Buys and Sells for the Week 1/15

When the week started I was resolved to not buying anything this week but then noticed a small movement of money shifting away from defensive names. It wasn’t a large move but enough to make me want to buy:

  1. General Mills (GIS) – increased position –  GIS is back to increasing annual revenues year over year and 2020 marks the 4th year in a row. Growing revenue is always good for dividend growth and grabbed 9 shares at $54.13 and a 3.77% yield. This also will help to contribute to my overall dividend payout in the second month of a quarter.
  2. J.M. Smucker (SJM) – new position – Starting to see SJM finally make some moves to sell some product lines, refocus on key growth areas, and I do not believe SJM is done selling product lines. Grabbed 4 shares at $111.28 and a 3.23% yield.
  3. Oil-Dri Corporation of America (ODC) – increased position – This buy was also part of my efforts to increase my overall dividend payout in the second month of a quarter. Grabbed 5 shares at $33.34 and a 3.12% yield

Buys and Sells for the Week 1/8

Wow starting the year off with the DOW surpassing 31000! Did anyone predict this last spring? I definitely did not see this coming. Here is a summary of my trades:

  1. Verizon (VZ) – increased position –  This buy is part of my efforts to increase my overall dividend payout in the second month of a quarter which is considerably lower than the other months. Grabbed 14 shares at $57.70 and a 4.35% yield
  2. 3M (MMM) – increased position – Bought on bad news weakness based on downgrades for a potential environmental liability. Grabbed 5 shares at $165.70 and a 3.55% yield.

2020 Income Goals and My COVID Life in Review

I originally was going to make two posts but ultimately decided it best to combine the two topics as both were in the same vein of reminiscing for the year that was 2020 .

Income Goals

For the year I earned a total of $35,876 in passive income versus $32,382 in 2019. This was a 10.67% increase year over year which fell ~2% below my targeted growth of 12.5%. Yes the pandemic with its dividend cuts greatly hurt my progress. However, I did not take it lying down and repositioned my portfolio over the summer. Without this adjustment my annual increase would have been closer to 8% or 4.5% below my growth target.

The largest reposition of my portfolio was reducing my REIT exposure from 19% down to 13% while the remainder was eliminating weaker or small positions across multiple sectors.

The other large portfolio change was I reduced my cash holdings from 10% to 5% and went on a buying spree in the utilities sector which started to bear fruit in the 4th quarter and added quite a bit to my forward dividend income already making 2021 a much better year.

Looking at my age 53 goal, I closed out 2020 at 90.20% complete. I’ll turn 53 in October of 2021 and this leaves just 10 months left to achieve my goal. After running multiple projections it looks like I may end up short on this one but I will continue to push. I am currently calculating I would need an additional $16,000 of new cash invested over and above what I currently save & invest. I definitely do not have room in my budget to save an additional $1600 a month so this will be a challenge.

My forward annual divided just cleared the 40K mark coming in at $40589. Using this figure I updated my comparison to median household income in the U.S and was pleasantly surprised to see I now meet at least 80% of median household income in 5 states (+3 states) and the number of states where I was less than 50% shrank to 4 (was 5). I only started this comparison in October of 2020 so not a big base to measure improvement but this time next year will be more interesting.

COVID: What I Learned and Observations

A global pandemic was something new for all of us and here is a quick rundown of things I learned and interesting observations

  1. I was disheartened we needed a pandemic to get people to wash their hands after going to the bathroom. Really?
  2. When stocking up for a disaster the first thing you should buy is…toilet paper?
  3. I had to learn how to cut my own hair. I over-payed to buy clippers but it was well worth it.
  4. Being an introvert finally paid off. Lots of folks struggled being isolated from family, friends, and co-workers but being an introvert this was a walk in the park. My work productivity actually improved.
  5. After procrastinating for 24 years I finally built the home office I wanted.
  6. I didn’t need Pro Sports. Watching sports was a large part of my entertainment consumption. When sports were cancelled earlier in the year I was surprised how easily I did not miss it and when sports came back my consumption dropped by 90%. Guess I discovered other things in life
  7. In spring, sports and film Industry were labeled as nonessential jobs but my job was essential. Puts things in perspective, too bad they make way more money than I do.
  8. There are a lot of people struggling in silence. I need to continue making food donations.
  9. Checking in with and helping elderly neighbors, its not a chore to reach out.
  10. I am humbled by the amount of hours and dedication health care workers have.
  11. My kids wanted to have real conversations with me that had more than 10 words.
  12. Locked up with my wife for 9 months and we never argued, guess we can handle retirement together 🙂
  13. It has never been more apparent that passive income is a necessary survival tool in modern times.

All things considered this was not too bad of a year from a saving & investing perspective given the challenges. For 2021, my goals will remain the same as 2020 as I continue towards retirement which is now just 7 years and 10 months away.

December Dividend Income

After 33 years of clocking in and out of work and religiously saving 10% annually in my 401K every year, in good times and bad, I have decided to share my monthly dividend income to show what regular saving and investing can accomplish.

