Year Over Year Dividend Growth 2013-2015

As I travel along on my journey to financial freedom and work towards my fiscal independence, it's important to reflect on how far I've come.  I really started to change my thoughts on how I invest starting in 2013.  My idea on investing was very scattered up until that point.  Had I made money? Yes!  Was I really successful at building a long term strategy?  Absolutely not, in fact I would argue that I really didn't know what building a long term sustainable passive income pipeline was really about.  In 2013 I really started to poke around at some online blogs and found retireby40.org  and dividendmantra.com, both really outstanding at getting my butt up off the couch and saving in a meaningful way.  My eyes were open to what passive income can do and how it can essentially free you from your regular 9-5 grind.  So I started to shift my portfolio and investment strategies into dividend stocks and other passive income pursuits.  So how have I done over the years?  Let's find out:

So this is 2013, as you can see it's all over the board with my month to month with December looking fantastic compared to the others.  However, my total was only $1310.53 in passive income.  Not the stuff that financial independence is made of, but what would amount to at least a decent start considering my prior investment decisions.

2014 looks quite a bit stronger, pretty obvious I've done some reallocation of assets and generated some substantially different returns from dividends.  In fact I brought in $6269.18 in passive income.  That's a pretty solid rate of improvement with almost a 4x increase.  This happened from a few things.  I rolled over my old 401k and bought some dividend stocks, probably did a lot of the lifting right?  It actually only accounted for about 40% of what I improved upon.  So my other accounts did some pretty heavy lifting of their own.  

So how am I looking so far this year?  Well as previously noted I've had some dividend reductions from Seadrill, but all is not lost.  Halfway through the year I'm at $3024.53 in passive income.  This makes me about $850 YTD over my total of $2126.55 at the same time last year.  So while my income looks like it has gone down.  I'm actually up considerably in 2015 thus far TYD.

Monday Rant

Happy Monday to everyone!  Thought I'd start of the week with a little bit of fun for myself and hopefully you all.  I thought I'd take a moment to borrow with pride from 1500days.com and get a little stress off my chest with a small rant on something that irks me.  For those of you that follow my blog, which at this point is probably all four of you :), you know I work in the insurance industry.  I used to work on the claims side, but now I work on the continuous improvement of our processes within the organization.  What I would like to focus on out there are all the people who have claims and blame the insurance company for all of their problems.

So let's start with a couple of stories from my past life in handling claims.  Some of the things you see when you are helping people get back to where they were prior to a loss is truly outstanding.  I'll start with my property management days when I ran a team up in Chicago that handled any type of claim that was damage to a structure (IE house or detached garage) and personal property (said crap within those locations)  I use personal property and crap as synonyms as what is a treasure to one individual is likely garbage to another and for the purpose of this story there is quite a bit of crap involved.

Before we go any farther let's put the entire insurance claim process in perspective for how people basically treat the insurance company through this youtube video (NSFW).

Let's meet our insured who we will name Mrs. Pain.  Mrs. Pain was out of town one February when she got a call that she had a frozen pipe burst in her house.  So while out of town Mrs. Pain decided to file a claim on her policy which came to my team.  We promptly called her to schedule an appointment the same day to visit her and help her out on her loss.  Since she was out of town she decided that she did not want to have anyone on her property to inspect or mitigate the damages.  We even offered for us to meet her son onsite who lived a few miles away in order to make sure that we could save as much of her personal property as possible.  Unfortunately this was not an option for her so we had to wait for her to get back in town a few days later.

My rep was booked for the day when she finally called in, but being that it was already a few days into the loss I decided as the manager to go out to assist with her claim.  I coordinated with Mrs. Pain and got permission to bring a water mitigation vendor with me to the site to assess the damages.   Additionally she agreed to allow a textile restoration vendor and personal property storage vendor to come as well to potentially start moving the claim forward.  So far Mrs. Pain appeared to be a normal insured, except for the few day delay of mitigating her damages.  So here I was driving to meet with her and help her get her claim started and hopefully start getting her back to a normal life.

