RoseRelish.com

New Home - RoseRelish.com

2016-06-03T16:54:00.002-05:00

Hello, all. I've decided to join the big leagues and buy a domain. All future content will be found at my new home, www.roserelish.com.

RoseRelish will document my attempt to slow down and enjoy the good things in life. Relish means savor/enjoy/slow down and Rose means beautiful/good/life. Thus, savor the beauty of life. RoseRelish.

I hope you follow the journey!

Major Life-Altering Decisions

2016-06-02T13:28:00.001-05:00

I've made two major life-altering decision in my life. The first was to quit NCAA basketball and leave the college I chose to attend after my first semester to get on the fast-track to a stock market job and return home to ensure the relationship with my girlfriend was maintained. The second was to quit the job I'd worked so hard to earn.

Out of high school, I chose to attend a small, liberal arts college and play basketball. I liked the feeling of a small school. Students can get to know professors and each other. Athletic careers can be extended. School pride exists in the Alumni base. It's a pretty compelling package.

I'd started dating my girlfriend after choosing my college. She was a year younger than me and, thus, would stay in hour hometown another year while finishing high school. I didn't think our relationship would last through college if I stayed away.

I loved playing basketball. It was part of my identity in high school. I was a 3-year Varsity starter. College basketball was far more work than high school ball. And therefore, a lot less fun.

The program of study at liberal arts colleges is very broad. To get a major, one needs just a handful of classes. It wouldn't be hard to triple major at a liberal arts school given the fairly lenient requirements. That wasn't my goal. I thought I got a very broad education in high school and wanted a specialized education to prepare me to become a stock analyst after college. My school didn't fit that desire.

These three factors combined to lead me to find a new path. I did some research and figured out I could graduate in 3 years at my local, state university. Then go on for a specialized, one-year masters degree. Thus, in 4 years, I could have a BS and MS in my chosen field. Plus, I'd be in my hometown to nurture my relationship with my girlfriend.

The decision was made, but telling everyone was difficult. I remember being in tears in the basketball coach's office. I just wasn't happy and didn't see sticking around as providing my desired outcome in life.

I transferred and completed my goal of earning a BS and MS in my field. I stayed with my girlfriend who became my wife. I got a job in the stock market. Everything worked out as planned. Now, I've given notice that I am resigning from my dream job.

The point of this blog from the beginning was to document my move home and attempt to build my dream life. I've had a great career in the stock market, but that chapter is coming to an end. I'll earn at least $40k in dividends next year. That will nearly cover my expenses. I want to truly and fully experience being a parent to my beautiful baby girl. I want to complete my home renovation. I've got a lot of interests and a long commute to stare at a computer screen has lost its appeal. I haven't been this excited about the next chapter since I got my first job 7 years ago.

Opting out of a great paying, stable job was/is nearly as hard as quitting basketball was as an 18 year old. Basketball was my life. Recently, my job has been my life. It's been my identity. It's been the fuel to help build a sizeable retirement fund. In the grand scheme of things, my job has been more important than basketball ever was. Quitting was hard. I've had the same boss for 7 years. He hired me. He brought me with him to a new firm when he left. He's been the one deciding my bonuses and raises. He's treated me extremely well. I can't thank him enough. But I'm to the point where the trade of time isn't worth the money. He asked me if I wanted to stay on until the next bonus season. He said I could have nearly any work arrangement I want. I told him no thanks. He is proud of me. He told me that "too many people in our profession stick around too long for the money while hating their lives and their work. I respect you for not becoming one of those people." I don't know if I visibly blushed, but he hit on my biggest fear. I don't want to become a zombie who is addicted to the paychecks but hates my life and potentially loses a marriage and family in the process.

I need extreme flexibility in my next chapter. I want to be able to take a day to go to the pool with my daughter and wife. To enjoy the sun on an unseasonably warm spring day. To take long road trips with no concrete plans. I can't be weighed down by a job or a boss.

I'm 1 for 1 in my major life-altering choices to date. I have no doubt that this second one will prove to be at least as successful.

2016 Goals

2016-05-05T14:19:00.000-05:00

So I'm obviously late in setting 2016 goals. I don't know what to say about that other than my goals below will probably explain why the delay happened. 2015 was an epic year. 2016 is going to be even better in many ways, but nothing compares to becoming a dad. Enough drama, here are the goals:

1) Earn $30k of dividends in 2016: Whoah. I earned just under $16k last year. I was set to earn just over $19k in 2016 based on my 1/1/16 portfolio. What gives!? Well, in prior updates, I've been excluding my retirement account dividend income. These accounts earned about $2k last year and are set for about $3k this year. But that's with S&P 500 index funds at a ~2% yield. If I can get the yield up to ~4%, which is about where my main account is, that means an extra $6k of dividend income from retirement accounts gets added to my starting point of $19k - for a total of $25k. Meaning now I just need to invest enough to earn $5k of additional dividends this year.

2) Have my portfolio set to earn $40k of dividends in 2017: Another whoah! Even adding the optimization needed to get retirement accounts up to a ~4% yield, I have work to do here. Starting 2016 at $22k of expected income (including retirement accounts), plus optimization of $3k by getting the yield from ~2% to 4% in those accounts, I will need to invest enough to add $15k of dividend income. At a 4% yield, that's $375k! To be fair, my buy list has a yield of just over 5% and my goal is to get the portfolio yield up to 4.5%. This might sound high for folks who invest in KO, PG, JNJ and the like at ~3%, but add a healthy dose of utilities and REITS and 4.5% is pretty achievable.

