Income/Expenses For February 2014

budgetI’ve been tracking my income and expenses online since I initiated this blog back in early 2011. I do this for a few reasons.

First, I want to prove to the world that it’s possible to become financially independent at a relatively young age even if you don’t make a lot of money. I don’t make a six-figure income. I never have and I probably never will. But it’s not necessary. Often, people focus on income too much. Expenses are just as important because if you make $200,000 per year, but spend $190,000 of it you’ll never become financially independent. Conversely, bringing home $40k and learning to et by on half of it means you’ll likely be able to retire if you want to within 15 years or so. Making less means you have less to save, but spending less means you need less to retire off of.

The second reason I do this is because I want this to be a live look at one man’s journey. You can find countless books by financially successful people, but often it’s long after they’ve completed their trek to significant wealth that they’re then telling you how they did it. It’s easy to postulate. It’s much more difficult to actually show the whole process in action, for better or worse.

And finally, knowing that every dollar I spend is going to be published for the world to see serves as reinforcement to stay frugal. There’s been more than one occasion where I decided against a particular expense after realizing I might be a bit embarrassed to write about it.

So each month I will post my income/expenses for the previous month. I track every dollar in and out, so what you see is exactly what I earned and spent (rounded to the nearest dollar).

Income from February 2014:
Day Job Paycheck$1,494.00
Dividend Income$337.00
Online Income$478.00
Total Income$2,307.00
Expenses from February 2014:
Rent & Utilities $534.00
Auto$300.00
Student Loans $224.00
Health$155.00
Restaurants$113.00
Groceries$100.00
Fast Food/Takeout$81.00
Auto Insurance$49.00
Mobile Phone$40.00
Pharmacy$39.00
Fuel$35.00
Internet$30.00
Gym$30.00
Amusement$5.00
Everything Else*$92.00
Total Expenses$1,822.00

*The Everything Else category includes expenses I don’t have a regular budget for. For this month, I spent $26.00 on flowers, candy, and a card for Valentine’s Day. I also paid $11.00 for a new kitchen mat. Finally, I paid $55.00 to do my taxes on TurboTax.

Income was great this month, but it was skewed. I owed $2,777 in federal taxes due to dividend and online income earned in 2013. So I reduced my income from my day job accordingly to reflect the taxes owed. I always include net income in these reports, and so I reduced my income to reflect true net this month. Otherwise, I had a pretty solid month at work. I’ve noticed my numbers at work being negatively affected by some recent changes, so I expect my day job income to start trending downward over the next month or so.

Dividend income for February was fantastic. It was a superb improvement on February 2012 as previously discussed. I’m really proud of how my dividend income snowball is coming along. It’s slowly turning into an avalanche.

Online income was really strong yet again, although the net was impacted by higher-than-usual expenses. I had to hire out assistance ($350) to help me move all my content over from Blogger to WordPress when I migrated over to the latter last month. I also purchased a Genesis theme ($100) from StudioPress, which is why the site looks so great. I also had to renew my domain name with GoDaddy ($17). In addition, I paid $15 to have my header designed for me. I then initiated an email service because FeedBurner sucked ($20). Finally, I paid for hosting for the first time ever. I signed up with Liquid Web to run a 4GB VPS, and this is costly ($170). However, even after all of this the net was still pretty solid! I’m a bit behind my goal to earn $12,000 in online income this year after this month, but I’m hopeful I’ll be back on pace very soon. Note: The StudioPress and Liquid Web links are affiliate links, but I only include them because I recommend both services.

Expenses were mainly held in check this month. Thankfully, no major surprises came my way.

I actually didn’t spend as much on food as I initially thought I was going to. The only reason it was high as it was is because I took my girlfriend out to a rather expensive Valentine’s Day dinner. Without that, it would have been a fantastic month in the food department. But there’s always something, right?

Fuel was very light this month as I spent two weeks at home during my little sneak peek at financial independence. Instead of using this time to go out and hit the town, I instead hunkered down at home to see what the day-to-day looked like if I was actually financially free. And let me tell you it looked great! I didn’t spent a lot of money, but instead just lived my life as I normally do. The time I didn’t spent at work I instead spent on the blog writing or over at my investment account reviewing my portfolio and researching new potential investments.

All other expenses were normal. It’s always good to have a nice, clean month!

I managed to save 21% of my net income this month. Obviously, it’s a disappointing figure. However, this low figure isn’t due to really high expenses, but rather a large tax bill that reduced my income. I’m also comforted by the fact that even with $2,777 going to the federal government I still had a savings rate well above the average American.

My goal is to save 50% of my net income, averaged monthly. So far, I’ve hit rates of:

49.8% – January
21% – February

So far I’m at an average monthly savings rate of 35.4% for the year. It’s a slightly disappointing start to the year, but I’m still hopeful I can hit the 50% savings mark for the fifth year in a row. I knew this year was going to be challenging with reduced income at work and added expenses in the form of a car, but I’m going to give it my best shot. Looking out over the next couple months I think March will be a challenging month with the second half of some dental expenses coming in. I also expect lighter income. April will also be a tad expensive as I have a day trip planned for my girlfriend’s birthday. But I think looking past the next couple months I have a great shot at a very frugal summer.

