September 2015 Financial Reports

September came and went. The Retire29 household had quite a fun month. We took a trip to Minnesota for a wedding and to see family. (Fantasy) Football is back, so Sundays are now the best day of the week. I love the slightly cool weather of fall, and we did a farm day (short video below) with hayrides and corn mazes and father/daughter roughhousing. Work is busier and traffic sucks worse now with nobody on vacation any more.

I’m back in school. Taking Accounting classes #4 & #5. Four more classes in Spring and I’ll be ready to sit for the CPA exam.

(Note: We call the baby “Turtle.” It’s not her real name. Although, that would be a cool name.)

I wrote seven posts at Retire29, which is about average. Hitting my goal of 100 this year seems like a longshot, unless I start publishing some real shoddy work and tempting all of my subscribers to cut the cord. This month, I wrote about:

• Keeping the end goal in mind by writing a letter to yourself from the future.
• How my recurring nightmares of work are driving me toward retirement.
• A funny post about some ridiculous ways to save money (thank you to J. Money at Rockstar Finance for picking this up!).
• My $9.54/month iPhone plan.
• Finding your retirement number (the right way). Props again to J. Money!
• Lastly, getting reader feedback by opening the books on my projected retirement expenses.

The S&P was down 3% for September, closing out a pretty terrible Q3. The big story, though, is the continued woodshedding of energy and materials stocks. It’s getting pretty scary out there. Even with volumes and revenues up for companies like Hi-Crush, and hyper-strong cash flow from deepwater drillers like Atwood, these companies are getting absolutely demolished, and are priced so far below book in some cases that the overarching opinion seems to be that we’ll see a rash of bankruptcies in the near future.

I certainly don’t think this will happen. But, the fear is getting pervasive and is creating some huge yield opportunities in stalwart names like Kinder Morgan, Textainer, BHP Billiton, or Holly Energy. See my portfolio to see that my money is where my mouth is.

The Path to Financial Independence

My passive income plus side hustling covered 13.6% of my expenses in September. While passive income continued its rise to a record highs, expenses are still high. I’m a broken record on expenses, but with us finishing our basement and the tail end of car payments, that’s just the way it’s gonna be for a few more months.

Passive Income

Dividends

See Investment Portfolio for Full List of Holdings and Details

Paid In September: $911.46
Previous Forward Dividend Income: $776.23
New Forward Dividend Income: $803.37 (+3.3%)

What a sweet month on the dividend front. Microsoft, Philip Morris, Realty Income, and Lions Gate Films all increased their dividends. Pennymac Mortgage cut their dividend, unfortunately, but the risers more than made up for the faller. The $911.46 in dividends were the highest ever! That’s a lot of money, and is more than I made in my first whole year of working.

I increased stakes in Hi-Crush, Textainer, and Industrial REIT STAG. I know what you’re thinking…I’m chasing yield. And you know what, you’re right. However, there’s a big difference between chasing yield and a yield trap. In these company’s cases, I see significant fear, uncertainly, and doubt. Everything I’ve read about sand volumes shows that Hi-Crush’s commodity is only getting more in demand as drillers want to extract more out of existing wells (a cheap option) rather than drill new wells. The U.S. rig count has stabilized and recently started a gradual uptrend, as well. HCLP now yields 26%!!! That’s ridiculously, and it should rightfully be cut (again) this month when they announce November’s distribution. It’s not that HCLP cannot afford the payment, they easily can with cash flows rising. However, the macro environment (and interest rate environment) is highly uncertain. They’d be wise to hold on to some of that cash to reduce their risk. Even cutting their dividend in half, though, would still mean a yield of 13%. Nearly all companies I invest in aren’t playing this sort of game with the dividend. HCLP is simply a company that could offer a huge yield-on-cost a few years from now.

Textainer is being killed based on fears over a China-driven global economic slowdown, as well as material prices making container building cheaper and more competitive. However, Textainer’s revenues are in long-term contracts (great article here), and the actual revenue impact will be muted. We would need a multi-year slowdown to really bring about serious concerns. Revenue and earnings projections are stable, and trading at just 2.5x cash flows (ttm and forward), I don’t see a real strong case for why TGH trades at 0.8x book value.

At any rate, forward dividend income jumped 3.3% in September. If I can get 3% raises monthly for the rest of the year, then I’ll hit my total passive income goal of $925/mo. With my 401k complete, and with my work matching coming at EOY, I see this as highly doable.

Interest

Paid In September: $0.00
Previous Forward Interest: $42.49
New Forward Interest: $42.74

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

Side Hustles

My goal for Retire29.com was the hit 60k page views this year. I’m about 5,000 away, so that should be done in a couple weeks based on the average 400/views/day I’m getting now.

September was my most profitable month ever, with $26 coming through Adsense—my only form of monetization. I might try a BlueHost affiliate link or something in the future, but I’d like to get viewership up more than anything else.

Alexa rank improved slightly. My goal of getting under 500k in rank I see as just a test in how much I care to integrate social.

Expenses

I’ll only be doing these updates quarterly in 2016. Not because I hate doing them, but because I really feel bad having to say the same things every month. I’m not what you would call a real “go-getter.” Things in my life move slowly, like watching an aircraft carrier turn around. Most FI bloggers would say, “I’m gonna sell that car,” and it would be sold in like three days. Not me.

One of our cars will be paid off in November. That’s good news. That cuts $435 off our monthly expenses. The second car will be sold shortly thereafter (before Dec. 31 so we don’t have to pay taxes on it again). That will cut another $315/mo.

Very high “Home” expenses this month for $600 toward basement finishing. Expect more of the same (if not worse) for the next few months.

Bright spots include total food costs. Even though dining out was high, groceries were very low. Not a great mix, but lower overall is fine with me. I don’t remember ever being hungry.

Several minor categories had some high expenses. We went out for our anniversary, and Fantasy Football league dues were in September, so entertainment was higher than the usual Netflix alone. We did a bit of travel, and a rental car and some Uber Rides added up to $175, as well as gov’t fees for next week’s flights to Orlando.

Phone was high due to some accessories we bought for the car, as well as a double payment on my wife’s plan before she moves over to my $9.54 a month plan.

Net Worth

Net worth rose 1.2% this month to $333,261. Against a backdrop of the S&P being down 3%, I’m actually pretty okay with that.

Thanks for reading and following along, as always!

Eric

Previous Financial Reports:

2015: Jan Feb Mar Apr May Jun Jul Aug

2014: Dec