New Purchase: Verizon Communications Inc.

This is a bit of a belated post. A couple weeks ago, I purchased 22 shares of VZ at $46.39

At the time, the PE ratio was 18.4 and the dividend yield was 4.8%. Since then, the price has come down, and it is currently yielding over 5%, so maybe you can capitalize on my lack of patience. This investment adds $49.28 to my yearly dividend income, and $4.10 to my average monthly income.

Putting me at $414.44/$500.00 for the annual passive income goal and $34.54/$100.00 for the monthly passive income goal. These numbers are probably a little off due to dividend reinvestment, but I’m getting really close to my $500 per year goal.

I’ve written before about why I like Verizon. You can check it out here.

Dividend Income – October 2015

I think it’s important to celebrate wins on the path to your ultimate goal, no matter how small. Sharing my dividend income results with you readers gives you some insight to what is possible as you begin your journey.

My ultimate goal is to be able to live off of the passive dividend income from my investments, so I can just stay at home and play video games. Here is the money I made in October 2015 without lifting a finger.

KO – $8.39

Total: $8.39

Compared to the dividends I earned in July ($8.32), I made $0.07 more due to compounding, KO should be raising their dividend payment in the first quarter of next year.

Walden

I’ve started reading Walden by Henry David Thoreau. I had read it in high school, but recently thought I might appreciate many of the details more as a working adult. I was right. I’m only 20 pages in and so much has resonated with me already.

For those who are unaware, Thoreau wrote Walden about a 2 year period when he lived alone in a cabin near Walden Pond in Concord, Massachusetts. It includes several reflections on what makes life worth living, and some of the self-destructive and ridiculous aspects of society. Above all, the messages on frugality and separating your life and self respect from material goods are especially meaningful to me.

It’s especially interesting how the “keeping up with the Joneses” theme and the associated counter-culture have been around since the mid-1800’s when the book was written. Lines like the following illustrate Thoreau’s opinion on the matter as well as the insignificance of material goods:

“The life which men praise and regard as successful is but one kind. Why should we exaggerate any one kind at the expense of the others?”

“When the soldier is hit by a cannonball, rags are as becoming as purple.”

What resonated with me the most were the parts where he talked about how life is more than the rat race. I feel like this line, in particular, embodies the spirit of the frugal living dividend investor seeking freedom from the corporate world:

“instead of studying how to make it worth men’s while to buy my baskets, I studied rather how to avoid the necessity of selling them.”

There are multiple reflections on what a man truly “needs,” or the necessities of life. The obvious necessities are food and shelter, but having either in excess is a sign that you may be lacking in other less mentioned requirements for a happy life like companionship or finding meaningful things to do.

I’d highly recommend Walden any like minded people.

New Purchase: Johnson and Johnson

I’ve owned Johnson and Johnson (JNJ) in my personal account for some time. Recently, there has been a nice price dip in the company and I’ve been able to pick it up for my Joint account that I disclose to all of you.

Back in September, I bought 10 shares of Johnson and Johnson (JNJ). I regret not being able to post about it at the time, but I want to rectify that by sharing it now. I bought those 10 shares at $91.28, which is a better deal than you can get today, but I think it’s still a good buy today as well if you’re looking.

Today, JNJ’s P/E ratio is 16.54, and the dividend yield is 3.19%. This investment adds $30.00 to my yearly dividend income, and $2.50 to my average monthly income. JNJ is also a Dividend King and has raised their dividend every year for 53 years! That’s the kind of history I can get behind.

Putting me at $335.22/$500.00 for the annual passive income goal and $27.93/$100.00 for the monthly passive income goal.

This purchase doesn’t bring me to any major milestone, but it is the first stock in this portfolio that will pay a dividend in February, May, August, and November. So those months will no longer be $0 dividend months for me, and I’ll now be getting dividends every month of the calendar year. So that’s cool!

Dividend Income – September 2015

This has been a rough year financially for me, so I haven’t paid as much attention to this blog for the past several months. I just went through and back filled the dividend income posts since March. We’re all caught up now, so without further ado, here’s September!

I think it’s important to celebrate wins on the path to your ultimate goal, no matter how small. Sharing my dividend income results with you readers gives you some insight to what is possible as you begin your journey.

My ultimate goal is to be able to live off of the passive dividend income from my investments, so I can just stay at home and play video games. Here is the money I made in September 2015 without lifting a finger.

WMT – $5.95
CVX – $9.83
EMR – $7.64
MCD – $9.52
BP – $30.86
LMT – $7.61

Total: $71.41

Compared to the dividends I earned in June ($70.64), I earned almost a whole $1 more just due to compounding. I find this fascinating because none of these companies have raised their dividend, but I’m earning more free money than I did 3 months ago.

March, June, September, and December are my big months, and most of these companies are due to raise their dividends for December’s payout. So I’m really looking forward to seeing what my December income looks like.

You Can’t Have It All

Life is full of choices. The choices we make are driven by our desires, but quite often, those desires are contradictory. I want to lose weight, but I also want to eat delicious food. I want to go out for drinks, but I also want to save money and invest it for the future. Unfortunately, we can’t have it all.