How was your February? Did you have a great month for your budget?

Thanks for reading.

Photo Credit: Stuart Miles/FreeDigitalPhotos.net

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80 Comments

  1. Jason,
    I was meaning to ask how the Frugalmobile was doing? Do you find that you go out more often, or to further places, as a result of the convenience? I as wondering what skewed your income…..at first I thought the new guy took THAT much of your cut. Glad that’s not the case. Did you enjoy General Mills 8% raise a few days ago? I sure did.

    Tonight might be our last cold front. Enjoy it my friend :o)
    -Bryan

  2. That tax bill of $2,777 is a bit of a double edged sword that I am not sure if I am happy about wielding one day. On one hand it is a mark of your success as a dividend investor and on the other it stinks to have to pay the tax man a large lump every year. 50% savings is a pretty massive achievement and I will work to join you in that challenge. My February was very successful, I hit my lowest amount spent in the last 12 months and am confident that I will be able to beat it each month going forward.

    Thank you for the article Jason and keep up the good work!

  3. DM,

    Sorry to hear about the income decreasing at work. I know you have seen this coming for a few months, but I’m sure that doesn’t make it any easier.

    I’m sure the expenses will even out for you soon. I like seeing your monthly expenses and I track my own each month as well, but I find that a quarterly look at each category is a little more helpful as it seems to smooth out the odd expenses we seem to have in any given month. My last two months were a bit heavy, but I would be surprised if I go too far over 800.00 for this month.

    Cheers

  4. You can reduce your federal allowances on your day job W-4 to keep the big payout more manageable. I will likely have around $8K this year of outside (non-job related) income, so I need to increase my withholdings throughout the year.

  5. You mention “writing opportunities” in the income section sometimes. Would you be willing to discuss what exactly that is? Are you writing for profit-sharing sites like infobarrel?

  6. Jason,

    Have you thought about estimating your taxes and spreading the amount over 12 months? I think that would prevent these wild swings in your savings rate.

  7. Bryan,

    That’s a great question. I should post about that soon.

    I actually don’t find my routine changed at all. I figured it might be easier to stray a bit and take trips here and there, but I really don’t. My life hasn’t changed much at all since I bought a car, but that’s probably because I was already getting around pretty well without one. I mean having a car is nice, but I really miss those cheap months when I was spending $50 on bus passes and maybe $10 on gas. I wasn’t all that cramped without a car, but our new dealership is already under construction. So it was sooner or later…

    Yeah, the new guy is definitely impacting things but not quite that bad. For instance, my sales at work are about 15% March 2013’s numbers, even though as a department we’re up quite a bit. We’ll see. Tomorrow I have 2 appointments, and usually I have 9-10. So there are some significant changes being felt. I think I’ll have to continue gauging this situation. I’m not ruling out looking for work elsewhere.

    That raise by GIS was great. I’m so upset I didn’t buy in when it was under $40. I kept circling, but never made the move. That was a big error for me. I’m usually not so shy about pulling the trigger, but I just kept finding other opportunities. Can’t buy ’em all!

    Thanks for stopping by.

    Best wishes.

  8. Dividendasaur,

    I’m not all that upset about a big tax bill. I have an upcoming article on taxes, and in it I explain why having to pay taxes sometimes is a good thing. I could easily go back to the days when I was in my 20s, waiting tables and getting tax refunds because I didn’t make much money. Of course, I was broke back then.

    Congrats on a great February for spending. I seen you and I spent a very similar amount of money. I wish you luck with getting it even lower! 🙂

    Cheers.

  9. Ravi,

    I did that last year. I knew I was going to owe more than $1,000, so I had my employer withhold a little extra in December so that my 2013 withholding was more than my 2012 withholding. That way I skirted the underpayment penalty.

    However, this year with reduced income it’s doubtful I’ll pay more in taxes throughout the year without having my HR department constantly messing with my paycheck, so I’ll be paying quarterly estimated taxes instead. I’ll be talking about that in the coming days.

    Take care!

  10. The Stoic,

    Thanks! Appreciate the support. 🙂

    Yeah, the income reduction is unfortunate, but I’m glad that I took steps a few years ago to bolster my other income sources. It certainly makes it much less painful.

    Congrats on getting your expenses down so low! That’s awesome. I’m hopeful I can get mine down that low one day when my “auto payment” is gone and my student loans are paid off. That will knock more than $500 off the top right there. With a few other moves and perhaps a lower rent situation I could get pretty close. I think I’m going through an expensive patch here, but I’m confident I can get the bills super low again in the near future. My auto amortization will be done in the fall, so I have that to look forward to. 🙂

    Again, congrats on the low spending. At that level you don’t really need to worry about FI so much as just having enough income here and there to support yourself. That’s a path I might explore if the road to FI by 40 is a little too long and winding. If I could get my bills down to, say, $1,200/mo and my dividends up to $600 or so (which isn’t far off) I would then just need another $600 to cover myself. A very interesting idea.

