Income/Expenses For March 2015

writingsavingI’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 potential income to save, but spending less means you need less passive income 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 March 2015:
Online Income$1,502
Dividend Income$942
Other Income$600
Total Income$3,043
Expenses From March 2015:
Rent & Utilities $533
Student Loans $224
Engagement Ring$200
Health Insurance$193
Groceries$192
Amusement$174
Fast Food/Takeout/Coffee$144
Restaurants$82
Transportation $59
Pharmacy$39
Cable/Internet$27
Domain Registration$26
Mobile Phone$25
Fuel$24
Auto Insurance$15
Everything Else*$341
Total Expenses$2,292

Income

Online income was unfortunately heavily impacted by taxes. I earned a lot more online income than I initially expected in 2014, which led to a tax bill this year. A first world problem I’m glad to have, but it still reduced my net income. However, I’m still excited by the fact that I even broke a profit at all. I owed north of $4,000 in federal income taxes, so that really took a bite out of the gross ( you see net here). In addition, I was a resident of the state of Michigan for a few months last summer, so I owed Michigan for the “privilege” via state income tax. They haven’t cashed that check yet, so that’ll reduce April’s gross to the tune of $422. Otherwise, I’m really incredibly grateful for what was otherwise a record-breaking month for gross online income. Thank you for all of your support!

Dividend income was also a record, which really helped since my net online income was lower than normal. The hard work I’ve put in over the last few years is really starting to make a dramatic impact on my monthly budgets and I can actually already start to see the finish line. It’s hazy and still far away, but it’s definitely there. If earning almost $1,000 in tangible passive cash flow in one month doesn’t make you a believer in what’s possible, I don’t know what will.

Other income was related to the sale of my car. I’m going to spread the profit out over the next nine months so as to smooth any month-to-month variances out. So this will provide a nice boost to my monthly savings rates for the rest of the year, just like it was a drag on my monthly budgets last year.

Expenses

*The Everything Else category includes expenses I don’t have a regular budget for. I didn’t spend much in this category last month; not so true this month. First up, I applied for a passport so we can visit El Salvador in December for Christmas (Claudia’s from the country). I also recognized the costs to do my taxes with TurboTax. Lastly, I picked up a VersaCart. Now that we’re car-free, we needed something to move our groceries from the store to the apartment. So far, this thing is working out great.

You’ll notice amusement was much higher than normal. This is due to the aforementioned spring break activities, including taking in a spring training baseball game and a local play. Definitely a lot of fun. I don’t know if I find enough value in those kinds of activities to make them a regular occurrence, but living frugally and taking advantage of special events only occasionally means I appreciate them that much more when we do go.

I also spent a lot more on food this past month. I’ve been visiting this deli/coffee shop across the street quite frequently lately. It’s been amazing how much more productive I am there compared to staying home. I lack distractions, and there’s something energizing and inspiring about being out in the world. I notice I can write twice as much or more in the same amount of time in comparison to staying home and writing. It’s funny, because I’ve always been an introvert through and through. But since quitting my job, I have a renewed appreciation for society. Once the undercurrent of tension that exists because you’re in a role to serve others disappears, it’s a lot easier to interact with people without getting bummed out and jaded.

Anyway, I spent about $75 more on food this month than I normally would have. The me of 2010 or 2011 would have balked at that, but I don’t feel the need to scrimp on every penny now that I’m largely living the life I always wanted. In addition, this is a lot cheaper than paying for some kind of co-working space, plus I get pretty decent food in exchange for the money – this is a quasi-business expense at this point. The deli isn’t great, but it’s within walking distance. Works for me.

Other than that, everything else was pretty normal. I spent a tad more on public transportation because I lost a buss pass at one point. Still getting used to using the bus once again. You see some remnants of the expenses of car ownership up there due to the fact that I owned a car for the first week or so of the month. Hopefully, that’ll be the last of anything car related for a good while.

Business expenses were once again extremely low. I still have some credit on file with my host, Liquid Web. All I had to pay for this past month was the domain registration renewal.

Savings

I managed to save 24.7% of my net income this month. Disappointing for being such a low absolute number, but it’s relatively great considering the size of the check I had to write this month for my tax liability. I’m fortunate in that I sold my car when I did. That greatly helped my cause this month, as did the absolute monster month for dividend income. Without the aid of those income sources I would have had a negative savings rate.

One of my goals is to save 50% of my net income throughout 2015, averaged monthly. So far, I’ve hit rates of:

MonthlyNetSavingsRate

I’m now at an average of 37.4% for the year. My worst start in five years, but things are looking up. May will likely be my last real expensive month of the year, as I have a wedding and trip to Omaha to pay for. But I honestly think the rest of the year will provide a huge tailwind for the savings rate average. Coming back to hit 50% will be extremely difficult and unlikely, but I bet I come really close. The fact that I’m even saving this much without a traditional full-time job is still just amazing to me, so I suppose I’m still letting that sink in a bit. This will be my first year ever without a regular paycheck to rely on, so it’s going to be a test.

May will probably be another low number, but I think it’ll be a lot higher than what I posted this month. However, the summer is shaping up to be fantastic for the savings rate. No major expenses on the horizon coupled with continued strong income from multiple sources should give me just the boost I need. Stay tuned!

How was your budget for March? Any unexpected expenses? Is your savings rate on track? 

