Investment Income Updates For 2013 And 2014

This post is a consolidated investment income report for the period November 2013 through December 2014. Posts  were originally published individually but are now listed from oldest to newest. They are combined here for consolidation and ease of reading. 


November 2013

The Investment Income tab on my blog has been updated here as of November 15th.  This page outlines my portfolio of investments and the income they generate on a yearly and average monthly basis.  Also included is a chart with a historical look at my investment income since October 15th 2003.

Unlike a lot of people, I update the spreadsheets for my net worth and investment income on the 15th of each month. I have been doing this since at least October 2003.  The 15th originally worked better for me because my bills and payments have always been due on the last or first day of the month.  I have continued to use the 15th of the month because it provides a better snapshot of my numbers, and usually my financial life is slower mid-month which gives me time to compile the data.

Purchases 10/15/13 - 11/15/13
 CLX                                        $200.00
 CAT                                        $100.00
 CSX                                        $500.00 
 HCP                                       $1573.16  Buy 40 shares @39.329

Peer to Peer Lending
 Lending Club                               $200.00

Total New Purchases                        $2573.16

Dividends Received 10/15/13 - 11/15/13
 VZ                                          $99.63 (reinvested)
 APPl                                        $48.80
 ABBV                                        $32.00
 ABT                                         $11.20
Total Dividends                             $191.63
 
Forward Yearly Income                      $3681.15
Forward Avg Monthly Income                  $306.76

The $2573.16 in new working capital and a dividend increase by ABT, minus a slight decrease in cash savings due to an early mortgage payment, has increased my yearly forward income to $3681.15, an average of $306.76 per month.  This number is a 5.17% increase over October 2013, and a 20.30% increase year over year.  I primarily highlight these two numbers instead of the precise dividend income I have received each month historically.  My biggest curiosity is how much money I would receive though investment income if I stopped working today. I am very happy with the progress I have made this month. While I do not have any goals I set for myself this year, I am working on a set of goals for 2014 so I have something to aim at.

This month, I continued my dripping into both CLX and CAT. I believe CLX is getting a little ahead of itself now at $93.60, so I will likely cut my monthly drip back to $100. The extra $100 I may put more to CAT, or more likely start dripping into CSX. The initial CSX purchase was successful and my drip is now active with Broadridge. The surprise move from Computershare happened just a day or two after I made my purchase and posted about it. I must say I was not thrilled with the move and the very little information provided by both companies. But now that I am in Broadridge, so far I like the interface and the company itself is interesting to me.

I also picked up 40 shares of HCP. The price dipped below $40 at which point it hit my radar. Then it had a nice down day on November 8th when the strong jobs number suggested the Federal Reserve may start tapering earlier and raise rates. REITs dipped, and I bought.  Dips like these are otherwise meaningless for long-term investors like me, but I will take the lower entry price.


December 2013

The Investment Income tab on my blog has been updated here as of December 15th 2013.  This page outlines my portfolio of investments and the income they generate on a yearly and average monthly basis.  Also included is a chart with a historical look at my investment income since October 15th 2003.

I update the spreadsheets for my net worth and investment income on the 15th of each month. I have been doing this since at least October 2003.  The 15th originally worked better for me because my bills and payments have always been due on the last or first day of the month.  I have continued to use the 15th of the month because it provides a better snapshot of my numbers, and usually my financial life is slower mid-month which gives me time to compile the data. One downside to updating on the 15th is that I need to do one extra per year on January 1st to track my annual net worth, income, and investment performance. So you’ll likely see another update in two weeks.

Purchases 11/16/13 - 12/15/13
 CLX                                        $200.00
 CAT                                        $100.00
 CSX                                        $100.00 
 HCP                                       $1490.16 Bought 40 shares @37.25

Peer to Peer Lending
 Lending Club                               $200.00

Total New Purchases                        $2090.16

Dividends Received 11/16/13 - 12/15/13
 CAT                                          $3.42 (reinvested)
 CLX                                          $9.66 (reinvested)
 CSX                                          $2.84 (reinvested)
 CVX                                         $77.49 (reinvested)
 EMR                                         $38.48 (reinvested)
 MAT                                         $14.40
Total Dividends Received                    $146.29

Forward Yearly Income                      $3822.55
Forward Avg Monthly Income                  $318.55

The $2090.16 in new working capital, plus an increase in cash savings this month, has increased my yearly forward income to $3822.55, an average of $318.55 per month.  This number is a $141.39 and 3.84% increase over November 2013, and a $739.88 and 24.0% increase year over year.  I consider the $3822.55 number the most important because it is how much money I would receive though investment income if I stopped working today.

This month, I continued my dripping into both CLX and CAT. CLX I still believe CLX is getting a little ahead of itself now at $93.25, so I cut back my monthly drip to $100. Computershare allows me to invest $50 twice a month, so I am utilizing that functionality to dollar cost average even more effectively. The extra $100 I took away from CLX went to CSX this month, and I will continue to add $100 to CSX for a few years. I am quite happy with the Broadridge web site for dripping into CSX, and I hope to get up a blog post to review it sometime soon.

I also picked up another 40 shares of dividend aristocrat HCP in my taxable TD Ameritrade account. The price dipped into the low $37’s at which point I made the purchase, only to watch it fall below $37 that day. I am looking to pick up some more, another 20-40 shares, if the price stays under $36, averaging down my cost. I usually try to buy a position in four separate purchases, so I may do one more if the stock continues to fall further. I believe the fundamentals are solid and this is a simply a difficult stock environment for REITs, but I do not think the tapering will impact them significantly.

The upcoming month should be a busy one with the holidays, and it is a busy one for me at work. I’ll have another post near January 1st to go over my annual performance, and also I am working on some goal setting for 2014, something I have not done in the past with my investments.

Thanks as always for reading and looking at my portfolio. I welcome comments here or you can email me directly at RetireBeforeDad at yahoo dot com.

Disclosure: Long all stocks mentioned in this post.


January 2014

The Investment Income page on my blog has been updated as of January 15th 2014.  This page outlines my portfolio of investments and the income they generate on a yearly and average monthly basis.  Also included is a chart with a historical look at my investment income since October 15th 2003.

It has been a busy month for me with the holidays, work and family. My day job requires extra hours between December and mid- February due to seasonality. I have also been upgrading my blog to a self-hosted site and I changed the theme. The whole thing wasn’t to bad except for dealing with the WordPress/Jetpack staff who were very slow to move over my email followers. If you are interested in doing this yourself, send me an email and I’d be happy to share my experience.  The delay caused a lack of posts in the past week. That said, my new website platform is much more flexible and powerful. Keep an eye out for more changes and tweaks over the next few weeks and months, all to improve the reader experience.

The $2140.40 in new working capital, minus cash savings due to making a Roth IRA deposit, has increased my forward 12-month investment income (F12MII) to $3869.99, an average of $322.50 per month.  The yearly number is a $47.46 and 1.24% increase over November 2013, and a $712.76 and 22.6% increase year over year.  I consider the $3869.99 in F12MII the most important because it is how much money I would receive though investment income if I stopped working today.

This month, I continued dripping into both CLX and CAT at $100 each. Computershare allows me to invest $50 twice a month for CLX, so I am utilizing that functionality to dollar cost average more effectively. I meant to DRIP another $100 into CSX this month but forgot to automate it. That is now fixed and I will continue to add $100 to CSX for a few years. CSX took a hit due to earnings today so the valuation is more palatable compared to yesterday.

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Click to Enlarge

On January 7th I initiated a brand new DRIP through my Computershare account. Aqua America (WTR) is a water utility that has paid and increased dividends for the past 22 years. The new position required a investment amount of $500 for the initial direct purchase and I’ve set it up to DRIP $100 per month going forward. The company pays all fees for this DRIP, so building a position will cost me nothing. I hope to dedicate a blog post to this new holding soon. This utility helps to balance my portfolio which I realized was lacking utilities after the analysis I did on sector weightings.  The new website changeover has gotten me behind a bit on posting so hopefully that will be up soon.

I also opened a new position in Target (TGT) this month. In my taxable TD Ameritrade account I picked up 20 shares of the company on January 13th. The price has gone down since then, but there may be a good opportunity to average down in the coming month. Everyone knows the short-term problems they are facing which gives us long-term dividend growth investors a sale price. I won’t be dedicating a blog post to this purchase since many bloggers in our circle already have. But the Investment Income page will be updated every month so you always check on my current holdings.

As you may have read in my 2014 goals post, I am consolidating some retirement accounts.  Right now I have a number of purchases to make in my wife’s IRA this coming month because we have transferred a chunk of money from her former employer’s 401k. This is in addition to some moves I’ll be making in my Roth. I tend to invest in index funds and ETFs in my retirement accounts when those choices are available.

I am very happy to be through the holidays and into the new year.  With my new website up and running, I’m excited to keep writing good content and sharing my retirement journey with all of you. Thanks as always for reading and looking at my portfolio. I welcome comments here or you can email me through the contact form in the menus above.  I’d also appreciate any feedback on the new website.


February 2014

The Investment Income page on my blog has been updated as of February 15th 2014.  This page outlines my portfolio of investments and the income they generate on a yearly and average monthly basis.  Also included is a chart with a historical look at my investment income since October 15th 2003.

