Reaping Dividends: July 2018
July 23, 2018
Oops, I missed writing up the April report! I think about our investing all the time but somehow forgot to report since last July. It’s been a bit busy here. 🙂
Observations
- I predicted that we’d see about $2600 in dividend income in 2017. We netted $2,445.95.
- Knowing that at some point, we’re due for a recession, and with stock prices being so high, I’m focusing on buying consumer defensive stocks – necessities, not luxuries.
- I’m trying to decide how I feel about buying Amazon stock. I don’t own any right now, and I’m very not cool with how Bezos treats his employees – the way he pays his employees is awful. At the same time, it’s the one company that provides a significant number of the services and products I need so I use them quite a bit as a consumer and that bothers me. Similarly, when the racist incident happened at Starbucks, I was really annoyed that we hold stock in a company that responded so badly at first, but I came around to realizing that it doesn’t make sense to dump stocks, or refuse to buy stocks, entirely on how a company conducts itself on single episodes. It’s a tough needle to thread sometimes and I’m still figuring out how to make this work.
- First quarter dividends (Jan-March): $346
- Second quarter dividends (April-June): $770
- Total net dividends year to date: $1,293.07
- New purchases: 100 shares of CLX, and 100 shares of KMB
- I sold GE at the start of the year at $17.59 a share and that felt silly because I mistimed it for tax loss harvesting for 2017 but it should work well enough for 2018.
Year to Date Dividends: $1,309.04, Fees: $15.97, Net: $1293.07
Income Replacement
For perspective, I like to think of the dividends investing project in terms of how much of our income it can replace, or how much of our fixed expenses it can cover.
At $1293.07, this year’s dividends can pay 46% of one mortgage payment. We still have a long way to go.
Since I started 6 years ago, I’ve made a grand total of $5,171.52. All money is reinvested at this time, no income is taken out.
I think in theory the idea of investing in dividends is a sound one and I’d like to experiment with it; alas, I’ve never tried it in reality. My husband’s 401k is parked in a bland & boring (but I think reasonably well performing?) target-date fund. But we really ought take a closer look at it. Saving for retirement primarily through real estate has always seemed a bit chancy to me. If stocks crash you could wind up with zero, yes – but if real estate plummets or buildings collapse or water mains break due to your trees or property taxes skyrocket, you could end up with LESS than zero because you owe more than it’s worth! But I say that as a jaded older millennial who watched several friends get burned by the Great Recession.
I think it was Buffett that said to really screw things up requires leverage, and real estate is the easiest way for most investors to play with large amounts of it. About 1/3rd of our NW is in RE, but we bought at the bottom back in 2010-12. I don’t see it as a particularly great investment currently, but there seems to be a TON of articles out there in the FI-blagosphere about how awesome RE is.
Bland and reasonably well performing is definitely up my alley. Honestly this is only one facet of our investing and not the primary one.
I branched out into real estate because I know families who have done very well that way but that’s also a minor arm of our investing. I think it’s a decent investment IF you hit several variables like a low purchase price, stable rent income, low maintenance costs, etc. Those aren’t always givens!