Thanks for reading.

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90 Comments

  1. Still not too of a month bad considering the freedom you now enjoy by being a full-time writer! I would be somewhat less concerned about my savings rate (compared to level of when i was working) if I had already transitioned from the regular workforce like you have, but that will help your freedom fund keep increasing.

    I hear you about being more productive sitting out in public. Its something about the atmosphere and not having all of your stuff around to disctract you that makes it easier to get things done. I tend to get a ton done at the airport when travelling.

  2. My savings rate is on track as well, I’ve averaged after-tax 58% this year so far due to a great 68% rate in January. This includes buying an engagement ring in March, thank god for that annual bonus in my new job! Hopefully next year around this time I can still say the same with the included wedding costs in May(ish) 2016

  3. The $600 spread over nine months will help you throughout the year. I remember last year when you had to include the car expense every month, it was taking a big chunk of expense.

    24.7% savings rate? Are you sure you are the Dividend Mantra that I know? Hahah kidding aside, I think you can still pull a 50% savings rate over the course of the year, it was a slow month for the online income thats why it is totally acceptable.

    My savings rate had fallen on the 47% on the first quarter and I am expecting an even lower savings rate for April since we went on a road trip, my paycheck will be lower than usual. Hey at least the family had fun, that’s the most important thing right!

    Thanks for sharing your income/expense ratio and take care!

  4. I saved over 50 percent only if you count reinvested dividend income. For some reason I have a hard time counting dividend income as income, it gets reinvested automatically so I often have a hard time claiming it as part of my overall income.

  5. I’ve been FIRE since 5OCT2012. Starting last month, I established a “budget” for the first time instead of just being a miser and letting the chips fall. It’s more of an anti-budget as there are no categories, just a defined set monthly withdrawal rate from the brokerage. If I spend less than that, the ‘anti-budget’ works. So far, it looks like I set the rate about right and have a couple hundred to spare. The defined rate leaves me a few percent of dividend income a year not being withdrawn so I can grow capital and hopefully stay ahead of inflation permanently. Options trading income are gravy that goes into municipal bonds to give me a tax-free “raise.”

    Keep up the great work. You are a hero to many.

  6. Congrats on a thrifty March. 25% may not sound killer (in our world; in the ‘real’ world you’d definitely be ‘crazy’ for such a high savings rate), but it’s awesome in a tax-month! In my mind, the big achievement is keeping those expenses under $2,300.

    We are looking at a crazy-expensive April on our end (property taxes coming due!), but we’ve been amortizing expenses since we starting keeping a ‘for real’ budget and it’s not going to impact savings/investing at all. Something that was never an issue when Marie and I were both working, but that I’m glad I learned before she quit working full-time.

    Keep on saving,
    Charles

    *Plus, I’d say it’s hard to feel ‘down’ about any aspect of a month when you pull down $900+ in dividend income!

  7. DM,

    I really appreciate your openness and honesty, thank you sir. You are the gift that keep on giving 🙂

    In order to help with valuations, I nearly pulled the trigger today and signed up for the Morningstar premium service.
    I’ve noticed that you reference their fair value ratings. Do you pay monthly or annually for the premium service?

    Many thanks

  8. DM,

    Although your savings rate wasn’t as high as a typical month, it’s still very impressive considering a hefty tax bill. Your 25% savings rate is still much higher than the average persons and this was during tax season. Keep up the great work!

    Regards,
    Dividend Odyssey

  9. Awesome to see your expenses starting to get back under control now that you’ve gotten yourself settled back in Florida 🙂 Also, all great writers need coffee!(so i hear!)

  10. Still really good. It’s really the tax bill that took a huge hit at your savings rate more than anything else. I hope the government spends your hard earned money wisely (I also hope to wake up to find a stack of solid gold bars in my bedroom and my face on the cover of Time’s “Man of the Year” edition).

    And I have to agree with you on how spending your time in the service of others colors your feelings in dealing with people. It creates that tension you very briefly mentioned. Before I started working in customer service, I used to love speaking to people. After many years of some form of retail or another, well, I won’t use your comment section to talk about my feelings about the general public. But I wonder what would happen if I achieved financial freedom tomorrow, quit my job on the spot, and never looked back? I bet those negative feelings towards other people would melt away.

    Yet another reason to march towards financial freedom. You get to deal with people on your own terms, not an employer’s. And your own terms will probably be a lot less………….hostile.

    I think I just used your comments section for a creative free-writing session.

    Sincerely,
    ARB–Angry Retail Banker

  11. Vawt,

    We’re on the same page. I’m a bit less concerned about the savings rate now that I’ve transitioned away from a traditional full-time job, though because I’m still aggressively pursuing full financial freedom, the rate is still somewhat important. I’ll probably cease to care at all once I’ve crossed over. 🙂

    I’m really surprised at how much more productive I am when I’m out and about. I’ve always been an introvert, so I’m kind of supercharged at home. But being home all the time is a bit different. Kind of goes from a retreat to a prison, so it’s nice to get out there and really pump out some good stuff!

    Thanks for stopping by.

    Cheers!

  12. Dave,

    Excellent! A 58% savings rate is really fantastic. I’ve always targeted a 50% rate because that puts you on track for FI somewhere between 12 and 15 years out… which is a pretty solid timeline. And I’ve obviously been aiming for that 12-year mark, so I’ve tried to exceed it when possible.