My day job is busy from December through about mid-February every year so things have slowed down somewhat. The kids of course take up most of my time when I’m not working and I wouldn’t have it any other way. They are a blast.  The process of updating my blog hosting and theme are completed. I hope the new theme makes the reading experience better. I know it could use a logo of some kind and I’m working on it (or if you know someone who’s good let me know), but making a logo takes time away from reading and writing.

This month I’ve also started working on some Seeking Alpha articles. I haven’t submitted any exclusive articles yet, but they have reposted three of my posts from this site. Hopefully in the next month you’ll see some exclusive stuff there. I’ll be posting snippets on my home page so you won’t miss anything.

The menu on my blog has been updated. I’ve created a recommended page for products and services I endorse, and a new Investing Resources page where I put some useful links that I use on a regular basis. Both pages will have new content added to in the coming months. On to the numbers.

The $2824.38 in new working capital has increased my forward 12-month investment income (F12MII) to $3969.49, an average of $330.79 per month.  The yearly number is a $99.48 and 2.57% increase over January, and a $712.46 and 21.9% increase year over year.  I consider the $3969.49 in F12MII the most important because it is how much money I would receive though investment income if I stopped working today.

This month, I continued dripping into CLX , CAT and CSX at $100 each. I also contributed my first $50 into Aqua America (WTR). I decided to only DRIP $50 into WTR because with no fees and a low beta, I feel comfortable building a position in this company very slowly.

The Computershare DRIP allows me to invest $50 twice a month for CLX, so I am utilizing that functionality to dollar average more effectively. I restarted the DRIP into CSX at Broadridge this month after forgetting to automate it last month. That is now fixed and I will continue to add $100 to CSX for a few years.

I also added two lots of 20 shares each to my position in Target (TGT) this month, bringing my total shares to 60 at a cost basis of $59.08 when I include purchase fees. As I suspected last update, the price did go down nicely and I was able to average down my cost. Everyone knows the short-term problems they are facing which gives us long-term dividend growth investors a sale price.

One of my holdings, Mattel (MAT), got hammered after earnings this past month. I may look to average down my cost there this month as the price is under my original purchase of $40.13.  I wanted to also buy Hasbro (HAS) when I opened my MAT position, but HAS was more overvalued. Well after the earnings reports, we see why; HAS performed better and spiked higher. That makes MAT the better long-term value at the moment. If there is one thing I’ve learned from being a Dad, it’s that grandparents buy new toys for kids with intense passion. The company will come around by this time next year. Their comps for the next holiday season will be an easy beat. Other than that, I am taking a look at tobaccos for the next purchase in my taxable account, or possibly another industrial or consumer staple.

As you may have read in my 2014 goals post, I am consolidating some retirement accounts.  I made a few purchases in my wife’s IRA account buying the Vanguard Total Market Index ETF (VTI), on the dip this past month. I still have a decent amount of cash awaiting placement, and I’m hoping to add to her VTI holdings and maybe throw in an international or emerging markets ETF. This is in addition to some moves I’ll be making in my Roth, which I didn’t get a chance to make this month. After writing about Roth IRAs in a recent blog post, I may open a new Roth IRA for my wife called a Spousal Roth IRA. This would double the amount of money we would put towards tax free investing.  I’m considering adding some excellent dividend stocks to my own Roth, perhaps a GIS, JNJ, or PG… rock solid dividend stocks, or starting with the VIG and/or VYM ETFs for income, then adding some stocks when I see better values.

That’s all for this update. Be sure to check out my Investment Income for all the latest.


March 2014

Mar 15 2014 Inv Income ChartThe Investment Income page on my blog has been updated as of March 15th 2014.  This page outlines my portfolio of investments and the income they generate on a yearly and average monthly basis.  Also included is a chart with a historical look at my investment income since October 15th 2003.

I had a nice increase in investment income this month due to a couple of purchases in my taxable account. It’s the biggest increase since I started renting my condo, so I am psyched!  I also received dividends from nine out of the 16 companies in my portfolio.

The family taxes are done! I completed them this month using TaxAct and it was quick and easy since I could import my information from last year’s return. I’m getting a few thousand dollars back which is going into a general savings/investing account. Our refund this year was bigger than past years since my wife stopped working mid-year. Check out my post Don’t Hate the IRS – Follow These 8 Tax Filing Tips for some tips on tax filing.

The market is conjuring up a lot of debate about whether it is overvalued or not.  I wish I could write some grand valuation about where it stands that would be 100% accurate 6-12 months from now, but I can’t. In a recent post, I pointed out some long term trends that look positive for the US economy. I also highlighted a chart of the S&P 500 during the Asian currency crisis of 1997. The market tumbled badly, but it turned out to be a great time to buy as stocks continued upward until 2000. The recent unsettling events in Ukraine may open up another opportunity to buy, so I’m watching that closely this week.

This past month I submitted my first exclusive article to Seeking Alpha about my EMR holdings. I’ll be writing more articles for SA in the future and posting them here if they fit into my blog content. Some articles about mid-cap dividend payers may not fit in as well so I’ll spare you the email and only link to it in my update posts.

The $3579.00 in new working capital has increased my forward 12-month investment income (F12MII) to $4192.39, an average of $349.37 per month.  The yearly number is a $222.90 and 5.62% increase over February, and a $871.46 and 26.2% increase year-over-year.  I consider the $4192.29 in F12MII the most important because it represents how much money I would receive though investment income if I stopped working today. My goal for 2014 is to reach $5000.

This month, I continued dripping into CLX , CAT and CSX at $100 each. I also continued a monthly drip of $50 into Aqua America (WTR).

Mattel (MAT) got hammered after earnings last month and I was able to average down nicely at $35.65/share. That brings my cost basis down to $37.90.  If there is one thing I’ve learned from being a Dad, it’s that grandparents buy new toys for kids with intense passion. MAT bought a company called Mega Bloks this month. Their building blocks compete with LEGO. My son has a bag of Mega Bloks and loves to knock over the towers that I build. He’s getting better at building too. Their blocks are BPA free which keeps my wife happy (whether or not that makes toys safer).

This month I also opened a new position in Philip Morris International (PM). Tobacco was an obvious hole in my dividend growth portfolio. I chose PM International instead of Altria (MO), a more US levered company, for two primary reasons. First, to get broader international exposure in my taxable accounts. Secondly, I’ve seen first hand how people smoke around the world and its much more than in the US. When I was in China, a pack of locally made smokes was about $.30. Marlboro Lights were closer to $2.50. The cost to make both are mostly likely the same, but Marlboro is a premium brand around the world. Surely China throws a tax on the imported cigarettes. But if they can make money selling them for $.30, PM is making plenty of money after the tax. These are 2001 prices, but this pricing dynamic hasn’t changed much since then. Valuation and dividend growth are good and a 4.7% yield is well above my portfolio average

I have recently consolidated some retirement accounts.  I made a few more purchases in our family’s IRAs including some Vanguard Emerging Markets Stock Index ETF (VWO). I still have a decent amount of cash awaiting placement, and I’m hoping to add to my wife’s VWO and VTI holdings and maybe throw in a solid dividend growth stock like GIS, PG, or JNJ. In my Roth IRA I placed an order for the Vanguard REIT Index ETF (VNQ), but it hasn’t hit my price target yet. After writing about Roth IRAs in a recent blog post, I still may open a new Spousal Roth IRA for my wife this year. This would double the amount of money we could put towards tax free investing.

That’s all for this update. Be sure to check out my Investment Income for all the latest.


April 2014

Click to Enlarge

Click to Enlarge

The Investment Income page on my blog has been updated as of April 15th 2014.  This page outlines my portfolio of investments and the income they generate on a yearly and average monthly basis.  Also included is a chart with a historical look at my investment income since October 15th 2003. I track my net worth and investments on the 15th of the month.

Special thanks to Rockstar Finance, Dividend Mantra and Passive Income Pursuit for sharing my recent post 14 Months, 18 Countries, $10,000 with their readers. The response to it has been tremendous. This is mostly a finance and retirement blog so you might not have expected something like that, but travel is a big part of why I am passionate about saving and investing. Based on the response and what I read around the web on similar blogs, it’s clear that financial independence and travel go hand in hand.

The past four weeks have been a little bumpy in the market. I’d like to see less volatility and gradual down movements to open up more value and higher yields. But I’ll take whatever down markets I’m given. The momentum stocks finally took a break and had a big impact on the overall market. I remember watching the market during some days and seeing the indices down 1%, but all of the stocks on my buy list were up!  That is frustrating. It seems frequent traders are looking to dividend stocks for safety.

The big news for my portfolio this month was the 400% increase in Bank of America’s (BAC) dividend. I’ve been waiting patiently for this since the crisis. I’ve held shares in this company since 2004. At one point it was too big a position in my portfolio which cost me. But I’m now in the green, and I think the stock has entered a new era of dividend growth. I recently wrote an exclusive Seeking Alpha article about it called Bank of America Poised for Strong Dividend Growth, and invested another $200 in my BAC DRIP that will be on next month’s update.

