Q1 2016 Financial Reports

I’m direct to you today from the Embassy Suites in downtown Washington, D.C. We’re staying here for a couple nights to celebrate my wife’s birthday. Our two-room suite (with free happy hour and cook-to-order breakfast) overlooking New York Avenue in the heart of the District runs for $430 per night. But, thanks to the Citi Hilton HHonors Reserve card, we didn’t pay anything (not even for wifi!) Thank you, credit card churning.

We also took advantage of a Groupon for a $100 Bobby Vans Steak dinner for $35 (even cheaper than grocery store prices). My point for bringing this up isn’t meant to brag. For many people, being in a hotel isn’t necessarily better than being at home. Nor is a steak dinner out better than a steak dinner in. For us, though, it is better—and that is the point. We really enjoy dining out and staying at hotels, which can be an insanely expensive affair. Frugality is simply knowing the things that bring you happiness, and finding a way to do them for less (in most cases, significantly less). A frugal life is not about deprivation or destitution, but optimization and resourcefulness.

Elsewhere in the Retire29 Household…

As you can guess by reading this, my post on April 1st was a joke. Thank you to those who sensed the heavy sarcasm and didn’t feel the need to send a concerned note to me directly asking if all was okay.

Also, this is my first of what is now a quarterly update to my finances. I said at the beginning of this year that a monthly update was too frequent, and that this feels more my style.

The markets were a rollercoaster in Q1 2016. The S&P dropped 11% thru February 11th, then rallied back 12% to close the quarter up a fraction. Let this be a lesson to not get caught up in the gyrations on stock prices day-to-day or even month-to-month. As Ben Graham famously said, “In the short term markets are a voting machine, and in the long term they are a weighing machine.” Let this also underscore the unimportance of monthly financial updates—things simply don’t move that fast and, if they do, then the movement is likely all the more meaningless.

A sideways market, though, still bodes well for net worth and passive income. As I will discuss below, net worth and passive income rose 7% and 9%, respectively, in the quarter. I’m quite pleased with both of those numbers (especially in the aforementioned flat market).

A Little Portfolio & Market Update

I’m now managing my portfolio in a Google Sheet that is shared on my Portfolio page. So, my current holdings are always up-to-date for all my readers to see.

I sold four securities in Q1.

I sold deepwater driller Atwood Oceanics when the company suspended its dividend program. Another casualty of the commodities rout.

I sold my municipal bond ETF, CMU. This has been a great investment for me for years. However, I no longer am subject to taxes on any qualified dividends, given my 15% income bracket. The market “prices in” the tax-deductible feature on municipal coupon payments, so when you aren’t a beneficiary of said tax treatment, then I (at least) believe it makes more sense to get tax-free income on higher yield corporate debt (of the same credit profile).

I sold long-time holding Yandex. The “Russian Google” had been underperforming along with the entire Russian economy. After some negative remarks by Putin on Russian companies with Western-owned influence (Yandex is listed on the Nasdaq), it became a little too political. There are too many great companies out there to have to worry about geopolitics in an underperforming and generally underexecuting company.

Finally, I sold my stake of motion chipmaker Invensense. The bankruptcy of GTAT (making of sapphire glass) after Apple stuck with Corning screens gave me some consternation over companies with concentrated revenue streams. I’d rather own more Apple than a supplier that could be pushed aside on a whim. Simplistic reasoning, but most of my (usually successful) investing is based on simple principles.

Other than standard dividend reinvestment, I added to my positions in the following (with the dollar amount added):

  • Apple ($660)
  • American Express ($1,100)
  • Consolidated Edison ($1,300)
  • Gilead ($2,500)
  • Johnson & Johnson ($1,200)
  • Nuveen Preferred Income ETF ($11,170)
  • Kinder Morgan ($700)
  • Realty Income ($1,100)
  • Pfizer ($1,000)
  • Valero ($1,000)
  • S&P 500 ETF ($12,300)

I also initiated new positions in the following companies (with dollar amounts):

  • Boeing ($1,140)
  • Ventas ($3,000)

This is a total new investment of over $38,000—in a single quarter. It’s not every quarter that I put almost four racks into the market. So, you probably deserve some insight as to where all that came from.

