Income/Expenses For December 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. Oftentimes, 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 $40,000, and learning to get 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 and 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 December 2014:
Online Income $3,169
Dividend Income$685
Other Income$25
Total Income$3,877
Expenses From December 2014:
Gifts$567
Rent & Utilities$528
Auto$300
Student Loans$224
Engagement Ring$200
Health Insurance$193
Groceries $159
Hosting$116
Restaurants$105
Amusement$67
Auto Insurance$65
Fast Food/Takeout$63
Fuel$28
Cable/Internet$27
Pharmacy$25
Email Services$20
Everything Else*$439
Total Expenses$3,120

Income

The sixth full month of writing full-time is now behind me and things continue to look wonderful. I generated less online income throughout December than I was able to over the last couple of months, but it still represents a huge success in my mind. This income will obviously oscillate a bit from month to month, which depends on a lot of factors like blog traffic, advertising income, and freelance writing. However, this was still an incredible result. I appreciate everyone’s readership and support immensely.

Dividend income this month was huge yet again. I always look forward to December’s dividends. It’s usually one of the larger months in terms of dividend income and it’s a great way to finish off the year. I was especially grateful for these dividends because expenses were so high, as discussed below.

Other income represents cash back rewards from one of my credit cards. I don’t spend much but I do enjoy playing the points game as much as reasonably possible in order to generate a little extra income. This was like a dividend all in itself.

Expenses

*The Everything Else category includes expenses I don’t have a regular budget for. I spent a lot more in this category than normal, which was both good news and bad news. The bad news is that the money’s spent. The good news, however, is that the $439 I spent represents two round-trip, fully-paid tickets to the annual Berkshire Hathaway Inc. (BRK.B) shareholders’ meeting in May in Omaha, Nebraska. Claudia and I will be going to the meeting this year as a quasi-honeymoon. I consider that a strong score to land two tickets for that low of a price. Even better, the flight is direct. No layovers!

So there’s not really anything frugaltastic about this month’s expense report. It’s almost shocking how much money I spent. There were some minor victories, however. Fuel was kept to a minimum. Other than a day trip to Tampa, we stayed very local this month.

I also made some key changes in the budget to lower expenses moving forward into 2015. First, I downgraded my hosting. I’ve been monitoring my traffic over the last six months or so and it appears that other than very occasional spikes in traffic, the blog could handle a platform with less resources. So I saved a bit of money there. It’s likely that I’ll have to upgrade again at some point in the future, but I’ll continue to monitor traffic and enjoy the cheaper expense in the meanwhile.

I also signed up for a cheaper HDHP that was available on the exchange. It’s a bronze package with a $6,350 deductible.

This will also be the last month that I recognize any expenses related to the amortization of my Toyota Corolla. I have now completely realized all expenses relating to the purchase of the car that was completed in December 2013.

So what went wrong this month? Other than the plane tickets, I spent money on gifts. I pitched in 50% on a PS4 for Claudia’s son. I also purchased a gift certificate that’s good for a day package at a local spa here in Sarasota for Claudia. She doesn’t really do anything for herself ever, so this will be a nice afternoon break all for her whenever she’s ready. The rest of the spending in this category was actually also related to travel. I didn’t travel up to Michigan for Christmas this year, which was the first year in my life I wasn’t up there for the holiday. But I did offer my oldest sister a unique proposition. I told her if she wanted to come down and visit us for the holiday, I’d pitch in for the plane ticket. She scheduled a flight (using the same discount carrier I used for the tickets to Omaha) and I’m paying for part of the flight. This is a win-win. She gets a nice little winter break, some sunshine, and gets to hang out with her big brother. And I get to see her while I’m able to skip the travel, the snow, and drama. I don’t know how you go wrong with that arrangement!

Claudia actually ended up getting me a really great gift. I’ve notoriously resisted cooking, as I generally find it about as enjoyable as poking myself in the eye. However, since I’ve been at home a lot more, I’ve slowly worked my way into the kitchen to spend time with her as she cooks. I now act as her sous chef, where I help cut meat and/or vegetables, measure items, help with stirring, etc. So in honor of this radical shift, she got me my own little apron complete with customized “Dividend Mantra” embroidery.

souschef

Most other expenses were mostly in line. Core spending was actually pretty solid if you back out the $1,000+ I spent on gifts and plane tickets.

Savings

I managed to save 19.5% of my net income this month. That’s obviously a big disappointment for someone who routinely aims for and attains a 50% savings rate. But it’s just one of those things. The good news is that I feel really good about the spending this month. The flight to the BRK meeting is booked and paid for, I gave some great gifts that weren’t over the top or particularly expensive, and made some key changes to spending that will hopefully allow me to get back on track in 2015. This month would have perhaps been a bigger disappointment if I wasn’t already on track to miss my mark for the year.

One of my goals is to save 50% of my net income throughout 2014, averaged monthly. So far, I’ve hit rates of:

[show-rjqc id=”19″]

I finished the year with an average net savings rate of 44.3%. It’s disappointing to miss my goal by such a wide margin, which is the first time I haven’t saved 50% of my net income since 2009. But I honestly have no regrets about the events that led to this. If I would have stayed on at the car dealership, I’m positive I would have easily exceeded 50%. But the trade-off was so completely and absolutely worth it. And I think there’s a good chance that one day I’ll be able to fully replace my old day-job income via writing. We’ll see!

I’m looking forward to getting back on track for 2015, however. The lower hosting costs, cheaper healthcare plan, and elimination of the auto expense will make a huge difference in my ability to register a high savings rate once again. January will likely be a little expensive in the food category, as I’ll be hosting my sister and her husband for a week. And I expect some higher costs relating to the Omaha trip. We haven’t booked our hotel yet, so that will be another expense to realize at some point within the next few months. Lastly, I’ll likely owe a hefty sum for taxes in February or March, as my quarterly estimated taxes last year were nowhere near enough to cover my online income, as the income increased dramatically and somewhat unexpectedly in the second half of the year. But I suspect the second half of 2015 will be a huge tailwind for the savings rate.