    Congrats on the engagement and the bonus! Everything’s firing on all cylinders over there. 🙂

    Enjoy the good life, my friend!

    Best regards.

  13. FFF,

    Ha! Yeah, the savings rate isn’t quite what it used to be. Though, neither is my income for the most part. I remember collecting those $5k commission checks intermittently at the old job and thinking how much my savings rate was going to rock for that month (and how many stocks I was going to buy). A little different nowadays. But it’s a trade I’d make 100/100 times. I’ve always preferred time to money. 🙂

    A savings rate of 47% is still really, really good. That’s near 50%, which I kind of consider the threshold for “extreme”. And you had a great vacation in there as well. Life is good!

    Thanks for stopping by.

    Best wishes.

  14. DD,

    Well, I count dividend income because the IRS surely does. In addition, it’ll be the income I’ll be living off of one day. Doesn’t make sense for me to not count it for 10 or 12 years and then all of the sudden count it the very next day I start to live off of it. Moreover, I could use it for expenses right now just like any other source of income. All the same, I invest most of my other income as well but it doesn’t mean I don’t count that as income either. (Re)investment or not, it’s cash flow. 🙂

    Great job on the 50%+ savings rate. Very, very nice. I hope to catch up toward the latter half of the year. We’ll see how it goes!

    Best regards.

  15. I went to Vegas for March Madness opening weekend. Amazingly I was able to improve my net worth by $600 over the month of March. April doesn’t look so good with two weddings to attend, but after this month I should be cruising again on the savings. My goal is to purchase AAPL next week after payday this week then reload the gun and hopefully be ready to go again by late May, early June. Overall it looks to be the same as yours at a 23% savings rate this month. I also had my first year where I had to shell out money for taxes, it was a mixed bag with $150 owed to the fed and a $250 return from the state. I had to shell out the Fed’s money in March, but hopefully I’ll get that state return by the end of April.

  16. FV,

    Nice. I like that term – “anti-budget”. I do something somewhat similar in that I set out every month to spend $0 in every category I can. I don’t really set aside anything at all. I just resist spending until it’s not possible, which is obviously impossible in certain categories like rent and what not. But I categorize every dollar spent just so I can track that and see if anything can be improved.

    Thanks for the support. Really appreciate it. Glad FI is working out so well for you thus far. That’s a wonderful spot to be in. 🙂

    Take care!

  17. Charles,

    Ha! Yeah, it’s tough to be disappointed when the passive income closed in on $1,000 this past month. I’m pretty happy, all things considered.

    I can imagine property taxes can bite a little bit. Never had to deal with that, but as long as you budget for it you should be all good to go. And amortizing it out like that smooths things out pretty nicely. Glad things are working out with the budget with Marie at home. Exciting times with the baby coming up! 🙂

    Thanks for dropping by.

    Best wishes!

  18. TDE,

    Appreciate the support. You readers are the gift that keeps on giving. 🙂

    I have a special deal there with Morningstar. But I think the services they offer are really fantastic. I definitely recommend it if you’re thinking of pulling the trigger.

    Cheers!

  19. DM,

    Last month I wrote that you were going to have a great March and you balked at the comment because of a looming tax bill. So my expectations were pretty low based on the comment. But all I want to say is congrats man, even though your savings rate decreased. Even with a large tax expense, a trip to spring training (which you have no idea how jealous I am of you for that. It has always been one of my life goals), and incurring great food expenses, you were still able to save a great amount of income, which we both know is more than the majority of Americans save.

    As you mentioned in the article, the most important thing is that you were able to engage in these activities while living the lifestyle that you want. You have the freedom for a frugal weekend getaway or the chance to go out for lunch at a deli because you are living the dream. You make your own schedule and your own rules, man am I jealous. So if it costs a little more than you would like, who cares haha We are frugal, not cheap. Financial freedom allows us the opportunity to create those memories, which are often created through those small getaways.

    Keep up the great work DM. Now that the tax man is in the rear view mirror, your expenses should reduce allowing your savings rate to increase. I can’t wait to see how your April measures out!

    Bert

  20. DO,

    Thanks! 🙂

    Yeah, I try to remember that even when my rate is low it’s still something like five times the national average. I hold myself accountable to pretty high standards, but most people dream of a 25% savings rate… especially when a big tax bill comes up. So I’m really thankful and fortunate.

    Appreciate the support!

    Best regards.

  21. FFdividend,

    Exactly. Glad to have that bill out of the way. I’ve set up a much more aggressive quarterly estimated schedule this year, so I doubt I’ll be in a similar circumstance next year. 🙂

    Cheers!

  22. DW,

    Haha. I’ve heard the same thing. I’ve never been a big fan of coffee at all, but I’ve come around a bit. Of course, when I say that I mean I drink the sugary iced coffee drinks that aren’t really “coffee”. 🙂

    Thanks for dropping by!

    Best wishes.

  23. DGJ,

    Ha! Yeah, I hope to not have another state income tax bill for many years to come. Not fun at all!

    Not my best monthly rate by far, but I’ve done worse and still come back to finish with a great annual rate. Had a bigger income back then, though. We’ll see how it goes.

    Take care!