When the markets are down sharply, dividend investors are faced with the question, buy now or wait for lower prices? In late-January and early-February, investors who hesitated missed out. So I think it’s prudent to buy on the way down and not worry too much about catching a falling knife for solid dividend payers, especially when the economy is in a turnaround phase and the Federal Reserve is still accommodating. I did a bit of nibbling this month, but not as much buying as I need to do, particularly in my retirement accounts where a lot of cash is sitting idle I’m waiting for some index ETFs to become cheaper.

The $1462.00 in new working capital has increased my forward 12-month investment income (F12MII) to $4307.43, an average of $358.95 per month.  The yearly number is a $115.04 and 2.74% increase over March, and a $922.36 and 27.2% increase year-over-year.  I consider the $4307.43 in F12MII the most important because it represents how much money I would receive though investment income if I stopped working today.

This month, I continued dripping into CLX, CAT and CSX at $100 each. I also continued a monthly drip of $50 into Aqua America (WTR)Procter & Gamble (PG) became my newest investment, but the DRIP transaction hasn’t closed yet so it will also show up on next month’s update.

Last Friday the market was down big led by biotechnology and momentum stocks. Abbvie (ABBV) was down along with the rest of the market and I managed to pick up another 20 shares at $45.60 to round out my position at 100 shares. The stock was yielding 3.68% at that price with a payout ratio of 17%. I got lucky as I’m not usually a nimble trader. I’m hoping to add another 20 shares to my ABT position as well.

I have recently consolidated some retirement accounts. The only purchase I made in my Roth IRA this month was the Vanguard REIT Index ETF (VNQ) which hit my target price of $70.

After writing about Roth IRAs in a recent blog post, I realized we could open a spousal Roth IRA in my wife’s name even though she isn’t working. We finally pulled the trigger and opened the account a few days ago so we were able to do it for 2013, doubling our Roth IRA investment for the year, and allowing us to easily do the same for 2014. The problem now is we have a bunch of cash in her traditional IRA plus $5500 in her brand new Roth waiting to be invested. I’d like to put it in some more index ETFs, possibly some dividend growth index ETFs, total market ETFs, or international income ETFs. But I am waiting (with newly found patience) to put the money to work. Because even though I believe we are in a long-term uptrend in the market, I think (or maybe it’s hope) there will be better opportunities than today to buy these ETFs. Transferring the $5500 out of our savings account lowered my F12MII number by about $40, but it’s a small sacrifice to make for tax advantaged investing.

That’s all for this update. Be sure to check out the Investment Income for my complete portfolio.


May 2014

May 15 2014 Inv Income Chart

Click to enlarge

The Investment Income page on my blog has been updated as of May 15th 2014. This page outlines my portfolio of investments and the income they generate on a yearly and average monthly basis. Also included is a chart with a historical look at my investment income since October 15th 2003. I track my net worth and investments on the 15th of the month.

New Property Update

First I want to update you on the new rental property I wrote about at the end of last month. The property was a run-down, bank-owned one bedroom/one bathroom condo that had been on my watch list. Within two weeks, the bank dropped the price two times by 9% each time. Suddenly it was in my desired price range and I ran the numbers to determine if it could be a decent rental. Cash flowing properties are difficult to find in my area, so I was surprised it was still available after four days. I went to look at the place with my agent and realized it needed a complete rehab; kitchen, bath, floors and most of the fixtures.

My agent and I went back a second time with a contractor to get an estimate, and another contractor was able to give me a ballpark estimate based on the MRIS listing. Based on the price and the cost of the rehab, I came up with an offer accounting for the rehab and giving me the opportunity to make about 4-5% cash-on-cash if I got it. The next day I learned a bid was already in and any other bids had to be in by 5pm. With my agent, we put together what I thought to be a fair price considering the condition and specific location of the condo (it was adjacent to a commercial business, making it less attractive for a buyer or renter).

The results came in the around noon the following day. I was outbid. The selling agent would not disclose the terms of the winning bid, but I should learn in a few weeks when they close. I bid below the asking price because there was a decent amount of risk to the transaction, and the bank had been aggressively lowering the price. My guess is a contractor bought it for a flip, someone that can refurbish the unit for cheaper than I could. Overall it was a good unit, but to win the property it would have required a larger bid, making the monthly rental profit too low. Learning the winning bid number will give me a better sense of how competitive the market is and how far off my bid was. Based on that, I’ll have a better shot at the next one, if another opens up. Or maybe the winning price will discourage me from looking for another.

Not a Great Month

Due to the real estate offer, I hoarded some extra cash in savings to prepare for winning the offer. That in addition to not seeing a lot of value in the stock market led me to not make any big purchases in my TD Ameritrade taxable account. I continued to DRIP into a few stocks, and started a Proctor & Gamble DRIP (PG). I also purchased Whole Foods Market (WFM), but that is in my wife’s traditional IRA and does not count toward my forward 12-month investment income portfolio (F12MII).

Two events occurred recently that caused my F12MII to decrease for the month. Last month you’ll recall I wrote a Seeking Alpha article about Bank of America’s (BAC) dividend growth potential. You can read it here. Well, BAC had to reverse their previously announced dividend increase due to accounting errors from 2009. This was a major annoyance, and probably weeded out some weaker hands holding the stock.

Everything I’ve read says that the error does not affect the bottom line. The reversal seems to be a matter of appeasing the regulators. This month, the blunder lowers my F12MII by $56.

The second bummer of the month came in the form of a tax bill. My rental property taxes went up by 5.5%, $150 a year, or $12.50 a month. What really angers me is that the tax rate went up way more than the value of my property. New properties and condos are popping up everywhere in my area, replacing dilapidated public housing. So the tax base is much larger. They are now collecting more taxes from much higher value properties, plus they raised the rates on everyone else. Typical local government money-grab. I haven’t decided if I’ll be raising the rent on my tenants. I’m leaning toward no because they are very reliable after almost two years of living there.

Here is a summary of investing activity for 04/15/14 – 05/15/2014:

Despite adding $1250.00 in new working capital to my investments, my forward 12-month investment income (F12MII) decreased to $4209.67, an average of $350.81 per month. This was a $97.76 and 2.27% decrease over last month and a $791.84 and a 23.2% increase year-over-year. I consider the $4209.67 in F12MII the most important number because it represents how much money I would receive though investment income if I stopped working today. My goal for 2014 is to reach $5000. I need to pick up the pace!

This month, I continued dripping into Clorox (CLX), Caterpillar (CAT) and CSX railroad at $100 each. I also continued a monthly drip of $50 into Aqua America (WTR). PG became my newest taxable investment with a $500 initial purchase.

As you may have read in my 2014 goals post, we have consolidated some retirement accounts. We rolled over my wife’s 401k into her traditional IRA with Fidelity in January. We have struggled to allocate the remaining funds because I want to put most of it into index ETFs and I’d prefer to buy them on bigger pullbacks. But I decided to change it up a bit when I saw Whole Foods Market (WFM) down 20% after earnings. I bought 100 shares for her IRA. I think it’s a great addition to her portfolio.

Last month, we opened a Roth IRA for my wife and fully funded it for 2013. That money is still idle. I’d like to put it in some more index ETFs, possibly some dividend growth index ETFs, total market ETFs, or international income ETFs. But I am being extremely patient to put the money to work (rare for me). Because even though I believe we are in a long-term uptrend in the market, I think there will be better opportunities than today to buy these ETFs. Still waiting.

Lastly, this past Friday May 16th, I made a purchase in my own Roth IRA. I bought 40 shares of AFLAC (AFL). I’ve been watching the price action on this stock for the past few months. It missed my limit orders by a few pennies twice. Finally, I bought 40 shares on Friday for $61.30. I wanted to make sure I got some by then because it goes ex-dividend on Monday the 19th. AFL is a well-known dividend champion/aristocrat with 31 straight years of dividend increases. Its currently yielding 2.3% and has a PE ratio of 9.5.

I intend to utilize my Roth IRA as an early retirement tool. AFL is the first individual stock in this account. It joins the Fidelity Mid-Cap Value Fund (FDVLX) that I’ve owned since I opened the account, and the Vanguard REIT Index ETF (VNQ).

That’s all I have for this month. Thanks for stopping by, reading, commenting and sharing on your social networks. As always, check out my Investment Income page to see my portfolio and latest numbers.


June 2014

June 15 2014 Inv Income ChartThe Investment Income page on my blog has been updated as of June 15th 2014. This page outlines my portfolio of investments and the income they generate on a yearly and average monthly basis. Also included is a chart with a historical look at my investment income since October 15th 2003. I track my investment income on the 15th of the month.

Last month saw dip in my investment income due to a property tax increase and the Bank of America dividend retraction. But this month my portfolio has recovered from the dip and then some.

Vacation

Saturday I returned from a much needed week-long vacation. It was a vacation from work in the sense that we went to a beach and stayed at a nice place with my extended family. But I spent most of the week chasing my two-year-old son around the beach and town. It was an exhausting week as I had little time to simply relax. Family helped at times, but with four kids under five years old constantly on the move, the adults in the house were all craving some alone time.

While I was gone, I published a post about my new Facebook page. If you are on Facebook, please click here to like my page. The financial blogging world seems to hang out mostly on Twitter, but for those that prefer Facebook, my posts can now be viewed in your feed there. I’ll only be posting my latest posts. If you find the content compelling, please consider sharing with your social network.

