relation to the quarter ending months but $161 is nothing to sneeze at guys! That money reinvested at my average portfolio yield will add an additional $3.71 in forward annual income.

The other good news is that Steve, my dividend employee is almost on the verge of breaking $1/hr every month. Steve made $0.97/hr this month and it’s possible it’s his last month under $1/hr if things keep increasing. January has historically been my lowest month of the year so things are looking good for Steve.

The overall growth is great and I’m eager to see how the below graph looks once we start getting into the bigger months.

It’s clear that the compounding effect is happening and I’m seeing big jumps every year. I’m excited to see those blue bars and how they look in March and June and onward.

January Total : $161.49
2019 Total : $161.49
Portfolio monthly hourly wage : $0.97/hr
Portfolio annual hourly wage : $0.97/hr

Savings Rate and Expenses

This wouldn’t be a dividend and expense review without the expense side of things.

January is typically a relatively good savings month for me. It’s cold up in the northeast and we typically stay in and snuggle rather than go out. It’s winter hibernation season y’all!

That means more expensive grocery bills but lower restaurant and entertainment bills.

On top of that, the 401k and HSA resets in the new year means I can bump up my automatic contributions back up to 20%+ and save more! There’s also the automatic benefit of seeing a lower check and subconsciously wanting to spend less. I don’t know if that’s actually a thing but maybe.

One of my goals this year was to hit 50%+ savings rate in as many months as possible. I was close to that last January with a 49.06% savings rate so let’s see where I fell this year.

My savings rate came in at 51.4% this year, a proper good total if I say so myself. Adding in employer contributions brings that total up to 58.1%!

On a gross income basis(including taxes), my savings rate was 40.5% or 45.87% with employer contributions.

It’s month 1 and I’m well on my way to my 50%+ goal with a 100% hit rate so far! February is usually a pretty good month too due our yearly bonus payout as you can see below!

On the expense side of things, as I mentioned groceries were up quite a bit. That included a few visits to Trader Joe’s and a Costco visit. Honestly, I was a bit surprised by the grocery total and how many times I went to Trader Joe’s during the month(like 6). I don’t even remember why I went so often or what we needed!

The second big cost driver besides rent was health insurance. I am newly married and am now covering my wife under my plan. Her work offers insurance but it’s a pretty bad plan so we made the decision to cover her under mine.

That took my monthly cost from $84/month for single coverage to almost $500/month for the two of us. That’s quite a jump! It’s clear that my job doesn’t subsidize spousal coverage at all!

The worst part is that it’s not even a great plan. It has a family out of pocket max of $11,000 so if both of us get sick, we’re paying $500/month and potentially have to cover $11,000 in medical bills. I realize the huge impact medical costs can have on someone now, even with insurance. When I was single and paying $80/month, it wasn’t that bad but $500/month is rough. I can’t even imagine what people with families are paying at my job!

I’m lucky in that part of my insurance is subsidized by my employer but $500/month is a big change from what I was paying last year. I still haven’t combined our finances in terms of tracking everything and I’m not sure when I will but this change will certainly impact my savings rate in a big way in the meantime.

Gifts were a layover from Christmas. I had to contribute my part towards the gifts my wife purchased for everyone. She does most of the shopping in that area and luckily we’re part of families that don’t go crazy on the gift side of things. We mainly buy things for the kids and tiny trinkets for the adults.

Beyond that, there weren’t many new expenses. My Amazon Prime annual membership fee and Netflix were all the entertainment expenses. Winter is an indoor time for us and when we did go out, it was to play board games with friends. I highly recommend Scythe, a new board game we tried.

We’re lucky in that we’re happy just staying indoors when it gets cold. It’s not an all year thing and as soon as the weather picks up, we’ll be day tripping everywhere. However, until then, winter is time for hibernation!

Overall, this month was a solid one. I doubled my dividends for the month(yay for Steve) and hit 50%+ in my first savings rate of the year. There’s still plenty of work to do to hit my goals but this is a pretty great start.

February is likely to be a good savings rate month assuming I get a decent bonus. However, I already have a few expenses lined up including a root canal I have to get started tomorrow. I am not looking forward to that!

Thanks for reading and let me know how your month went!