November is absolutely beautiful in Georgia. The trees are still turning colors and the weather is perfect. Most of the month we enjoyed plenty of sunshine and temperatures in the mid 60’s. October and November are really the months that reinforce our relocation from the northeast.
Mrs. TPM was traveling most of the month to Asia. Anyone with little kids knows it is very hard on a one year old when mommy is out of town. I have to admit, this month was pretty hard on me. You may have noticed my posting schedule dropped to about nothing. There was very little time devoted to this blog.
Gratefully, I had some help. Both sets of grandparents made trips and we basically had house guests the entire month and our grocery bill really reflects this.
On a positive note, we actually spent a little on entertainment this month! We took the kids to the north Georgia mountains for a Santa train ride. It was a blast. Their are some great towns in the northern Georgia mountains.
Mortgage – Our mortgage expense includes an additional $500 in principal. I will back this out.
Childcare/Dependent – This is our daycare expense and two doctor visits.
Groceries – I have nothing to say about this one other than we had house guests the entire month. Either way this is utter failure. Lots of beer and wine were consumed.
General Merchandise – With the holidays coming up and a couple family birthdays, this is primarily gift purchases.
Entertainment – If you spent any time looking at our expenses in prior months, you will notice that we never have anything in this category. After Thanksgiving was over we took the kids on a Santa Express train ride in the North Georgia mountains.
Month over Month Change
Our expenses jumped by nearly 60% from October! Most of this is due to having houseguests the entire month of November. All of our usual expenses were up 50%. We will look to get this back under control for December.
Our track record was improving steadily until this month. The holidays can really play havoc with our budget.
Next month I anticipate our spending to decrease slightly. It really depends how crazy we go spoiling the little kids at Christmas. I know someone requested a Jeep power wheels. Given my investment in FCAU, I may splurge on this one.
Passive Income from Dividends
For the past few years I have transitioned away from some large cap dividend payers. Some of the consumer products and a few financial institutions valuations were stretched. I repurposed those funds into a couple of non-dividend paying companies that are now part of the value portion of our taxable portfolio. While our turnover is minimal, once in a while the opportunity cost is too great and we free up capital to make a large purchase.
Over time, I intend to increase our investments in dividend growth stocks. My intention for trimming the dividend portfolio for the past couple years was due to valuations, an unfavorable tax bracket and having to write a large check to the federal government to cover our dividend income.
In November we saw three of our favorite investments increase their dividend significantly:
- Starbucks increased the dividend by a whopping 20%. I love our Starbucks holding and anticipate this to be an excellent compounder for years to come.
- Brown Forman increased the dividend 8.2%. We would love to buy more of this company, but not at the current valuation.
- Abbvie increased the dividend 11%. To think, after a couple of years of dollar cost averaging into Abbvie, I am now receiving over $200 in annual dividends. All by investing $100 a month on autopilot.
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 September I made the following small recurring DRIP investments:
Other Investments Made
From time to time I make purchases in other equities with monthly contributions to our brokerage accounts, pooled dividends, proceeds from sales or other extra money from our day job. This month, I was very active. More so than usual. Even still, our turnover for the year is low.
Tax loss Harvesting sales:
I sold shares in two energy companies and one out of favor healthcare company to eliminate the gains from my speculative option sale last month and earlier sales of Norfolk Southern. I had around $40k of capital gains to offset and utilized a tax loss harvesting strategy.
New Stock Purchases
I made three purchases this month with some of the extra cash on hand and about half of the cash raised from the tax loss harvesting.
- I added $4,000 to my favorite European energy company.
- I added $52,000 to a pipeline master limited partnership.
- I added $5,729 to purchase 100 more shares of Starbucks. We think Starbucks is not really a tremendous deal at the moment. We added because we want to own more of it and to increase our dividend income. Morningstar believes Starbucks is undervalued by 15% with a $66 target price. Again, not a screaming bargain.
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.