Bank Transfers this Month

One of my goals for 2014 is to simplify my finances and consolidate some accounts. The most significant of these consolidations is transferring all of my banking to Wells Fargo. I’ve been a loyal PNC bank customer for more than 10 years and I’ve had few complaints. The only real complaint, however, is the lack of a branch near my house. I have to drive 15-20 minutes to use the ATM which is near my old condo (now my rental property). PNC covered all fees for non-PNC ATM transactions for me, but I still wanted to have a bank closer to my house.

Wells Fargo has three branches within minutes of my house. On top of that, Wells Fargo holds both my home and investment property mortgages. By switching to them, I eliminate my PNC logon, and can do everything I need via one website including pay my bills. So far, the Wells Fargo experience has been OK. The person that opened my account wasn’t as knowledgeable as I hoped, and she was very slow (a problem since I had my son with me). The perks aren’t as good as the old PNC accounts because I was there for so long. But like most banks, it should do the job just fine and should have no fees if I follow the basic account rules. I had three accounts at PNC which I’ve consolidated into two at Wells Fargo.

Here is a summary of investing activity for 05/15/14 – 06/15/2014:

By adding $1890.00 in new working capital to my investments, my forward 12-month investment income (F12MII) increased to $4,337.49, an average of $361.46 per month. This was a $127.83 and 3.04% increase over last month and a $1,140.06 and a 35.7% increase year-over-year. I consider the $4,337.49 in F12MII the most important number because it represents how much money I would receive though investment income if I stopped working today. My goal for 2014 is to reach $5,000.

Due to transferring cash from PNC to Wells Fargo, my cash savings that collect interest was lower this month. This probably lowered my F12MII by about $30. This income should return by the next update.

DRIPs (Computershare/Broadridge)

After ten years of building a position, I transferred my Verizon shares out of Computershare and into my TD Ameritrade account. This move eliminated a reinvestment fee and adds fuel to my taxable stock purchasing account. I’m hoping to do this for other holdings in the future once I have reached certain levels for each holding.

I continued to DRIP into a few stocks including my Procter & Gamble (PG) DRIP that I started in April. This list also includes Catepiller (CAT), a company that had an excellent 16.7% dividend increase recently. The stock price has been on a tear. One downside of dripping is that you buy on a regular basis, sometimes at higher valuations, instead of at a determined chosen price. When I started purchasing the stock last August, it was trading around $83. Now it’s trading around $107, but I’m still adding funds. I’m not always good at picking bottoms or tops, so the DRIP is a solid method to dollar cost average. While I’m not thrilled paying $107 for the stock, I’ll continue building the position through the DRIP. Today’s price could be a bargain, who knows. Ten years from now I’m confident the stock and dividend will be higher. My average purchase price to date is $90.47 and I’m reinvesting the dividends to grow the position.

I’m continuing to DRIP $50 a month into Aqua America (WTR) and reinvesting the dividends. A cool thing about this DRIP program is that it offers a 5% discount on dividend reinvestment. So if the stock is trading at $25 on the day of the transaction, dividends are reinvested as though the price is $23.75… very cool. I plan to keep that DRIP going slowly for the next few years.

Clorox (CLX) is an investment holding I’ve been adding to for more than a year now. My position has slowly grown to about $2,000 through bi-monthly investments and dividend reinvestment. With a low beta of 0.47 and 3.30% yield, I’m very happy continuing the DRIP until I reach at least the $3,000 mark. At that point I’ll reevaluate. Last month CLX increased its dividend by 4.2%.

I initiated a position with CSX through the DRIP program back in October. As you may have read in my post about it, Computershare was administering the program when I started, but soon after it switched to Broadridge. The Broadridge website is fine, but it’s another logon I’d like to eliminate to help simplify things. I think I’ll end up transferring those shares to TD Ameritrade sooner than later as an additional account consolidation.

Taxable Account (TD Ameritrade)

I made one purchase in my taxable account this month, American Reality Capital Properties (ARCP). This commercial REIT is a popular investment choice for dividend investors because of its monthly dividend. The monthly dividend was one factor for my purchase, helping to smooth out my income over the months. The 8%+ yield is another. I bought 100 shares at $12.40. With the high yield and some short-term downside risk involved in this position, I’ve bought all the shares I want for the time being.

The company made a fairly controversial move recently to buy property associated with Red Lobster in a deal with Darden and Golden Gate Capital. They sold some other commercial properties to pay for it. The frequency of deals by the company has gotten some investors nervous and the stock price has been in decline. ARCP has very high quality tenants and strong occupancy rates which I believe will provide a good ROI over time. Anecdotally, I recently went to Red Lobster for the first time in about 30 years. My expectations were quite low, but I was pleasantly surprised by a nice dining experience.

If you didn’t hear (if you’re on Mars), Apple (AAPL) announced a 7:1 stock split this past month. That brings my total number of shares to 112. I previously referred to Apple as the elephant in my portfolio, and that holds true now as the largest holding in my portfolio and the first to top the $10,000 mark. I continue to be long, and believe we’ll see $100/share soon. The tech and financial worlds are anxiously awaiting the iPhone 6 and anything else up Apple’s sleeve. I’m still hoping for a simple Apple TV upgrade since I dropped my cable TV.

IRA Investments (Fidelity)

This month I made one new purchase in my Roth IRA account. The purchase used up all the remaining cash there, until I start up the funding again (on hold because of the bank checking account switchovers). I bought 45 shares of Hasbro (HAS) at a cost basis of $51.54. I’ve had my eye on HAS for many months now, ever since I decided to buy both Mattel (MAT) and HAS to have exposure to a large part of the toy industry. I believe the purchasing power of doting American grandparents is very powerful, and diversifying my toy investment into the two biggest players is better over the long-run than just buying one. Now is the time to buy toys as there is a traditional run-up into December. MAT in particular had a disappointing Christmas season last year so the comps should be easy to beat.

When I bought MAT, HAS was valued higher at the time so I decided to wait. On June 3rd, HAS dipped and I nibbled. Why did I buy in my Roth IRA? Because that was where the idle cash was sitting. Also, my strategy of buying index funds in my IRAs is not going well at the moment because I believe the indices will retract at some point this year. So far I’ve been very wrong about this. Seeing the dip in HAS, I made the buy because I want to own it for a very long time. I still plan to buy index and dividend paying ETFs in this account, but not until I see better value in the overall market.

Last month you read about the Whole Foods (WFM) purchase in my wife’s traditional IRA. So far this investment has panned out well. Of course one month is a tiny fraction of my investment horizon for this holding. The $5,500 in cash in her Spousal Roth IRA is still idle, so I need to get that cash to work soon.

That’s all I have for this month. Thanks for stopping by, reading, commenting and sharing on your social networks. As always, check out my Investment Income page to see my portfolio and latest numbers.


July 2014

July 15 2014 Inv Income Chart

Click to enlarge

The Investment Income page on my blog has been updated as of July 15th 2014. This page outlines my portfolio of taxable investments and the income they generate on a yearly and average monthly basis. Also included is a chart with a historical look at my investment income since October 15th 2003. I track my investment income on the 15th of the month. In this monthly post I also address some purchases I made in retirement accounts.

Banking and Rental Hunting

In keeping with my goal to simplify my finances and consolidate some accounts this year, I’m almost entirely done leaving PNC Bank for Wells Fargo. I’ve executed this move slowly over the past few months to make sure everything is transferred and running smoothly at Wells before closing the PNC account. I should be able to close out the final PNC account in a week or two. With automated investing, bill pay, and deposits etc, I have between 20-30 ACH transfers every month so there is a lot of changes to make. No hard feelings PNC, your branches just aren’t close enough.

More significantly this month, I’ve eyeballed two new rental property prospects. You may recall in late April I put in an offer to buy a one bedroom that needed a lot of work. I underbid by quite a lot due to the renovation costs, and it ended up selling at list price (probably to a flipper). Lesson learned, low-balling isn’t working in this market. I was discouraged until a few places came to market this past week.

The first is a two bedroom at the same complex as before. I hoped it wouldn’t need much work, but when I visited the place it was a little more rough than the pictures indicated. And it had two smelly tenants; a cat and a smoker. To get a decent rent amount, it needs a new kitchen, all new paint, new carpet, and probably an HVAC unit. The bathroom is suitable, but not for a higher quality tenant. The numbers aren’t quite there at list price either.

Then just a day after seeing the first condo, another one came on the market, this time a one bedroom in a prime location. Almost a perfect location really, an area I didn’t think I could afford. Indeed, this one could work, and yesterday I put in an offer. I won’t go into the details now, but if it goes through, it should cash flow better than my first rental, yet still cost a good bit less.

If I do get this condo, it may mean I’ll need to slow down my taxable stock purchases for a period to gather cash for the down payment and to maintain our emergency fund.

New No-Fee Loyal3 Portfolio

I wrote last week that I opened a new Loyal3 account to start a no-fee stock portfolio. The portfolio is taking shape slowly and I will be sharing my new holdings in the coming weeks. I’ll be putting money into a few stocks that are not cheap, but they are high growth stocks I want to own for the long run. So instead of hoping for and waiting for a dip in the next few years and guessing on a good entry price, I’m going to dollar cost average $50/month per stock instead, using my credit card to make the purchases. Dollar cost averaging has worked well for me in the past, so we’ll see how it goes at Loyal3.