    Thanks for stopping by. Always appreciate your insight.

    Best regards.

  11. Kevin,

    I don’t mind sharing that. Right now I write for Daily Trade Alert – an investment website. I hope to expand on this and write for more sites as time allows, but right now my plate is pretty full. Once I’m close to FI, however, I hope to create more opportunities in this area. That would allow me to potentially bridge the gap to FI a little sooner, and also do something I really enjoy. I’m still probably a few years off from something like this, but it’s something I think about here and there.

    I’ve never heard of infobarrel. Is that something I should look into?

    Best wishes.

  12. Roberto,

    Great question there.

    I actually just sent in my first ever quarterly estimated tax payment. I’ll be posting about that in the coming days. So to answer your question: Yes, I will be spreading out taxes throughout the year to even out the months a bit. I’ll likely just include the $700 in quarterly taxes I paid this year during the actual month they hit, but if these payments get real large in the future I’ll spread them out over 12 months. My monthly budgets are hard to even up because my income swings so much at work, but it would be nice to see them a little less erratic.

    Cheers!

  13. Jason,

    That is a fantastic month considering some one-time website expenses and a large tax bill. I saw your monthly pay and thought maybe you took unpaid time off but glad to know it was net.

    With the growth of your blog and online income, I think you will reach FI before you know it. Obviously FI is reached when your passive income equals your expenses but do you have a specific number in mind where you call the day job quits and just blog or look for something more rewarding?

    Keep up the good work! Inspiring as always.

  14. I’ve been watching these monthly reports for a while now, so I was shocked when I saw the income side. Good to know it was taxes and not a real drop in pay. The $170 for VPS, is that monthly or yearly?

  15. Hi DM,

    First time posting but I’ve been following your blog for quite a bit. Being a college student, your blog has motivated me to get an early start on FI! (Ironic since I’m still technically a dependent). But since I’m looking really long term, I have some concerns. One thing that I am most worried about with this strategy is that tax bill! While the qualified rate might be 15% now, do you have any concerns about how this might change with the state of the US? With debt of 17 trillion and still accelerating, when will we have to pay the price? Capital gains and dividends seem easier for politicians to go after and it was seen last year with the dividend tax increase for high earners. Once my portfolio really gets going, who knows what the rate could be?! My other concern is thanks to the Fed and QE 1,2,3,4 etc, markets seem so artificial and way overvalued. While I might not have much capital, it’s hard to buy thinking there could be a correction any day. Being young, I know I shouldn’t be so risk averse, but I can’t help it.

    Another great month and thanks so much for the inspiration!

  16. I’m feeling the wrath of the taxman this year, it has slowed down my investing activities. The $55 you spent to do your taxes, was that on the purchase of the TurboTax software or some other TurboTax-related fee? I may have to do my own taxes in FI, so I’m curious.

    This has been a tough month on your savings rate, but that’s to be expected. I’m glad you’re not beating yourself up over it. Btw, I love the table that you put together, it’s really beautiful! I think the theme you bought makes a difference.

  17. Brazilian greetings!

    I’ll walk you two weeks ago. Adhere much to their discipline. Will soon reach the long awaited financial independence.

    I noticed in your portfolio that has only U.S. stocks. Think someday invest in other countries? And in Brazil?
    Do you believe that Brazilian stocks are cheap? What U.S. investors are thinking about the Brazilian stock market?
    Once again, congratulations! I hope it comes out soon from the rat race.

  18. Brazilian greetings!

    I’ll walk you two weeks ago. Adhere much to their discipline. Will soon reach the long awaited financial independence.

    I noticed in your portfolio that has only U.S. stocks. Think someday invest in other countries? And in Brazil?
    Do you believe that Brazilian stocks are cheap? What U.S. investors are thinking about the Brazilian stock market?
    Once again, congratulations! I hope it comes out soon from the rat race.

  19. Great job Jason, still net positive even when expenses rack up, always gonna be ups and downs but it’s another step in the right direction. Nothing much to report this end although been looking at what i believe to be a few good deals. As you know, i tend to be a bit contrarian, i also like getting into stocks that have potential especially when people hate them, next one i am looking at is FCX. Good dividend 5% but the payout ratio is a bit high. If you believe in long term commodities then i think the valuation becomes more compelling and this one is getting clobbered due to indonesia copper kerfuffle. It’s in a hated sector right now and could well go into the $20’s but i am going to start adding to it shortly, long term hold for me.

  20. Good job nonetheless! The taxes are a very high special cost. You can also consider the website costs as a long term investment and in a way a one-time cost. Will be curious to see how next month goes.