  • $7,500 came straight out of my paycheck (401k) for the S&P 500
  • $4,800 is my employer match to my 401(k) for the full year 2015
  • $8,000 came from selling the aforementioned four positions (so, this isn’t new money)
  • $2,600 came from writing covered calls
  • $1,800 came from non-DRIP dividends
  • $8,500 came from my tax return (even though my W4 claims the maximum exemptions allowed by Federal and State laws, I still get a big return)
  • $4,800 came out of my after-tax pay

I make a decent income, but certainly not enough to put this much glimmer in play every quarter. As you can see, a lot of that action is once-a-year items. What’s more, I front load my 401(k) as aggressively as I can, so those 401(k) additions will only stay that strong for one more quarter.

I can only imagine what we could do if my wife were still working.

Regarding the trades, there was a fair amount of activity this quarter, looking back. I certainly don’t expect to sell four positions each quarter (maybe one or two). I’m like Warren Buffett in that my favorite holding period is “forever.” If I can sum up this quarter’s trades in one sentence, it would be: I am placing a greater emphasis and value on stability and value, and moving away from risk and volatility, while maintaining proper sector allocations.

The consolidated yield on my portfolio is still a meager 3.2%. I expect that to rise VERY slowly as the years wear on, and for it to be between 3.8-4.1% by the time I retire in 2020.

On Retire29…

This is going to sound like a cop-out, and it kinda is, but I’ve been very busy at work lately. This busy-ness has bled over into my home life, which has really crimped my post frequency.

My target is to write 8-10 posts per month. I wrote 10 in ALL of Q1. That’s pathetic. I’m not the only blogger that has a busy job. I will do better going forward. With this post, I’ll already have hit the same number of posts (two) for April as I did for all of February. That’s a fat pitch comparison, but hey, at least it’s progress.

That said, there were some gems in Q1.

  • I stirred the pot on retirement accounts, publishing my thoughts on both 401k’s and IRAs. That IRA post was picked up by SeekingAlpha and is already my most-read and most-commented post ever on SA (over 7k views and 150 comments already). It also brought in a few dozen more followers.
  • Both LifeHacker and Rockstar Finance mass published my guide to finding where you stand, financially.
  • Retire29 had its first guest post, with financial advising insider, Brother29, giving us the skinny on the industry.
  • I also did my first expert roundup to commemorate my 100th post, bringing together the blogosphere’s best in offering pithy advice to become a better writer.
  • Strictly from a writing perspective, this was my favorite article in Q1.
  • Lastly, I finally wrote a “Start Here” page for new arrivals right there in the top menu. If you haven’t seen it yet, check it out.

The Path to Retirement

Retire29 Q1 2016 FI

My passive income plus side hustling covered an average of 16.6% of my expenses in Q1. Not sure exactly what to make of this other than I have a lot of work to do on both ends. Expenses will be discussed below, as will passive income.

Over the next four years, you’ll see this line trend up slowly with the vigor and persistence of the hour hand on a clock (as if another reason to drop the updates to quarterly from monthly).

Passive Income

Retire29 Q1 2016 PI


See Investment Portfolio for Full List of Holdings and Details

Paid: $734.83 (Q1 ’16 Avg) vs $377.84 (Q1 ’15 Avg) +94% YoY
Previous Forward Dividend Income (Q4 ’15): $764.27
New Forward Dividend Income (Q1 ’16):  $835.42 (+9.3% QoQ)

Welp, I received $921 in March that I didn’t have to work for—so I got that goin’ for me. Forward dividend income is up nicely both YoY and QoQ, but YoY comparisons will be much more meaningful going forward.

I finally get to talk less about dividend cuts. BHP Billiton cut their dividend by 75% in Q1, which sucks. But, another dozen or so positions increased their dividends. You can see which ones on my portfolio page, where I also note dividend changes. Oil has finally started to form a discernible bottom and has at least stabilized at around $40. That still sounds like a crazy low level, but considering it’s 50% higher than six weeks ago, I’ll take it.

I started dividend growth investing last February. All I’ve ever known is collapsing commodity prices and their effect on dividends. I envy dividend growth investors who have known extended periods of time where dividends increased steadily, rather than this dividend volatility we’re experiencing now.


Paid: $0.00
Forward Monthly Interest: $43.99

My annual interest payment for my annuity occurs in April. I’ll continue contributing $75 each month to this account.

Side Hustles

Retire29 Q1 2016 Side Hustles

I’m about to switch my hosting provider to A Small Orange, so I prepaid for three years of hosting in March. I’m starting to dislike BlueHost. They’re like the carpenter with a hammer where every problem looks like a nail. To Bluehost, every problem can be solved with upselling additional services.