Aside from that our household had a nasty virus hit three out of four of us, ruining two full weekends. Nothing like being stuck inside when the weather is perfect. At least we had the World Cup.

Here is a summary of investing activity for 06/16/14 – 07/15/2014:

By adding $2,714.00 in new working capital to my investments, my forward 12-month investment income (F12MII) increased to $4,473.21, an average of $372.77 per month. This was a $135.72 and 3.13% increase over last month and a $1,215.55 and a 37.3% increase year-over-year. I consider the $4,473.21 in F12MII the most important number because it represents an estimated amount of how much money I would receive though investment income if I stopped working today. My goal for 2014 is to reach $5,000.

No dividend increases this month. Disappointing, but expected. The coming month I am hoping to see a modest increase from Verizon, the shares of which I recently transferred from Computershare to TD Ameritrade.

In some uplifting dividend news, Bank of America resubmitted its dividend increase request to the Federal Reserve in May and should expect to have a response buy August 10th. The request is for a $.05 quarterly dividend. Hopefully in my next income update, I’ll finally be able to add in this dividend increase, poising Bank of America for strong dividend growth again.

Lending Club Investments

Steady as she goes with Lending Club this month. I continue to deposit and invest $200 per month in my account. I’m considering adding another $100 per month to Lending Club since the loan selection is very good right now and my account is earning more than 13%. I also mentioned last week I’m keeping an eye out for the Lending Club IPO that is expected before the end of the year. I want to invest in the company if it comes public, and hopefully Loyal3 and Lending Club will give us that opportunity.

DRIPs (Computershare/Broadridge)

I continued to DRIP into a few stocks including Procter & Gamble (PG) which I started in April. Starting next month, I’ll be buying $200/month in PG instead of just $100. I simply want to build that position faster and believe it is more fairly priced compared to the rest of the market.

My current DRIP list also includes Catepiller (CAT), The Clorox Company (CLX), CSX Railroad (CSX), and Aqua America (WTR). Nothing new to report on these investments. Last month I wrote in more detail about each DRIP, you can read that update here.

Taxable Account (TD Ameritrade)

This month I made one significant purchase in my TD Ameritrade account. General Mills (GIS). I’ve been watching this one for a while, especially since my main food holding, Heinz, was bought out by Berkshire Hathaway last year. General Mills has a wonderful history of earnings and dividend growth and I consider it a must own stock for the long run. At a $2,000 purchase amount, this is a 1/2 to 1/3 position in my portfolio, meaning, I’d like to buy at least another $2,000-$4,000 worth of this stock before I consider it a full position. I’ll consider averaging down if I get the opportunity in the next few months, or I may wait longer before buying more. It all depends on when I have the money and where the stock is trading.

IRA Investments (Fidelity)

This month I made just one new purchase in my wife’s traditional IRA account, and nothing in our other retirement accounts where some money still sits idle. We bought 50 shares of Procter & Gamble (PG) at $78.80. PG is one of the best dividend growth companies out there and I’m already dripping into the stock in my Computershare account. I thought this purchase was a good long-term buy in lieu of index funds at this time, which I believe will be at a better price at some point in the future. I may very well be wrong on that, but I’d rather have the money working instead of waiting for indexes to dip.

I’m considering doubling-down on Whole Foods (WFM) in my wife’s traditional IRA since there is some money left to invest. I still believe in the long-term story, even if it’s out of favor with everyone else now. Yesterday the stock broke below $37 for the first time, so I’ll be taking another look soon to average down.

That’s all I have for this month. Thanks for stopping by, reading, commenting and sharing on your social networks. As always, check out my Investment Income page to see my portfolio and latest numbers.


August 2014

August 15 2014 Inv Income Chart

The Investment Income page on my blog has been updated as of August 15th 2014. This page outlines my portfolio of taxable investments and the income they generate on a yearly and average monthly basis. Also included is a chart with a historical look at my investment income since October 15th 2003. I track my investment income on the 15th of the month.

Failed Real Estate Transaction

August was not a smooth month for my investments. Since my last update on July 15th, I found a new rental property, made an offer that was accepted, and moved forward with the purchase. However, the property transaction fell through five days before the closing date. I’ll be writing a full blog post on that process and what went wrong in the next week or so. All told I lost about $1000 preparing to buy the place, so that sucks. But there were valid reasons for the transaction to fall through that were out of my control. So I’m not terribly upset about walking away from the deal.

During the process I completely missed the big market drop around August 7th because I was hoarding and transferring cash for the down payment. I was so busy with inspections, paperwork and everything else with the property that I wasn’t prepared to act on the price drop in my taxable or retirement accounts.

Had I not been preparing to buy the rental, I likely would have made a few purchases during that downturn. Now stocks are back up and the timing of the dip did not work in my favor. Thanks to my DRIPs and Loyal3 account, I still made a number of small purchases this month adding to my forward 12-month investment income (F12MII). Bad timing is one of the reasons why I DRIP and make small regular investments, so I’m always in the game.

Bank of America

One income growth savior this month was the announcement of the dividend increase by Bank of America (BAC). You’ve likely read about this saga as they previously raised the dividend and announced a share buyback in the Spring, only to retract those capital plans due to a newly discovered accounting error. While the error didn’t affect the bottom line, the bank had to resubmit their capital plan to the Federal Reserve for approval. That approval finally came through on August 6th.

I’ve been a shareholder of BAC since August of 2004. In fact, ten years to the day this past Sunday. Let me tell you, this stock has been quite a ride. That story deserves a post of it’s own. I still believe that Bank of America is at the beginning of a long stretch of dividend increases. Click here to read more about my take on Bank of America’s future dividend growth potential.

Here is a summary of investing activity for 07/16/14 through 08/15/14:

By adding $950 in new working capital to my investment portfolios, my forward 12-month investment income (F12MII) increased to $4,612.27, an average of $384.36 per month. This was a $139.06 and 3.11% increase over last month and a $1,302.12 and 39.3% increase year-over-year. I consider the $4,612.27 in F12MII the most important number because it represents an estimated amount of how much money I would receive via investment income if I stopped working today… subject of course to unforeseen obstacles. My goal for 2014 is to reach $5,000 in F12MII.

$59 dollars of the F12MII increase can be attributed to the Bank of America dividend announcement. Sweet. Aqua America (WTR) also came through with a nice 8.2% increase. For those of you not familiar with WTR, it’s a water utility with 23 straight years of dividend increases. Their Computershare DRIP is also pretty cool because you can reinvest your dividends received at a 5% price discount every quarter. Read more about that investment here. Just two more years and this stock will be a Dividend Aristocrat.

Despite the big mess this rental transaction made of my finances this month, I managed to increase my cash position because of a commission check and an extra paycheck. So headed into the Fall I’m looking to put some money to work in stocks. Interest on cash helped my F12MII along by another $30. Putting some of that low interest earning cash to work in the stock market will certainly help my overall yield.

Lending Club Investments

Steady as she goes with Lending Club this month. I continue to deposit and invest $200 per month in my account. I’m considering adding another $100 per month to Lending Club since the loan selection is very good right now and my account is earning more than 13%. I also mentioned last month I’m keeping an eye out for the Lending Club IPO that is expected before the end of the year. I want to invest in the company if it comes public, and hopefully Loyal3 and Lending Club will give us that opportunity. Expect to see a new quarterly Lending Club review post in the coming weeks.

DRIPs (Computershare/Broadridge)

I continued to DRIP into a few stocks including Procter & Gamble (PG) which I started in April. I briefly cut back on PG and Clorox (CLX) last month to help build up cash for the rental. Next month I’ll be back to buying $200/month for PG instead of $150, and $100 for CLX.

My current DRIP list also includes Catepiller (CAT), CSX Railroad (CSX), and Aqua America (WTR). Nothing new to report on these investments.

Taxable Account (TD Ameritrade)

Zero trades this month in my taxable account, but I received a good number of dividends. With lots of cash on hand, I’m looking to buy again. Of course, I missed that opportunity a few weeks ago, so we’ll see what develops in the coming months. Now that Kinder Morgan (KMI) has simplified its structure, I’m interested in that company. The complication of the whole thing held me back previously. I missed that boat in the low $30’s. But I love their work backlog and wide economic moat, so it’s certainly on my radar. Also keeping an eye on YUM, WFM, JNJ, ACN, OMI, MO, PH, T, V, WAG, and AOS.

IRA Investments (Fidelity)

No trades this month in retirement accounts. Between my wife’s accounts and mine, there’s about $12,000 still to allocate. I’d prefer to put this money in index funds and ETFs, but I may buy more stocks instead.

A Note About Loyal3

As you know, I’ve joined and been promoting Loyal3 as a no-fee place to buy stocks through small purchases and their IPO offerings. My promotion is an affiliate relationship, meaning if you find their site through mine, I may be compensated. Thank you to those who opened an account through my links last month. Those of us with accounts can attest to how awesome it is to be able to invest fee-free under this business model they’ve created, not to mention being able to buy with a credit card and earn cash back rewards (Sorry Canadians and other international readers who can’t join yet!). This is a perfect place for beginners to start investing as well.

We all have read that fees are eating away at everyone’s retirement savings. Those of us who measure our investment income every month take special note because we can quantify how fees delay our financial independence. Loyal3 is fighting against this and gaining momentum, particularly in the financial blogosphere and through their IPO offerings.