    I am also in the process of cutting my spending, so far everything else is gone, only the groceries remain. Now I need to find a way to cut the groceries bill, but it’s being hard.. The groceries price here in London are terribly high.

  21. Paying off my student loans was one of the hardest and best things I’ve done. I say hardest because even though I had already paid off the smallest one and was making large payments to the other one, it was tough to write that check for 20k!! At the time I was still investing in stocks and there was a lot I could have done with 20k!

    Looking back I don’t regret the decision at all. Not having that student loan payment nor having a rent/mortgage payment has allowed to enjoy (f)unemployment without burning through too much cash.

    You’re doing great man; keep at it!!

  22. DM,

    Nice Job and 2013 was a solid year with all your goals being achieved! I have to read more, but looks like another great move by Schorsch spinning ARCM off of ARCP and more monthly dividends may be coming our way!

  23. Jason, as always, your consistency in documenting, dreaming, and investing, has been and will likely continue to be your best asset! Things will smooth out and I foresee a big end of 2014 for you as some of the expenses wane and the online income continues to grow.

    As for the the taxes, I’ve always held the following to be true: Generally speaking, the higher the taxes, the more money I’ve made, and for that I cannot complain. Comes from my time in public accounting watching as folks who have made the real big bucks pay checks that you and I cannot even fathom. The largest I’ve ever held in my hand was a personal check for almost $7 million. Also created the most stressful trip to the copier/scanner as we saved it in the clients tax records.

  24. That’s actually a pretty nice month considering the tax bill. How much longer do you have to pay on your student loans? If I were you I’d pay it off right before retiring as a margin of safety. Or maybe even pay it down if the markets reach bubble status and nothing seems attractive.

    One thing I am currently looking into is dropping cable and getting a digital antenna. I don’t really watch TV anyways.

    I like the look of the new blog

    CI

  25. I have a question for you. What do you curently do for health insurance? Do you get it through work? And do they offer a high deductible HSA account? I decided this year to move to an HSA account w/ a high deductible. Reason being, I’m young & health, but I know I’ll always have medical expenses (like your dental work). The benefit with an HSA account is that it gives you triple tax savings. On the front end, my contributions are tax-free or tax deductible. Any money made in the account is tax free, and any withdrawals for medical expenses are tax-free. Also, you’re able to open an investment account and invest the money letting it compound even more. You can put in money anytime during the year and take out anytime for medical expenses.

    Anyways, I thought I’d throw that out there to possibly lower your taxable income. Afterall, medical expenses are inevitable.

  26. On another note with an HSA account. Current real life application; my wife just had a baby, so I threw $2,000 into the account to pay for medical bills. Lowered my taxable income for 2013 (got an extra $700 back), for an expense I knew I had to pay regardless of where the money came from.

  27. I was wondering why job and online income were both so much lower but it makes a lot more sense now. I was curious if you’d start paying estimated taxes and since that might be an issue for me going forward I’ll be looking forward to the taxes post. February was pretty much par for the course and I think expenses came in around $6 higher than January. I like the consistency on the expense side but like you the income side can vary quite a bit for me.

  28. Keep up the Good Job Mr. Mantra.
    “Your Focus is your reality.”

    Good job bud.

  29. Brent,

    Thanks, bud. It was my worst month in terms of saving percentage since I started tracking my expenses back in 2010. Unfortunate, but it’s just a minor speed bump in an otherwise (hopefully) successful journey. Just another challenge to overcome. 🙂

    It’s really amazing. The dividend income combined with the online income is getting very close to where all of my expenses are covered. It’s been far more amazing than I ever thought it could be. As far as a number goes, I was kind of mentioning above that if my dividends got to $600/mo – which isn’t far off – and I was able to get my expenses even lower then I think I could potentially work part-time and then maybe expand my writing online. I think at that point I’d enjoy my time a bit more while still being able to save and get to true FI via passive dividend income. I’m not sure if that’s something I’d do or not. I mean I think I’d really enjoy it, but it would be tough to give up the ability to invest as much as I do now. In addition, I think that my message that it’s possible to become completely FI via dividend income might get lost in translation if I did something like that. I don’t know. It’s a really interesting concept, that’s for sure.

    Thanks for stopping by! And keep up the inspiring work on your end too.

    Cheers.

  30. Addison,

    Thanks for stopping by!

    I appreciate the support. Glad you like the new look. I’m extremely happy with how it’s turned out thus far. I feel almost like before I was renting and now I own my own pad. Like I now have my own little home on the internet. It’s kinda cool. I was able to finally paint the walls! 🙂

    Take care.

  31. DivSaver,

    Yeah, that tax bill was a monster. But it’s a good thing; it was because I had a great year.

    The $170 is monthly. I’m at about half capacity right now, but that just means the site should load quickly and there’s room for growth.

    Best wishes!

  32. Andrew,

    Thanks for following along. I really appreciate your readership. And I’m glad you decided to leave a comment this time around.