  24. ARB,

    I couldn’t agree more there. This is actually something that I’m going to address. Have an article halfway written on it. Gotta finish it up one of these days. But, yeah, working around people creates this tension and a jaded attitude. That’s especially true in any type of position where you’re serving other people. Retail is a great example of that. But dealing with people on your terms and transitioning away from serving to being served creates a whole new view on society at large. No doubt dealing with people on a regular basis can be a somewhat miserable experience, and that’s just one more reason to become financially independent. 🙂

    Thanks for adding that!

    Best wishes.

  25. I’m interested to hear how you are strategizing your future around your income outside of dividends. What kind of emergency fund do you maintain? 3 Months, 6 months or or more (or living expenses)?

    Typically the size of this fund would be based on one’s assessment of how long it would take to get back going if they lost their job. For you, losing your job would equate to a $1,500/mo loss of income. You certainly could not live for very long on dividends (at this time).

    Thanks for sharing. I always enjoy reading!

  26. TDM,

    Sounds like you saved a good chunk of change and had a ton of fun in the process. Nice! 🙂

    Glad you were able to get a refund of some sort. My issue was all my own fault since I didn’t increase my quarterly estimated taxes toward the latter half of 2014. Live and learn, but I just delayed the inevitable.

    Let’s get these bigger expenses out of the way in May and then aim for a great second half of 2015!

    Best regards.

  27. Bert,

    You’re absolutely right. The whole point of creating this lifestyle of independence and freedom is so that we have control over our time. It’s really incredible that I’ve kind of arrived to that point much earlier than I had planned on, but it’s truly a fortunate position to be in. I’m incredibly grateful.

    Appreciate all the support. We’ll see how April and May go. I’ve got the hotel bill in Omaha to take care of, a rental car in there, and then some miscellaneous travel costs. And then there’s some wedding expenses as well, though we plan to keep that pretty light. Should be smooth sailing after May, though. 🙂

    Keep up the great work over there! You and Lanny are doing awesome.

    Best regards!

  28. dukeofism,

    Ah, I must have misunderstood your question.

    I discussed my emergency fund a few years ago. Not much has really changed since then. I still keep around $4k or $5k or so in the bank and then I have something like $20k in credit available to me in an emergency. Add in the cash flow the portfolio provides and about $190k in liquid assets, and I’m in a good spot. Cash earns very little and my expenses are pretty low, so I’m pretty comfortable with a somewhat low emergency fund:

    https://www.dividendmantra.com/2011/10/my-thoughts-on-emergency-fund/

    BTW, there are two search bars on the site. With more than 600 articles on the blog, you’ll probably find a lot of information pertaining to most subjects. 🙂

    Cheers!

  29. A disappointing month for you and you still saved about 24% more than the average American! Great job.

  30. I like posts like yours, that illustrate that real life is real different month to month. Our spending and saving can’t always be a constant.

  31. Randall,

    Yeah, it’s unfortunate. Some of the most abundance in the world with one of the lowest savings rates among first world countries. Last I looked, it was something like 5% at the national level.

    Doing all I can to spread the word! 🙂

    Thanks for dropping by.

    Cheers.

  32. ARB,

    Ha. Yeah, that’s kind of why I mentioned that note in the post. It was something fresh on my mind.

    Of course, I have like 100 drafts going on right now covering a wide variety of topics. Just have to find the time to get some of them completed. 🙂

    Cheers!

  33. DB40,

    Absolutely. That’s one thing I love about blogging and showing this journey from start to finish. It’s one thing to pick up a book written by someone showing how it was done long afterwards, but it’s quite another to show all the ups and downs in real-time. These are the kinds of things that a calculator just won’t show. 🙂

    Cheers!

  34. Hi DM,

    Thanks again for sharing the info. There are some great points above.

    The saving rate is clearly very different for you now. I know that if were in your shoes I’d be less concerned than what I used to be, as you have more freedom in what you’re doing now.

    I still find it amazing that you don’t have a job, you write for a living, and you manage to save money every month!

    You’re dividends are ticking over beautifully and you’re still able to re-invest the (now) considerable income you make from them.

    Keep up the good work!

    Cheers
    Huw

  35. Typically, still a fantastic savings rate, even if it doesn’t hit your goal. But I think we all know you’ll probably strive to hit that 50% by the end of the year.

    The eating out should definitely be considered a business expense, especially if it’s as productive as you say it is.

    Cheers

  36. Sounds like you enjoyed life this month, which is the true early retirement dream :)! I like that you don’t worry too much about the numbers month to month–that’s how I feel as well. Like you said, things usually even out over the course of the year. I always feel like as long as I’m staying on my frugal path for the most part, more expensive months here and there are just fine. And, that’s great you have a good coffee shop to work at!

  37. DM,

    You are absolutely fine as long as you are in positive net saving and moving forward your ultimate goal of freedom. In few years, your dividend income will cover all your expenses and let you free from taxes and the deli/coffee shop. I know you love writing and inspire people like us, but you don’t need to rely on the online income.

    Keep up your good work..

    Best Regards,

    FJ

  38. Jason,
    I just want to say it’s pretty cool how you sit here and answer everyone who writes a comment. What a great way to reward your audience and keep us engaged. I hope for your sake though that your blog becomes so popular that this is completely impossible.