Perhaps if enough of us join, and we tell our friends, and discuss and promote the site through our blogs, more brokers will take note and reduce or eliminate fees. Or, maybe, companies will consider lowering or eliminating fees in their DSPPs and DRIPs at transfer agents like Computershare.

When more investors join Loyal3, more companies will become available to invest in, and the more likely they can offer even better products and services like IRAs and perhaps more timely purchases in the future.

The popularity of Vanguard and their low fees has had a huge impact on the financial services industry. Low and no fee investing is gaining steam from the grass roots up. WE ARE THE GRASS ROOTS… individual investors simply aiming to preserve capital by utilizing tax advantaged accounts and paying lower fees to increase our income.

Did you catch my watch list above? What do you think?  Stay tuned for an update on my FAILED real estate transaction!


September 2014

Sept 15 2014 Inv Income ChartThe Investment Income/Portfolio page on my blog has been updated as of September 15th 2014. This page outlines my portfolio of taxable investments and the income they generate on a yearly and average monthly basis. Also included is a chart with a historical look at my investment income since October 15th 2003. I track my investment income on the 15th of the month.

One Year Blogiversary

Well, it’s been quite a year here at RBD. On September 3rd 2013, I wrote my first blog post, About This Blog. Just six days later, we welcomed a new baby girl into this world. She came a few weeks earlier than expected. I didn’t think I’d last a full year blogging, but here I am still writing once a week, now on my 72nd blog post. For more about why I started this blog, check out this recent post.

The blog started on a basic WordPress.com framework and theme before I moved it to a more powerful WordPress.org site in January of this year. That upgrade provided a new platform for the blog to grow and flourish and I rededicated myself to building it into something useful for readers. This is an ongoing project, so I’m always making subtle changes to this site, hopefully making it more enjoyable to read. Thanks to my readers and fellow bloggers for welcoming me into this space on the internet.

Lots of Activity This Month

After last month’s rental property debacle, I hit the pause button on my rental ambitions and started accelerating my stock purchases. I’ve added a couple of new stocks to my no-fee account, and opened a new position with Parker Hannifin (PH), a dividend growth stock on a 58-year streak of increasing dividends. But with the stock market recently at new highs, I’m still leaving a healthy opportunity/cash fund in case we have a large sell-off or some other investment arises.

With all the idle cash resulting from backing out of the real estate deal, I made a simple move to increase my forward 12-month investment income (F12MII) by $45. The profit and maintenance I have set aside for my condo rental has been sitting in a checking account since I started renting it three years ago. Now that the cash level has grown to more than $8,000, I decided to open a second account next to my regular Capital One 360 online emergency/opportunity savings. I created a direct link from my real estate checking account, and moved over $6,000. That money is slated to cover any unforeseen expenses that might come up with the rental, or to make some upgrades to the unit before I sell it in the future. Instead of sitting in a feeble interest checking account, I’m now getting .75% on that cash. If I end up needing it, it’s a simple transfer away. Even at these record low interest rates, moving money like that is worth it, especially when chasing a goal.

Here is a summary of investing activity for 08/16/14 through 09/15/14:

By adding $2,630.42 in new working capital to my investment portfolios, my forward 12-month investment income (F12MII) increased to $4,762.49, an average of $396.87 per month. This was a $150.22 and 3.26% increase over last month and a $1,320.22 and 38.4% increase year-over-year. I consider the $4,762.49 in F12MII the most important number because it represents an estimated amount of how much money I would receive via investment income if I stopped working today… subject of course to unforeseen obstacles. My goal for 2014 is to reach $5,000 in F12MII.

Taxable Account (TD Ameritrade)

The biggest purchase overall this month was Parker Hannifin (PH). I bought 15 shares at $114.70 adding $28.80 to my F12MII. You can read about that purchase here, and it was republished with a few updates on Seeking Alpha. This is a relatively unknown dividend growth stock despite a dividend increase streak of 58 years.

DRIPs (Computershare/Broadridge)

After cutting back on DRIPs a bit last month because of the condo purchase gone bad, I’ve restarted and continued the DRIPs I’ve been funding for a while now. These include Catepillar (CAT), Clorox (CLX), CSXProcter & Gamble (PG), and Aqua America (WTR).

Moreover, I’ve restarted a DRIP program that I’ve participated in for a decade now: Bank of America (BAC). I believe BAC is a good company despite a tumultuous past 10 years. I’ve begun a regular investment of $50 per month to add to the 371 shares I already own. Dividends will continue to be reinvested. BAC finally increased their dividend just last month, so the future income is somewhat predictable again. I wrote a blog post about the future of BAC’s dividend growth prospects a few months ago. I think the stock is at the beginning of a long and prosperous dividend growth streak. Click here to check out that article.

Loyal3

As I’ve written about a few times already, I started a no-fee dollar cost average account with Loyal3. This is a great platform to buy stocks, especially for new investors. In addition to the three stocks I’ve been buying for the past few months, I’ve added two more. VF Corp (VFC), and YUM! Brands (YUM). VFC is a long-time dividend payer and grower, though not especially cheap at the moment. YUM has decreased in price recently due to some food quality concerns in China. Instead of buying shares in big purchases, I’ve gone with the dollar cost average strategy. If these stocks become cheaper in the future, I may add more funds. But currently I’m adding $50 per month, funded via my credit card which gives me 1.5% cash back. That makes $250 in regular Loyal3 purchases per month.

IRA Investments (Fidelity)

I don’t discuss the specifics of my retirement accounts on this site because I primarily focus on income that that will be available prior to age 59 1/2. Most of my retirement money is in mutual funds and ETFs. However, this past year I’ve purchased a few stocks in our IRAs, most notably Whole Foods (WFM) and Alfac (AFL).

I made another purchase that I didn’t mention in earlier posts because it was in my wife’s retirement and not a typical purchase for us. We generally don’t buy growth stocks that pay no dividend. However, when Annie’s (BNNY) stock tumbled back in early June, I saw an opportunity to put some money to work. Annie’s is a brand my family enjoys, particularly for its “hops” as my son calls them… little bunny shaped cookies and crackers. This is a brand that keeps things more natural and organic than others, something my wife talks a lot about. We buy them at Costco. They also make a nice array of mac n’ cheese’s.

Anyways, I picked up 100 shares at $31.55. To my delight and surprise, another stock I own, General Mills (GIS), bought Annie’s last week for $46 per share. NICE! I promptly sold those shares for a pretty $1,400 profit and 46% gain. That’s a 172% annualized gain, and it won’t be taxed for at least 20 years. Considering I’m not a trader by any means, and intended to hold BNNY for many years, this was still welcome news. We certainly had a lucky rabbit’s foot in our corner on that one. I’m happy to see this great brand was picked up by GIS.

Lending Club Investments

Nothing new of late with my Lending Club investments. I wrote a detailed update last week and I’m happy to say my delinquent borrower came back to current. But a new borrower missed a payment, so we’ll see how that turns out. My current income from Lending Club is $49 per month, all of which gets reinvested.

I also mentioned recently that I’m keeping an eye out for the Lending Club IPO that is expected before the end of the year. I want to invest in the company when it comes public, at the same price as Wall Street. Hopefully Lending Club and Loyal3 will give us that opportunity in the coming months.

Conclusion

That about does it for this month’s update. Don’t forget to like my site on Facebook and follow me on Twitter. As always, thanks for reading and sharing my articles on your social networks. Lots more money to put to work before reaching my 2014 goals. Hopefully this coming month will give us more opportunities to buy!


October 2014

Oct 15 2014 Inv Income ChartThe Investment Income/Portfolio page on my blog has been updated as of October 15th, 2014. This page outlines my portfolio of taxable investments and the income they generate on a yearly and average monthly basis. Also included is a chart with a historical look at my investment income since October 15th, 2003. I track my investment income on the 15th of the month.

Busy Month Buying Stocks

On September 15th, the S&P 500 index stood at 1,984.13. 30 days later, the index closed at 1,862.49, down 6.16%. The decrease provided the best buying opportunity for stocks and ETFs since February. After backing out of a real estate deal in August, I had plenty of idle cash waiting to become more productive. Dry powder, if you will. This month was finally the time to average down on some investments, open a few new positions, and allocate retirement funds that had not been fully invested since an early year 401k transfer.

I made six large purchases this month. Two were brand new stocks for my portfolio, while the others averaged down my cost on existing holdings. My DRIPs and no-fee Loyal3 account continue to grow strong with periodic investments. All included, I transacted with 17 stocks this month.

The total number of holdings in my portfolio is now 27, beyond the goal of 25 I set for 2014. I’m also fast approaching my goal of $5000 in investment income. It was a slow month for dividends, which is fine because I know the next two months will likely be the largest ever for my portfolio.

One downside of my income portfolio this month was my P2P lending account at Lending Club. While it was a nice streak, three of my notes are now late. This has significantly lowered my Net Annualized Return (NAR), thus lowering my anticipated income from P2P lending by about $17 for the coming 12-months.

Before the end of the year, Wall Street is expecting Lending Club to have its IPO on the NYSE under the stock symbol “LC”. I recently speculated the IPO will be available to investors through the Loyal3 platform. New insight over at Lend Academy strengthens my thesis for current Lending Club investors.