What was your savings like in December? Did you come under budget? Excited for saving more money in 2015? 

Thanks for reading.

Photo Credit: Stuart Miles/FreeDigitalPhotos.net

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103 Comments

  1. Dividend Mantra,

    You still saved more than probably 90% of the population saves in December. I was right around 50% for December, which comes with a lot of sacrifices. But I would rather my money work for me and then buy things I don’t need .

    You need to post of picture of you wearing the apron and a chef’s hat!

  2. DM,
    I enjoy reading these posts. Makes me want to get even more intense with our family’s budget. Nice work on amortizing off the car. Next up, ring! Hope you have a great time in Omaha. I’m a shareholder now too, so maybe one year I’ll make the pilgrimage! Not sure my wife would be into it though.
    -RBD

  3. I was down on my savings rate (35%) for December as well , nothing like holiday travel & gifts to derail things :). I’m hoping to offset things this month for sure

  4. December can be rough on the spending side of things. Sounds like you received a lot in return though.

    Nice to see you’re getting in the kitchen more these days. I expect to see some recipes from you soon 🙂

  5. “This will also be the last month that I recognize any expenses related to the amortization of my Toyota Corolla.”

    Yay! I’ve been waiting for this for a long time. I know it wasn’t technically a car payment but it sure looked/felt like one.

    When can we expect to see a “Recent Buy” post for BRK.B?

  6. IP,

    Haha. I’ll see if I can take another picture. Though, we lack a chef’s hat. 🙂

    Congrats on the great savings rate over there. I always consider 50%+ as a big victory. That’s something like 10x the average, which is enormous. Keep up the great work!

    Best regards.

  7. RBD,

    Ha! Yeah, that ring is going to sting the budget for a few more months. I also have taxes and a hotel to book in Omaha. It’s going to be a rough first half.

    Hope you’re able to make it down to the meeting sometime. Seems like a great event. Not just being in the same room as Buffett, but also the camaraderie of it all. 🙂

    Thanks for dropping by!

    Cheers.

  8. Dave,

    35% is still really solid. Much better than I did. A combination of lower income and higher expenses put the squeeze on me.

    But it’s one of those things. Certainly glad to be part of the holiday festivities. I used to dread buying gifts a little when I first started this journey, as every dollar was at a premium. I’ve relaxed on that a bit nowadays.

    Best of luck having a much better January. I’m hoping for the same!

    Take care.

  9. Stoic,

    Yeah, it was a crazy month. Always fun around the holidays. It was definitely different this year being in Florida for Christmas, however. Not necessarily bad, just different. Tough to publish a result like this, but I wasn’t going to make 50% anyway. I’m hoping to get things back in gear in 2015. If it weren’t for a big tax bill that I know is coming, I’d say I’m confident I can hit 50% next year. But it’ll be very, very difficult with that factored in. I’m going to give it my best either way. 🙂

    I’m actually cooking whole meals now. It’s nuts. I don’t really “enjoy” it, but it’s nice to be part of the process and help Claudia. I started making my own version of quesadillas, which is surprisingly really good. Just kind of put together what I think they should taste like. We’re also doing a lot of stir-fry these days. Perhaps I’ll update some frugal recipes at some point here now that I’m not packing Lean Cuisines for work anymore.

    Thanks for dropping by!

    Best wishes.

  10. Great month and you’re getting real close to $1,000/month in December. That’s always been my favorite month as well. I cleared over $2,000 in dividends this past December with the retirement accounts.

    All the best!

  11. FI Fighter,

    Man, congrats on a blowout month over there. That kind of dividend income would definitely buy me my freedom, though only if it were more of a regular occurrence and not inside retirement accounts. You’re in a tremendous spot over there with your high income, real estate ventures, and retirement accounts. Keep it up, bud!

    Cheers.

  12. Jake,

    You and me both. Glad to have that thing finally behind me. Sometimes I wish I was car-free (and carefree) again. But then there are those days when it’s nice to pop in the car and get across town in a hurry. Plus, Claudia’s son has some extracurricular activities that are difficult to retain without a car. But it’s a luxury, no doubt about it.

    You’ll probably never see BRK in my portfolio, though. I love all things Buffett. I have a lot of respect for the guy and admire his intelligence, frugality, will, determination, individuality, sense of humor, personality, perspective, and business acumen. But the lack of a dividend prohibits me from investing in his company. Just one of those things.

    Hope all is well for you and Emily over there. 🙂

    Best regards.

  13. Hi Jason,

    Nice job! You continue to inspire me. I really like your new apron too. I think I see a resemblance 🙂

    Here’s an easy one: mince a couple cloves of fresh garlic and heat in olive oil (enough to cover the bottom of the pan ) over medium heat for about five-six minutes. You could add some protein, I like shrimp, cook three minutes on each side. Add some broccoli florets about halfway through (and/or mushrooms or veggie of your choice) Boil and drain some spaghetti and stir into the infused with garlic olive oil. Top with some chopped tomato. Colorful and healthy. And cheap and tasty.

    The main thing is the spaghetti and garlic infused olive oil, you can improvise the rest.

    Tom Bergman

  14. DM,

    Regardless of what happened this month, you had a great year! Saving on average over 40% of your income is excellent and has been an integral part of making your career conversion successful and allowing the dividend portfolio to keep on rolling.