I arrived around 2:00 and was awaiting the vendors to show up who were scheduled at 2:30.  I always like to be a little earlier than the vendors so I can explain the process, what to expect, and to answer any reservations the person who has a large loss may have.  I met Mrs. Pain who seemed like she was a nice person, albeit a little off, but nothing that I hadn't really dealt with before.  However as I walked into the insured's house things changed just a little bit...

not the actual house, but a pretty good representation

At this point my initial thoughts ran along the lines of holy crap, shit, and dammit this is not going to go well.  We've all seen probably five minutes of any hoarding show and we know that these people have a disease.  However, I was pleasantly surprised at the amicable response I got from Mrs. Pain and her dealing with all the vendors.  She chatted with them, decided that she wanted to use them even when I told her she could choose her own, and then even signed work authorizations.  I thought to myself that this was the one off and that she would actually be ok to work with.  I followed up a couple of days later with my rep assigned and we started to actually have people do work within the residence. This is where the wheels fall off the tracks quickly.

Some fun facts about Mrs. Pain and her claim:

• This was her mom's old house and filled with her mom's and her property
• In the bathroom our insured has a feral cat with feline leukemia, said cat is not potty trained, nor is it friendly
• Apparently during the storage of her crap, yes literally crap with no intrinsic value, we had hundreds of thousands of dollars of mystery jewelry stolen by the vendor.  There are no receipts for these and the vendor took pictures of everything they took out of the house
• Said jewelry wasn't stored in a jewelry box, but rather in random things throughout the house
• The second floor water wasn't water, it was feral cat piss
• Paying $147,000 policy limit and 5% for debris disposal was not enough to resolve the pain and punishment we were inflicting on her trying to get the house back to livable conditions
• The items that were cleaned weren't apparently clean.  They looked like they had gotten wet and this was unacceptable.  (Apparently she washes things with air)
• Our insured decided that she didn't want her stuff back from the storage company, nor did she want to pay them
• The claim has gone on for four years and she still is trying to get money from the claims department even though we've paid out the maximum amounts

Examples of treasures that she couldn't live without

So I rant about this story because literally the worst people ever, despite the fact that we went over and above on this woman's claim.  We were the big bad insurance company out to screw her.  What's ironic is we did more on this claim than on any other person's claim to provide as seamless and easy experience that we possibly could.  I hate this type of mentality as it's very woe is mentality that is prevalent in our society and really is the basis for a lot of our social ills.  We've become better at whining that actually owning up to our actions and the entitlement we feel is something that is unbelievably deeply rooted into our societal fabric.  Mrs. Pain highlighted many of the qualities that, unfortunately, have become the basis for our cultural thinking.  I've paid you so I'm entitled to whatever I want.

In reality it doesn't work this way, you get what you earned or what you contractually signed up for.  In this case this person got way more than a reasonable person would have expected for the claims process.  Then she believed she was entitled to more because she was her and had been paying us to insurer her.  What's even more fun was she had been a policyholder for six months.  So in six months she ended up having a questionable frozen pipe (more of the story than is needed here) and paid less than $1000 to get $147,000 and she believed she was entitled to more.

Remember you earn your way through life, nothing is given to you nor does the world owe you anything.  Similar to growing your wealth, you have to earn it.

2014 Personal Savings Rate

It's always interesting when I read other blogs and see the discussions with people about their personal savings rate.  For those out there that achieve 70% or high is astounding and really is a testament to their frugality and dedication to their willpower to not get lost in keeping up with their neighbors.  I especially like Dividend Mantra's journey and his incredible 64.5% savings rate for the month of May.  I haven't seen another update from him on June, but I'm sure with his crazy amount of purchases that he did quite fine last month as well.

