December Wrap Up

Merry Christmas and a Happy New Year to all of you! I hope you all had a great holiday season, I know I did. I got to celebrate Christmas with my family and couple days later have second Christmas with my girlfriend's family, and I got some pretty good gifts; my girlfriend's family gets a little crazy with the gift giving.

This is my 4th monthly roundup and I hope to use these posts to discuss my current state of affairs including income/expenses, stock buys and sells, dividend income, and of course my progress on all of my yearly goals. With this being the end of they year and all I was not sure how to handle this post. But I have decided I will first wrap up December (this post), then I will post a separate piece to wrap up the year, and finally I will have a third post that lays out my 2015 budget and goals (or maybe two posts if it gets long).

Income/Expenses:
My expenses are listed to the side. On each line I have the budgeted amount per month, the actual
amount spent for the month of December.

My total expenses were just over $2,000, which is which is actually my best month yet. This is a bit of a surprise with it being gift season but I knew going into this month that I would have to keep my budget tight if I wanted meet my 50% expense rate goal. It also helped that I have been spending more time at home(s) (whether mine, my family's or my girlfriend's) thus leave less opportunities to go out and spend money.
The only category I was over on this month was my "Other" category where all my gift purchases ended up. But I reality this is offset by some birthday and Christmas money I received this month.

INCOME:
Paycheck: $ 6,056.This was a three paycheck month so my income saw a real boost for the moth

% Expenses = 33%  of income. A great month (best month ever) but was really boosted by the extra paycheck.


Dividend Income:
Because I have been working hard on paying down my debts, I haven't been able to add much to my portfolio this year. But the great thing about dividend investing is that its still working whether I am adding to it or not. This month I earned $156 without lifting a finger, not bad. The following companies paid me this month:

Buys/Sells:
December was another boring month for trading for me,  in the past this is due to me focusing on paying down my student debt but now most of my debt is resolved so I don't have much of an excuse other than a lack of time to perform research.

FRIP
Scottrade offers a Flexible Reinvestment Plan, where dividends from qualifying companies can be used to purchase shares in any other qualifying companies without any commission. So I take advantage of this every month and I usually use it to build up my positions in companies where my positions are lagging.
This month my dividends were used to purchase 6 shares of Kimco Realty Corporation (KIM) .

Net Worth
Net worth will always be a secondary goal for me with generating passive income being my primary goal. But net worth is something I have started tracking. Given how much of my net worth is in stocks, my net worth will have a tendency to fluctuate frequently with the market but hopefully my net worth continue an overall upward trend over time.
Assets:

   - 401k:                   $71,803

   - Investments:        $63,971

Liabilities

   - Student Loan 1:  $0

   - Student Loan 2:  $6,866

   - Car Loan:           $9,150

NETWORTH:       $119,758 down 1.5% from last month

Goals:

• Spend less than 50% of my net income - This was another good month and should keep my on track for meeting this goal.
• Pay off one of my student loans - COMPLETE
• Keep taxable income in the 25% tax bracket - My current federal taxable income is $86,779 from my day job and considering dividends, capital gains, and interest I am about 99% of the way to the 25% bracket limit of $89,350 so this is really close, and I'm not exactly sure about how much my "other" incomes will amount to.
• Weight under 200 lbs - My current weight is 210 lbs which is higher than last month's, Christmas time is not go for weight loss. I don't think I will make my goal but I think I have been putting on muscle lately so I guess its OK. I'll have to revise this goal for next year.
• Run a half marathon - COMPLETE
• Complete the Tough Mudder - COMPLETE
• Work out my legs regularly - I have not been as good as I would like you to be but I have been better than in the past. This one still needs some work.
• Increase my running pace - I have not been running lately because of all of basketball games so I need to figure some way to incorporate running back into my routine, perhaps I will start running on the treadmill at the gym as a warm up before a workout.
• Take an online class - I have chosen a class but have yet to start, when will I find the time? I don't think I will get this goal done this year.
• Work through my backlog of magazines - I finished some of my other books so now I have more time to work through these magazines. My girlfriend would be very happy if I complete this goal, she's tired of the magazines lying around.

How was your December?

Photo Credit: freedigitalphotos.net

2015 Look Ahead Part 2: Goals

As I mentioned in my previous post I was thinking ahead to 2015 and where in the last post I wrote about my budget, this post is about my goals for 2015.

Financial

Expense rate: My goal for 2014 was to keep my expense rate under 50%, which I think is a pretty significant goal. I would like to take it one step further this year, but I don't want it to get too drastic, so I think I might shoot for 45-47%. I'll have to take a close look at my budget for next year and decide what goal would be both meaningful and achievable.