    I wouldn’t sweat this month too much, even though you had a lower than average savings rate. After all, you used your hard earned money to bring pleasure and joys to others through gifts and helping others have memorable life experiences through travel they wouldn’t normally take. There are a lot worse things that you could spend on, and the memories you will make will be worth much more than the small cost you are spending today.

    Congrats on the great year. Keep the ball rolling into 2015. I bet you will hit at least a 50% average next year!

    Bert

  15. Jason,

    Love the apron! 🙂 Hope you start to enjoy cooking as you help Claudia more and more.

    Your savings this month may not have been what they usually are, but looking at your expenses it’s not too bad. You had some major one-off big ticket items. As such, I’m sure your savings rate will bounce right back up in January.

    Furthermore, it still amazes me that you manage to live off your writing and add to your dividend portfolio.

    Keep it up!

    Best wishes,
    NMW

  16. “I consider that a strong score to land two tickets for that low of a price.” — I consider that a strong score to land a wife who views the BRK Annual Meeting as a honeymoon 🙂

    I’ve enjoyed your blog a lot this (last) year, so thanks! I’ve had to cut down my new investment a lot since we bought a place this year (expense 1) and are currently renovating (expense 2) while we rent another (expense 3), but it’s nice to have the inspiration when there are some spare bucks to put away.

  17. Hey just wanted to say great job on your blog. I just started following it a few weeks ago, but I find myself checking it almost daily. I have just started my journey down the dividend path and I look to you as an inspiration. One question I do have is, how the heck do you only pay $27 a month on cable and internet? I wish my bill would look like that. Haha.

  18. Tom,

    Haha. Yeah, I think he’s bald under that hat. 🙂

    That’s a great recipe. That’s right up Claudia’s alley for sure with the veggies and mine with the olive oil/garlic. May have to make two batches!

    Thanks for sharing. We’ll have to add that into the rotation.

    Best regards!

  19. Bert,

    Thanks for the support, bud. I consider it a really successful year. The savings rate was lower than normal, but still about 10 times the average. Plus, I made this massive transition in my life. I consider it a blessing to be able to write for a living and continue to save/invest. Just to be able to write for a living and get by would be a gift in itself.

    You guys are doing great over there as well. Looking forward to what 2015 has in store for all of us. 🙂

    Cheers!

  20. NMW,

    Right. There were some pretty big one-off expenses there. Factoring those out and it was pretty decent. Outside of a big tax bill, I expect a pretty good year for 2015. Of course, those one-off items have a way of creeping in more often than we’d like.

    It’s been a tremendous year, no doubt about it. I’m blessed to be able to continue saving and investing even while I follow my passion. I’m about as close to financial independence as one can get without having their passive income cover expenses. I’m living what I think FI will basically look like for me, so it’s amazing.

    Thanks for all the support. Wishing you the best throughout 2015!

    Take care.

  21. DB40,

    Thanks! I think it’s a pretty solid result, considering the transition and doing my own thing now. I’m confident I could have been closer to 60% if I would have stayed on in the auto industry, but the savings spread isn’t even close to worth it. This journey is all about happiness and ownership of time, not having the highest savings rate or the most money. 🙂

    Best wishes.

  22. Tad,

    Agreed! I’m lucky. Claudia is incredibly kind and open-minded. 🙂

    I can imagine a house will slow things down a bit. I have no desire to own my residence, but I understand why others do. Hope you guys have fun making it the home you want it to be!

    Best wishes.

  23. Matt,

    Thanks for dropping by! Glad you found the blog. 🙂

    Some of these bills are split 50/50 with my fiance. Anything we share (the apartment, internet, some food) falls under that. This cash flow statement only represents my income and my expenses.

    Stay in touch. And best of luck as you start down your own journey. I hope you find even more success with it than I have!

    Take care.

  24. Ok, I’ll be the killjoy here and tell you to either find ways to crank up the income or cut the expenses, or some of both. 44% is a great savings rate, but you didn’t meet your goal. You need to be asking yourself how you’re not going to let that happen 2 years in a row. You don’t want to let yourself get too complacent or next year your savings rate might only be 38%.

  25. Oh, and PS. Nothing wrong with going to the Berkshire meeting, but it’s really not a true need.

  26. Mysticaltiger,

    Well, I think it’s important to consider my goal was set up when I was still working at the car dealership. To be honest, if I could save 38% of my net income and write for a living, I’d be incredibly happy with that result. I’m still going to aim to save 50% and become financially independent by 40, but I’m already living the life I’d be living if dividend income covered me. If dividend income doesn’t cover my expenses until, say, 45, that’s really fine with me. It’s not going really going to change anything. Again, I’m still aiming for my original goal. And I’m staying as aggressive as possible. But it’s not extremely important that I race to FI by 40.

    Keep in mind that this journey is about ownership of your time and being happy, not saving the most amount of money or having the biggest portfolio. If that were my goal, I’d still be miserable and working 50+ hours per week in the auto industry. If you can get to the point to where you own your time and you’re happy, that’s what ultimately matters. Having passive income cover all of your expenses is one of the best ways to get there, so I’m still aiming for that. But you’re going to have a lot of spare time on your hands when you get there. And I’m doing what I’d probably do with that spare time anyhow.

    I’m not after the highest savings rate or the most dividend income. I’m after happiness. Being the wealthiest guy in the cemetery isn’t my goal. 🙂

    Best regards!

  27. Do us both a favour and get back to an ordinary job. May it be in the Auto industry. Do not trust in that online income.
    Stef

  28. “It’s still moving in the right direction”, despite extra expenses that always seem to happen in December, you still hit an awesome savings rate! I’m sure you’ll hit over 50% average again in 2015!

  29. Don’t fret about your expenses for the month. I think December is one of the most expensive month for pretty much everyone. Be happy you actually have a savings rate. Think about all those families and individuals that spend more than they earn during the month only to deal with the credit card hangover when the bill comes due in January. In all, pretty good for one of the most expensive months of the year.