    As far as tax rates go, I wouldn’t worry about it. The way I look at it is even if the dividend tax break goes away completely, we’re not talking about a lot of money here. I don’t know what your idea of FI looks like because I don’t know much about your expectations, but for me I’m not going to be retiring early off a ton of money. We’re talking $15k-$20k in yearly dividend income. I’ll be “low income” either way you slice it. Now if you’re talking $50k/yr in dividend income that’s a different story.

    As far as investing right now I wouldn’t worry too much. When I first started it did cause my heart to skip a beat when I seen my account gyrate by a couple hundred dollars. But then I realized that when my account is down $200 on the day, Warren Buffett is down billions. When you think about it like that, it keeps things in perspective. Plus, a 10% drop on a relatively small amount of money isn’t going to derail your plans. I started with $5,000. Even if the stock market immediately dropped by 10% the following day I would have been down by $500 – and that’s simply a paper loss anyhow. $500 isn’t going to stop this train, you know what I mean?

    Keep things in perspective. Paying $38/share for KO today only to see it drop to $36 doesn’t matter much when it’s $100/share or whatever 15 years down the road.

    Best of luck! And stay in touch.

    Take care.

  33. I recently began tracking my trailing twelve month expenses- assists with planning and understanding where cash goes. I’m been doing this for 36 months so I plan to begin plotting this over time. With a baby on the way, this will likely make an impact- which I’ll be able to do with accuracy. I recommend doing such an analysis- you can identify inflation over time, but also, if you have any “lifestyle inflation” as well.

  34. Spoonman,

    Glad you liked the new table. This stuff is all way more complicated than it looks. But the end result is well worth the effort.

    The money I spent on TurboTax was to use their online software. It took me a few hours to do my own taxes. Although, I’m a bit worried that as my situation continues to become more complicated I may have to hire an accountant. We’ll see. I’d rather not spend the money, but I also want to make sure things get done right.

    Cheers!

  35. Daniel,

    Thanks for stopping by from Brazil! Seems like a beautiful country. Would love to go someday.

    I do invest in foreign companies. You’ll see BNS, TD, VOD, and BBL in my portfolio, which are all foreign. I don’t really follow any Brazilian companies. Any you recommend?

    Take care!

  36. talesfromthetape,

    Seems like a good play there. I don’t follow FCX, but I do have an investment in BBL. I like commodities because I believe in global growth continuing, but I also realize that there really isn’t any pricing power there. These companies are subject to wild swings in pricing for many of the commodities they go out and dig up, so there is a bit more volatility there than what I’m used to. But I picked up BBL for what I thought was cheap enough to weather the storm. If FCX is cheap enough it should work out fine for you. 🙂

    Best regards.

  37. DividendVenture,

    Thanks so much.

    I agree with you; the website costs are simply an investment. It took me a while to come around to the idea because of my inherent frugality, but I’m glad I took the plunge. The earnings may take a hit for a while due to the high hosting costs, but in the end I’m really happy I have my own little place on the internet.

    Great job keeping your expenses low. I can only imagine how expensive London can be. Seems like an amazing city, but also very expensive. It’s unfortunate that some of the most vibrant and great places on this planet are also the most expensive.

    Thanks for stopping by!

    Best wishes.

  38. SWAN,

    ARCP is turning out to be a fantastic holding. I only wish I would have bought more when I did. I can’t say anything bad about it so far, although the company is changing quite rapidly. It’s definitely different from say, KO, where the GMCR partnership was the first big news from the company since I first started investing years ago. It’s exciting. Hopefully the new ARCM holding turns out to be solid, which it should considering it’ll be quite focused. Plus the 7%+ dividend raise is very nice, especially coming so soon after the last raise and the special dividend!

    Best regards.

  39. W2R,

    Thanks for the very kind words. I appreciate all of the support. And I’m hoping for a big finish to 2014 as well, because it’s starting out a little rough. But I think the expenses will drop quite a bit near the end of the year and hopefully the other income sources grow enough to offset the loss at work.

    And I couldn’t agree more about taxes. I wrote a post about paying quarterly estimated taxes, and I basically framed as how lucky I am to have to pay quarterly taxes. If you’re in the spot to where you’re making enough money to have a big tax bill, consider yourself lucky. I totally concur with you.

    As always, hope everything is very well on your side of things as well!

    Cheers.

  40. CI,

    I’ve got another ~8 years of payments left on my student loans. Maybe a bit less. I think whether or not I make a lump sum payment at some point they’ll be paid off before I hit FI because the payoff date is within my timeline to retire early.

    I’d definitely check out the antenna. Maybe buy it and try it out. If you don’t like it, you can always take it back. But if you don’t watch much TV then I think you’d be just fine.

    Thanks for stopping by! And glad you like the new look. It was a big change, but I’m so happy with the final product.

    Best wishes.

