Andy Hough

Making March Goals After Lazy February

by

February was a pretty lazy month for me.  I never did get around to making any goals for the month or maybe I made some goals and just forgot about them.  Either way I didn’t get much done.  I did work my 40 hour a week job, although I didn’t work any overtime. My job is not at all physically demanding and not very mentally demanding, but when I’m done with my eight hours I am tired and just want to go home and relax in front of the TV.  I’m not sure how other bloggers manage to do so much in addition to working a full time job

In an effort to be a little more productive in March I am setting some goals for this month.  My goals are in the areas of writing, exercise, and getting rid of stuff.

My writing goal is to write at least 300 words a day plus write a post for Bank Bonuses. My daily writing won’t necessarily always be Tight Fisted Miser blog posts.  I might write some more on my long neglected non-fiction book.  I got the idea for the book over three years ago and I have only written a couple pages for it so far.  It is way past time to get that book done.  I plan to also do some writing for my other neglected blogs and maybe even write a little fiction for fun. I do have a short vacation at the end of the month so some writing will have to be done ahead of time.

My exercise goal is to exercise at least twice a week.  That isn’t much of a goal, but it is two times more than I usually exercise now.  I will be going hiking next month and it would be good to have at least a little bit of conditioning before I go.  My exercise will be hikes when I have time and the weather is decent.  Otherwise, my exercise will be walk/runs on the treadmill and maybe a seven minute workout as well.

My final goal is to get rid of stuff.  I want to throw away, donate, or sell at least 31 items this month.  This will mostly consist of putting my comic books up for sale on Craigslist and/or Ebay.  I did put one lot of comics up for sale last month, but didn’t get any buyers. I’m going to put up some more listings this month and hopefully find some buyers.  Since we have a big snowstorm coming this weekend I won’t be putting anything on Craigslist until next weekend.  I don’t think anyone is going to want to go through the snow to buy comics.

Those are my goals for this month for now.  I plan to have at least one update on my progress this month to keep me on track for my goals.  These goals are easily attainable so I won’t have a good excuse for not making them.

January Savings Rate – 45.73%

by

I made $2733.20 in January and saved $1250 for a savings rate of 45.73%. That is a pretty good start to the year. I forgot to calculate my savings rate for December so I don’t have a last month comparison for this month. My savings rate in November so this month was obviously a lot better than that.

My SWR was 49.15% in November and has now decreased to 45.73%. That is a good move in the right direction, but I’ve got a long way to go. My goal is to get down to a 4% safe withdrawal rate. The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. Once I reach that point I will consider myself financially independent. I now have 25.91 months of living expenses saved, compared to 24.41 months in November.

I should have another good month this month. My investments have gone up a bit this month, I’ll be able to add a fair amount to my savings, and I think I’ll keep my monthly expenses under $1000. Those three things together should add up to a nice improvement in my tracking numbers.

January Income – $2733.20

by

Here is a breakdown of my income for January.

Online Income

 $525.60
Interest

$3.64

Dividends

$12.92

Cash Back

$25.85

Job

 $2165.19

Total

$2733.20

January was a decent month for income since I did work full time for the whole month. My previous job and my current job overlapped for a week, but I just took time off from one to work the other and didn’t accrue any extra hours.   No overtime was offered at my job or I would have done better.  Now that filing has started I should be able to work a few hours overtime every week which will help my income quite a bit.

My online income was once again a little higher than I expected.  I’m not making anywhere near as much as I used to online, but it is still good money considering how little time I devote to it.

My passive income such as referral income from sites like Mr. Rebates and dividends is pretty small, but it adds up over the year.

This month and the next I need to make a lot of money from my job since I plan to take some time off for at least a couple months once the tax season is over.

 

January Expenses – $1199.65

by

Here is a breakdown of my expenses for January.