  30. Hi Jason,

    I failed miserably with the 150 USD living cost experiment, I just couldn’t quit the fags, my living expenses came in at about 185 USD.

    The BP. I bought intraday at 3.65 I ended up trading for a quick profit a week or so later at 4.16, kept back just a small position for the 7% yield.

    I’ve brought the old blog back to life with lost bike trips I found in a portable hard drive I had in Turkey, now I’m single the open road keeps calling me, so I’m going to buy another bike this year, the BP. profit will pay for half of it, so half the cost of the bike is free 🙂

    If you fancy looking at the FI life on 2 wheels with 29 million photos of bikes and places, its here…http://travelswithmymotorbike.wordpress.com/

    Cheers and stay lucky,

    Dave…

  31. Jason, ahora que vas a aprender español, podre tener un dialogo mas fluido contigo.

    Buen mes de Diciembre has tenido.

    Saludos

  32. I am quite sure you will like cooking after a while. It is a great way of spending time together as a couple. I especially like baking bread!

  33. Love that apron!

    I think most people blew their budgets in December, myself included!

    All the best for 2015, I look forward to reading more of your inspirational posts!

  34. Hooray for your semi-annual anniversary of being self-employed! And saving 44% of your income is still a step in the right direction. Yes, you could’ve achieved a much higher savings rate, but it would’ve been at the cost of your time and happiness. Not a fair tradeoff at all, in my opinion.

    I am so disappointed that you did not post a picture of you with that apron on! Don’t be shy – wear it with pride! 8)

  35. Maybe I’m missing something here. I totally understand you avoiding BRK.B because of the lack of a dividend. That said, you’re planning on going to the Berkshire annual meeting, right? How are you going to do that without being a shareholder?

  36. Stef,

    Is there a particular reason you’d rather see someone work in a job they’re miserable at over something they enjoy?

    And what makes it difficult more difficult to trust online income over income from the auto industry or anything else? You do realize people are fired every day from all kinds of industries, right?

    It sounds to me like you have a lot to learn about what this journey/lifestyle is really all about. I plan on never, ever, ever going back to the auto industry. Did I mention ever?

    Take care!

  37. I will say that I am extremely disappointed in your purchase of a PS4. We all know that the Xbox is inherently better of a console 🙂 And as a MSFT shareholder I am even more disappointed! Seriously though, looks like you had a great December, savings rate aside. And that apron is awesome!

  38. M,

    Thanks for the support! I appreciate it. 🙂

    It’s still a great rate. It’s tough for someone used to hitting a much higher savings rate to be okay with something in the mid 40s, but it’s about 10 times the national average. And it still moves me closer to my goals, which I’m more than on pace for. Life is good!

    Hope 2015 is off to a great start for you.

    Cheers.

  39. Thanks for being so open.

    I have 2 questions.
    1. Did I miss the line item in your budget for taxes? I don’t see that anywhere. How does it impact your savings rate?
    2. Why don’t you DRIP your dividends? It would seem to have a nice positive impact on future dividend earning when you slow down with regards to your other income streams in the future.

    Thanks again

  40. DivHut,

    Unfortunately, what you speak of is all too common. I couldn’t imagine not only not saving money, but actually going into debt. Especially for a bunch of stuff that will likely be forgotten after a month. That’s a real shame.

    But I remain here blogging and working away to serve as inspiration for those that eventually find themselves wanting off the rat wheel. 🙂

    Best regards.

  41. Dave,

    Just checked out the site. Good stuff, my friend. You’re living life on your terms. One of the lucky few out there doing it the way you want. Keep at it!! 🙂

    Best wishes.

  42. Vicent,

    Well, I’m not actually fluent in Spanish quite yet. Claudia has tried and tried, but my brain doesn’t seem to work very well when it comes to foreign languages. I actually failed Spanish twice in college. It was the only subject matter that I couldn’t ace easily. One of those things.

    However, I’m lucky that we have Google Translate. 🙂

    Appreciate the support and you taking the time to stop by. Hope all is well for you and yours. And I hope your journey is off to a great start here in 2015.

    Cheers!

  43. Sensim,

    Oh, I definitely enjoy the time together. That’s exactly why I’m in the kitchen now. Plus, I enjoy helping Claudia, as there’s no reason she needs to be solely responsible for making sure a good meal hits the table. That said, I still don’t really find the whole process enjoyable. If there was the possibility of food just automagically appearing on the table, that would be perfect for me. In the meanwhile, however, I love helping out in my own small way. 🙂

    Cheers!

  44. Weenie,

    Ha. It’s a nice little apron. I enjoy wearing it proudly, even though my responsibilities in the kitchen are still pretty small. The head chef still does most of the hard work. 🙂

    December is always a rough month. Just one of those things. I could be a total miser and insist on not giving/receiving gifts, but I see no reason to do anything like that. We keep it pretty reasonable. And I do enjoy giving something meaningful. The spa treatment, for instance, isn’t a meaningless trinket that will clutter up our closet. It’s a great experience that I think will lighten Claudia’s load for one day.

    Appreciate the support. Looking forward to more of your quiet saving throughout the year!

    Best regards.

  45. Seraph,

    Ha! I definitely wear that thing with pride. I guess I should have taken a picture with it on me. 🙂

    You’re absolutely right there. I could have nailed a rate closer to 50% or 60% if I would have stayed on at the car dealership, but this journey/lifestyle isn’t about money. It’s about time. The former buys the latter, which is why I’m after money in the first place. But if we lived in a world where money wasn’t necessary to buy time, I wouldn’t be saving or investing. I just play the game because it’s necessary to play it, but money means nothing to me.