In the spirit of the rest of us savers and seekers of financial independence I'm going to keep a regular cadence of my savings.  Before I break it down and get into the numbers I want to explain how I'm calculating my savings.  I spend approximately $1350 on my mortgage each month and pay an extra $100 towards the principle each mortgage period.  I will not include this in my savings rate as to me it is an expense that I have to pay.  I guess I could not pay it, but something tells me that Chase and I would have a rather unpleasant conversation.  I explain this as I have seen it included in people's financial savings rate and, while it does have some merit as you technically are saving interest, it's still a mandatory expense until you pay off the house.

So  how did I do in 2014?  I'm going to break it down in two ways to see what I'm saving comparing full salary and my take home pay.  Before we do that though we need to know what the average US savings rate is to see if I'm really doing any good.  Referencing ycharts for the savings rate we see a breakdown for the last five years and currently we have a national average of 5.1%.  That's pretty abysmal and it's no wonder we're looking at a retirement "crisis" in the near future.  I put parentheses up because everything nowadays is a crisis or disaster, pretty sure when I was a kid things just happened instead of being sensationalized.

Looking at comparing it to my full salary to my savings last year I saved 34.65% of my gross income.  That's a pretty solid number almost 30% higher than the average American.  Digging even deeper into it when I pull out an base it solely on my take home, meaning after taxes) I socked away 39.90% of my take home pay.  I set a goal for 2015 to save 40% and I almost accomplished it last year without really even knowing.  I really like having a goal in place as I did not have one in 2014.  I tried to sock away money with no regard to really understanding what I was going for.  Now that I've got a goal I have something to work towards.

How about you?  What are your savings rate goal and achievements.

Bad days and the little things

So I posted last about Tallie, my wonderful Black Lab that keeps me entertained and provides lots of relatively free entertainment.  Well as anyone who owns a pet can tell you there is always that one time when you walk in and discover that your furry friend has done something unexpected.  So Saturday June 28 I went to bed with Tallie sleeping comfortably by my side.  I woke up to her still next to me, but when I came downstairs I found that someone had had some mischievous moments over night.  Tallie DECIMATED my wallet overnight.  The type of decimation that you really never expect to see, especially since I was scheduled to fly to Chicago for the Fourth.

This may be a problem...

So yeah this is what it looks like when your dog gets a hold of your ID and decided to take it for a spin.  Clearly she did me a favor though by leaving me all the pertinent information needed to show who I was.  Luckily I had my passport and could use that at the airport, but this is a bit inconvenient.  So what other fun things did she decimate?  Funny you should ask that as this was the Sunday that would keep on giving, without further ado I give you the shit that broke on me on Sunday photo!

So what do we have going on here?  Well the brown is clearly my wallet or at least what's left of it.  I believe that this clearly is the definition of demolished.  My license has clearly seen better days as did my Costco card, but here's where the rest of the day got really fun.  See that white cord that is supposed to charge my phone and that little silver thing just in front of it?  Yeah that's the lightning connector that got stuck in my phone.  No big deal $30 to fix it and charge my phone right?  Well I went out and bought myself a brand new shiny white cord and find that my phone isn't charging, glorious...  So far it's turning into what looks to be a pretty rough Sunday, but what else can go wrong?  Well as it turns out it wasn't over.

Inside the Apple store I was actually lucky enough to walk in and get a genius appointment forty minutes after my arrival.  Anyone who's lives near a normal Apple store knows that this was  likely a stroke of luck on a weekend in a busy city as these stores are packed during this time frame.  This was when I quickly discovered that the off brand cable I had been using to charge my phone has fried my phone when it broke and I needed a new phone.  Epic...just what I wanted to do with my hard earned money.  It was then I found out that I couldn't actually purchase a phone at Apple anymore as they can't do contract upgrades.  Thank you ATT, love your dividend, dislike your upgrade policy. I thought luckily there is an authorized dealer in the mall so this should be an easy experience and I can get my phone and move on pretty quickly.  Well, as it turns out, you can't renew your contract with an authorized dealer, you actually have to go through their next program.  Ridiculous that this is the practice they have, but the day gets even better.