  39. Looks like a solid month DM! Over $900 in dividends and despite the tax bill you still netted $1,500 from your online income. That’s fantastic. And I hear ya on it being difficult to get work done at home, well writing. There’s too many distractions there and I find my mind wandering very easily. You’re an inspiration as always.

  40. I am so impressed by your $900 dividend income this month! It keeps me motivated to keep plugging away and putting money aside to build our portfolio! I’m hoping we can use the dividend income to help fund kids college costs!

  41. Wow, I got *so* happy for you when I read: “I can actually already start to see the finish line.” Just wow! I’ve been following your blog for over a year (two years?) and it is so awesome to be on the ride with you in a way, through your blog, and acknowledge that fact: the end is in sight. That is AWESOME!! Good job!!

  42. Hi DM,
    A question for ya..I am looking to take advantage of the recent decline in energy and oil sector and one stock that particularly interest me is RDS.B. This baby has been 7% down today and is trading at near 52 week low.
    But the only problem is they have 90% dividend payout ratio…which will get them some day of the oil prices are remain low

    Also their profit has been on a steady decline since 2012 and the dividends are eating away chunk of profits.
    Do you think that this will trigger a dividend freeze? Mind you that they are sitting on hoards of cash right now but the buyback have stopped.

    Let me know your thoughts

  43. I’m new to the site. Is your $900 approx dividend income this month a consistent thing or I imagine it varies from month to month? I’m doing this strategy myself and wondering what portfolio size is creating that kind of dividend income and what is your goal – i.e. a portfolio of x that will produce dividend income of y per year? Or? Do you have suggestions or show what your portfolio includes and how you select your stocks?

  44. You’re living the kind of life I dream about. To be able to be a full time blogger and still increase net worth on s bad month is fantastic!

    I’ll leave the day job at some stage, but at the moment it’s helping to find an 80% savings rate, so I’m not going anywhere unless I have to…

  45. A little lower savings rate than usual but I wouldn’t worry too much about it. Totally agree with your statement below:

    “The me of 2010 or 2011 would have balked at that, but I don’t feel the need to scrimp on every penny now that I’m largely living the life I always wanted. In addition, this is a lot cheaper than paying for some kind of co-working space, plus I get pretty decent food in exchange for the money – this is a quasi-business expense at this point. The deli isn’t great, but it’s within walking distance. Works for me.”

    It’s great to hear that you’re realizing that you don’t need to scrimp on every penny now. 🙂

  46. Huw,

    Thanks for dropping by. Always appreciate the support!

    Yeah, I’m in a different place than I was a couple of years ago. But I definitely don’t regret taking the pay cut to have more time and spend that time on projects I enjoy. My day-to-day life is just completely different and much better nowadays. If someone were to come up to me two years ago and ask if I’d be willing to work from home on things I enjoy for a price tag of, say, $1,500 per month, I definitely would have said yes. And that’s kind of what I did. 🙂

    You’re doing great over there as well. Good things happen to those like yourself who put in the effort, that’s for sure!

    Best wishes.

  47. M,

    Thanks!

    Yeah, it’s still a solid rate in absolute terms. Relatively low for me, but I’ll continue to give it my best effort.

    The coffee shop visits are effectively a business expense. At least, that’s how I’m looking at it. Although, I include personal and business expenses together in these reports, just like I include business and personal income together. They’re pretty much one and the same these days. 🙂

    Cheers!

  48. Mrs. FW,

    Yeah, absolutely. I think we both take a holistic approach to this. I look at the journey as a whole. Certainly it’s the sum of a lot of days, weeks, and months. But as long as I get from Point A to Point B in a reasonable fashion, then that’s what I’m most concerned about. 🙂

    I can tell you the me of a couple years ago would have totally slapped me upside the head for paying $2.50 for an iced coffee. Especially more than once per month!!!! But I’m just not in a position anymore where every dime needed to be maximized and saved. And I’m not making it up when I say I’m more productive over there. Plus, I try to keep my eyes on the big picture across the budget. Spending less than $500 on rent and living without a car means I have a little more wiggle room in other categories.

    Thanks for dropping by!

    Best wishes.

  49. FJ,

    Ha! Yeah, still in positive territory, which is certainly better than registering a negative savings rate for the first time. Got lucky with the timing of the car sale, however.

    I still rely heavily on my online income now, though I think that’ll become less of a factor for me in a few years. Just gotta keep striving! 🙂

    Best regards.

  50. Grant,

    Ha! I hope the same. 🙂

    It’s definitely time consuming to do this. And you’ll notice that authors of other blogs with similar level of commentary don’t end up responding to every comment. But I really enjoy it. I enjoy the discussions more than the writing, to be honest. So I hope I can keep it up.

    My issue with time management right now is that I not only write 12x monthly for the blog and respond to hundreds of comments every day, but I also write approximately 20 freelance articles every month as well as respond to a few dozen emails every day. So I’m becoming busier than I ever thought I’d be. But it’s definitely a good type of busy. 🙂

    Take care!

  51. JC,

    Yeah, exactly. A lot of distractions at home. It’s easy for me to just stop writing and start doing other things. And when you’re writing as much as me – 30 or so articles per month – I have to stay on task. It’s nice to stay in the pajamas and crank some tunes, but I honestly get more done outside the house. Never thought it’d be like that.