    Trading time and happiness for money is exactly what I recommend against doing. To do so even though I have the chance to avoid it would be discounting everything I talk about and want out of life. Some people out there maybe see it a different way, but perhaps they’re just after the most money or biggest portfolio value. Those are things I don’t care about. If that was what I was after, I would have went after a high-paying job early on in my career and I’d still be at it.

    Thanks for dropping by!

    Best wishes.

  46. Jason,

    Good questions!

    1. This is a net income report. Taxes are taken out of gross income. So what you see here is net of taxes. That said, I set up my quarterly estimated taxes earlier in the year, before I was making so much money online. I expect to owe a hefty sum in Feb/Mar when I do my taxes, and thus that will reduce my gross income there as well.

    2. I do reinvest dividends, though not automatically and without thought into the respective company that paid them:

    https://www.dividendmantra.com/2014/03/selective-dividend-reinvestment-vs-drip/

    Hope that helps!

    Cheers.

  47. Jake,

    You need credentials (tickets) to get in to the meeting. Shareholders are given first dibs. Berkshire also releases a select number of credentials out in the open market, which will be for sale in the coming months. Each shareholder gets up to four credentials. Luckily, there are a couple of shareholders out there willing to give me a couple of spare tickets they don’t need. If not, I’d have to purchase them on the open market, when they become available.

    Best regards!

  48. I would say you have already achieved your goal in a matter of speaking. You aren’t retired, but you are doing what you love and you’re your own boss. I have heard from countless people that if you do what you love, you’ll never have to work another day in your life. With that being said, I understand that your goal is to be completely financially free and to cover all of your expenses with dividends. But, being able to be your own boss is something that most people can only dream of.

  49. Congrats on following your dreams Mantra! I remember how you were not sure about quitting your job and here you are now enjoying your life without going there and doing that you like! and with this apron you can explore healthy food cooking! 🙂

  50. I would make the trade for a 5% lower savings rate to work from home and be self sufficient. I think you made the right choice.

    With the help of some extra income at work, we were able to have our best saving month ever in Dec 2014. We also travelled back to the cold Midwest with 2 small kids for the price of 1 plane ticket (other 2 tickets on points, 1 kid was a lap child).

  51. RBD, we might just have to go together as my wife would definitely not be interested in this sort of event. I’d absolutely LOVE to go.

    Jason – Congrats again on a solid month. You’re year was a tremendous success, and 12 months ago you would have never dreamed to be living the life you are today. Happily engaged, self-employed, and making a sustainable income. Keep on inspiring all of us.

  52. I totally agree with you on the trade-off between hitting your savings % goal and being happy. Definitely more important that you’re living the life that you want to! And, like you said, your spending was all on stuff that’s meaningful, which is what really matters. I think you have such a great perspective on things!
    P.S. I like the apron :)!

  53. I think that considering it’s the year you’ve gone self-employed you’ve done fantastically well 🙂 and you’re living the life you want to, which is much more important. It isn’t as if you frittered your money away on nothing either. You’re doing great! I like the apron too 🙂

  54. I did a quick check and noticed that you averaged your monthly savings rates to get 44.3% for the year. But what was your rate of “total savings/total income” for the year? That might be a better average to track, since your income varies month to month, it would more accurately represent your ability to save “half of what you make in a year”. I was wondering what your thoughts were on why you think about it this way instead?

  55. Don’t beat yourself up too much for your December expenses, it was a challenging month for everyone. Our net expenses were manageable for us because we rolled over some unspent cash from the previous month, but had it not been for that we would have been way overbudget. We overspent in the food and discretionary categories, but it was money well spent!

    I hope your new health plan works out, we kept the same one from last year. We’re gonna apply for subsidies next month, it will be interesting =).

  56. Ok, but I think you know what I’m saying. It’s good that the focus isn’t 100% on the money. But my point is it’s also easy to rationalize this stuff and say everything is ok even when it might not. be. I’m not saying you’re doing that (yet), but that is the danger. What happens if the blog income doesn’t meet your expectations and your expenses stay higher than you’d like? Once you’ve left the work force, you really most likely won’t ever want to go back, especially if you were working a job you hated. I don’t want to be alarmist, but this is something to look out for. You’re not really financially free until that dividend income pays all your expenses and then some.

  57. Hahaha, maybe start a site called CookingMantra 😉

    Jokes aside, I think you are making progress. You have saved money consistently every month for how many months in a row now? That’s how I view it – so keep plugging!

    Estimated taxes suck..So do taxes in general. As I have suggested a few times, you should think about tax deferred accounts. You are essentially paying over $800/year in taxes on the dividends alone in your accumulation phase ( on $5300 in div income). That’s your spending for half a month. And you are going to be earning some income and paying more in taxes till you get to 40 in about 8 years (I think you are 32 or 33, but I might be wrong).

  58. Hey,
    Im 29 yr old from India and came across your website while casual googling.I m totally surprised to see that I m pretty much doing the same thing as you!!!
    I started investing at 23 and have managed to build a solid portfolio overtime.The only thing is my div.yield is low at about 2.6% (companies here are less liberal with dividends as India is a growth market).The gap you cover thru capital growth.
    Personally, I feel extremely happy for you. Bookmarking this website.Will keep visiting and sharing thoughts.Happy Investing !!!

  59. good job! I would say your spending side was little high in December, same here with gifts and outings.

  60. December is usually one of the most expensive months for most people so I wouldn’t worry too much about the lower than usual savings rate. I absolutely love that apron! You’ll have to show a pic of you wearing it one of these day.

    Saving 44.3% of your annual income is an impressive feat. A lot of people can’t even bother save for 10%.