Emergency fund: I don't have much of an emergency fund right now; I usually just rely on my saving account having some extra funds. Instead I would like to have a dedicated account for emergency purposes. I am thinking that I will open a money market account in order to keep my emergency fund separate yet still accessible. Once I start the fund I think I will have it automatically draw from my paychecks.

Invest $2,500 per month: This amounts to $30,000 for the year which is about half of my net income from 2014. I think this is an achievable goal but it will certainly be challenging. Everything will have to go according to plan for this to remain possible.

Automated Investing: I would like to set up at least a small portion of money to be automatically invested. The purpose here is to make investing a habit and ensure that at least some of my money will be automatically set aside for investing every moneth.

Open a Loyal3 Account: My purpose here is to set up some fee-free investing but Loyal3 has some other advantages such as payment by credit card (hurray for miles), minimum transaction of only $10, and the ability to buy fractions of a shares, which lends itself well for the automated investing I mentioned above.

Pay for my vacations with overtime: I have some big vacation plans for 2015 and work is going to be extremely busy this year so voluntary overtime will be requested. To help with both of these situations I want to set a goal to pay for my vacations through overtime. That way I have an incentive to work the overtime and can keep some expensive vacations from ruining my budget.

Establish one new source of income: An important part of financial independence is a diversified stream of income. A lot of dividend investors accomplish this through a diversified dividend portfolio. While I will certainly pursue a diversified dividend portfolio I would like to explore additional options for earning money. Some possibilities are peer to peer lending (such as the Lending Club), ride-share driving, this blog, or performing odd jobs (TaskRabbit.com, etc.). Not all of this would be a consistent source of income but it would provide and opportunity to explore what other options exist for earning income.



Physical

Tough Mudder: I had so much fun at the 2014 Seattle Tough Mudder I am already signed up for 2015. I better start working on my pull ups!

Workout my legs 2x per week: I have some minor yet consistent knee pain and I believe that I could reduce my pain and swelling by strengthening my leg muscles. So, in 2014 I had a goal to work out my legs regularly. I didn't keep to my goal very well partly due to the vagueness of the goal. 2015's goal will be better defined. It will be VERY difficult to stick to because right now my schedule does not allow it. Currently I play basketball on Tuesdays and Thursdays but I can't work out my legs the day before or after basketball so I basically can't work out my legs Monday - Friday leaving only Saturday and Sunday but it would be pointless to work out my legs two days in a row.

Complete a Triathlon: I am still uncertain about this goal, it is definitely something I am interested in doing but my major concern is the swimming, currently I don't have anywhere to swim so I would need to find out what pools are available and the associated cost to see if I can really work this in or not.

Run at a faster Pace: In 2014 I completed a half marathon, a great accomplishment but it was especially apparent during the race that I need to run faster, my current pace is very slow. I had this same goal for 2014 but I did not complete it, partially because it is a poorly defined goal. So for 2015 I will probably try to a more specific goal of completing a certain distance in a certain amount of time.

Percent Body Fat: In 2014 I set a goal to get my weight under 200 lbs, that is not going to happen this year and given the amount I have been lifting weights lately I am not sure if getting fit will translate to my weight going under 200 lbs. Instead I will set a percent weight loss goal for 2015.

Mental

Reading List: I have a lot of books I would like to read, to help work through them I will probably set a number of books I want to read this year. I know I won't make it through this whole list and I plan to be continuously updated the reading list as I find other books I would like to read.

A Random Walk Down Wall Street
7 Habits of Highly Effective People
Rich Dad Poor Dad
One Up On Wall Street
The Intelligent Investor
Fooled By Randomness
Common Stocks and Uncommon Profits
Thinking, Fast and Slow
Predictably Irrational
The Millionaire Next Door
Voluntary Simplicity
Walden
Zen and The Art Of Motorcycle Maintainence
Intelligent Investing
Winning is a Loser's Game
Straight Talk on Investing
Where Good Ideas Come From
Crow Road
This is How You Lose Her
Great Inventions that Change the World
A Guide to A Good Life

Take Online Class: This was another goal I set for 2014 that I did not accomplish. I have no idea when I will have the time though...

Average One Blog Post Per Week: Since I started my blog in September I have averaged one post per week. I would like to continue and hopefully improve this trend.

Travel Somewhere New: I would like to make this a recurring goal to travel somewhere new every year. This year will (hopefully) be New Zealand!

