Andy Hough

2009 Income – $15277.99

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After adding up all my sources of income in 2009 I came up with a total income of $15,277.99 for the year. This might not seem like much but I’m happy with it. Especially considering I was in school for the first few months of the year and never had a full-time job during the year. My only employment income was from working part-time during the month of December.

My expenses for 2009 were only $12,090.99* giving me a surplus of $3187 for the year. I felt like I was mostly living off my savings in 2009. It was a nice surprise to see I actually made more than I spent. Since I didn’t include the purchase price of my car or the cost of buying My Retirement Blog in my expenses I actually had a small deficit for the year but I’m ok with that.

My income goal for 2010 was originally going to be to make more than in 2009. I plan to spend several months doing a thru-hike of the Appalachian Trail which will make achieving that goal difficult. Therefore, I am setting a backup goal of making more than I spend in 2010.

I hope this blog shows that you can live pretty well on a small income. I managed to travel to 6 foreign countries, spend a week hiking on the AT, went to the movies about 50 times, and did lots more last year. Being frugal and living on a relatively small income doesn’t mean you have to stay home and watch TV all the time.

*I found it a strange coincidence that both my total income and total expenses ended in 99 cents.

December Expenses – $938.65

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Here is a breakdown of my expenses for December.

Household

$398.22

Entertainment

$72.61

Transportation

 $91.21

Food

$90.98

Health

$61.66

Phone

$34.63

Debt

 $189.34

Total

$938.65

December wasn’t a bad month but there is room for improvement. The debt category is too high but it will be going down because I have refinanced it to 0% for 12 months and I will pay the remainder of it off at the end of the 12 months. That will help reduce my monthly expenses. My entertainment expense might go down a little this month.  At some point this year I will be traveling though and that will more than make up for any decrease in my entertainment budget. There isn’t much else to be cut down at this point.

December Investment Income – $90.93

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My December investment income rose to $90.93 from $89.13 the month before.  This was all the result of gains in my investment portfolio as I did not invest any additional money in December.  There will probably not be any additional investments made for the next few months, other than reinvested dividends, as I am trying to rebuild my cash after a couple of large purchases at the end of 2009.

Disclaimer: This is not my actual investment income. To get this figure I first add up my retirement savings, emergency fund, and any other money I consider permanent savings. What the total of my savings would earn at 6% interest for a month is my monthly investment income. My goal is to get this amount to $1000 a month. If I have $1000 in monthly passive investment income I will be able to retire early.

December Income – $896.30

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Here is a breakdown of my income for December.

Online Income

$414.12

Interest

$46.95

Stock Dividends

$117.96

Job

$309.32

Survey/Cashback

$7.95

Total

$896.30

I did manage to increase my income in December as compared to November. It still wasn’t quite enough to cover my expenses though. I do need to start making more money than I spend and I should be able to do that this month. I didn’t make much money from my job last month since I didn’t have the opportunity to work very many hours. That will change this month and I should make quite a bit more money from the job. It will not be full-time hours and the pay isn’t much so it isn’t going to be too much. It is a good thing I have passive income and alternative income to help pay my bills as well.

A lot of my stocks paid dividends in December but not as many pay dividends in January so that will be down this month.  There probably won’t be any other significant changes in my income this month.

Why Are We So Clueless About the Stock Market?:Book Review and Giveaway

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I was recently provided a copy of the book, “Why Are We So Clueless About the Stock Market?” by Mariusz Skonieczny. As I usually do when provided with books for review I will be giving away a copy as well. The giveaway rules will be at the end of the post.

This book starts out explaining what stocks are and how the stock market works. This explanation is simplified so that even a novice investor should be able to understand it.

The author then goes in to some detail on how to evaluate a stock for purchase. He mainly focuses on the company’s projected earnings compared to its current price. He points out that if the stock doesn’t offer a return greater than you would get from a Treasury note than the stock is a pass. He also prefers to invest in companies with “moats”, which are barriers to competition.

The book also includes a chapter on when to sell. This is an important part of stock investing that is often overlooked.

His advice on diversifying goes against the conventional wisdom. He warns against over-diversifying which can prevent your top picks from having much impact on the overall performance of your portfolio.

In summary, I think this book would be a solid resource for anyone who is looking to invest in the stock market or simply wants to learn more about stock investing.

Leave a comment on this post if you would like to win a copy of this book. I will be choosing a winner at random this Friday. Only one entry per person and you need to have a U.S. mailing address. Good Luck!