  61. Hello,
    Could you explain a little about your “job”? Thats good money for online income. Just from this blogg and writing about investing? I’ve seen you on seekingalpha too. What are your other sources? What was your previous job? I’m a blue collar working grunt, and see investing as the only way to break from the bottom of the pyramid.
    I blogg too (not as seriously as you) and have followed you a couple of years at least now, definitely an inspiration, thanks!
    /Booban

  62. Todd,

    You’re absolutely right there. I’ve kind of already achieved what I wanted when I first started down this path, and that’s ownership of my time. There are certainly obligations and schedules in there, but it’s all stuff that I’m really passionate about. I certainly plan to continue down the path to full financial independence, but I also think the urgency isn’t quite as strong. If I’m going to continue writing and sharing after FI (which I plan on), then I’m very much living how I would be if my dividend income covered all of my expenses. However, I’m also mindful of the freedom and flexibility that passive income offers, because there’s no saying what will happen in the future.

    Thanks for the support and for stopping by. Hope all is well with your own journey over there! 🙂

    Best wishes.

  63. DD,

    Ha. Sorry to disappoint you there as a MSFT shareholder. That would have been very interesting if I were also a MSFT shareholder. Not sure how excited I would have been to pitch in on a PS4 in that case! Might have really tried talking up the Xbox! 🙂

    Wasn’t one of my best months, but the annual rate really isn’t that bad considering I only had a full-time job for less than five months. I’m hopeful I can get back to 50% next year, but I won’t be totally disappointed with another 45% performance. The big tax bill is going to be a setback for sure.

    You had another great month over there, though. Keep up that fantastic savings rate.

    Thanks for dropping by!

    Cheers.

  64. Happy,

    Thank you. It’s been a wonderful journey thus far. I couldn’t be more pleased with the way things are progressing. 🙂

    I actually dig wearing the apron. Makes me feel qualified to be in the kitchen, which I’m really not. Haha! But we’re cooking a lot of stir-fry these days, which is pretty healthy. Just some rice, meat, veggies, and a sauce of some kind. Easy, cheap, fairly healthy, and tastes good.

    Thanks for the comment. Keep up the great work over there. Great dividend income for December.

    Take care!

  65. Vawt,

    Thanks. I’m 100% confident I made the right choice. I don’t have one regret over leaving the auto industry. The fact that I was even in a position to be able to do that is just a dream come true.

    Congrats on the great month over there. Especially when most of us struggle a bit. To nail your best rate ever in December says a lot. You guys should be sitting very pretty throughout 2015! 🙂

    Cheers.

  66. W2R.

    Would love to meet you at the BRK event as well. The more the merrier! 🙂

    It’s definitely a dream come true. I never would have thought a year ago this was all possible. I’m just happy to continue staying so busy and doing what I love. The amount of support here in the community is what makes it all possible, however, so I remain very cognizant of that. Thank you!

    Keep up the great work over there. You’re likely going to have a blockbuster 2015.

    Hope to maybe see you in May.

    Best wishes.

  67. Mrs. FW,

    Right. I think sometimes people lose perspective in the savings and investing. After all, there’s a point behind all of this. It’s like your situation over there. You surely could become multi-millionaires and then some quite quickly by staying on in your careers instead of pursuing your dream of a homestead, but enough is enough. I’m glad that you guys realize that. Too many people suffer from OMYS, in my opinion – all in the pursuit of more.

    I surely have enough cash flow right now to live life on my terms while still marching toward FI. It’s amazing that it’s possible to live the best of both worlds right now, but I’m still extremely excited for FI. 🙂

    Thanks for the support!

    Best regards.

  68. Nicola,

    Ha. Thank you! I like the apron as well. I somehow feel like I can make amazing dishes when I wear it. Then I start trying to cook and realize that’s not the case. 🙂

    Appreciate the kind words. It’ll be really interesting to see how 2015 goes since I won’t have that high income over the first few months to bolster things for me. I imagine it’ll be tough once again to hit 50%, but it’s possible that 2016 could be a revival there. However, I’m still going to give it my all!

    Thanks for dropping by.

    Best regards!

  69. Tommy,

    They say that you know you’ve truly made it when they start to come out of the woodwork. 🙂

    This income is net of quarterly estimated taxes. However, my payments were light this year because I set the schedule up in March before I was making as much. Anything I owe when I do my taxes will then adjust this year’s net downward. You see a similar adjustment earlier this year.

    Hope that helps!

    Cheers.

  70. jman,

    Yeah, someone pointed out a while ago that my savings rate would actually be a bit higher if I were to take the total amount of income and total amount of expenses at the end of the year. At least that’s how it was for 2012 or 2013, when we went over the numbers. I think it was like a .3% difference or something. This is just easier and it’s still fairly accurate for these intents and purposes. It’s not a science project or something where I have to be exact down the decimal. I might have to reassess if I miss my goal by like .2% or something like that, however.

    Cheers!

  71. Spoonman,

    I hear you there. December is rough for many of us. I like how you roll over unused cash from one month to the next. I always found it weird when people would question how one could live off of dividend income if one month (like February) didn’t cover that month’s expenses even if another month (like March) more than covered expenses by and equal or greater amount. It’s like people cannot roll over unused cash from one month to another? I never understood that. I guess some people just miss the forest for the trees. Or maybe they have no clue how to budget?

    Please let me know how the subsidies work out for you. That’ll be very interesting. It’s based off of income rather than assets, so I imagine that’ll be quite helpful. Some have criticized the ACA, but it works out pretty well for some in situations like ours. 🙂

    Best wishes!

  72. Henry,

    That’s a lot of money for you, my friend. But the good news is that with living at home and keeping those low expenses, that’ll barely even dent you for the year. 🙂

    But if you go, I imagine you’ll be very happy. It’s a once-in-a-lifetime opportunity, especially while Buffett is still alive. I don’t think you’ll regret it.