2015 Look Ahead Part 1:

Well 2015 is just around the corner and I have been thinking a lot about my goals and what I want to accomplish next year so I thought I put some of those thoughts in writing. After the new year I'll probably have a post wrapping up 2014 and a separate post on my final goals for 2015. This post is just an early look at what I am thinking budget-wise for 2015.


Income: 
My net income from my day job for 2014 will probably end up at about $63,000. My only other sources of income are interest on bank accounts (trivial) and dividend (which are automatically reinvested through my FRIP) so I generally don't include them in my income. For now I will assume that I will make the same amount next year, which is probably conservative for a couple of reasons: 1) I will get a raise in March 2015, 2) I got a raise in March of 2014 so I will be starting off at a higher wage this year, 3) work is going to be very busy and I will likely need to find a way to do weekly overtime.

Expenses:
The following are my budget items for 2014 with my projected performance for the year and how I think it might change next year.

Phone: Little Over 
I am on a contract so for the time being so this will remain unchanged. I think during the summer I can revisit and try to find a cheaper plan.

Groceries: Under
Through November I have averaged a little less than my budgeted amount so maybe there is some more room to reduce this next year.

Car: Over
My car loan payment and insurance are set values but unfortunately I did not include maintenance in my 2014 budget causing me to overrun. Next year I will need to factor in maintenance and I also may switch this category to generic "transportation" and include my vanpool dues and gas budgets all into one just to simplify.

Movies: Under
In 2014 I had this line item to account for Netflix and occasional DVDs purchases or visits to the movie theater, but I no longer subscribe to Netflix so I think I will just roll this over into the "other" category.

Dinner/Drinks: Over
I overran this budget a lot early in 2014 but cooled down this fall. I think I will need to be strict about this one. My girlfriend loves to go out and complains when I don't take her. I have no problem going out to eat but I think we need to be more selective about where/when we dine and especially avoid $15 glasses of wine. One change that will help greatly for 2015 is that I will start including dining while on vacation as part of my vacation budget. Its a lot harder for me to stay on my regular monthly budget when on vacation but with a separate vacation budget I can plan for that separately.

Other: Way Over
This is my most vague and most overrun category. I am not sure how to clean this up, I don't really want to break it up into multiple lines but I may think about breaking out regular payments like the gym. I will probably need to up this budget for next year.

Health: Under
This budget is for copays and deductibles but I didn't use it at all in 2014, who knows what will happen in 2015.

Clothes: Met
I expect this will be the same next year.

Student Loan: Under
This budget will see a significant ($200) drop for 2015 because this year I paid off one of my student loans bringing my monthly student loan payments to $85.

Gas: Under
I was under on this item for 2014 due to my use of the vanpool, I will probably roll this up into the transportation category.

Travel:  Little Over
This is going to be a big budget for 2015 because my girlfriend and I want to go to New Zealand! I'll need to evaluate how much that trip will cost and factor in any other possible vacations.

Cash: Over
I may need to boost this budget for 2015. Its a vague category as the money I withdraw usually ends up going towards drinks, lunches, or "other".

Rent: Over
This will go down from 2014 due to moving to a slightly cheaper place. I will also need to change how I account for this, right now I pay the whole rent and my girlfriend pays me back but sometimes the distinction between rent and utilities gets muddled. I may make one rent/utilities budget.

Utilities: Way Over
I significantly under-predicted the utilities for 2014, and accounting has gotten confusing after my girlfriend and I moved in together. I think I might join this budget with the rent budget.

Vanpool: Under
I will probably roll this up into one transportation budget.

Conclusions
Well I definitely have some work to do, both in the sense of maintaining my budgets better throughout the year and cleaning up how I account for various expenses. One particular aspect I need to improve is my awareness of where I stand with my budget as the month progresses. Right now I usually end up looking at my monthly expenses after the month is over, this makes it hard to adjust you expenses throughout the month. I personally do not like any budgeting apps I have tried but I can certainly see the advantage of being able to keep up with your budget on the go. Perhaps I can find a way to keep track on my phone.

Photo: FreeDigitalPhotos.net

November Wrap Up

Every month I start this post saying how fast time is going by and surprise surprise, November flew right by!