It can be especially frustrating when those contradicting desires escalate to actual needs. For instance, needing time away from work to care for your child, but still needing to work to support your family.

As investors, we often find ourselves with competing interests of the long term rewards of buy and hold investing, and instant gratification. Living a completely frugal and spartan life style can take its toll on your mind or those around you.

As you might have expected, my answer is found in games. Games force us to make these choices all the time. Do I risk my safety to get that mushroom? Do I sacrifice my toughness so my Wizard can deal more damage? The magic word is “Balance.”

There’s a saying “Everything in moderation.” To live in any extreme has consequences, so we must always try to reach a balance between our desires.

There is no golden ratio in your life either. Balance is a moving target, and you must constantly re-evaluate. While a 50% savings rate might make sense this month, next month it might only be reasonable to save 20% of your income.

This concept can be difficult because it takes self control. That self control can be difficult to maintain when you look around at others and it seems like they “have it all.”

There’s always going to be that guy or girl that seems like life was handed to them on a silver platter. Money, looks, and time seem to be abundant for them. However, the truth is that you’re just not seeing the sacrifices, or the things that come hard to them. Maybe, they don’t have any meaningful relationships. Maybe they struggle to achieve anything new because they’ve never learned how to persevere through the struggle.

You can’t have it all. There’s always going to be something you need to sacrifice to satisfy one of your desires. This is true for you, and it’s true for them as well.

Besides, other people’s priorities and situations don’t match yours. It’s entirely possible that they’re jealous of you for when you prioritized something they sacrificed. The only person you should be comparing yourself to is who you were yesterday.

Seek balance, and never stop improving yourself. But don’t forget to have fun every once in a while!

New Purchase: Apple Inc.

This year has been rough, so this is the first purchase I’ve managed to make in a while. For this investment, I bought 9 shares of Apple Inc. (AAPL) at $112.13.

I’m back filling my records for this year, so I can’t give a super accurate report of EPS and PE ratio at the moment. But at this time:

AAPL has a PE ratio of 12.54 and a dividend yield of 1.92%. This investment adds $18.72 to my yearly dividend income, and $1.56 to my average monthly income.

Putting me at $305.22/$500.00 for the annual passive income goal and $25.43/$100.00 for the monthly passive income goal.

Apple has dropped a few dollars per share since this purchase, but I still believe it to be a solid and competitive company. Apple is staying on top of the evolving technology world, and I believe there is a lot of growth potential on top of the decent dividend. Also, let’s not forget how many people are addicted to getting new iPhones.

Frugal Advice: Drinking On a Budget

This is a Guest Post from my friend over at BeerNBling.com.

I met Kevin about a year ago. We both work for the same company and became friends over our common interest in living a frugal lifestyle, investing, and just general shit talking.

In 2013 I started dabbling in dividend stocks. Although my portfolio is in its infancy, I’m doing better than most single women in their 30’s. Between my Roth IRA (which I started in my 20’s), my 401k (which I also started in my 20’s), my rental property (that I’ve owned since 2006) and my E-trade account (recently created in 2013), I’m hoping to retire well below the current median age of 62.

As I mentioned before, Kevin and I have a few other common interests, one that includes my real passion, beer.

I moved to Seattle almost 2 years ago and shortly after began a mission to visit all breweries in the state of Washington. As of August 2015, I’m up to 59 and counting. In addition to touring local craft breweries, I home-brew and started a mostly beer blog called beernbling.com. I am a gemologist by trade and the blog includes pictures and reviews of the breweries I visit, food and beer pairing suggestions, fun interviews with fellow beer lovers, links to local beer events, random beer related shenanigans that can’t be categorized and last but not least, bling. Seattle is an amazing city with a strong craft beer and art culture. I am never short of content. In fact my writing struggles to keep up with my activities.

So, how does drinking beer relate to living a frugal lifestyle? Well, beer is my main hobby and what I choose to categorize as my entertainment budget. I rarely spend money on going out to eat. I make my lunch and other daily meals. I have little need for things since I’m living in a relatively small 553 sq. ft. apartment just outside of Seattle. I don’t own a car and have a short 10-minute bus commute to work. I have no debt other than the mortgage of the rental property. I make it a point to live below my means. This affords me the ability to save for retirement while enjoying my beer drinking and brewery tours. Did I mention I’m flying out to Denver this September to attend the Great American Beer Fest (GABF)!

To give you an idea of my monthly beer expenses, let’s take a look back at the first three months of the year where I spent a total of $292.66 on beer related activities. This averages to less than $100 a month. There are many different sources one can reference on the subject of entertainment expenses, including the definition, but on average sources agree, Americans spend approx. $2500/year in this budget category. This equates to a little more than $200/month.

In the month of January I spent a total of $91.99 on beer, which included 6 new brewery visits and a few happy hours.