Household $400.00
Entertainment

$39.93

Transportation

 $399.03

Food

$120.57
Phone

$26.81
Health

$56.31
Travel

$157.00

Total

 $1199.65

My January expenses were slightly higher than I prefer.  I would have made my goal of spending less than $1000 a month if I wouldn’t have needed to get my brakes fixed.  I was hoping to just get new pads, but I was told I needed new rotors which seemed plausible since my car has almost 200,000 miles.  The brake job with the new rotors and an oil change set me back $268.  I would like to reduce my transportation expense category this year and I’m not off to a good start.

I also spent $157 on airfare for a hike I’m going to be taking as soon as the tax season is over. I shouldn’t be spending anything on travel this month or next month.  My entertainment category was abnormally low since we didn’t feel like going to the movies in January. I expect that will change this month.  All of the other categories will likely remain about the same.

My Terrible 2013 Investment Returns

by

Here is a breakdown of my investment returns for 2013. Although the stock market returned about 32% for the year I managed to do much worse. I don’t think I’ve ever given any advice here on investing in stocks and bonds, but if I did I hope you didn’t take it. I calculated the returns using the portfolio personal rate of return calculator at My Money Blog. The calculator doesn’t give your exact return, but it is close enough.

I have three different investment accounts. My Roth IRA which was invested in a bond fund. My Traditional IRA which is invested in index funds and my dividend stock account which consists of individual dividend stocks. I’ll share how each of them did and why I think they had sucky returns for the year.

I will start with the worst. My Roth IRA which was invested in a bond fund managed to lose 9.09%. This was quite a feat considering the bond fund I invested in lost 8.77% for the year. Somehow I managed to lose just a little more. It could have been even worse. I bailed out of the bond fund and into a money market fund about halfway through the year and it ended even lower than when I bailed out. I’m guessing my return was worse then the bond fund’s return because the additional investments I made early in the year were when the fund had appreciated a bit from the beginning of the year. I knew the bond fund would take a big hit when interest rates began to rise and I had been thinking of switching out of it, but I waited too long to do anything. I’m not sure what I’m going to do with this money now. The money market fund actually has a slight negative return after expenses so I don’t want to leave the money there. I’ll probably put the money back into a different, shorter-term, bond fund, but I am still a little wary of doing that. What would you recommend.

The second worst was my dividend stock portfolio. It managed to return 5.9% for the year. That is pretty bad when the overall market returned 32%. My worst mistake here was not being diversified enough. Part of the reason I wasn’t diversified enough was not having enough money. Since it costs $4.95 to buy a stock, I like to wait until I have a $1000 to invest before purchasing a stock. The most stocks I’ve had in the account was 10 which is still not diversified enough. I had to sell some of them in 2012 because I needed the money so for 2013 I only had seven stocks. A couple of the remaining stock positions were well under $1000 because I had sold part of them when I needed money. The two REITs I had in the portfolio were full positions and their value went down quite a bit due to the entire REIT sector going down over fears of higher mortgage rates. I stopped investing in that account last year and started buying stocks through LOYAL3 . This allowed me to diversify a little more since they don’t have any transaction fees and I can invest as little as $10 in a stock. When you have a small investment amount like I do not having to pay $4.95 to buy and sell the stock makes a difference. The big drawback to Loyal3 for me is that they do batch orders for buying and selling so you can’t be sure what price you will get. I’m holding off on buying any more individual stocks for now because I want to max out my IRA and build up my cash savings a bit.

My traditional IRA account was my best performing account for the year although it still lagged the overall stock market by quite a bit. This account returned 20.64%. The account was invested in a couple of domestic dividend stock index funds, a preferred shares fund, and an international dividend stock fund. The preferred shares fund and international fund both had small losses which dragged down the overall return. This year I’m not going to invest in the preferred shares fund. Also, the two domestic dividend stock funds have a lot of duplicate holdings so I’m just going to invest in the lower cost one from now on. Investing in both is an unnecessary extra cost.

My overall portfolio return for the year was measly 3.51%. I could make that much with a savings account. I’m hoping that with a change of strategy I’ll do better this year.