November 2015 Financial Reports

The Falcons and Chiefs are both 6-5. Six and five is an unremarkable record, and if the season ended today, both teams would sit just outside the playoff bubble. However, beneath the surface of that identical record, the teams couldn’t be more different. Atlanta is playing like a lost team, turning the ball over at inopportune times and losing 5 of 6, including a few to bad teams (with the only win coming against the league’s worst team, Tennessee). Kansas City, however, is playing inspired football. Alex Smith is knocking on the door for the record of consecutive passes without an interception. The run game is beating down opponents, and the defense is looking top tier.

Despite the identical records, Nate Silver gives the Chiefs a 78% chance at the playoffs, while the Falcons have just a 24% chance.

I say all that to defend what is probably a very below average financial report. November’s report is very “6 and 5.” However, under the surface, a lot of really good things are happening, which I will talk about. In not so many words, I feel like the Chiefs.

The holidays are in full swing, but the Retire29 household has been in the Christmas spirit for a month now (we set up our tree on November 1^st). Christmas music echoes in the halls of our home, smells of cookies and spice waft in the kitchen, and in the air there’s a feeling of Christmas. It’s the most wonderful time of the year—seriously.

We took our longest vacation ever (8 days) to Atlanta over Thanksgiving. We took a train down and a car back (thanks for all the baby gifts, grandma!). While there, Baby29 experienced her first ball pit.

Baby29 also had her first date…

I checked this guy’s Facebook page and his criminal record. He checks out (so far), but I’m keeping my eye on him. If he tries any funny business, I’ll have to bust out “The Regulator”

It never ceases to amaze me how this blog creates content. In October’s report, I spoke about a great queue of content coming up. Well, I did get out my usual six-eight posts, but only one or two were actually planned. In November, I wrote about:

• How Keeping Score with Others is Insane
• Some things we “waste” money on but we absolutely love.
• Our Veteran’s Day escapades for an epic day of free food.
• My thoughts on the oft-debated Emergency Fund.
• A rant about Millennials.
• An impromptu look at making the best of a bad situation (IMO, this is the best post I’ve written so far).

I was also interviewed at Islands of Investing. I think you’ll enjoy that.

As I said at the top, financially and otherwise, things were merely average in November. But, I’m really excited for the future.

Let’s talk about it…

The Path to Retirement

My passive income plus side hustling covered 13.6% of my expenses in November. This half-a-year sideways trend is about to make a step-change up.

Passive Income

Dividends

See Investment Portfolio for Full List of Holdings and Details

Paid: $831.88
Previous Forward Dividend Income: $795.55
New Forward Dividend Income: $774.29 (-2.7%)

Uh Oh, a big drop in forward dividend income. The protracted drop in oil prices, while greatly helping the consumer (and consumer stocks like Apple, Starbucks, Hasbro, Netflix, or Disney) is really hurting some of these upstream (exploration and drilling) energy companies. What’s more, complementary sectors (materials and industrials) are getting pinched as well, as the low input costs are increasing competition and decreasing their pricing power. This all led to Atwood Oceanics to cut their dividend 70% and Textainer to cut their dividend in half. Double Ouch. On the plus side, this greatly reduces their liquidity risks and gives them more capital to get through however long this takes.

These dividend cuts (plus Hi-Crush’s dividend suspension last month), I must say, weren’t expected by me. I always knew cuts could happen, but I thought that these dividends would be safe. So, now I question what other dividends I hold are next on the chopping block?

Thankfully, not many seem to be in these dire straits. Potash, BHP, and Holly Energy could be three that I see as candidates for a cut. BHP is probably most at risk, as their business is very capital intensive, and the payout ratio has gotten astronomical. Potash can probably weather the storm of low commodity prices for maybe another year, they can still afford their dividend—but barely. I wouldn’t be surprised if they held steady or dropped the dividend a bit at the end of January (when they typically announce dividend changes).