3) Get monthly spending down to target of $3,500: My Budget page is my target budget for retirement. It's not my current spending, which is closer to $5,000-5,500/month. We spend a lot for convenience right now. And daycare is $1,200/month. And work-related expenses. Remove a few of these items and we can hit the target.

4) Quit my job: This is going to be the hardest. I suffer from the One More Year Syndrome. Very much so. I wrote that article three years ago. I was planning to quit my job back then, but got a great arrangement worked out. But the 2 hours each way commute is killing me. Especially as a dad. And seeing enough dividend income to nearly cover all expenses is truly life-changing. The hard part now is giving up a great paying job, where I'm an established and integral part of a growing, successful business. I just crave the freedom and time with my family. But I fear the unknown. One more year of work will make it all better...The back and forth on quitting my job is driving my wife nuts. She needs closure either way. And she plans to work at least through the end of the year, so we won't need the dividend income this year. What am I waiting for?

5) Be a better Dad and Husband: I've been doing my best, no doubt. I'd objectively say that I'm a great dad today. I want to be better. I haven't been the best husband lately. I've been stressed and tired and take out frustrations on my wife. I'm scared to quit my job even though we'll have enough income to cover expenses and then some while she's still working and I'm building the dividend income up.

2015 Goals: How Did I Do?

2016-05-04T13:36:00.001-05:00

This update is obviously quite overdue. I haven't been as consistent with this blogging thing as I'd planned. And having a baby girl is a real time suck. I wouldn't go back in time for anything. Being a dad is the best. Overall, 2015 was an epic year. I may or may not have achieved what I wanted, but it will be one for my personal history book.

1) Earn $16,000 of dividends: At the start of the year, my portfolio was set to earn $12,961 of dividends in the coming 12 months. I ended up earning $15,987 during the year. Just $13 short! Ouch! If achieving this goal was a yes/no, I clearly failed. But seeing as $13 is not that much money - and I invested large sums of money, I'm calling this one a win. A technical loss, but a real-life win.

2) Have my portfolio set to earn $20,000 dividends in 2016: At the end of 2016, my portfolio was set to achieve $19,319 of dividends in 2016. Again, this is just short of my goal. So another technical loss. But in real life, I will have nearly $20k of dividends pouring into my account in the next 12 months. That's an epic success. Especially considering I was set to only receive $12,961 a year prior.

3) Sleep at least half of my daily commute: Plain and simple didn't happen because I didn't need the sleep. The baby had a pretty solid sleep schedule and my wife was a saint in allowing me to sleep and taking care of the baby in the middle of the night.

4) Weigh 190 pounds by Thanksgiving: Haha. What a joke. I actually gained weight throughout 2015 and the gains continued through the new year. I maxed out weighing 207lbs. Since then, my wife and I have done a few rounds of Whole30 and I'm now down to 188lbs. It's a great diet and I highly recommend it if you're looking to lose weight and learn how to eat right. We're not super strict anymore, but the lessons have stuck with us. We no longer eat Pop Tarts for breakfast as they're empty calories. It's now bananas and almonds. Sort of the same story for every meal.

5) Earn side hustle revenues of $1,200: I made just $180 on the side in 2015.

Overall, I failed each goal. That's pretty sad. Focusing on the positive, I was within $13 of my $16k goal. I grew my dividend income by over $6k in 2015. And I'm eating healthier. Most importantly, I have a healthy baby and a wonderful wife. I loved 2015 in almost every way. 2016 has a lot to compete with, but I think it may end up winning...more to come.

2015 Goals: Q3 Progress: Chugging Along

2015-10-02T13:20:00.002-05:00

I think I set a pretty good mix of goals this year. The financial ones will be real stretches to hit. The personal ones will take commitment over time. And the 5th goal will take a mix of creativity and commitment coupled with a bit of luck. How have I done in hitting these marks through the three quarters of 2015?

1) Earn $16,000 of dividends: I earned $5230.22 in dividends during the quarter and have earned $12,311.14 so far this year. The Kraft/Heinz Merger gave me an additional $1,650 of dividends during Q3. I'm going to beat the $16,000 goal because of this huge dividend and continued purchases.

2) Have my portfolio set to earn $20,000 dividends in 2016: I'm still sitting at $15,750 of dividends over the next 12 months. It'll be quite a bit of work to hit this goal, but a few dividend increases and continued purchases could get me close. My current projections have me earning about $21.5k during 2016 with steady purchases over the next 4 quarters. I'll need to invest more rapidly to get there by year end 2015, but I'll be taking advantage of the recent pullback.

3) Sleep at least half of my daily commute: I'm not a natural napper. Once I'm up, I'm up for the day. My baby girl has now started sleeping (mostly) through the night. Thus, it seems my estimated need to sleep during the commute was overblown.

4) Weigh 190 pounds by Thanksgiving: No loss. I love food. I've actually held steady this year at about 205lbs, so no damage done. And I think I look fine at this weight. Maybe I'm making excuses...

5) Earn side hustle revenues of $1,200: I've made about $180 so far this year on side hustles, with most of it coming in May and June. I need to pick up the pace a bit to reach this goal.