    Appreciate the support. Hope all is well over there!

    Cheers.

  52. klinel01,

    So glad to hear that. That’s why I write these kinds of reports. The result thus far kind of speaks for itself. 🙂

    Keep plugging away. The progress is real.

    Cheers!

  53. Congrats on another positive month. Got my numbers for last month but now have to find the time to write about them. Home ownership hit me again and will next month as well. If anyone knows of a 5 bedroom apartment for rent let me know with utilities included let me know 🙂

  54. Jamie,

    Thank you for following along. Without readership, the blog wouldn’t exist. 🙂

    The finish line is definitely there. I always knew it was there. But I’m far enough into the journey to actually see it through the fog. You have to have faith when you start out. But I’m proving that the faith isn’t in vain.

    Hope your journey is proving just as fruitful as mine!

    Best wishes.

  55. Abhi,

    Yeah, it seems the market isn’t real impressed with the BG deal. Looks like there will be some share dilution there if the deal goes through, so the pressure makes sense.

    As far as the dividend goes, management recently stated they plan on paying out the same $0.94 per quarter per share for the rest of the year and then at least that much next year. So that’s effectively a dividend freeze for this year, but that would still be a larger payout than what they paid last year because the Q1 2014 payout was only $0.90. However, this isn’t real surprising or uncommon for Shell. They last froze the dividend for a couple of years through 2010 and 2011 when oil pricing was similarly weak.

    With that dividend news they also announced they were intending on initiating a repurchase program of at least $25 billion from 2017 to 2020. So we’ll see how it goes. Their FCF isn’t particularly strong right now, but it appears to me that most major oil companies are having FCF issues right now. XOM’s FCF last year barely covered the dividend.

    Hope that helps!

    Take care.

  56. Connie,

    You can view all of my monthly dividend income reports here:

    https://www.dividendmantra.com/dividend-income/

    And you can view my portfolio here:

    https://www.dividendmantra.com/portfolio/

    These are both pages that you can see at the top of the blog. Other than that, there are two search bars (one at the top right and one on the right sidebar). In addition, I’d recommend going through the archives and/or the recommended reading section for more information. 🙂

    Cheers!

  57. Patrick,

    Thank you. I’m really fortunate. I’m definitely busier than I ever thought I’d be because I’m actually more of a full-time freelance writer than I am a blogger (this blog represents only about 40% of my writing output), but it’s a blessing to be able to work on things I enjoy and inspire people in the process. 🙂

    That’s a killer savings rate! My highest annual rate wasn’t anywhere near that. I can imagine it’s tough to pass that up. There’s certainly a spectrum there of job enjoyment and income potential… but I was somewhere else on the spectrum where the satisfaction was low and my income also wasn’t particularly high. Made it a fairly easy decision to strike out on my own and I’m surely glad I did.

    Keep up the great work!! An 80% savings rate puts you on track for FI in less than 10 years. 🙂

    Best wishes.

  58. Tawcan,

    Yeah, I’m definitely in a different situation now. The urgency isn’t quite there anymore. I’m still aggressively pursuing the goal so as to have the flexibility and freedom to do whatever I want whenever I want, but I’ve slowed the pace down a bit. Like I’ve said before, it’s like exiting the highway in favor of some country back roads. More enjoyable trip, even if you don’t get there as quickly. 🙂

    Thanks for dropping by!

    Cheers.

  59. DFG,

    Man, sorry to hear about some additional expenses over there. Home ownership can be incredibly rewarding, but it’s more expensive than people like to admit or recognize. Just one of those things. It’s a lifestyle call. Tougher to make the case for renting when you have a larger family, like in your case.

    Hope you’re still having a great year. Just a speed bump. 🙂

    Cheers.

  60. Nice job again Jason!

    I got KILLED this year on my tax bill (like you did), which is going to make my april budget looks pretty damn ugly.

    Good for you for still cranking out a savings rate way above 20% despite the headwinds!

  61. The VersaCart, at the first glimpse, I laughed (homeless people often steal shopping cart to carry their stuff around). Anyhow, then I checked out the website you provided. It’s kind of cool idea if you live in a metropolitan area. It will solve the carry stuff around the subway, bus, walk, etc. It’s a very nice working concept.

    For me, I go shopping once a week (for 1 person, me). So, I carry 1 basket, if my basket is full, I’m done. How much a 100bls person can eat?!! If I buy more than a basket, it’s probably some appliance. In that case I’ll need a car/truck, delivery would be a better option.

    I’m toying with the idea of keeping some money each month in saving for taxes next year too. I will have a better figure after I give myself a $10K raise.

  62. Brian,

    I hear you. I was murdered, though it was kind of a suicide since I didn’t boost my quarterly estimated taxes toward the latter half of 2014. But I was going to pay it sooner or later… just turned out to be later.

    Appreciate the support. Hope you were still able to eek out a positive savings rate even after the taxes. If not, there’s always next month. 🙂

    Cheers!

  63. Vivianne,

    Yeah, the cart is great. We love it. Super versatile and tough. We shop for three people whenever we go to the grocery store, so it’s a bit much to try and carry that back with just a couple of backpacks. So this works out really nice. And it’s as cheap as two backpacks anyway, but it carries much more.