So off I went to leave the mall and find a new iphone for myself which should have been a relatively painless experience.  But with the way this day is going let's be honest, it's not going to be that simple.  This is where the little piece of paper comes in on the table in the picture.  Yes if you can read it you read it right.  Someone hit my car while in the mall, but at least they left a note.  At this point I'm starting to wonder who I pissed off and what I can do to right the cosmos as this is quickly becoming borderline absurd.  So off I went and finally got a competent individual who I was able to purchase a phone from and go on my merry way.  

At this point I'm driving home and am talking to my parents and received some other fun news.  We use the same accountant to file our taxes and being that I'm in the process of moving to a new state I have them as the contact address for any mail I receive.  As it turns out my accountant checked the wrong box and deferred my refund to 2016, awesome $3000 dollars that I was expecting to invest gone with the flick of the wrist.  Time to go home and board up the windows and doors and pretend that the world doesn't exist.

So why do I outline what a ridiculously horrible day?  Am I looking for a pity party?  Am I just venting?  Do I really just want someone to tell me it will all be ok?  The answer to all of these is a resounding no.  The reason I write this tale is to tell you to remember what's important in the scheme of things.  Do you think I yelled at or spanked my do?  Absolutely not, she's going to break something at some point, it was an accident, and it wasn't like it was malicious.  Stuff happens, it's important to remember that.  I ended up taking Monday off to recollect and decompress from a terrible day.  Coming into the office the next day I wasn't pissed off or angry, but when telling people why I wasn't there the day before was a story of insanity and ridiculousness in a you aren't going to believe it kind of way.  Finding a way to laugh at it because you legitimately can't believe that much stuff can happen in one day is important.  Will this one day derail my long term plans at financial independence?  Nope, it may slow me down this year, but it's a blip in the radar and it's what emergency funds are for.  How about you all, how do you recover from those horrible, terrible, no good days?

Driptasic June

Once I buy a stock I tend to set it on auto pilot to drip the dividends back into the stock.  DRIPing is the automatic reinvestment of dividends into the stock paying the dividends and is free at most investment accounts.  This allows the dividends to work harder for me the next time they come around and really works to highlight compounting over time with you initial investment.  I like to look at VWLEX as my baseline:

Stock                Purchase Date    Share Price          Shares          Total Cost

VWLEX

3/10/2008

30.6

326.797

9999.9882

Current

Stock                Current Price    Shares              Values

VWLEX

$38.96

445.98

$17,375.38

So what was the reinvested amount you ask?  It turns out that almost half of my gain the this mutual fund is directly from reinvested dividends.  The total market cost of my position is now $13,725.56, meaning that #3,757.57 have been reinvested and helped to almost double my returns.  Keep in mind I bought this at the beginning of 2008 so the worst was yet to come in the markets, but this highlights long term compounding and how DRIP can be one of your best friends.

Driptastic results in Juse as follows:

Roth

Bought 0.66 O @ 45.2191

Bought 1.174 LINE @ 10.259

Bought 2.729 VWLEX @ 39.47

Bought 0.576 VIV @ 13.8073

Bought 0.873 VIV @ 13.8073

Bought 0.998 VIV @ 13.8073

Bought 1.771 VIV @ 13.8073

Bought 3.304 BAC @ 16.9848

Bought 0.304 XLF @ 24.4015

IRA

Bought 7.122 LNCO @ 10.2487

Bought 2.223 BP @ 42.6498

Bought 0.028 RDS.A @ 62.434

Bought 2.348 RDS.A @ 62.434

Bought 0.402 AIG @ 62.7432

Investment

Bought 1.221 BBEP @ 5.4038

Bought 0.946 VNR @ 15.0982

Bought 0.443 RIG @ 17.074

Bought 0.54 XLU @ 41.4746

So how about you, do you DRIP or not?  Please share your experiences and why you do what you do.