Cash Cost of a Mortgage

2015-07-30T12:58:00.002-05:00

In the pursuit of financial independence, one has to have a clear and realistic budget. For many, housing costs are the biggest budget category. This is also the case for me. My home mortgage, property taxes, and home insurance make up about 35% of my spending. That said, it's worth considering ways to reduce costs in this budget category.

The typical debate over whether to pay off a mortgage has two main factions:

The interest rate on a mortgages (3-5%) today is well below historical stock market returns (8-10%), thus paying off a mortgage early isn't the best financial decision.
The peace-of-mind of paying off the mortgage outweighs any financial gain that could be achieved.

I think both of these factions have great points. It's why it's almost universally accepted that home debt is "good debt". The interest rate tends to be below what one could earn on an investment. But there's something deeper in the peace-of-mind argument that might be internalized - sequence of return risk is reduced with no mortgage payment.

Let's look at cash costs of a fairly typical mortgage today. $200,000 borrowed on a 30-year, fixed-rate mortgage with a 4.0% interest rate. The payment on this loan would be $954.83/month or $11,457.97/year. Thus, the cash cost of the mortgage is 5.73%.

At a 4.0% safe withdrawal rate, we'd need to have $286,450 invested to cover the mortgage payment. That's a difference in amount borrowed vs. invested of $86,450!

As the principal gets paid down, the cash cost of carrying the mortgage increases. Thus, it may be a prudent move to pay off a mortgage - despite the headline interest rate being well below what one can reasonably expect to earn on investments.

I ran an example of someone with $250,000 in cash that could either buy a $250,000 house outright or borrow $200,000 to buy the house and invest. The person who buys the house in cash gets to invest the other person's mortgage payment. At the end of 30 years, taking out a mortgage leads to higher net worth:

Year 1	Mortgage	No Mortgage
House Value	250,000	250,000
Mortgage Balance	200,000	-
Mortgage Payment Value	-	-
Investment Balance	200,000	-
Net Worth	250,000	250,000

Year 30	Mortgage	No Mortgage
House Value	452,840	452,840
Mortgage Balance	-	-
Mortgage Payment Value	-	1,297,995
Investment Balance	2,012,531	-
Net Worth	2,465,372	1,750,836

I'm still debating this in my personal life, and have tended to believe that not paying off the mortgage is the better choice. But the cash cost continues to remain in the back of my mind, despite the mathematics proving that having a mortgage results in more wealth.

In Need of a Break

2015-07-15T15:04:00.001-05:00

I used to love summer breaks. There's something magical that happens when you wake up without an alarm clock and don't know what day of the week it is. Being able to do anything on nothing more than a whim is extremely freeing. The last time I had an extended break was over 4 years ago!

That last break lasted a month when I was between jobs. It was good, but happened during the cold months of the year and all of my friends (and future wife) had to work. I ended up playing lots of video games.

My last true summer break was right after my last semester of college before I got a job that September. It was the best summer of my life! I would take 25-30 mile bike rides every day, golf, fish, and take on fun projects like building a stone wall for my parents and renovating rooms in my parents house. My wife and I still rave about that wonderful summer together. I think the fun times we had helped cement the foundation of our relationship even today.

I'm getting to the point where I feel like I need another extended break. Part of the issue is that my wife is a teacher and has summers off. I've noticed that the past few summers are when I most feel the need for a break. It's hard to go to bed early while she stays up late and have to wake up early while she sleeps. Plus, returning after a day in the office while she can enjoy the outdoors adds to the jealousy. Teachers have a pretty decent balance of work and time off. I'm a product of the school system where we work hard for 9 months and get 3 months to decompress. A full 12 month work schedule isn't how most Americans were raised/programmed.

I also think part of the issue is being somewhat close to financial independence. I will earn over $16,000 in dividends this year. Add in the cash in my account and I'm roughly 2/3 of the way to covering my "stay alive" expenses and approaching full FIRE income levels at a 4% withdrawal rate in just a handful of years.

I'm not sure how close to full FIRE I'll get when it's all said and done. I'm all for making some decent income in semi-retirement, just with extremely flexible hours/terms. With that as my base case scenario, why wait until full FIRE? Why not have enough passive income to cover base expenses and use earned income for luxuries? It would pull forward FIRE materially and increase quality of life meaningfully. Or perhaps it's better to stick it out that extra couple years to full FIRE and still be able to use earned income for even more luxury? Tough decisions...

2015 Goals: Q2 Progress: The Mid-Year Update

2015-07-01T14:38:00.001-05:00

I think I set a pretty good mix of goals this year. The financial ones will be real stretches to hit. The personal ones will take commitment over time. And the 5th goal will take a mix of creativity and commitment coupled with a bit of luck. How have I done in hitting these marks through the first half of 2015?

1) Earn $16,000 of dividends: I earned $3581.24 in dividends during the quarter and have earned $7,080.92 so far this year. The Kraft/Heinz Merger will give me an additional $1,650 of dividends during Q3. I'm going to beat the $16,000 goal because of this huge dividend.

2) Have my portfolio set to earn $20,000 dividends in 2016: I'm still sitting below $14,000 of dividends over the next 12 months. It'll be quite a bit of work to hit this goal, but a few dividend increases and continued purchases could get me close. My current projections have me earning about $20k during 2016 with steady purchases over the next 4 quarters. I'll need to invest more rapidly to get there by year end 2015, but I'm waiting for a big pullback in the market with my cash.