    My tax bill won’t be nearly as large next year. I’m paying significantly more in quarterly estimated taxes here in 2015. Unless I get some kind of major boost in online income (I wouldn’t complain), things should be pretty accurate.

    $10k raise? That sounds pretty awesome. Congrats! 🙂

    Cheers.

  64. BAM taxes done! Great to hear that, Jason. Now it should be smooth sailing from here. I can totally see how writing at home would be distracting. When I go home I want to spend time with the girlfriend and just relax. I usually try to quickly update the blog at work while I’m exporting shows and twirling my thumbs. I’m sooo glad you’ve found a good place to be a ‘regular’ at. I bet the staff love you for being low maintenance and very kind. I’m hoping some unexpected opportunities open up for you during this year and you’ll earn way more income than you’re hoping. You know I’ll be reading 🙂 Best wishes and thanks for sharing!

  65. Ryan,

    Thanks, man. I think the waters will be much calmer moving forward. April will probably be my last rough month, but I expect the rest of the year up until the holiday season to be pretty quiet for spending. So I’m hoping I can start recording some blockbuster savings rates again. 🙂

    I have some ideas in terms of increasing revenue. Not sure what I’ll implement yet, but I’ve got three or four exciting ideas. It’s just tough to do some of the things I want because of time constraints, however.

    Thanks for dropping by. Keep up the great work over there!

    Best wishes.

  66. Not the best month DM, but I’ll be looking forward to see you try and get it back up to 50%. Like you said, you are largely living your life like you would do once you reach FI so the savings are not such a big deal anymore. I’d just hate to see you get too far off track.

    Good news going forward is the tailwind for the $600 car payment. Not too mention, since most of that money is already in the market, you’ll be making dividends on that money

  67. ADD,

    Yeah, we’ll see how things go over the next few months. I’m excited looking out past April and May. Not only do I have the $600 tailwind until the end of the year, but the engagement ring will be gone after April. And then there’s always the chance that online revenue increases, in addition to the high likelihood that my dividend income is more toward the latter half of the year. Things look good! 🙂

    Thanks for dropping by.

    Best regards!

  68. Jason,

    It’s wonderful to be able to say that though isn’t it! You now have the freedom to do what you want with your time, it’s almost like you’re FI already! I am guessing that once your dividend income starts to officially cover your required expenses, that your lifestyle won’t really change that much.

    I certainly hope that you will continue blogging once you reach that point too!

    Cheers

  69. How do you feel about CAT? 3.5% dividend, and trading 14x earnings..i feel at $80, it’s a good buy.. but maybe thats just me?

  70. As one of people that was inspired by you and your dedication to financial freedom, I wanted to let you know that I feel thankful for your motivational posts. Higher tax means you made higher income so things are going great for you which is an amazing news for me and so many other fellow readers. Keep up the great work!

    Cheers,

    BeSmartRich

  71. M,

    Absolutely. I’m incredibly blessed. I’ve worked very hard to get to this point, but there’s a lot of luck involved. I mean, a lot of people out there work hard and don’t get what they really want, so I’m always pinching myself to make sure I’m not dreaming. 🙂

    I certainly hope to continue writing in some capacity once the dividend income is fully covering me. Not sure how much/if I’ll be blogging like this, but I’d love to still reach out and be a part of the community in some way. We’ll see!

    Thanks for all the support.

    Cheers!

  72. Tyler,

    I personally prefer DE in this space, but CAT is a solid choice as well. I don’t think I have room for two cyclical heavy machinery manufacturers, and DE seems to offer superior fundamentals almost across the board (along with a similar valuation). However, if I didn’t own DE already, CAT would probably be intriguing. Just make sure you’re okay with a heavy cyclical business.

    Cheers!

  73. BSR,

    Thank you. Very kind of you! 🙂

    I’m really thankful that so many people “get this” and thus they’re changing their lives dramatically. Meanwhile, we’ve kind of built up this community of like-minded savers/investors, which provides a ton of value to every member within the community. And as this community grows, we’ll continue to spread the word that this is possible.

    To be able to make a living with my writing is a dream come true. To be honest, freelance writing continues to be a significantly higher source of income for me than blogging, but the blog is really where my heart is. There’s an opportunity cost there for sure. However, this gives me an excellent platform to inspire others and prove that financial independence is out there waiting for us. 🙂

    Thanks for dropping by!

    Best wishes.

  74. Hi DM,

    It looks like your forward dividend income of $7200 is covering 40% of your estimated spending of $18K/year. This is not bad at all. Even if you never add another penny in new cash but just reinvest dividends, you are on track to reach the dividend crossover point within 7 – 10 years.

    However, it looks like your expenses are inching up. You need to do some serious cost cutting 😉

    Also, I was curious how large your Federal Tax bill was for 2014?

    Best Regards,

    Dividend Growth Investor

  75. hello DM,

    Well done! Another good month for you considering you quit your day job. Your site income is also quite nice to say the least.

    I’m curious about one thing though, why the “large” expense on the engagement ring?
    We actually decided to ditch the engagement ring (its also not as common in the Netherlands) and only buy wedding rings. Guess we paid slightly less (~$150 if I recall correctly) for the both of us. The bond is more important then the jewelery in our minds, but I guess it a very personal decision.

    Cheers, Mr. FSF.