    Take care!

  73. Mysticaltyger,

    Agreed that I’m not financially independent yet. However, I think I’m about as close to FI as it gets without actually being there.

    While the blog income may not hold up or turn out as expected, the same could be said for any job out there. It’s not like a job in the auto industry is somehow more secure or guaranteed. Anything but, as we would routinely go through new employees. I wouldn’t even introduce myself until they were there for more than three months. I was personally let go from a dealership back in 2009. So it’s not like online income is any different in that regard in terms of its safety. But it sure is a lot more enjoyable.

    Cheers!

  74. DGI,

    CookingMantra! It would be a massive failure. Haha. I call that “outside my circle of competence”. 🙂

    I hear you on the tax-advantaged accounts. But I really do think the journey is going to be pretty close as is. I’m a bit ahead of schedule now, but that’s because I was making more at the dealership there for the last year or so than I had planned. Income has taken a hit now, so that’ll catch back up. I imagine dividend income will cover/exceed expenses right about the time I’m 40. Perhaps even a year or so late, depending on how things go. Diverting funds to tax-advantaged accounts will delay that quite a bit, which just isn’t really in the cards for me. Again, I think they’re great for most. But I’m absolutely determined to get to where I want to be, and tax-advantaged accounts just don’t work for me there. They’d reduce the amount of taxable income, but also my dividend income by the time it’s all said and done. And who knows how much I’ll be writing then. I could very well get burned out or something, as I tend to enjoy things for 5-7 years before interest wanes. Thus, it’s imperative that I stick to the plan.

    It’ll also be interesting to see just how necessary tax-advantaged accounts are. I think it’ll be cool to have this blog as live proof that they’re really not necessary at all. Could probably have more money in the end, but I could have stayed on in the auto industry and had more money as well. As I’ve stated many times, this journey is about time, not money.

    Thanks for dropping by. Hope you have a great weekend over there!

    Best wishes.

  75. harsh,

    Great stuff! I haven’t had many readers stop by from India. Glad to have you here. Really enjoy the perspective from over there. 🙂

    2.6% is lower than where I’m at. I’m at about 3.5% or so. But 2.6% is still solid, and higher than most funds. That’s amazing you started at 23. I WISH I would have started back then. I’d probably be financially independent within a year or two here.

    Appreciate the readership. Please stay in touch!

    Cheers.

  76. AJ,

    Agreed. The spending was obscenely high. I’m not used to spending anywhere near this much in one month. Although, I kind of wish I would have booked the hotel tickets already, as that would have saved me another big expense in 2015. 🙂

    Gift giving is just one of those things. And I’m sure you’d agree in that it feels good to make others happy, even if we’re not necessarily driven by “stuff”. December will probably always be a somewhat expensive month for me, though I’ll try to certainly come in much under this level next year!

    Thanks for dropping by.

    Best regards.

  77. Tawcan,

    It was a bummer month for the savings rate, but it was a great month otherwise. Great holiday, spent time with loved ones, had wonderful weather, and it was another busy month for online work. Other than being sick for a few weeks, it was a great way to end the year, as I’m sure it was for you guys up there. 🙂

    44.3% is a disappointment for someone used to routinely crossing the 50% mark, but doing what I love for a slightly lower savings rate is a trade-off I’ll always make. This journey and lifestyle is about ownership of time and being happy, and that’s exactly what I’ve achieved. I’m just incredibly blessed and grateful. And this community largely makes it all possible. It’s just a great group to be a part of!

    Wishing you guys the best throughout the year. Have a great weekend.

    Best wishes.

  78. DM,

    Like most people have eluded too, your expenses were a bit high and the savings rate wasn’t nearly your best but I wouldn’t fret over that Positive thing is that you are already “retired”… you discuss that you will continue to blog even after your dividends cover your expenses so congrats! As of right now, it appears you will be able to live your life the way you want and do what you want to do, when you want to do it.

    I have a possible post you could do: Now that you are generating significant page views, I’m sure you would be able to pick out trends from the clicks. For instance, you said that this month your online income was a bit light but most likely that was because Christmas just happened… If people are anything like me, there is much less time around the holidays to read blogs and comment on posts. Great news for December is that it is usually a heavy dividend month so it will make up for the lower online income! Other times that could experience less page views could be Easter, Thanksgiving, first month of spring and even times when high traffic countries are experiencing nice weather. It could be interesting to look at…

    Looking forward to see you hit 50% or greater savings rate in 2015

    ADD

  79. ADD,

    The position I’m in right now is definitely amazing. I’m very much living exactly as I would if dividend income covered me, which is wonderful. I probably wouldn’t be writing quite as much as I am now, but it’d be otherwise very similar. And to be able to still save almost 50% this year while living like that is just a gift. This community is really incredible. 🙂

    It’s interesting, but the pageviews in December were actually a record for me. But more pageviews doesn’t automatically mean more income. One advertiser I work with is always 60 days behind and another affiliate paid out in November but not December. So this stuff oscillates, but I think the trend will average out and up over the long haul. I may see a bigger January or February because of this, but my quarterly estimated taxes are going to be a lot bigger as well. I’m probably going to set a goal of $3,000 net per month next year, which might actually be pretty challenging. Excited to see how it goes for a full year, though!!

    Thanks for the support. Keep up the great work over there as well.

    Cheers!

  80. Hi Jason. Your online income is great! Much greater than your dividend income. Did you ever think that would happen? I’ve just reported my december income (below). My online income is still so low that I simply dont report it my my dividend income was the best so far as I exceeded a thousand euros. Can you detail your online income a bit? I mean, is it just adsense?