This is my 3rd monthly roundup and I hope to use these posts to discuss my current state of affairs including income/expenses, stock buys and sells, dividend income, and of course my progress on all of my yearly goals

Income/Expenses:
My expenses are listed to the side. On each line I have the budgeted amount per month, the actual

amount spent for the month of November, and finally the total amount spent in that category for the year. Those items in yellow have either exceeded or are in danger of exceeding the total amount budgeted for the year.
With my total expenses around $3200, which is certainly not my best month, in fact it was my second worst month of the year.
My grocery bill was higher than normal due to big a Costco run. My "other" category was also high due to a $150 purchase of a blender/food processor (I guess its a birthday present to myself) and another $150 purchase of a used phone for my girlfriend, as a Christmas present. My car budget was a little high due to new tabs for my car.
Travel
My travel budget is really what put me over the edge this month. I bought a $288 plane ticket for myself to go visit my brother (and more importantly my nephew) during New Years. As I mentioned in my last post we traveled to Mexico during Thanksgiving. My girlfriend ended up paying for the plane tickets and accommodations; I guess we were operating under the assumption that I paid for us to go to my friend's wedding earlier in the year so she paid for us to go to her friend's wedding. Regardless, because she paid for the hotel and travel I ended up paying for everything while we were in Mexico. I ended up spending around $560 in Mexico, $130 for the cooking class, $40 for boat tour and snorkel rental, and the rest on eating out, beer runs, and taxis. I am not too upset about what ended up paying because we had a great time but I do wish I had planned ahead and made a budget for what I expected to spend.

INCOME:
Paycheck: $4,904 .

% Expenses = 66%  of income
Not good at all, and this brings my yearly expense rate over 50%. But luckily December happens to be a three paycheck month so beyond my obligatory monthly payments I have about $1000 for gas, groceries, eating out, vanpool, car maintainence, gifrts, etc. So I can meet my goal of keeping my expenses under 50% if I keep a careful watch on my expenses as the month progresses.


Dividend Income:
Because I have been working hard on paying down my debts, I haven't been able to add much to my portfolio this year. But the great thing about dividend investing is that its still working whether I am adding to it or not. This month I earned $196 without lifting a finger, not bad. The following companies paid me this month:

Buys/Sells:
November was another boring month for trading for me, this is due to me focusing on paying down my student debt.

FRIP
Scottrade offers a Flexible Reinvestment Plan, where dividends from qualifying companies can be used to purchase shares in any other qualifying companies without any commission. So I take advantage of this every month and I usually use it to build up my positions in companies where my positions are lagging.
This month my dividends were used to purchase 9 shares of Kimco Realty Corporation (KIM) .

Net Worth
Net worth will always be a secondary goal for me with generating passive income being my primary goal. But net worth is something I have started tracking. Given how much of my net worth is in stocks, my net worth will have a tendency to fluctuate frequently with the market but hopefully my net worth continue an overall upward trend over time.
Assets:

   - 401k:                   $70,000

   - Investments:        $60,114

Liabilities

   - Student Loan 1:  $0

   - Student Loan 2:  $6,866

   - Car Loan:           $9,391

NETWORTH:       $121,652 up 7% from last month, not bad

Goals:

• Spend less than 50% of my net income - This was a not good month and brought my savings rate down but I should still be able to meet my goal.
• Pay off one of my student loans - COMPLETE
• Keep taxable income in the 25% tax bracket - My current federal taxable income is $78,545 from my day job and considering dividends, capital gains, and interest I am about 89% of the way to the 25% bracket limit of $89,350 and we are currently 91% complete with this year. I have been watching this lately and I have had a good percentage of my income (20%) going towards pretax 401k.
• Weight under 200 lbs - My current weight is 208 lbs which is actually higher than last month's but my body fat % was actually lower so I've been making some progress. I don't think I will make my goal but I think I have been putting on muscle lately so I guess its OK. I'll have to revise this goal for next year.
• Run a half marathon - COMPLETE
• Complete the Tough Mudder - COMPLETE
• Work out my legs regularly - I have not been as good as I would like you to be but I have been better than in the past. This one still needs some work.
• Increase my running pace - I have not been running lately because of all of basketball games so I need to figure some way to incorporate running back into my routine, perhaps I will start running on the treadmill at the gym as a warm up before a workout.
• Take an online class - I have chosen a class but have yet to start, when will I find the time? I don't think I will get this goal done this year.
• Work through my backlog of magazines - I finished some of my other books so now I have more time to work through these magazines. My girlfriend would be very happy if I complete this goal, she's tired of the magazines lying around.

How was your November?

Photo Credit: freedigitalphotos.net

Thanks-Living!

A very belated Happy Thanksgiving to everyone! I have been trying to right this post for a week now and I just have not found the time.