For the month of December I made $4,324.88; an increase of +39.93% versus this time last year. I was hoping to hit my very first $4K month and was shocked when I blew by it by $300.

My buying in large quantities has slowed down quite a bit since November as valuations rose significantly across the board. I’ll continue buying in small lots and going into January here are the stocks on my watch list; AbbVie (ABBV), Allete (ALE), BCE Inc (BCE), J.M. Smucker (SJM), Lockheed Martin (LMT), 3M (MMM), Unilever (UL), Verizon (VZ) and Walgreens Boots Alliance (WBA).

DateSymbolCompanyAmount
12/1/20ALE ALLETE INC$123.50
12/1/20PFE PFIZER INC$214.90
12/1/20PSX PHILLIPS 66$25.30
12/3/20CMI CUMMINS INC$37.67
12/3/20DFS DISCOVER FINANCIAL SERVICES$11.34
12/3/20UPS UNITED PARCEL SERVICE INC$225.60
12/7/20SO SOUTHERN CO$60.16
12/8/20JNJ JOHNSON &JOHNSON$174.10
12/9/20VLO VALERO ENERGY CORP$35.28
12/10/20CVX CHEVRON CORP$21.77
12/10/20IBM INTERNATIONAL BUS MACH CORP$142.13
12/10/20MSFT MICROSOFT CORP$61.03
12/11/20WBA WALGREENS BOOTS ALLIANCE INC$42.67
12/14/20MMM 3M CO$48.75
12/15/20AVA AVISTA CORP$122.28
12/15/20CMP COMPASS MINERALS INTERNATIONAL INC$137.52
12/15/20FAF FIRST AMERICAN FINANCIAL CORP$143.84
12/15/20NWL NEWELL BRANDS INC$25.56
12/16/20DUK DUKE ENERGY CORP$57.90
12/17/20PRU PRUDENTIAL FINANCIAL INC$444.45
12/17/20QCOM QUALCOMM INC$153.82
12/18/20BHB BAR HARBOR BANKSHARES$41.10
12/18/20BP BP PLC SPONSORED ADR$8.13
12/18/20KHC KRAFT HEINZ CO$9.20
12/18/20R RYDER SYSTEM INC$51.93
12/18/20WM WASTE MANAGEMENT INC$39.34
12/22/20FAST FASTENAL $16.22
12/23/20HYG ISHARES TR IBOXX HI YD ETF$42.20
12/23/20PFF ISHARES TR PFD AND INCM SEC$70.32
12/24/20PSEC PROSPECT CAP CORP$155.54
12/29/20BLV VANGUARD BD INDEX FDS LONG TERM BOND$187.70
12/29/20VCLT VANGUARD SCOTTSDALE FUNDS LONG-TERM CORP BD$30.63
12/30/20ARCC ARES CAPITAL CORP$460.48
12/30/20NEWT NEWTEK BUSINESS SVCS CORP$364.74
12/30/20TROW PRICE T ROWE GROUPS$13.70
12/31/20BEP BROOKFIELD RENEWABLE PARTNERS PARTNERSHIP$253.70
12/31/20BEPC BROOKFIELD RENEWABLE CORP$63.36
12/31/20BPYU BROOKFIELD PPTY REIT INC$49.77
12/31/20GATX GATX CORP$51.02
12/31/20GRMN GARMIN LTD$61.81
12/31/20WEYS WEYCO GROUP INC$18.87
12/31/20M1 FinanceM1 DIVIDEND GROWTH ACCOUNT$25.55

Buys and Sells for the Week 12/31

Looks like I’m ending the year on a whimper with just a few small buys. I usually have little to no cash at the end of a year but this time I will be carrying over a sizeable cash position into the new year. Here is a summary of my trades:

  1. Verizon (VZ) – increased position –  This buy is part of my efforts to increase my overall dividend payout in the second month of a quarter which is considerably lower than the other months. Grabbed 3 shares at $58.15 and a 4.33% yield
  2. Oil-Dri Corporation of America (ODC) – increased position – This buy was also part of my efforts to increase my overall dividend payout in the second month of a quarter. Grabbed 5 shares at $33.55 and a 3.10% yield.

Buys and Sells for the Week 12/25

Treated myself with some early Christmas presents. Here are my trades for the week:

  1. BCE Inc. (BCE) – increased position –  6.1% from this Canadian company was enough to make me go H! Ho! Ho!
  2. Oil-Dri Corporation of America (ODC) – increased position – Having a significant snow storm before Christmas was a good reminder to keep kitty litter in the car and to buy more ODC for a 3.04% dividend yield.
  3. Bar Harbor Bankshares (BHB) – increased position – 4% yield and I’m hoping for a dividend raise announcement in February around 10%. Hopefully Santa is listening and I have been a good boy this year…

Why Saving 10% in my 401K Worked for Me

Routinely in my posts I state how I have consistently saved 10% in my 401K and I would like to take a moment to walk through how this was successful for me but may or may not work for you.