June 2015 Dividend Wrap Up

This is the first post I've had that highlights my journey and I'm excited that I am starting to really get the ball rolling on seeing how my dividends are starting to do the lifting for my portfolio.  June is an interesting month for me as it was one that really looked strong last year, but by comparison 2015 saw a reduction in my dividend appreciation.  This will also hold true in September as there were a few things that changed on me with my holdings.  This will highlight an important lesson as investing in stocks that are perceived high quality, with management confirming that they maintain the distribution and changing their stance, and making sure that you understand investment risks is imperative to your long term success.  So first I'll start out with the results per account.

	Roth IRA	IRA	Investments
January	39.87	121.93	172.97	334.77
February	265.53	105.44	110.36	481.33
March	205.87	430.79	82.56	719.22
April	41.46	124.5	159.04	325
May	287.29	118.82	95.75	501.86
June	270.12	341.4	50.83	662.35
July				0
August				0
September				0
October				0
November				0
December				0
	1110.14	1242.88	671.51	3024.53

A pretty descent month overall as I topped $660 in passive income which is pretty outstanding in and by itself.  So let's take a look at it in comparison to last year by account.

My Roth IRA produced $270.12 in dividend income, up from $180.88 which results in a 49.33657673595755% increase (yes oddly specific I know.  However this highlights the improvement year over year and an almost 50% increase in dividend income is amazing.  This truly shows how compounding really helps.

My Investments account income was $50.83, up from $36 which results in an increase of 41.194444444444436%.  What this doesn't show is that the $36 that was income last year at this time was all from Seadrill (SDRL) and they have eliminated their dividend with the price of oil plummeting.  So this is actually 100% new dividend capital that came in in 2015.  Pretty fantastic overall.

This brings me to my IRA, this one is the only account that had negative growth in the month, but that can also be attributed to Seadrill.  The account produced $341.40 in income, down from $634.03 last year.  This resulted in a decrease of 46.15396747787% which really hurts from an income perspective.  This is a hard lesson that the market teaches us on occasion, even when we don't want to be taught.  Seadrill is one of the world leaders in deep sea drilling and provided a generous $4.00 per share annual dividend.  The company committed to keeping the dividend intact while oil plummeted until they decided not to and surprised the market with the cut.  Obviously this really shocked the market and made the stock take a dive.  This is a good lesson though as we as investors tend to listen to the leadership of a company and look to them for guidance.  While I saw deteriorating results, I went against my gut and stood by the company as they "committed" to maintaining their payout.  Not only was this a false pretense, but they axed the dividend completely.  As I owned over 200 shares of the company, this resulted in a very negative downside surprise for me come dividend time this year.

Overall my dividend income fell by 22.1598053848233% this month and was down $188.56, but it's not as bad as it seems as my VIG shares did not pay out in June like they typically do.  This adds about another $100 to the total so excluding my dividend elimination from SDRL the account grew in payout quite nicely.

Meet Tallie

So on this journey I wanted to introduce you to my copilot.  Tallie is my six month old black lab rescue, she may be a bit of a mix, that will help me with some of my future posts.  She's incredibly good for a six month old puppy and really hasn't destroyed anything besides her own bedding.  She's incredibly smart and a ball of energy that I really can't seem to ever wear out.  You'd think two hours at the dog park playing fetch, wrestling with other dogs, and just all in all running around would make her tired.  You are very wrong.

So why do I include Tallie in my dividend blog?  We all know that this is a journey as we work towards financial independence and while we strive to save every dime, nickel, and penny we can you need to remember that there are things worth spending money on, that also give you incredible satisfaction because of they unrequited love and affection.  Tallie is someone who I gladly spend a few extra bucks a month on because she brings my life great joy and entertainment.  She also does a fantastic job by giving me free entertainment by going to the park and helping me stay healthy by exercising while there.  I get to enjoy nature when I take walks with her and meet new friends because dog lovers have a special bond and are always willing to talk to fellow dog owners.

Try to remember that as you follow whatever path you are on, there are some reasons you should deviate from it to enjoy life just a little bit more.  Sometimes the simplest companions can bring the biggest joys.