3) Sleep at least half of my daily commute: I'm not a natural napper. Once I'm up, I'm up for the day. My wife has summer's off as a teacher, so she's been a great team player and letting me get good sleep at night. Thus, it seems my estimated need to sleep during the commute was overblown. We'll see what happens when school resumes in August.

5) Earn side hustle revenues of $1,200: I've made about $150 so far this year on side hustles, with most of it coming in May and June. If I can keep up that pace, I should break my $1,200 goal.

Debating the Merits of Closed End Funds

2015-06-10T08:47:00.002-05:00

I've struggled a bit with whether closed end funds (CEFs) deserve a place in a dividend portfolio. I had 5% of my portfolio in CEFs at one point last year. I later sold all of my CEF holdings in a quest to increase the quality of my dividend income. I've decided again to add some exposure to CEFs. Here's the biggest reason why:

I've been debating about what assets should count when figuring a safe withdrawal rate for early retirement. I'm a big believer in the 4% Rule. I think it is highly defensible and both reasonable and prudent to plan based upon it. I'm the kind of person who will build in a decent cushion, so whether the most correct SWR is something modestly below 4% isn't so important. Just that it's a quality starting point.

But the next question becomes: which assets should be included as part of the calculation for withdrawal rate? Is it just the taxable portfolio? Do I add home equity? What about retirement accounts? After months of chewing on the issue, I've decided to use taxable investment accounts plus retirement accounts. Basically, any account that invests in stocks, bonds, and mutual funds.

Why did I come to this conclusion? Well, I'm relying on my retirement account to fund the later stages of my retirement. Thus, it should be included. If I exclude it, my safe withdrawal rate is below 4% by a meaningful amount. Currently, the dividend yield of my taxable account is about 3.8%. If I include my retirement accounts at a 0% withdrawal rate, the withdrawal rate of my total accounts is closer to 3.0%. So to get it to 4%, I need to juice the yield!

This is where CEFs come into play. They yield between 8-9%. The income may not be "sustainable" or "high quality", but it's a way to increase a withdrawal rate without selling shares of high quality companies. I'd expect to invest about $10-15k in CEFs over the course of the next few months.

What made me comfortable making this switch is that I used www.firecalc.com and noticed that using just my expenses and taxable account forecasted value at retirement, the account has a 100% success rate until about age 60. After that, the success rate is more like 75%. The assumed withdrawal rate is close to 5%. If I add in my retirement accounts, the withdrawal rate is just below 4% and has an overall success rate of 95%!

What role do CEFs play in your portfolio? What assets should count towards the 4% Rule? Is it a good idea to use such a high SWR?

How I Plan to Save for My Children's College Costs

2015-06-01T12:16:00.001-05:00

College is obscenely expensive these days. Tuition, Room & Board, and Other Fees can total into the $50k/year range. My wife and I plan on fully funding our children's college educations. My parents funded mine. Her parents funded hers. The cycle goes on. I'm convinced that the cost of tuition needs to slow/fall, but no matter what, saving for the cost is going to require some effort.
There are really 4 ways to pay for college:

1) Student Loans: Gives students their first taste of debt! While this product can be useful for certain people, the burden of having a student loan payment isn't something I wish to saddle my kids with. Unless they want to become teachers or work for the government (where loans are forgiven after a period of time), I won't let my kids take on student loan debt.

2) Scholarships: You can earn scholarships for academics or athletics. I had a few small scholarships for academics, as did my wife. I think it would be wonderful to hope for some level of scholarships for our kids, but building plans based on hopes doesn't leave a backup plan. Thus, I'll fully embrace scholarships, but will use other methods to fund college for my kids.

3) Savings: This is the traditional route pushed by most. You (typically) funnel money into a 529 Plan or Coverdell or some other form of tax-advantaged account specifically designed to pay for educational expenses over time and then use the money when your kid enters college. While this is fine, I don't like the lack of flexibility in these accounts. Saving in a regular account and/or a custodial account is more appealing to me - maximizing flexibility with just a few relative tradeoffs.

4) Cash Flow: Some people make enough to use cash flow to pay for college. This is how my dad funded his college education - working during the summer to get enough to pay for that year's schooling. It's getting tougher to do this from the student's perspective, but isn't unheard of for parents. My parents funded my college with cash flow.

My Plan:
I plan to use mostly savings to pay for my kids college. My novel idea is to purchase shares of companies that were representative of what they used/liked during a year, repeat each year, and hold until college comes. I envision a portfolio of diaper companies (PG, KMB), toy makes (HAS, MAT), athletic wear (NKE, UA, ELY), food, (MCD, SBUX, PNRA), and entertainment (DIS, RGC). It will serve as a time capsule and teaching lesson. I'd obviously make sure the companies continue to fit the goals of the fund, but see very little trading. I can teach about dividends and compound interest, among other things. Any shortfall will be funded by my own savings and/or cash flow.

The cool thing about saving for college in this portfolio of stocks is that if my kids choose not to go to college to become something that doesn't require a degree, they will be given the portfolio. It's a nice headstart in life for them.

2015 Goals: Q1 Progress

2015-04-01T13:15:00.003-05:00

I think I set a pretty good mix of goals this year. The financial ones will be real stretches to hit. The personal ones will take commitment over time. And the 5th goal will take a mix of creativity and commitment coupled with a bit of luck. How have I done in hitting these marks through the first quarter?

1) Earn $16,000 of dividends: I earned $3,499.68 in dividends during the quarter - which is right in-line with my projections to squeak by the goal. However, the Kraft/Heinz Merger will give me an additional $3,300 of dividends during Q2. I'm going to crush the $16,000 goal because of this huge dividend.