In the month of February I spent $80.17 on beer, which included 2 new brewery visits, a couple beer tasting at a local bottle shop, and the purchase of a growler from one of the breweries.

In the month of March I spent $120.50 on beer, which included 3 brewery visits, a trip to a bottle shop for some unique beer purchases plus tastings and finally celebrating St. Patrick’s Day with co-workers for happy hour. Yes, I did pick up the tab.

It is possible to drink great beer on a small budget. Here are a few ways I make it happen.

Flights
If you’re like me and want to try everything a new brewery has to offer, check out their tasting flights. Flights are a relatively inexpensive way to try many different beers. Most flights include 3-5oz pours and range from $1-$2 per sample. Many breweries have set tasting trays. For example No Li Brewery has their “Usual Suspects” sampler which includes 6- 4oz tasters for $7.

Bottle Shops and Brewer’s Nights
The weekly tasting at The Beer Junction bottle shop in West Seattle that I attend every Thursday night costs between $4-$5 each evening. The tastings consist of 5-6 different 4-oz samples and feature a different craft brewery each week or sometimes a theme (such as Belgian Beer Week). Check local bars for their Brewer’s nights which have similar events with discounted tastings.

Event Nights
Many breweries also have special weekly discounted event nights such as “Tuesday Nights – Enjoy $6 Growler Fills.” A growler is equivalent to 64oz (a six pack is approx. 72 ounces for comparison). With a $6 growler, that’s less that $0.10/oz.  

Happy Hour
Also, don’t forget to check out local bars for their happy hour selections. A local Seattle bar, J&M Cafe offers 50% off happy hour beers (which makes most of their pints $2.50-$3.00 each) and they have a decent selection of some local craft beers as well as the usual suspects that consist of Stella, Bud Light, Miller, Guinness, Manny’s and Mac & Jacks African Amber. A pint is equivalent to 16 ounces. Pretty inexpensive way to socialize with coworkers. I also happen to be a slow drinker and can enjoy two pints within the short happy hour discount window.

Rewards Programs
If you’re a regular, check on rewards programs or Mug Clubs at local breweries and bottle shops.

Beer Fests
Another great way to enjoy lots of beer. On average these festivals range from $20-$40. If you purchase early some events offer discounted tickets or extra tasting tokens. One of my favorite events in Seattle is the Bacon and Beer Classic. The ticket price was a little higher than most beer fests at $59/ticket. But this event included all you can eat (delicious bacon inspired treats and appetizers hosted by 31 different restaurants) and beer (with 50 different breweries on tap) once inside the venue.

Trivia Nights
Trivia Nights at local pubs – Check out your local watering hole for event nights. These usually offer discounted drinks and chances to win free beer or prizes.

Free Beer Tours
Many Breweries offer tours that are free or really inexpensive. Mac N Jacks Brewery offers free beer tours. The tour includes free tastings and a commemorative pint glass. Red Hook Brewery offers their brewery tour for $5, which includes 5 tastings and a free commemorative pint glass.

Kegerators!!!
I have a friend that has a kegerator for home use. When it’s time to refill the keg, I will tag along for the tastings. Many breweries offer free tastings if they know you are purchasing a keg. Not only do I get to drink for free and sample each beer, but I have the very important and difficult job of helping to make the next selection.

Beer Blogs
Follow beer blogs for listing of other local events, giveaways for beer fest tickets and other fun and free beer related happenings. Here are some of my favorite in Washington: WABL, Washington Beer Blog & Seattle Beer News.

Don’t forget Pub Crawls
These events will be similar to a Beer Fest with either tickets to the crawl or discounted drink selection for those participating.

Dividend Income – July 2015

I think it’s important to celebrate wins on the path to your ultimate goal, no matter how small. Sharing my dividend income results with you readers gives you some insight to what is possible as you begin your journey.

My ultimate goal is to be able to live off of the passive dividend income from my investments, so I can just stay at home and play video games. Here is the money I made in July 2015 without lifting a finger.

KO – $8.32

Total: $8.32

Compared to the dividends I earned in April ($14.13), it’s actually less money, but that’s because Walmart paid its dividend in a different month. If I was only comparing to KO from April, I’d be up $0.07 due to compounding.

Dividend Income – June 2015

I think it’s important to celebrate wins on the path to your ultimate goal, no matter how small. Sharing my dividend income results with you readers gives you some insight to what is possible as you begin your journey.

My ultimate goal is to be able to live off of the passive dividend income from my investments, so I can just stay at home and play video games. Here is the money I made in June 2015 without lifting a finger.

WMT – $5.91
CVX – $9.73
EMR – $7.58
MCD – $9.43
LMT – $7.56
BP – $30.43

Total: $70.64

Compared to the dividends I earned in March ($64), I’m seeing some progress, but part of that is the odd timing of this quarter’s Walmart dividend. However, if I compare the individual dividends, I can notice some small compounding even though none of these companies have had a dividend raise in this time frame. The big increases should come in December, by then all of the dividend raises will be due (in theory).

The stocks I currently own all seem to be on a March, June, September, December payment schedule.

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