Here is a summary of investment activity for 09/16/14 – 10/15/14:

By adding $10,014.96 in new working capital to my investment portfolios, my forward 12-month investment income (F12MII) increased to $4,920.99, an average of $410.08 per month. This was a $158.49 and 3.33% increase over last month and a $1,420.82 and 40.6% increase year-over-year. I consider the $4,920.99 in F12MII the most important number because it represents an estimated amount of how much money I would receive via investment income if I stopped working today… subject of course to unforeseen obstacles. My goal for 2014 is to reach $5,000 in F12MII. Almost there!

Taxable Account (TD Ameritrade)

I took full advantage of the wild stock market swings over the past month. Buying on the way down, I payed more than I’d like in hindsight for some positions. Particularly, Mattel (MAT). I wanted to even out my holdings at 100 shares, which I did. But I paid $34.12 per share when a few weeks later the price dipped under $30. At this stage, I’m considering doubling-down on MAT, and either selling the first 100 shares for a tax loss, or simply holding on to 200 shares and monitoring the ability to pay the dividend. Management seems to be confident going into the holiday season.

This month gave me to opportunity to fill my entire Parker Hannifin (PH) position. I bought two more 15 share lots at $109.25 per share, and $100.05 per share. Added to my original PH position, I now hold 45 shares at a cost basis of $108.

General Mills (GIS) is another stock that had a modest pullback in October. I bought another 30 shares at $49.05, below my initial purchase price of $51.60. GIS is currently yielding 3.30%, below its 5-year average dividend yield of 2.90%

I added two new positions this month, Accenture (ACN) and United Technologies (UTX). I was happy buying into ACN before the downturn at $80 per share. However, last Wednesday the price dipped all the way to $74! I saw a bargain there, but hesitated as I was focused on other stocks and ETFs. Now back above $76, I’m still considering adding to the position soon. I wrote about UTX in the PH article and it’s one of the stocks I think my 2 1/2 year-old son would like due to its elevator division. On the recent downturn I nibbled at $101. UTX has a 20 year streak of increasing dividends.

DRIPs (Computershare/Broadridge)

I’ve continued to actively DRIP into six stocks. They are Bank of America (BAC), Catepillar (CAT), Clorox (CLX), CSX, Procter & Gamble (PG), and Aqua America (WTR).

While I like the ease and consistency of DRIPs, they do require a lot of tracking. Earlier this year, for the sake of simplification, I transferred my Verizon (VZ) shares out of Computershare and into my TD Ameritrade account. After the December round of dividends coming up, I’m planning to move a few more holdings. This move will help decrease the number of 1099-DIVs I receive at the end of next year, simplifying my taxes, consolidating, and allowing me to allocate the dividends to other holdings.

Loyal3

Now that I’m investing with Loyal3, I get the same dollar cost averaging as DRIPs, but without any fees, and less tracking. Loyal3, however, only automatically reinvests dividends if the amount received is greater than $10 and the company participates in dividend reinvestment. DRIPs usually allow reinvestment for very small amounts. With the number of investable stocks increasing and the platform growing, I’m less inclined to start new DRIPs through traditional transfer agents.

I am now investing in five stocks through Loyal3. They are Berkshire Hathaway (BRK-B), Disney (DIS), Hasbro (HAS), VF Corp (VFC), and YUM! Brands (YUM). Each month I automatically add $50 to each company. But I also threw some ad hoc money at these stocks last month due to the low prices.

IRA Investments (Fidelity)

I’ve written a number of times about a chunk of cash sitting idle in my spouse’s IRA. This cash was the result of transferring her 401k from a previous employer into her traditional IRA. This year I also created a Roth IRA for my wife. October provided an excellent opportunity to allocate some of this cash into index ETFs.  I added to three ETF’s that were already in my wife’s accounts; the Vanguard Total Stock Market Index (VIT), the SPDR S&P 500 index ETF (SPY), and the iShares Russell 200o ETF (IWM). I was a little early with IWM and SPY and didn’t quite catch the bottom of the market for those two. The VTI purchase on the other hand, I timed well last Wednesday, one of the best buying days of the year.

The only idle cash left in her retirement accounts is $3,000. I kept that amount as dry powder last Wednesday in case the market fell even further. At this point, it has not, so I’ll need to find a way allocate it another day. We’re also due to add $5,500 to her Roth IRA for 2014.

BlogFeed

Lastly, I want to direct you to a new page I created called BlogFeed. I’ve been wanting to see articles from my favorite blogs as they are posted in a simple feed, inspired by the common widget in many Blogger website sidebars. Twitter can be overwhelming and posts disappear too quickly. Tools like Feedly would surely suffice, but I’m not crazy about the user interface. So I came across a way to automatically put the new articles from writers in my Blogroll onto a webpage soon after they are posted. You can check it out here or on my main menu. Up to three posts per site will show for up to seven days. The feed is updated every 30 minutes. If you looking for great content from other like-minded bloggers and investors, check it out.

Thanks for reading, commenting and sharing.

Disclosure: Long all stocks and ETFs mentioned in this article except PLAY.


November 2014

Nov 15th 2014 Inv IncomeThe Investment Income/Portfolio page on my blog has been updated as of November 15th, 2014. This page outlines my portfolio of taxable investments and the income they generate on a yearly and average monthly basis. Also included is a chart with a historical look at my investment income since October 15th, 2003. I track my investment income on the 15th of the month.

After last month’s whopping $10,000+ in new purchases, my investing has slowed down significantly as the market V-bounced and is hitting new highs again.

Large purchases were scarce this month, but I did sell shares of American Realty Capital (ARCP) after disappointing accounting news. This sale lowered my forward 12-month investment income (F12MII) by $100, hurting the chances of reaching my income goal for 2014.

Today, I’m not as eager to make new big purchases, so I’m continuing to dollar cost average and DRIP into existing holdings. Hopefully in the next 40 days, I’ll be able to put some chunks of capital to work and surpass my goal of $5,000 in F12MII. There’s value out there, now I need to find it and pull the trigger by the end of the year.

A Few Notes

If you haven’t seen it in the menu yet, I created a new page called Blogfeed. This is a place to find newly published articles from like-minded bloggers. There’s about 50 blogs that feed into the page, with new posts updated every 30 minutes. Please check it out and come back often. Also, if you think your blog content fits in, drop me a note and I’ll consider adding yours to the feed.
This will be my last investment income update until January. Starting January 1st, I’ll be tracking dividends and updating my spreadsheets on the 1st of the month instead of the 15th. Since 2003, I’ve tracked my investment income and net worth on the 15th of the month because it’s an easier time of the month to track net worth. But with dividends, it makes more sense to track by calendar month. This change will standardize monthly comparisons and split the amount of work I need to do as I’ll continue net worth tracking on the 15th. My next update after January 1st will cover November 16th through December 31st, and I will update monthly on the 1st going forward.

Onto the numbers!

Here is a summary of investment activity for 10/16/14 – 11/15/14:

Accounting for the ARCP sale, and adding $1,100 in new working capital to my investment portfolios, my F12MII decreased to $4,853.36, an average of $404.45 per month. This was a (-$67.63) and (-1.37%) decrease over last month and a $1,172.20 and 31.8% increase year-over-year. I consider the $4,853.36 in F12MII the most important number because it represents an estimated amount of how much money I would receive via investment income if I stopped working today… subject of course to unforeseen obstacles.

Taxable Account (TD Ameritrade)

Aside from the ARCP sale, I made only one other move in my TD Ameritrade account. Mattel (MAT) has been a dog of a stock this year. I considered adding more during the last big dip, but decided to buy other stocks like Parker Hannifin (PH) and United Technologies (UTX) instead. I also considered selling my 100 shares for the tax loss, then buying them back 30 days later. However, as the shares started to recover after the Ebola dip, and since we’re headed into the Christmas season, I didn’t want to sell my toy company shares.I still like the stock and wouldn’t mind owning more. So I decided to hold my 100 shares and wait it out. In addition, I sold one January 2015 put option contract with a strike price of $31 at $1.36. The premium I collected was $125.22 (after the fee). At expiration, if the stock trades above $31, I’ll keep the premium and the option will expire. If the stock ends up below $31, I’ll have to buy 100 more shares at $31. In that event, my cost basis on those shares will be around $30 with fees included.

DRIPs (Computershare/Broadridge)

Nothing new this month for DRIPs. I’ve continued to actively DRIP into six stocks. They are Bank of America (BAC), Catepillar (CAT), Clorox (CLX), CSXProcter & Gamble (PG), and Aqua America (WTR). After my last dividends are received for the year, I’m planning to transfer some of my DRIPs to TD Ameritrade as I did with Verizon (VZ). Click here to read about transferring shares from Computershare to a regular brokerage account.

Since opening a Loyal3 account, I haven’t been interested in any new DRIPs. With Loyal3, it’s easier to dollar cost average than in normal DRIPS, and there’s never any fees. However, Loyal3 could be more forthright about dividend reinvestment on their site. None of the dividends I’ve received so far have been reinvested, although one reader of this blog left a comment mentioning that they do reinvest dividends if the amount to invest is $10 or greater and the company participates in reinvestment. So building my holdings to that $10 quarterly dividend level is something I look forward to as I’d like to have the option to reinvest.