2) Have my portfolio set to earn $20,000 dividends in 2016: I'm still sitting below $14,000 of dividends over the next 12 months. Quite a bit of work to hit this goal, but a few dividend increases and continued purchases could get me close.

3) Sleep at least half of my daily commute: I'm not a natural napper. Once I'm up, I'm up for the day. I can't do much right now in terms of feeding the baby due to exclusive breastfeeding, so I've been getting decent sleep at night. That will likely change once we begin introducing a bottle and taking shifts. So terrible progress here, but that is highly likely to change.

4) Weigh 190 pounds by Thanksgiving: No loss. I love food. Wife can't work out for another few weeks, so I've been taking it easy.

5) Earn side hustle revenues of $1,200: No progress or plan. My brother moves back to town from across the country and summer is coming - with a wife itching to do something productive. Something is likely to hatch.

Kraft and Heinz to Merge

2015-03-25T09:03:00.000-05:00

This morning, Kraft and Heinz announced plans to merge their businesses. The new company will be one of the top three North American food brands by sales. Kraft shareholders will get 1 share of the new entity PLUS a special dividend of $16.50/share and a commitment to maintain the current KRFT dividend (with growth) going forward. As a KRFT shareholder, I love this kind of merger!
What makes mergers like this so great for the shareholders that get the special dividend is the following:

I liked KRFT yesterday, before the merger announcement, at $60-62/share. I own 200 shares that I purchased in the $50-55 range. What's changed?

I now get 1 share for each KRFT share of the merged company, a more diversified, more global entity.
PLUS a special dividend of $16.50/share just for being involved.

Thus, even if the deal doesn't work out as well as planned - or as well as KRFT could have done on its own, my position is SIGNIFICANTLY de-risked!

My purchase price (actual money out of my pocket) is reduced by $16.50.
Meaning, it's as if I bought KRFT shares for $35-40.
Instead of my original $10,500 of money invested in the company, I now have only $7,200 invested after the $3,300 special dividend.

My yield-on-cost was about 4.0% with my ~$52.50 purchase price. Adjusted for the special dividend, my new yield-on-cost is 6.1%. Think of how many years of 5-7% growth it would take to achieve this level! (The answer is about 9 years).

So I'm a happy KRFT shareholder today. I get the same dividend going forward with a more diversified, more global portfolio of premier brands PLUS $16.50/share in my pocket.

I'll be crushing my goal of earning $16,000 of dividends with this unexpected $3,300 of dividends. I still have quite a bit of buying to do to hit the go-forward goal of $20,000 by the end of 2016 as special dividends aren't recurring. Nonetheless, I'm enjoying today's victory.

New Buys: Initiating a $10,000 Chemicals Position

2015-03-20T12:36:00.000-05:00

I've been on the hunt for bargains (or even relative bargains) out in the stock market lately. It's been tough! The typical list of dividend-payers trades at crazy valuations for the likely return. Sure, buying such quality companies is likely to turn out as a good idea over time regardless of valuation, but I'm trying to stack the odds of earning great returns in my favor.
The oil & gas sector has been hammered lately with the decline in crude - and looks very attractive. However, I'm not convinced oil has bottomed and making a call on short-term commodity prices isn't my game. What's an investor to do?

I took a hard look at adding to existing positions, but nothing is screamingly cheap and I'm on a diversification kick.

I looked really hard at National Oilwell Varco (NOV). It's been a popular choice out in the blogosphere and looks attractively priced. It's a derivative play on oil - but more on the production side than the price side. I decided that since the dividend is fairly new (initiated in 2009), and investor presentations don't stress dividend growth, I'd keep it on my watch list for now.

My hunt then lead me to the chemicals sector after reading an article on Kodak - and thinking about their spinoff Eastman Chemical (EMN). A bit of digging and I see Eastman Chemical has a decent yield (~2.3%) and trades at just under 10x earnings. Their investor presentations highlight key buckets for using cash such as debt reduction, dividends, and funding growth. Music to my ears. I also took a look around the competitive landscape and saw that a few other companies look pretty good (though not as good as EMN) and have similar profiles. I decided to buy Dow Chemical (DOW) as well.

I bought 75 shares of EMN for $69.50, a total of $5,212.50, and 100 shares of DOW for $47.50, a total of $4,750. The two purchases will add $288 to my annual dividend income. The yield on these purchases is 2.89%.

2015 Goals

2015-03-11T12:09:00.000-05:00

Though the first quarter of 2015 is nearly in the books, I never set goals for 2015. I was a bit distracted with my new baby girl and prepping the house for her and my wife's baby shower. Though I had a mixed bag of results in achieving my goals in 2014, it was still a great year. 2015 looks promising, but what are my goals?

1) Earn $16,000 of dividends: At the start of the year, my portfolio was set to earn $12,961 of dividends in the coming 12 months. Today, that number is at $13,771. I don't see a ton of value out there right now, but I'll still continue to make modest purchases because cash flow is better than cash.

2) Have my portfolio set to earn $20,000 dividends in 2016: This goal will require investing $125-150k throughout the year. While this is a HUGE chunk of money, I think it is achievable. I tend to hold a lot of cash, especially early in the year as that is when annual bonuses are paid. Combining my cash horde with consistent monthly savings could put me in the realm of investing this amount of money.