  1. My Retirement Plan Has Never Changed (Retire at Age 60) – Back in 1987 when I first started saving there was no concept of FI/RE.  At that time, a well-planned early retirement was considered to be age 60 and for extremely successful people it was 55.  I focused on age 60 and never deviated.
  2. I was Always Invested Heavily in Stocks – In the early years, 401K plans did not offer a wide array of investments.   My plan had a whopping 6 choices.  I chose to invest 90% into a large cap growth Fund and 10% into a bond fund.  Once a year I would rebalance to keep the 90/10 ratio.  As the years progressed my 401K expanded their investment options, and I was told more than once I should diversify into more investments.  I really did not care for spreading out my funds and liked the simplicity of the two-fund portfolio.
  3. I Never Withdrew Money – This one is self-explanatory.  Regardless of how financially in trouble we were at times I never once withdrew a dollar. I also forced myself to fix my financial problems through other means like cutting expenses, working over-time, or taking on part-time jobs.  To me my 401K money was for one thing and one thing only, it was not a personal piggy bank.
  4. I Had Time on My Side – The most powerful reason why saving 10% was successful can be boiled down to time in the market.

Here is a graphic from a July 2020 Fidelity article that shows the recommend savings rate at different ages.  The graphic depicts the earliest age of 25 with a 15% savings rate and that is where my advantage comes into play.  I started saving 10% at age 19, I had a 6-year advantage!

I wish I had saved all my annual 401K statements but alas I did not.  However, I was able to recreate my portfolio performance thanks to Portfolio Visualizer which had the two mutual funds I invested in starting from 1987 and was able to chart from the end of 1987 to the end of 2015 (I took my 401K rollover in Jan 2016). 

When I first started my career, I was making a $15,000/year plus whatever over-time they would throw my way.  Putting this in context, it would be closer to $34,000/year in today’s dollars.  But heck I did not care back then, I was 19 with money in my pocket to burn.  So even starting out with a small salary I was still able to build a sizeable balance (~$400K) by the time I rolled it over and the average annual return was 9.76%.    At this growth rate, I was on a path towards $1.3M by age 60 without adding any additional funds.

However, saving 10% was not the best for me or my family either.  As a young adult I greatly underappreciated the cost of life and in particular family life. 

When I first started saving, I thought all I needed was a 401K, a little bit of emergency cash, and a down payment for a house.  The rest I spent on fun. The reality of my lack of planning for life events set-in when my wife left the workforce to raise our children full-time.  I was unprepared financially to support 3 children and a wife on just one salary and it started a slow spiral into debt which we did not climb out of until my wife returned to the workforce in 2017.

Looking back, I wasted a lot of money on having fun during my single and early marriage years.  If I had to do it again, I would have kept the 10% 401K contribution and I should have been also saving another 20% in a brokerage account for life’s little needs for a total savings rate of 30% and dialed it down to 10-15% after the kids were born.  I obviously cannot go back in time so all I can do is chalk it up to experience.

Buys and Sells for the Week 12/18

The Dow & S&P 500 refuses to go back below 30,000 and 3,650 . Absolutely amazing the market has kept it’s momentum for a month. With few opportunities available here are my trades for the week:

  1. AbbVie Inc. (ABBV) – increased position –  This buy is part of my efforts to increase my overall dividend payout in the second month of a quarter which is considerably lower than the other months. Grabbed 3 shares at $102.66 and a 5.06% yield
  2. Ventas Inc. (VTR)sold position – I bought this during the market crash in March but at the time could only afford to buy $250 worth. VTR since has slightly more than doubled and being such a small position I sold out and collected $561 (plus $9 in dividends). Luckily this trade was in my IRA so it did not trigger a taxable event.
  3. WP Carey Inc. (WPC)increased position – Using the funds from my VTR sale I reinvested back into old reliable WPC. Late Friday the stock price came back down below $70 a share so it was an opportune moment.

Buys and Sells for the Week 12/11

Markets continue to hold onto their gains making dividends expensive. The few bargains available I already have a full position in so no need to buy more. Until things cool off I am content to just keep adding money to my brokerage and build up some dry powder. Here is my only trade for the week:

  1. OGE Energy Corp (OGE) – increased position –  13 years of dividend growth and a 5% yield. I decided to just finish this one off and have a full position and bought 27 shares to top off my investment.

Buys and Sells for the Week 12/4

Markets just keep inching higher and higher and another week of light trading for me as stocks on my watchlist stayed well outside my buy zones. Until things cool off I am content to just keep adding money to my brokerage and build up some dry powder. Here is my only trade for the week:

  1. Oil-Dri Corporation of America (ODC) – increased position – For a brief moment on Monday the stock price dropped to the upper end of my buy range and I picked up 6 shares. ODC has grown their dividend for 18 years, a debt to equity ratio of 7% and I nabbed a 3.0% yield.