  41. Trev,

    Using a HSA is very smart. I think they’re a great savings vehicle. Last I knew, my work didn’t offer one. At least the last time I looked into their healthcare plans they didn’t. I’ll have to check this year if they offer one yet.

    Good for you for using it to your advantage like that. That’s the name of the game! 🙂

    Thanks for stopping by.

    Best regards!

  42. JC,

    You had another fantastic month. Like you, I also have erratic income. But it’s nice to be able to keep the expenses relatively stable from month to month.

    I’ll be publishing the tax article in the coming days. It’s all ready to go. I don’t know if it’s comprehensive because everyone has different tax situations, but I think it’s a good overview.

    Cheers!

  43. FuzzyDice,

    That’s great advice. Tracking it over a twelve-month average tends to smooth things out a bit as well. Then tracking it on an ongoing basis will indeed tell you if the old lifestyle inflation is hitting you. My expenses have gone up over the last year or so, but it was less lifestyle inflation and more necessities. The health insurance was pretty much necessary to protect my assets, and the car, while unfortunate, was something I had to have. Our new dealership is already under construction. Maybe in the future I can get by without a car again. It would be nice!

    Thanks for stopping by.

    Take care!

  44. Tyler,

    Focus is incredibly important when one’s on a journey that is a decade or more long.

    I hope you keep your focus as well. 🙂

    Thanks for the support!

    Best regards.

  45. Hi Jason,

    I don’t believe it would dilute your message to go over to self-employment (blogging) on the way to full FI.

    We need more self-employment. Every time someone finds a way to work for him/her self, that’s one less wage slave. It’s not FI, but it’s WFTMI (working-for-the-man independence).

    Sure, not everyone can be a blogger. We still need people to grow food and build houses. But I know retired people who get part of their income from raising chickens, selling eggs, and offering handyman services.

    So if you can improve your life on the way to full FI by self-employment, you will have just found another way to inspire people.

  46. Hello friend!

    The Brazilian market despite emerging, has many healthy companies. Here are some:

    Bank of Brazil ,,Banco Bradesco ,Itau Unibanco ,,ambev ,Souza Cruz ,Natura ,Cemig ,Vale do Rio doce,Cielo .

    Among other companies.

    Hug!

  47. May be a good idea to drop more against your loans as this market continues to stay (near) fully valued? It’s like getting a guaranteed bonus return on top of a sweet run since 2012!

  48. Jason,
    What is the interest rate on your Student Loans?
    What’s the remaining balance?

    Enjoy the blog. Keep up the good work

  49. Hi DM,

    Great job as usual. You are more frugal than I could ever hope to be. I appreciate you sharing your steps with us. I thought I’d offer two suggestions that I have recently completed to save me money.
    I was already a Sprint customer but when they came out with the Framily plan I was able to get my per phone charge down to $25 per line, saving me about $75/month (for 3 phones). I notice with your expense of $40, this might be an option to save.

    2nd was your pharmacy expense, I don’t remember if you ever explained if it was specifically for rx drugs or just drug store related items, but if they are prescriptions, consumer reports has shown that Costco continually has the lowest prices on meds. Nice thing is you don’t need a costco membership

  50. Looking good!

    Hey I have a quick question for you (not sure how quick…) and I’m sure you’ve already done research on this:

    The primary oppositional argument to dividends (well not necessarily oppositional, just “naysayer”-ish) is that the income that they provide is illusional. I agree with them that while it is true that when a company pays cash out to shareholders, then the company should be proportionally worth less. But to me, what they are forgetting to mention is that a company has a certain payout ratio so the stock should still theoretically be worth more as long as earnings didn’t go down for the quarter. To me, the stock should actually go up as long as the payout ratio is below 50%. A payout ratio of 50% with expected earnings should mean, to me, that the stock stays the same price?

    Another thing those who seem to point out that a dividend paying stock is no different than a stock with capital gains is that a dividend paying stock (especially a growth stock) provides security when the market is on some kind of “emotional rag”, meaning the underlying company is doing fine despite a massive selloff. The only companies that may have stopped paying dividends were financials. Walmart paid and even grew their dividends throughout the last stock market meltdown. Same for most other companies. So dividend paying stocks pay you to wait, which is something that a lot of skeptical people seem to forget.

    Am I right?

  51. Jim,

    Thanks for writing that!

    You wrote the words I was thinking – “dilute your message”. That’s exactly what I was trying to say above. I don’t want to take away from what I’m talking about and trying to do. I really appreciate your support, however. If I could do more of what i really love to do while not taking away from the journey I would. It’s hard to reconcile the two, but I’m hopeful I can figure it out in time.

    However, I’m not against the idea of working part-time at a day job and writing a lot more if it meant that I could still achieve true financial independence within my time frame. I don’t want to give up what I really believe in, but at the same time my ultimate message is to be as happy as you possibly can in life. And I know that freedom brings me incredible happiness, and so does writing and inspiring people here. So, again, it’s just trying to reconcile it all. If I could just work at the day job a bit less and write a bit more I think I’d find a really nice balance in there.