3) Sleep at least half of my daily commute: With the new baby, my sleep cycle is messed up. I've always been an 8-hours per night kind of person. That cycle will be messed up this year, but I luckily have a ridiculous 2-hours each way commute. I have ample time to sleep on the train and will endeavor to take advantage of it this year to catch up on sleep.

4) Weigh 190 pounds by Thanksgiving: There's an old wives tale that if the father gains weight during the pregnancy, it's a girl. Well, I gained about 20 pounds during my wife's pregnancy. I hope to reverse that gain. She also gained weight (though with a real excuse) and we can now lose the excess together. I know I'll gain some weight during the Holidays, which is why my goal is for Thanksgiving - so I don't have to scrimp when the good food makes an appearance!

5) Earn side hustle revenues of $1,200: I've never built a side hustle. I've dabbled in things here than there that sometimes make a bit of money. I don't even care if I make money doing random things that add up to my goal. Or one big side job that nets me the entire $1,200. I just want some hard proof that it's not impossible to make a bit of money outside of a job. This will help ease my mind about early retirement without being 100% financially independent.

Baby Girl

2015-03-10T08:57:00.001-05:00

I announced a new portfolio addition of my baby girl back in September. The time has finally come to actually meet her. She was born on the 1st of March. She and her mother (my wife) are doing great.

I'm planning on starting a small fund for her where I'll buy shares of one or two companies each year that makes whatever she's into that year. I think it will be a cool way to make a time capsule of sorts. I can see a time in 15-20 years where she has a decent, somewhat diversified portfolio that also represents her favorite things over the years. How cool would that be?

2014 Goals: How Did I Do?

2015-02-05T09:44:00.003-06:00

2014 was a banner year for me. I hit $10,000+ of expected annual dividend income, got an unexpected mid-year raise, and will become a father to a baby girl very soon. That said, it's time to see how I did in meeting and beating my Goals for 2014!

1) Finish the house renovation: We are a few coats of paint and a small bathroom away from finishing the main floor of our house. The basement is still down to the studs, but should come together fairly quickly as most of the work is putting up drywall, painting, and flooring. Thus, this goal was failed.

2) Bench 275 pounds and work out more regularly: I got pinched under the bar late in August and haven't lifted since. I was getting close to benching 250 pounds and would have likely come close to the goal. But this is another failure.

3) Figure out what to do in early retirement: Nothing concrete chosen, but I'm now leaning towards a mix of photography, woodworking/construction, and becoming a Realtor. A mix of those things would provide flexibility and be fun.

4) Earn $10,000 of dividends in 2014: I ended up earning $11,173 of dividends in 2014! I put a lot of capital to work in the year and that bore lots of fruit. What a fun thing to see so much cash rolling in from doing nothing! The total was boosted a bit by holding closed end funds yielding 8-10% for about half of the year, which I've now sold.

5) Have my portfolio primed to earn $12,000 of forward dividends by year-end 2014: I also hit this goal. I would have been even higher today, but closed out on most of my closed end fund holdings after thinking about the questionable sustainability of the distributions. That said, my portfolio now sits at $12,961 of forward dividends in the next 12 months.

So I hit the financial goals and failed the personal goals. I think the personal goals were far harder than the financial goals. Oh well, stretch goals are more fun anyhow. Keep your eyes on the horizon, not the waves.

2014 Goals: Q3 Review

2014-10-01T09:56:00.002-05:00

My goals for 2014 were pretty aggressive. I tried to challenge myself. Without lofty goals and huge dreams, what's the point? As a results-driven person, I've got to have a destination in mind to succeed. My goals are clear for this year (and the next few years) - to retire early by building up passive income. So how have I done so far this year on meeting my goals? See below:

1) Finish the house renovation: Continuing to make progress, though summer always slows things down. I'm about 40% done painting the exterior of the house. We've also made huge progress on finishing the nursery for our baby girl.

2) Bench 275 pounds and work out more regularly: Summer again got in they way here, but I'm getting back to a regular 2-3 times per week schedule. I was getting up there in bench press weight, but the summer break has brought my strength back down a bit.

3) Figure out what to do in early retirement: Still pondering...there are endless possibilities at this point, and it's fun to entertain each of them for a while. Getting a PhD and/or becoming a Realtor top the list at the moment.

4) Earn $10,000 of dividends in 2014: I've earned $7,631 in dividend income so far this year. With recent purchases (and a special dividend or two), I think I'll squeak by the $10,000 mark for the full year.

5) Have my portfolio primed to earn $12,000 of forward dividends by year-end 2014: With my portfolio currently at $12,838 for the next 12 months and three more months of purchases ahead, I have exceeded this goal. I've still got quite a bit of cash in my account after my unexpected mid-year raise, so a market pull-back or correction would be a great opportunity that I'm ready to take advantage of.

New Portfolio Addition - Baby Girl

2014-09-17T11:26:00.005-05:00

I'm really excited to announce a pending addition to my (family) portfolio - a baby girl! My wife and I decided to give having kids a whirl and had success. The baby is due in late March. My wife is a teacher, and as such, gets her summers off. We determined that having a baby would be best in the early spring time frame, so she could let her maternity leave extend right through the summer. We decided to give it a try this year and hope for the best, and luck was on our side!

I've been wanting a kid for quite a while. Part of the reason we moved back to our hometown was to raise our future kids near family. Our life is pretty well set up to begin this next chapter. I'm sure there will be tons of lost sleep and opportunities to socialize, but I've never heard anybody say the rewards of parenthood don't outweigh the downsides.