  76. DGI,

    Haha. I’m a spendthrift, huh? 🙂

    Yeah, the food costs have come up quite a bit over the last couple years. But, like I mentioned, I’m okay with that. I’ve had to get used to being okay with some spending here and there, but getting out of the house to write has been an incredible boost to my productivity. Maybe it’s the caffeine in the coffee…

    I’m definitely ahead of pace. When I originally put my long-term plan together, I figured $6k in dividend income this year… so $7,200 would blow that out of the water. If I can keep ahead of pace like this I’ll definitely achieve financial independence well before 40. And I’m doing that all with a pretty modest income and exactly how I set out to do. We’ll see how it goes!

    My total federal liability was about $12k last year. A good chunk of that was due to all the online income. Self-employment tax is a bit hefty due to the SS and all that.

    Cheers!

  77. Mr. FSF,

    As far as the engagement ring goes, like you mentioned, it’s a personal decision. Would Claudia have still said yes without an engagement ring? Absolutely. But I also know it’s something she wanted and something she appreciates. And I suppose you pick your battles. She’s been really accommodating with a lot of the choices I’ve made, like recently getting rid of our one car. Besides, the ring was easily affordable and we’re not having a typical wedding ceremony or anything else. Just signing some papers. Again, you pick your battles.

    Cheers!

  78. Hi DM,

    I see it’s a great month for you, considering you quit your day job.

    I am especially impressed by your online income. Sometimes I hope I can earn some passive income online too (not so passive; but considering the time and place independent, I still call it passive.) However, considering English is not my native language, it’s a lot harder for me. Anyway, I keep writing on my MU blog and share my DGI progress with fellow bloggers.

    Keep up the good work!

  79. I love your online income and dividend income. Hopefully both of these will grow. I used to make several thousand dollars a month writing online from revenue sharing sites like Squidoo, which is now gone. Unfortunately my online income has now dwindled and I wish I had invested more of my money in dividend stocks. I did not totally squander the money, I used most of it to overpay my mortgage, which of course saves me money on interest charges.

    You are doing great to save as much of your income monthly. I look forward to reading more of your successes.

  80. Laura,

    Thanks for stopping by!

    Glad to hear you put some of that cash to work by overpaying the mortgage. That’ll surely save you some money over the long haul. 🙂

    I wouldn’t worry too much about Squidoo. Plenty of opportunities out there for those aggressive and looking for them!

    Appreciate the support. Stay in touch.

    Best regards.

  81. Just curious, how did you come up with :

    ‘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’

    Is there a rule-of-thumb formula you follow?

    For example, my expenses are $36k/year, which to me, suggests if I need 50 years’ worth if I retire today, that’s $1.8M. But that doesn’t take into account the interest/dividends, inflation, expense changes (i.e. mortgage to healthcare), etc. So just wondering how you calculate it!

    Thanks!

  82. benn686,

    That’s a good question. You can do the math on your own using a spreadsheet or a piece of paper, but that’s generally how it works, assuming long-term average returns.

    I haven’t written an article specifically on the math quite yet, but you can find a great article on how it works here:

    http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

    “…which to me, suggests if I need 50 years’ worth if I retire today…”

    That’s part of the problem. That’s an incorrect assumption. If you’re basing your portfolio income off of the 4% SWR, you’d need 25 years of expenses in assets, or $900,000 (using your numbers). Of course, if you’re attempting to withdraw only 2% of your portfolio in retirement, then you’d need that $1.8 million. But a 2% withdrawal rate is most likely overly cautious and unnecessary.

    Cheers!

  83. I have what might be a dumb question so forgive me,but I’m fascinated by what your doing and want to be able to invest more…the question is are you waiting until the end of the month to pay out your expenses,or do you pay out and save a portion totaling at the end of the month? When your only making $22,800 a year it’s a little tricky thanks for your time!!!

  84. The savings withdrawal rate seems a bit counter-intuitive.. for example, if you are withdrawing at a higher percentage I would think you would need more assets to cover, not less. I’m probably missing something obvious.. but how is it that you would need 1.8M for 2% and only 900k for 4%?

  85. lamonte,

    The best advice I could give is to make sure you set up your accounts with some kind of tracking software like Mint or Personal Capital. Once you get a good feel for your expenses, you’ll know exactly when they’re due and how to go about managing your cash flow.

    As far as my expenses go, I’d say most are due at the end of the month. So I simply manage my cash flow for that and invest as I receive cash, while keeping some aside for those expenses.

    I think it takes some practice but the main thing is to know exactly where your money is going and when, and then compare that to your cash flow. Make sure the gap between the two is wide as possible, which will mean due dates and things like that matter less as time goes on.

    Hope that helps!

    Best regards.

  86. ben686,

    I think you’re losing me here. I would recommend a bit more reading on withdrawal rates, savings rates, and how all that works. You’ll certainly find plenty of it here, as well as across the internet.

    The 4% safe withdrawal rate would presume (based on years of backtesting) that one can withdraw up to 4% of their portfolio, adjusting for inflation:

    https://www.dividendmantra.com/2014/09/the-4-rule-examined/

    Said another way, that involves saving up 25 years’ expenses. A portfolio would have to be worth $900,000 to generate $36,000 per year. That’s why I said your assumptions are wrong. 50 years’ expenses is just wildly conservative and probably completely unnecessary. But if that makes you feel better, then shoot for that.

    Cheers!

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