    Thanks again for stopping by and commenting. Appreciate the perspective!

    Cheers.

  52. Daniel,

    Don’t worry about the bad English. I really appreciate the effort. 🙂

    I don’t follow AmBev directly, but I do hope to own a piece of Anheuser-Busch InBev one day.

    Thanks for listing some companies there. I’ve got my research cut out for me!

    Best regards.

  53. Ravi,

    Well, my situation is becoming more complicated as time goes on. Special considerations are made with REITs and I now own a few of those, and this blog is now turning into a business. I handled everything fine myself this year, but I do wonder as time goes on if this will all go beyond me. I have a fair grasp on taxation, but I don’t know everything. Of course, if I find myself with a lot more time (due to FI) then I’m guessing I’ll be fine keeping up with it all. 🙂

    Best regards.

  54. Ravi,

    Thanks for the suggestion!

    It’s definitely a consideration, but with an interest rate of just under 3% on the student loans I continue to pay them off at the monthly minimum rate because I think I can do better that that with equities. However, if the market continues this march upward I may have no choice but to reduce this debt more aggressively.

    Cheers!

  55. John Galt,

    My balance is just under $19k right now, and the interest rate is just under 3%.

    Thanks for the support! Glad you enjoy the blog. I hope you continue to stop by. 🙂

    Take care.

  56. ed69,

    My pharmacy expenses are related to personal effects like razor blades (I shave my head), soaps, lotions, toothpaste, deoderant, etc. Stuff like that. I don’t take any medication. I simply include it as a Pharmacy expense because that’s generally where I buy this stuff and I like to track these expenditures.

    As far as the cell phone charges go, your comment is most timely. I’m actually going to be switching carriers here this weekend. I’ll be discussing that very soon. Although the savings won’t be huge because I’m coming from a low base, I’ll be saving a little money and also be receiving some pretty decent benefits as well. 🙂

    Cheers!

  57. Ricky,

    I don’t subscribe to the notion that a company is automatically worth less simply because it pays a dividend. Sure, technically speaking, it’s valued less by the exchange based on how much it pays out…but if you look at any long-term chart of a dividend-paying company I bet you can’t spot the dividend payouts.

    Furthermore, just because a company doesn’t pay out a dividend doesn’t mean it’s automatically worth more the amount it would have paid out. Any dividends not paid are retained earnings for the company to use elsewhere. However, how can it possibly be proven that the company will invest this money better than you, as a shareholder, could? Retained earnings over dividends creates a situation where the company has to put that cash to work. Will it always be put to work in the best possible way with the highest ROI? Paying out that cash forces management to focus on the highest ROI projects. Furthermore, higher retained earnings because of a lack of dividend payouts can potentially reduce ROE because you’re increasing equity without necessarily increasing the return.

    Just my thoughts on it! I hope that helps.

    Best wishes.

  58. Well I thought it was common knowledge that a stock should technically drop by the equivalent of the dividend amount on the ex-dividend date (as soon as the company announces it will distribute cash). It makes sense, since the company had X amount of cash, and will theoretically be worth less after holding X-dividend in cash.

    Its not noticeable, especially in companies that trade in larger volumes, because there are so many things that affect the price of the stock during the ups and downs in the market from day to day. I did read that you can look back at MSFT sometime in 2004, when if declared a larger than normal dividend, that the dip in stock price was absolutely noticeable.

  59. Ok I see that you said it would technically be valued less but hardly noticeable, and to that I would agree. At any rate, the stock should grow with good earnings and drop proportionally less based on the layout ratio once the dividend is declared (although, like you said, the drop is rarely noticeable).

    I was trying to point out a lot of people point out this technicality as a means to discourage anyone from investing in dividend paying stocks (or at least show why a dividend paying stock and capital appreciating stock are really not any different, just different ways of distributing value). I still prefer the dividend growth approach and you don’t lose shares with dividends.

  60. Good month overall! Why count taxes as a reduction to income? Seems like it would be more appropriate to count them as an expense.

  61. Congrats! As far as for paying costs for your website such as header, hosting, etc. I feel that pays off. People like going to a well designed, well organized, reliable website for information/entertainment. It makes a website look more professional.

  62. Steve,

    Thanks! It was my worst month in years, but still far better than the average American. So I guess I’ve got that. 🙂

    I don’t think it would be appropriate to ever count taxes as an expense. The number you see in all of my reports are net – net of taxes. I don’t post gross income because I have no control over Uncle Sam taking taxes from my paycheck. I can reduce many of my expenses, but I have limited control over my taxes. I didn’t spend money on taxes, but rather it was money I never really had available to me.

    Cheers!

  63. Lila,

    I completely agree. In the end, the money spent on moving this site to WP and designing it was an investment. It’s an investment in myself, in you readers, in the message. And I’m perfectly fine with that. From here, the only recurring costs will be hosting and email, but I think it’s well worth it.