With a baby on the way, my dreams of being just like Mr. Money Mustache and following his advice to retire before having kids won't come true. But having a baby on the way makes me want to pull forward independence as quickly as possible. I think I could cover my living expenses through passive income in about two years, but we'll see how costly raising a kid really is.

In any event, I'm really excited to be a dad. There is nothing like the bond between parents and their children and getting to re-experience the world through the eyes of a child will be super fun. I can't wait to teach the baby everything I know and gain a fresh outlook on how simple things are all that really matter.

Unexpected Mid-Year Raise and Recent Buys

2014-08-01T09:51:00.000-05:00

My boss somberly called me into his office earlier this week and asked me to shut the door. GULP! Usually, such events are bad things. I racked my brain for things I'd done (and hadn't done) in the last few weeks hoping to find a reason for what I was about to hear...
Once the door was shut, I was told, "I've got some unexpected good news for you." PHEW! Due to planning for next year and some complicated compensation rules & practices I won't pretend to understand, I was "required" to get a raise. And the best part? The raise is retroactive to the beginning of the year! So I'll be getting a catch-up payment on my next paycheck.

Recent Buys:
Also, as usual, I've been buying stocks lately. I've made three meaningful purchases lately:

1) Buying more shares of MAT. The shares have gotten hit on weak toy sales lately, though the company has consistently earned ~30% on their book equity. With a 4.3% yield and strong earned returns, I'm a big fan here.

2) Buying CLMS. The company has been buying back shares and increased the dividend. Assets Under Management has been flattish despite the rising market, though with the share repurchases AUM/share is probably up a bit. CLMS has a ~5.0% yield at today's levels after the dividend increase.

3) Adding exposure to high-yielding CEFs. I read that Bill Gross added something like $300 million of his personal wealth to CEFs earlier this year. If his predictions that interest rates won't rise much through 2020 prove true, this will be a very profitable trade. In the meantime, I get ~8% yields on the basket of CEFs I chose and will reinvest the payments into more equity exposure. I realize that some of the yield is return of capital. And that the leveraged nature of CEFs puts me at heightened risk of rising interest rates, but it's a smallish bet I'm willing to take. Besides these CEFs, I have less than 5% of my assets in fixed-income securities.

2014 Goals: Mid-Year Review & Progress

2014-07-01T15:43:00.001-05:00

My goals for 2014 were pretty aggressive. I tried to challenge myself. Without lofty goals and dreams, what's the point? As a results-driven person, I've got to have a destination in mind to succeed. My goals are clear for this year (and the next few years) - to retire early by building up passive income. So how have I done so far this year on meeting my goals? See below:

1) Finish the house renovation: Progress has been very solid here. We're painting the trim in the majority of our first level, which is essentially the last step before decorating. We'll move on to finishing up the remainder of the first level in the coming weeks and attacking the basement alongside that. This might drag into early next year, but the end is in sight!

2) Bench 275 pounds and work out more regularly: My wife and I have been lifting 2-3 times per week for the last 8-10 weeks. I can definitely see the results of this consistency.

3) Figure out what to do in early retirement: Still pondering...there are endless possibilities at this point, and it's fun to entertain each of them for a while.

4) Earn $10,000 of dividends in 2014: I've earned $4,243 in dividend income so far this year. With recent purchases, I think I'll squeak by the $10,000 mark for the full year.

5) Have my portfolio primed to earn $12,000 of forward dividends by year-end 2014: With my portfolio currently at $11,067 for the next 12 months and six more months of purchases ahead, I should exceed this goal. Adding another $1,000 of dividends at an average yield of 4% means putting an additional $25,000 to work throughout the remainder of the year. I've got enough cash in my account to meet this goal, but am being patient about valuations. A market pull-back or correction would be a great opportunity that I'm ready to take advantage of.

$10,000 of Forward Dividends and First $1,000/year Position

2014-05-28T13:54:00.002-05:00

I've recently hit two major milestones in my investment/saving career. First, I've surpassed $10,000 of expected dividends in the coming 12 months. And second, I've achieved $1,000 per year of dividends from a single position.
Due to time constraints, I've been horrible about providing timely updates on stock purchases and sales. That said, I've continued to be active in the markets. It's awesome to reach five figures of passive income. I should expect to get at least this level of dividend income forever. $10,000 goes a long way towards covering my expenses and takes a lot of pressure off of income from my day job. One of my goals this year is to earn $10,000 of dividend income, which will require me to continue to purchase actively throughout the rest of the year. I'll pretty much need to hit my $12,000 of forward dividends goal to achieve the $10,000 in 2014 goal.

And on one of my positions reaching $1,000 of dividend income alone - I couldn't be happier! My largest position (DAKT) recently increased their dividend by 11%. That, combined with a purchase of 250 shares on today's earnings miss and 15%+ price decline, pushed me just past $1,000 of expected dividends on DAKT. The company has enough cash on hand to fund the dividend for at least the next 3 years, but they'll continue to earn more money and reward loyal shareholders.

All-in-all, progress is being made here every day.