Loyal3

Note: As of May 22nd, 2017, Loyal3 is no longer in business having sold its customer list to FolioFirst. I’ve transferred all of my shares to TD Ameritrade. Read more about the Death of Loyal3 here

After last months Dave & Buster’s IPO, I’ve continued to add money to five stocks at Loyal3. They are Berkshire Hathaway (BRK-B), Disney (DIS), Hasbro (HAS), VF Corp (VFC), and YUM! Brands (YUM). Each month I automatically add $50 to each company. But I also throw some ad hoc money at these stocks when prices are low. Before the new year I’ll be adding a few more Loyal3 stocks to the portfolio. Since they charge no fees and dollar cost averaging is easy, I tend to buy great companies on this platform that aren’t necessarily cheap at the moment. These are companies I want to own for many years, but I wouldn’t normally buy based on valuation. Stay tuned.

Loyal3 decided to discontinue its acceptance of credit cards this month. Bummer. It was great while it lasted, but we all knew it wasn’t sustainable. They blamed credit card reward abusers, but on top of that, I’m sure the transaction costs were simply too high to keep it up. In my view this is a positive event, one that shows a maturing business model.

IRA Investments (Fidelity)

Last month, I was finally able to buy some index ETFs on the cheap in my wife’s retirement accounts. This money was sitting idle since early in the year due to a 401k rollover. Before the year is out, I’ll be adding another $5,500 to my wife’s spousal Roth IRA and buying more index ETFs. Since this is long-term money, I feel more comfortable buying the ETFs and letting the money work for itself, rather than maintaining another dividend growth portfolio. We plan to use our Roth IRAs as early retirement tools.

401K (A crappy platform not worth mentioning)

Finally, I don’t mention my 401k plan on this blog too often as it’s not a very interesting topic. It is, however, the largest of all my financial accounts. Unfortunately, the only investment options available are American Funds, all of which have expense ratios greater than 1%. My company matches at 4%, so I can’t complain too much about fees, but I wish I had better investment options. After all of the capital gains and dividends are distributed in December, I’ll be doing a complete reallocation of this account to cut back the number of funds I’m in, while ditching higher fee funds and under-performers. This reorganization is many years overdue.

Are you close to your year end goals? We’re in the home stretch!

Thanks to everyone for reading, commenting, and sharing my posts on your social networks.


 December 2014
December 2014 Inv Income Chart

The Investment Income/Portfolio page on my blog has been updated as of Dec 2014. This page outlines my portfolio of taxable investments and the income they generate on a yearly and average monthly basis. Also included is a chart with a historical look at my investment income since October 2003.

It’s been a month and a half since my last income update. I am now tracking my income at the end of each month instead of on the 15th.

Last episode, the sale of American Realty Capital (ARCP) in late October put at risk my goal of reaching $5,000 of forward 12-month investment income (F12MII) by the end of 2014. To reach my goal, I needed to get aggressive in the last 45 days of the the year without sacrificing investment quality. In the previous update, I was $147 short of my final 2014 goal.

Big Yield Buys to Meet My Goal

As of November 15th, my taxable stock portfolio held 26 positions. On December 31st, that number was 33. Big increase, right? Sort of. Three stocks were new holdings in my no-fee portfolio with Loyal3, but they are only $50-$100 initial positions. Another addition was Lending Club (LC) which I picked up in the recent IPO. That leaves three big lot purchases in the past 45 days.

IBM

The first of these three buys was IBM. No big revelation here as the stock has been down. On November 18th I bought 10 shares at $162.33, yielding about 2.71%. While I prefer Accenture (ACN) in the space due to its stronger balance sheet and better industry reputation, Big Blue cannot be ignored as a long-term investment. I failed to pick up more when it flirted with $150 on December 16th, but I’ll be on the lookout for another opportunity in 2015.

Helmerich & Payne (HP)

Next up, I bought shares of oil drilling rig maker Helmerich & Payne (HP) on three separate occasions, November 24th, 28th, and December 10th. With energy stocks down, I saw this as a good opportunity to increase my exposure to the sector. Chevron (CVX) is one of my biggest holdings, so I wanted an alternative to another large oil conglomerate. Enter HP. This company is a Dividend Champion, having increased its dividend each of the past 42 years.

Equally impressive in my view, is the company’s stellar balance sheet, with just 80 million in outstanding debt paired with $361 million in cash and cash equivalents. I like companies with low debt amounts because the risk of going out of business is very low. With a 38% dividend payout ratio, they should easily be able to continue their dividend increase streak through this oil price downturn.

I bought my 65 shares at an average price of $69, yielding around 4%. Just what I needed to help reach my $5,000 income goal.

AT&T

Finally, to help ensure I reached my goal, I bought into high yielding AT&T (T) on December 4th and 9th this past month, at an average price of $33.15, yielding 5.55%. After a 2.2% dividend increase last month, my 90 shares now pay me $169.20 per year.

Verizon is already a large holding in my portfolio, so I didn’t want to go overboard on AT&T. But I’ve looked at these companies from a long-term view, and do not see a scenario where data delivery companies get any less important during this this smart phone revolution.

Lots of activity this month, so onto the numbers.

Here is a summary of investment activity for Dec 2014:

By adding $10,384.88 in new working capital to my investment portfolios, my F12MII increased to $5122.74, an average of $426.89 per month. This was a $269.38 and 5.55% increase over the 15th of November, and a $1,300.19 and 34.0% increase year-over-year. I consider the $5,122.74 in F12MII the most important number because it represents an estimated amount of how much money I would receive via investment income if I stopped working today… subject of course to unforeseen obstacles. 

Taxable Account (TD Ameritrade)

Aside from buying IBM, HP, and T this past month, I sold an April dated T put option with a $33 strike price to generate some option income. If the stock remains above $33, the put will expire and I’ll keep the $234.22 premium. If it ends up below $33 in April, I’ll have to buy 100 shares of the stock at a $33. Accounting for the premium, the cost basis will be around $30.66. I’m comfortable holding this put until expiration because I don’t mind owning another 100 shares of T yielding north of 5%.

DRIPs (Computershare/Broadridge)

This January I’m planning to move five of my DRIPs out of Computershare and Broadridge and into my TD Ameritrade account. As my overall portfolio grows, I’m finding it harder to track my cost basis for these holdings. Also, I’m utilizing Loyal3 to dollar cost average which has no fees and will make tax time easier next year. This was the last month adding to the following DRIPs: Bank of America (BAC), Catepillar (CAT), Clorox (CLX), and CSX, and I’ll also transfer Emerson Electric (EMR). I’m planning to keep Procter & Gamble (PG), Aqua America (WTR), Cheveron (CVX), and Coca-Cola (KO) for the time being. Expect to see a full blog post on this move where I’ll outline the details.

Loyal3

My Loyal3 account now has eight stocks. I’m adding $50 to each every month. Dollar cost averaging over time has been a good strategy for me, and it’s a great way to always be active in the market. New holdings include Kraft Foods (KRFT), Nike (NKE), Unilever (UL).

I’ve been endorsing Loyal3 as a great brokerage for new and intermediate investors because the company charges no fees and the platform is simple and easy to use. Additionally, investors can choose from 60+ stocks and invest with as little as $10. The upside is that buying and selling stocks is free. The downside is you don’t buy and sell at chosen prices. Purchases are done in batch blocks so you can’t choose the price, you only choose the day of execution. But for someone just getting started, or looking to build a long-term no-fee portfolio through dollar cost averaging, daily fluctuations don’t matter.

Note: As of May 22nd, 2017, Loyal3 is no longer in business having sold its customer list to FolioFirst. I’ve transferred all of my shares to TD Ameritrade. Read more about the Death of Loyal3 here

IRA Investments (Fidelity)

Last month I completed transferring my wife’s Thrift Savings Plan (TSP) government retirement money into her traditional IRA at Fidelity. She hasn’t worked for the government in more than ten years, but we never moved the money. Now that the transfer is complete, I’ll need to allocate about $7,000 into some new index ETFs early in 2015.

Also for my wife, we’ll be depositing another $5,500 into her Roth IRA for 2014. I haven’t yet managed to fund that account for 2014, but we have until April 15th to do so and still get the tax benefit. We’ll be adding $5,500 to both Roth IRA accounts for 2015, hopefully in the first half of the year.

Real Estate

Reflected in the Other Streams section the income page, my rental property income took a bit of a hit this month. The HOA/condo fees on the unit increased by about $15 dollars per month, lowering my F12MII by $180 annually, making my $5,000 goal even harder to achieve. My profit margin has been shrinking ever since refinancing two years ago, first by higher taxes, now due to the higher fees. I have some options here such as raising the rent, but I’m developing a new long-term strategy for real estate investing that I’ll be writing about more in the coming months.

BlogFeed

Lastly, I want to direct you to a page I created called BlogFeed. Twitter can be overwhelming and posts disappear too quickly. Tools like Feedly surely suffice, but I’m not crazy about the user interface. So I came across a way to automatically put the new articles from writers in my Blogroll onto a webpage soon after they are posted. Up to three posts per site will show for up to seven days. The feed is updated every 30 minutes. If you looking for great content from other like-minded bloggers and investors, check it out.

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