    Thanks again for the support!

    Best regards.

  64. Jason,
    I truly enjoy reading about your journey to financial freedom. I think a new goal that may happen this year would be to earn enough dividend income and online income to cover all your monthly expenses.It won’t happen every month but it would be a tremendous achievement.
    Steve

  65. Steve,

    Thanks for reading! I appreciate you stopping by and commenting.

    I concur; that would be a fantastic achievement. I may take a page out of your book and make that a goal for 2015. Although far from passive, the income I make from my online ventures is becoming substantial. If I could one day cover half or so of my expenses via dividend income, and make enough from my writing to cover the other half while still saving toward full financial independence…well, that would be phenomenal. I’d consider myself extremely lucky.

    I’m not there yet, but every day is a step in the right direction.

    Again, appreciate the support.

    Best regards.

  66. Lila,

    Absolutely. The last time I talked about what I eat and how much I spend I was eating a lot of ramen noodles. I haven’t eaten in those in quite a while now. The very last time I ate a bowl of ramen noodles I literally started gagging. So I basically ate them until my body physically rejected it. How about that for discipline? Haha. Or maybe I’m a little nuts.

    But seriously, I plan on updating what I eat and how much I spend pretty soon.

    Best regards.

  67. Jason,
    I like your introduction of this post. It is so true to tame your expenses, but there is also other side of the problem: now you are single, but one day you get married, have kids, and you and your family will no longer live in a small apartment or one room with room mates. It is a very expensive part of the life and you have to plan for it, so, when you retire early you will be able to cover that part of life. But I bet you are well aware of it and getting ready. 😉

    Good luck.

    P.S. I love your online income!

  68. I tried out infobarrel and wrote about 3 articles. Only 1 of them sees any traffic and in total I’ve made about $0.03 in the 3 weeks since I wrote it, and new earnings have stopped. So, I’m going to say it’s probably not the best use of writing time.

  69. Another great month of frugality! Inspiring as always, and this is such a great tool to keep your expenses in check. My favorite is when you say by making this public you’re saving on ’embarrassing purchases.’ Way to take charge of your future.

    HURRAY, you’re all filed and done with taxes! This is a huge accomplishment and stress relief. I hope quarterly payments make this easier and more convenient going forward. I had one 1099-MISC form this year that is killing me with how much I have to pay in 🙁 But it sure feels good to be able to pay it all in the one lump sum I had budgeted for. Ryan from a few years ago would have been panicking!

    Your new WP design is so slick and easy to use. You know you’re doing great work when your blog can pay for hosting and tech help in the same month while still making a profit! Did you ever anticipate success and a following like this when you first started the blog? What’s best is your story is just beginning and is going to get much bigger 🙂

    Thank you for the great read,
    Ryan

  70. Martin,

    Thanks for stopping by!

    Actually, I don’t plan on ever having children. That was a decision I made many years ago, way before I started down the journey to financial independence/early retirement. It wasn’t a financial decision, but rather a personal one. Same goes for traditional marriage.

    However, for most others it’s certainly very important to plan for these life decisions because they have a big impact on finances.

    Thanks for the support. I appreciate it!

    Best wishes.

  71. Ryan,

    Hey, I appreciate the kind words! And I’m glad you like the new WP design. I’m extremely pleased with how the new platform works and looks. I truly could not be happier with this so far. It’s certainly a lot more work on the back end, but it’s worth it. 🙂

    And you make a great point there: Not only does it feel good to send a big check in knowing that it was a side effect of making a bunch of money, but it also feels really good knowing that you’re financially prepared to send in that check. The Jason of 2008 would have fainted if he knew he had to send the government more than $2,700. I would have had to sell a kidney or something!

    Thanks for the perspective. Great point there.

    Hope all is well with your continued journey!

    Cheers.

  72. DM,

    I’ve seen some of your articles on Seeking Alpha. Do those generate measurable income? What about when they are a repost of one of your blogs?

    Thanks for sharing the info.

  73. Jason,
    I understand and I understand your reasons. Then it would be a lot easier for you and I bet you get there incredibly fast. I already envy you the freedom ahead of you 🙂

  74. Keep up the good work Dividend Mantra! I’ve started tracking my savings rate and have been able to get it in the 70 percentile for most months. I make more, but you’re able to spend less. I’ve jealous of how you’re able to keep your expenses so low even though I don’t have some of your major expenses. I’m learning a lot, thanks!

    We need to keep getting the word out. So much of society’s financial ailments are due to their lacking of savings and frugality.

  75. Crass Cash,

    Thanks for the support!

    And congrats on a fantastic savings rate. I know firsthand how difficult it is to nail a 70% savings rate. It requires a lot of diligence and persistence. Keep up the great work!

    And I hear you on getting the word out. I’m doing the best job I can possibly do on that front, and I hope to keep improving at it every single day. 🙂

    Appreciate you stopping by. Hope you stay in touch. 🙂

    Cheers.

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