Home Renovation Update

2014-04-18T08:25:00.000-05:00

It's been a long time since my last home renovation update. Since then, we've gotten quite a bit done. I've got a slew of pictures below - and rather than explain everything in detail, I'll take the easy way out and give you the gist of what we've accomplished in the last year.
We've gotten our master bathroom nearly completed - just need to install the shower doors. The biggest thing we've done is create our "open concept" home. We tore down nearly all of the walls on the main floor, created a 5' x 10' addition in our kitchen, and had our fireplace converted from 3-sided to 4-sided. Enjoy the pictures below and be sure to let me know what you think in the comments.

2014 Goals

2014-04-13T08:18:00.003-05:00

Having achieved all but my most aggressive goal in 2013, it’s time to set some goals for the new year – 2014! 2013 was a year of transition. I transitioned into a new work format, by leaving the office early enough to be home at a reasonable hour. We had our first calendar year of marriage and living in our new house back home, which involved beginning to reconnect with family and friends after being away. I see this year and the next few as foundational to building our long-term lifestyle. With that said, this year’s goals echo that feeling. With no further ado:

1) Finish the house renovation. This is both extremely aggressive and realistic. Last year was about getting gruntwork (gutting, redesign, etc) done. This year, we’re all teed up to have the whole renovation fall in place. We’ve been waiting on our contractor to move a wall, which has been holding up drywall and flooring (and other finishing work) in most of the house given our open design. Once the wall is moved, we should be flying. Accomplishing this goal will take dedication and not too many weekends off.

2) Bench 275 pounds and work out with my wife more regularly. I bought a weight set last last year and have gotten back into lifting a bit. I’m hoping to be dedicated to lifting and get my bench press up to 275 from about 230 right now. I’m not sure how conservative or aggressive that kind of increase is. And my wife and I began Sean T’s Focus T-25 workout in October. After taking most of December off, we want to get back into it and be consistent about working out.

3) Figure out what to do in early retirement. We’ve thought of doing anything from opening a resale shop with antiques/custom pieces of furniture to simply building custom furniture for folks around the area. I’ve also thought about becoming a truck driver, professor, and various other things. With PhD applications due in January for fall enrollment, and entry exams that need to be studied for and passed, having clarity on what I’ll be doing with the second chapter of my adult life is a requirement.

4) Earn $10,000 of dividends in 2014. My portfolio sits at about $9,000 of expected dividends in the next 12 months. If I invested all of the cash in my account tomorrow, I could achieve this goal for the year. The issue here is that I’ve had trouble finding cheap stocks, so I’ve managed to accumulate a decent cash pile. I am trying to get better about making more normal purchases in addition to opportunistic buys.

5) Have my portfolio primed to earn $12,000 of forward dividends by year-end 2014. Again, sitting at about $9,000 today for the next 12 months. To add $3,000 of dividends at 3.5% requires about $85,000 of new investment. That may sound like a lot (because it is), but I’ve got a lot of cash in the account today, and a whole year of earning and saving ahead. This is a stretch goal, to be sure, but something I’m striving to accomplish.

2013 Goals: How Did I Do?

2014-03-14T20:24:00.001-05:00

We're obviously fairly deep into 2014, but I haven't yet disclosed in detail how I did in meeting my 2013 Goals. 2013 was a key year in my life. I made a lot of big changes and see it as a foundational year for my future.
2013 Goals:

1) Figure out my job situation. Goal Accomplished Working out pretty well so far. I am out of the house at 6:45am and home by 6:00pm. While not "ideal" it's not as bad as some - and not having to find a new job is a huge benefit.

2) Finish the new house. Making progress, especially lately. We'll likely be done with the main floor by the end of summer and finish the basement by next spring. Obviously, this will be a recurring goal until it's completed.

3) Spend more time with family. Moderate. I played lots of golf with my dad last summer/fall. I spent time with my in-laws at our family lake house during the summer, though they leave during the winter. I didn't quite capitalize on time with my brother and he has now moved away.

4) Get back into cycling. Total failure. Didn't even fill the tires with air.

5) Earn $5,000 in dividends. I only made about $4,400 in dividends during 2013. While this is a solid number, it's well short of my goal. Luckily, I hit $6,000+ in forward dividends late last year and have since gotten my 12 month number over $8,000.

All-in-all, I did a decent job with my goals. The biggest was the job situation, which is resolved. The house is a work-in-progress, which we can't feel too bad about. Family was a passing grade. Cycling and dividends were failures. Progress is being made here, so I'm feeling good about what 2013 meant for my family's future.

Long Overdue Update

2014-03-07T10:12:00.000-06:00

It's been forever since my last post way back in November. I've been swamped with the Holiday season, home renovations, and beginning of year stuff at work. I've got a list of posts in queue to get back on track. I'm going to recap how I fared in meeting my 2013 goals, set new goals for 2014, let you know how our massive home renovation is progressing, and get caught up with stock purchases/sales.

With all of that said, here's a broad brush overview:

1) I did ok on the goals, but not good enough.

2) Goals for 2014 will be (fairly) easily met. Let's just say I set my goals at the start of the year and something great has since happened - I got promoted and a juicy raise!

3) The home renovation is going slowly, but progress from here will be fast. Mostly finishing work and decorating. Not so much left that requires a contractor and waiting for the professionals to find time.

4) I've had a lot of activity in my portfolio since November. In my last update, I passed $6,000 of annual forward dividends, which was awesome. Since then, that number has reached $8,000 due to my purchases. As a preview for my 2014 goals, I'm trying to push to get to $12,000 of forward dividends by year end 2014. I never saw this level of passive income coming so fast!

That's it for now. Stay tuned for the updates in short order!