My site is abysmally slow (Alexa says 100% of websites are faster). I’m hoping another host can alleviate this problem. I’ve heard good things from people I trust about A Small Orange. When I called BlueHost to discuss, I spent over forty minutes on hold and was given the advice to buy more services. They had no idea what was wrong. I’ve also been having significant downtime issues. Sort of sub-optimal all around.

I’m starting to get some referral traffic to Cardpool and Raise, which are two gift card resellers that I use often.

Ads are an interesting monster. Terrible in February, meh in March. The whole blog monetization thing is a little tricky for me right now. Luckily, I’ll never rely on this for income, and I have years to figure it out. I’m a content guy. Always have been, always will be.

Hard to really dive into traffic statistics and associated ad revenue when there is a clear and present problem of infrequent posts. We’ll see how Q2 shakes out.


Retire29 Q1 2016 ExpensesThere’s a tendency to refer to life’s expenses with adjectives like “stubbornly high.” That mentality treats expenses like they are outside of our control.

I know better.

My expenses are still high for one reason: I’m making decisions in life that keep my expenses high.

The Bad: Auto, good Lord almighty. I’m driving too much. I paid two parking tickets in March and must have five tanks of gas in there. I could, overnight, cut my driving by 75% without much effort. All I would have to do is to ensure I wake up early enough to take mass transit (which my work pays for). This is self-inflicted damage.

We did a couple IMAX/Planetarium movies with the youngster (she loved it!), so entertainment was still a little higher than the normal ~$50. We also did a Cherry Blossom cruise and dined out a few times more than normal with our Godkids.

Utilities in February and March are always the highest of the whole year. My wife keeps the thermostat at around 78-80 for the whole winter. That hits us hard in these two months. This is partly the reason for our retirement destination of Florida. We rarely use the A/C in the summer.

We are switching to Verizon FiOS from XFinity. Our internet service has been getting progressively worse for months. We had to buy a new router compatible with that new service. However, I can sell our old router for around the same cost.

The Good: Some good things are still happening. Our grocery bill isn’t too bad. Travel costs are still negligible, even though we’re still traveling every once in a while (thanks, churning).

Work To Do: Driving less, starting tomorrow. No more driving all the way into the office. It’s ridiculous.

One quarter does not a trend make, so I’m not going to sound the alarm on dining quite yet. But, I would like to see myself exert a bit more control in that area. I have a plan to reduce our dining out expenses in April. I’m going to set a budget and use gift cards. If no gift card, then no dining. I’ll see how that goes.

Warmer weather will bring utilities way down (to like $120 or so), without much behavioral change on our part.

The new internet service will bring the phone/internet category to a stable $50 or so per month (after installation fees are paid).

Net Worth

Net worth rose 7% from Q4 ’15 to $386,762. That’s against a flat S&P or a down 2% Nasdaq. A few one-time items like my tax return and my work bonus caused part of that rise (as discussed above). My dividend growth portfolio also rose 6%, largely due to a rise in consumer staples and commodity stocks.

One note regarding the chart below. I’m tracking “Car Equity” now. Previously, I had “Cars” and then the auto loan under the axis with other consumer debt. It seems more appropriate given there is a lien on the car until the loan is repaid (no different than a mortgage, really). It will hopefully be a moot point as the loan should be paid off within a few months.

Retire29 Q1 2016 Net Worth


Previous Financial Reports:

2016: Jan

2015: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2014: Dec


    • Hey IH,
      Q1 is always an outlier for new money in the markets. Every quarter won’t have a bonus or a tax return to stoke the contributions.

      Q1 was $30k of new money in ($8kcame from sales, mind you.)

      For the full year, I will contribute between $65-75k (that includes dividends).
      Retire29 recently posted…Q1 2016 Financial ReportsMy Profile

  1. The amount of investment you are able to make this quarter is amazing.

    For me, the trend of the path toward retirement is what jumps out most. The trend is positive, you can see the progress. With the contributions that you are able to make, I am sure that the exponential phase of the curve should be there soon.

  2. Congrats on the increase in net worth. Turned out to be a decent quarter for you.

    I completely get where you are coming from with not having the time to write as much blog posts as you really want. Ive brought my posts down to 1 per week when I used to do 2. 2 was way too much especially with my day job and just life in general.

    Keep on truckin! 🙂
    Alexander @ Cash Flow Diaries recently posted…Blog Income Report and Traffic Stats – March 2016My Profile

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