Holly Energy has an 11-year streak of dividend increases. Cutting the dividend would be seen as a major “canary in the coal mine” sort of moment for the oil industry (HEP is a major bellwether). I can’t imagine they cut for at least another year, but I can’t be certain.

However, this is all very healthy. My income drops today, sure, but that money will be simply held in the company’s hands, rather than the shareholders. Right now, oil industry dividends are seen more as a “check the block” sort of thing rather than “hey, look how great we’re doing” sort of thing. That isn’t good. Oil prices will rebound eventually, and these once-weak hands will start growing the payout again.

Interest

Paid: $0.00
Previous Forward Interest: $42.74
New Forward Interest: $42.99

My annual interest payment for my annuity occurs in April. I’ll continue contributing a little bit each month to this account.

Side Hustles

Welp, November was quite weak for blog income. Nine bucks. I took away a couple Adsense ads late October, and November saw a noticeable drop in conversions. I’m fine with that. Blog income really isn’t important to me. As readership grows over the next many years, I don’t think I’ll have a big problem monetizing a bit better. That’s a problem for tomorrow.

About that viewership, page views were actually the lowest since June. Let’s just say that I’m an idiot when it comes to blogging. There’s this little block in WordPress Settings asking, “Discourage Search Engines From Indexing This Site?” Well, when I started this blog 15 months ago at three in the morning, I must have checked that box. APPARENTLY, that’s a colossally stupid thing to do. My organic search referrals were about 10 per day. Now that I’ve unchecked that box, they’ve jumped to 60-100 per day. Boom, traffic has doubled overnight. Unfortunately, I only found this like a week or so ago. I’m confident that December will be, far and away, my strongest month ever for traffic (it’s already looking that way).

That’s a good thing, too, as I was starting to really get discouraged that it was so hard to generate traffic.

Expenses

Expenses were high, but that’s okay. I paid off one car this month, so Auto (which also included our semi-annual insurance payment) will never be this high again—except potentially for some outlying car repair months. From here on out, Auto should be around $450/month, until the second car payment is gone (first couple months of 2016).

The Bad: We dined out quite a bit in November during our 8-day vacation. The wife loves her some deep south Waffle House. Plus, that vacation did cost us some money. The train tickets were paid for with points, but we got a rental coming back, a rental in/around Atlanta, and we had to pay the cat babysitter.

Home/Other was a little steep. We bought some Christmas decorations, whether you want a different reed diffuser in every room of the house, or are looking for a signature fragrance for your home, Laurel & Wolf bet you’ll find one you love in their list of the best reed diffusers. Amazon Prime Renewal, Veterans Advantage membership, a pair of shoes, a bunch of cat food, sheesh, I’m sure you do not care. But, this is our 3rd highest Home/Other month since I started tracking.

The Good: Utilities improvements are hopefully finally paying off. $112 combined for gas/electricity/water is pretty darn good for us. This will go up as it gets colder, but this was our lowest utility bill ever since we moved into the house (in 2011). Way to go CFLs and water heater blankets!

Phone/Internet was also the lowest it’s ever been. We’re now firmly into RingPlus, so our iPhone bills combined are less than $20/month.

Work To Do: Gotta work on that second car payment and kill it ASAP. That will free up a lot of money to pay down other debt or finish the basement. I showed about 30 dining transactions in November. That’s probably too many. Even though we dine on the cheap, the small stuff really adds up. December (and onward, I’ll try) will be a lot more home cooking.

Net Worth

Net worth dropped 0.52% this month to $350,404. The S&P was down 1.2%, so I lost less than the index (this all all thru Dec. 3rd, technically). My consumer debt level is noticeably smaller, which is exciting. As the cars continue to be paid down, and interest free credit card debt is paid down, this pushes up the net worth bars.

Thanks for reading and following along. The next few months should be pretty great: second car paid off and sold, end-of-year bonus, a raise (hopefully), tax returns, basement finished, IRA contributions, so much moving around today in order to relax completely in a few years…

Eric

Previous Financial Reports:

2015: Jan Feb Mar Apr May Jun Jul Aug Sep Oct

2014: Dec