    My december income here:

    http://www.dividendogma.com/dividendos-diciembre-2014/

  81. Jose,

    It’s been really incredible. I started four years ago with very modest ambitions in regards to the blog. I just wanted to share my story and inspire others through that narrative. I thought my journey could serve as some type of model to follow for perhaps a few people out there that might be interested. The fact that it’s turned into something as large as it is is really a dream come true for me. 🙂

    Congrats on the huge month of dividend income over there. That must feel amazing to cross the four-figure mark for one month. I can’t wait to hit $1,000 in one month myself. That’s a hell of a milestone!

    As far as blogging income, I’ve shared exactly where that comes from:

    https://www.dividendmantra.com/2014/06/blogging-about-blogging/

    That information is still extremely accurate, though I’m freelance writing more and more.

    Cheers!

  82. Jason,

    Have you considered forming an LLC? Given that Blogging is your career, I think you would benefit from business write-offs and tax breaks. Hosting fees, medical expenses, travel to Omaha, etc.

  83. yes, that’s right, we have to google translate. The kings, here the day is celebrated on January 6, which would be for you the papa noel, I have brought as gifts closing my corporation where I work, so the year did not start well for me, but you know, “I WILL SURVIVE ”

    Good year, Jason

  84. No reason to feel bad about being in the 40’s. The only reason to work so hard and save is to enjoy your life. That’s certainly what you were doing in December. My aim is the hit 50%. Sometime’s it’s more and sometimes it’s less. If its less I usually had a fun month.

    Congrats on another solid month

  85. DM,

    I really appreciate your honesty with writing your monthly income and expenses. December is a tough month to save because it is a holiday season. I’m very careful to go on a shopping spree during that time and manage not to overspend. But I cannot imagine not buying any gifts at all to my family during that time, just because I want to save more money. As long as I don’t spend more than I earn during December, I’m fine with that.

  86. I’m actually very happy to hear you pitched in for that PS4 btw. I don’t agree with a lot of my parents spendy ways but they were always generous in that department. Gaming was my gateway drug into the technology world. A very very large catalyst for me while growing up and something that pushed me to go into a well paying STEM field. They also kicked me off gaming at age 15 and forced me to get a 40 hr a week job over the summers which i still both love and hate them for 😉

  87. DD,

    Actually, you don’t need to have an LLC to write off business expenses. A sole proprietorship can take advantage of that as well through the Schedule C. I plan on writing off my hosting fees and anything else related to running the blog this tax season. I haven’t previously because I didn’t have any expenses before.

    Thanks for the suggestion!

    Best regards.

  88. Adam,

    Thanks for the note!

    I hear you there. I don’t necessarily correlate spending money with having fun, but it really depends on what I’m doing and how much it costs. It’s really all about finding value. And certainly there’s personal value in giving gifts to those that appreciate those items/experiences. Some things that are really fun cost no money, like exercising or spending all afternoon at the beach. Other things, like, say, a hockey game, sometimes costs money. But money has utility, and it shouldn’t be seen as something just to hoard. My goal in life isn’t to have the biggest portfolio value. It’s to live the happiest life I can live, but it just so happens that money buys the freedom necessary for me to do that. 🙂

    Glad we’re on the same page!

    Cheers.

  89. Jollie,

    I hear you there. When I first started this journey, gift giving was tough on me. Every dollar was one less dollar I could save and invest. While that’s still true, I have a bit of a snowball rolling downhill without ongoing effort on my part. So I don’t need to be quite as tight with the cash flow. I wrote an article a while back that discusses this, where extreme frugality is valuable in the beginning to get things rolling, but it’s not necessary to keep the pedal to the metal once you’re moving along. There’s a reasonable balance there that changes as you go along.

    December will probably always be a relatively expensive month for us, but I think saving four or five times the national average on a bad month is still pretty solid. And that’s the benefit of routinely living well below your means. It sets up this great baseline where even an expensive month still leaves you with a pretty decent result.

    Thanks for dropping by!

    Best regards.

  90. Zol,

    That’s great stuff there. I guess you never know. Maybe that will lead to some great results for Aaron as well. We also plan on making sure he gets a job next summer as well. I was working at 15 just like you, at a grocery store. Bagging groceries isn’t glamorous, but it’s the start of bigger and better things.

    Worked out pretty well for you! 🙂

    Cheers!

  91. Great job in December. Good call on the spa ticket. We spent some money on gifts too. Our kid is almost 4 and it’s a great age for Christmas. We had a great time putting Lego sets together.
    Our December was really slow too. I’m hoping things will pick up soon.

  92. Joe,

    Ahh, Lego. I remember spending hours with that stuff when I was a kid. Brings back fond memories. 🙂

    Glad that you’re able to get in that kind of quality time with Jr. You guys won’t always have that opportunity.

    Thanks for dropping by!

    Best regards.

  93. You can save what you have been saving as long as you are single. Once you get married and have kids, it becomes progressively hard to save. I experienced that so I am saying from experience. But it would make life easy if you have build a fairly large dividend income before you get married.

  94. Ray,

    I think it depends on the situation. Some people will find saving difficult once they get married and have children. Others won’t, like MMM. If you’re already having a hard time, then building a family may make it even more difficult to save. But if you’re already used to saving 50% or more of your net income, I don’t think marriage or a family will necessarily make a big difference. Again, depends on the situation. Having one child is a lot different than having four, for instance.

    Cheers!

  95. Thats awesome! The shareholders meeting should be an amazing experience. Can’t wait to read about it once you get back. As always, enjoyed reading your updates. Thanks for sharing Jason!

  96. Sam,

    Oh, I’m definitely looking forward to it. Should be a great time for sure!! 🙂

    I’ll be sure to post an update all about it when I get back. Can’t wait to share with everyone.

    Thanks for dropping by.

    Cheers!

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