Jan '18 expenses and investments

January ’18 Expenses and Investments – Net Worth +3.71%

We’ve had quite a start to the new year.  January came in as one of our most expensive months  However, our portfolio returned almost 15% in January alone.  This resulted in a few actions I made.  I will get to those details later.

Mrs. TPM welcomed January with trips across the world.  She was gone for a good portion of the month.  The two little one’s and I had some fun while she was gone.  The weather has been rather cold even for Georgia standards, so one day I took the kids to see Disneys Coco.  I wasn’t sure whether it would be too scary given all the skeletons, but both kids loved the movie.   I thought it was pretty good too.  I am sure Disney will continue to collect on this movie for years to come.

We also found ourselves making an offer on our dream home.  We have been going back and forth on moving for a year.   The neighborhood we are in is fantastic, but our floor plan doesn’t fit our family anymore now that there are four of us and we have out of town house guests just about every month.  However, our offer wasn’t accepted and the seller wasn’t willing to negotiate and inventory is at all time lows.   I will never overpay for any asset so we will keep waiting until something else comes up.

January Expenses

I use Personal Capital to centralize and categorize our expenses.  I also use it to centralize our investment accounts.

January turned out to be a very expensive month for our standards.

Travel –  This includes two things.  We are planning a trip to Kauai this month and we put a deposit down at a fantastic resort.  This trip is to celebrate our ten year anniversary.  It will likely be expensive, but we haven’t taken a trip like this since our honeymoon.  We also reimbursed multiple flights for grandparents to fly down and help me when Mrs. TPM travels for work.

Mortgage – Our mortgage expense includes an additional $500 in principal.  I will back this out.

Childcare/Dependent – This is our daycare expense, haircuts and swim lessons.  We also signed up for spring soccer.  That cost $200 bucks.

Groceries –  Our Grocery and home supplies continue to be expensive while on the paleo diet.  I might look to cut back on our Costco visits.

Insurance – This is six months of our auto insurance and a monthly draw on my life insurance term policy.

Other – Misc things.  Nothing worth discussing.

Healthcare – Our one year old continues to develop ear infections.  We had to go to urgent care a couple times this month due to weekend flare ups.  We decided to get tubes put in for March.  I am sure this won’t be cheap.

Month over month change


As usual, I will keep a running tally over the year.  Hopefully January is an anomaly with spending.  We are still able to save a lot, but we could be doing better.

We spent more than December, which is usually our highest spending month.  January was a failure in the expense department.  Luckily our investments lifted our network.

 

 Passive Income from Dividends


For 2017 we achieved $10,477 of dividends from our taxable stock holdings that were pooled and reinvested. Originally, I forecasted a goal of $15,000 for 2018.  However, I am not sure we are going to make it.  As I mentioned before, we confirmed our desire to find a new house and we want to contribute a large down payment.  This down payment will come from selling some investments.  You will see that I sold off some stocks so we have ample liquidity.  Most of the sell off was from non-dividend payers, but some of them pay a dividend.

Since I cut back on our equity investments, our dividends might be less than expected. We’ll see if we can get to $15,000 by the end of the year.

January Investments

DRIP and DSPP Accounts

Most months I dollar cost average into a few companies with little to no investment cost through transfer agents like Computershare and Wells Fargo Shareowner Online.  This has been automated for some time.  Typically the companies I choose to purchase this way are large cap stocks with durable competitive advantages that typically trade at a premium.  Good examples of these are Hersey and McCormick.  Both companies, I will likely hold forever if we are given the opportunity.  None of these companies are undervalued at the moment.

For January, I made the following small recurring DRIP investments:

$200.00 Home Depot
$100.00 Realty Income
$100.00 PPL
$100.00 McCormick
$100.00 Disney
$100.00 Disney
$100.00 Abbvie
$100.00 Hershey
$200.00 Coca Cola

Other Investments Made

From time to time I make larger purchases iwith monthly contributions to our brokerage accounts, pooled dividends, proceeds from sales or other extra money from our day job.

I made no new purchases, but did quite a lot of selling.  Let me explain couple of the transactions.

Tailored Brands

I mentioned this position before.  I purchased this back in 2016 because I saw it as a value stock.  The company was in a terrible position after the acquisition of Jos  A Bank.  Many analysts and financial writers were anticipating a dividend cut or maybe even bankruptcy due to a supersized debt position.  However I viewed Men’s Warehouse as a cash cow.

I believe that in January, we saw the company transition back to fair value.  I may miss out on some additional upside as they pay down debt, but I must follow my own rule and exit this position.

We made about $45,000 in capital gains.  Fortunately most of this is long-term capital gains.

Fiat Chrysler

I mentioned this investment before and if you are a regular reader you are probably tired of me talking about this one.  Please see the detailed post where how I found this incredible deal.  I ended up selling half my position in January.  I think this one still has room to run, especially if you believe managements target for next years profitability.

For me, I want to take some profits.  I believe the company is no longer undervalued and maybe slightly overvalued.  We made about $90,000 in capital gains on this half of our position.  This was a wonderful find and will likely fund a nice portion of our new house.

Misc

I trimmed a couple more positions.  Nothing on the size of these two so I won’t bore you with the details.  We feel much better to reduce our exposure to common stocks and eliminate some positions that did extremely well as value stocks, but aren’t quality dividend growth holdings for the long term.  I want our portfolio to transition to a defensive posture with quality companies that traditionally hold up well in a recession.  Just like I mentioned what Brown Forman did to reward us.

Mortgage Reduction

Occasionally we pay down our mortgage on our primary residence.  As of today our mortgage is our only debt. Our mortgage payment is automated and includes an additional $500 draft.

Net Worth Result = +3.71%

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