I hope you all had a great Thanksgiving, I know I sure did. This year we skipped the traditional Thanksgiving in favor of attending our friends' wedding in sunny Mexico. Some friends of ours decided to get married in Huatulco, Mexico so I thought I would take a little time and tell you guys about our experience.

Huatulco

Huatulco is on the Pacific side of Mexico and far to the south, almost to the border of Guatemala. Huatulco refers to a small region of bays containing several small towns.  Huatulco is a tourist area with the convenience of the a small airport and the port of cruise ships. The area works hard on maintaining their tourist appeal by constant maintenance, trimming, and painting to keep the area looking clean. I also never felt unsafe while I was there, I got the sense that the people there knew where their money came from and were anxious to keep the cash flowing. The people there were SUPER helpful all the time but were always trying to sell you something. The second you walked onto the beach people were there trying to shepherd you to their beach side restaurant and even after you were seated or relaxing on the beach enterprising individuals would walk around trying to sell you various trinkets.

The Resort
We stayed at the Las Palmas Resort which is serenely located on the cliffs of a very rugged coastline and overlooking some beautiful seaside cliffs. It was a small resort with 5 or so buildings with maybe 4 bedrooms each. The whole resort was rented to our group for the wedding, which was great to having 50+ people all there for the same thing. Our room was amazing, well I guess the room itself was not that interesting but the view was what made it amazing. From our deck we had an amazing view of the ocean and cliffs beyond. There was also 4 infinity edge pools which we used extensively to counter the hot Mexican sun.

The View From Our Balcony

One of Many Pools at the Resort

The Wedding
The wedding took place on the roof of one of the buildings with an amazing view of the water. It was a little tight for the 70 or so guests (70 guests at a destination wedding, these guys are apparently very popular). But the wedding was short and very sweet, they quoted music lyrics for their vows and it was fantastically sweet. I was actually on baby duty during the wedding so I spent more time looking at the baby than watching the wedding, but I love babies, especially happy babies like the one I was holding, so it wasn't a big deal.
The party after the wedding was where things got really fun. You know you're in for a crazy night when the father of the groom rips off his shirt 5 minutes into the dance party and bottles of tequila are getting passed around. There was a lot of dancing followed by a conga line into the pool and of course, more dancing. It was interesting to watch as the next morning people tried to find all the items that went missing (mostly clothing) the night before.

Activities
This was definitely a social vacation so we spent most of the time at the resort, usually socializing in or near the various pools. And we drank...a lot. But we did manage to find some time to go visit the local town for shopping, visit the neighboring beaches for swimming and sunning. There was a private beach adjacent to the hotel (although it was a very steep path to get down there which was deterent) but once down there we had some pretty intense beach volleyball games. I feel bad for trash talking the bride. We also took a cooking class for a lady who grew up in Canada but has lived in a very small neighboring village for the last 20 years. It was fun and we learned a lot about the region's cooking and culture. Turns out I would be a baller housewife because my corn tortillas were perfect! We also took a boat tour of the Bahias (bays) of Huatulco, with stops at two beaches, one for snorkeling and one for lunch. The snorkeling was OK, some people really loved it but compared to Hawaii's snorkeling this was pretty tame. This all happened the day after the wedding so everyone was pretty subdued and by the last beach people were just sleeping on the sand.

Cooking Class!

Food
I have always loved Mexican food and I was not disappointed on my trip. We ate most breakfasts and dinners at the resort, cooked but 3 very nice ladies. The food was what you might expect: at breakfast a lot of eggs, beans, tortillas, and pastries, and a dinner a lot of chicken, bean, tortillas, guacamole, and salsa. We also managed to go out for lunch and dinner several times and, with the exception of the beach side restaurants which were just tourist traps, all of my meals were very good. One thing that surprised me was how well they did beef down there. There was two different restaurants where we shared a mixed grill and I was really impressed, I still dream about the beef at one of the places.

Cooking Class Payoff

Well that's all I have to share for now. It was definitely a great trip. I felt good to be warm and tan even if it was only for a week. I am definitely glad we could go and be there for the wedding and it was a great chance to explore a part of the world I have never been to before. I know a lot of people in the dividend investing and frugal living blogosphere like to talk about NOT traveling in order to save more money now. Of course it makes more financial sense not to travel now but for me its not an option. Life is not guaranteed so who knows if I will ever get a chance like this again. Traveling needs to be within reason of course but if I can travel and still maintain an excellent savings I see no reason not to.



What about you? How was your Thanksgiving? Does travel fit in your frugal lifestyle?