the dollar journal

Where are you and where are you going?
thedollar
Posts: 39
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Fri May 04, 2018 1:08 pm

Expenditure:
50+ hours a week
Dealing with opposite-ere and corporate people
Dealing with corporate culture
+ 0.1 monthly expenses increase for convenience
+ 0.1 monthly expenses increase (transport/stuff)
Freedom

Gain:
Structure
Socializing
Being "normal"
+ 2.5x monthly expenses pay
+ 0.1 monthly expenses decrease because I don't have time to spend money

thedollar
Posts: 39
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Wed May 30, 2018 2:09 am

Thoughts...

Is 9-5 just a glimpse in history?
In the future I cannot be made to believe that this is how most humans will live. Why would anyone solve trivial, time-consuming tasks most of their available time that they have not chosen if they did not have to? It is such an inefficient and destructive set up.

All the time in the world - together?
This of course raises the much more interesting question of how a human life will be looking forward. When the market no longer - through demand - controls how we spend most our life I foresee A LOT of creative resources being released. I foresee A LOT of value being created through leisure activities. Value destruction because of frustration, stress and bad life style choices because of the stressful compulsory lifestyle could possibly have a huge upside as well.

We might even join smaller "communities" in adult life to enjoy time together and explore the world around us. This might be a little bit like going to school. You would take trips to see the world and do activities in cooperation of your choosing. I think it would be a great addition to life if this was considered normal. I think it simply doesn't exist because no one has the time. Freeing up 40+ hours of peoples time would enable these sort of things.

Set up a system to get paid or pay...
My friend drinks 1+ litres of Pepsi each day. I receive Pepsico dividends every 3 months. It's such a weird perspective that this is what a lot of resources - millions of people's worklifes - are spend doing.... the end game is to make a system that makes others pay. Is this truly "value creation"? I only drink water - I have to wonder if my Pepsi-drinking friend is truly happier than me. I have to wonder if the "value creators" out there are truly happy with doing something with such a lame end-game. What about truly great goals like changing the world or doing something you like?

These systems are "gaming" people. They are truly clever and soon to be highly data-driven. I honestly believe that the resources behind this set up are so huge that it will be kept in place for 100s of years to come.

Only few few people - like people on this site - have the tools to game the system. Even WE (EREees) do not have a truly good system for measuring what a Pepsi a day is worth to us. We simply build an overhead framework of saving (50-80%) and confine ourselves within this. Lots of work - I guess - to be done still.

thedollar
Posts: 39
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Sat Jul 28, 2018 8:27 am

Image

July 2018 - Update

Wow, the summer in Europe has been hot. I have enjoyed it to some extent but am looking forward to getting a few colder days soon, hopefully.

Net worth
Financially the summer has been great as seen in the chart above. As I have increased my equity part of my investments the volatility is also increasing in turn. These days it's not unusual to gain or drop 1+ year worth of expenses in a single month (!). Sick. Pretty awesome watching this unfold. Still, I have a lot of cash and bonds at the time which I will be holding on to for the next year or so. The goal is eventually to be 80% equities and 20% cash/bonds in a few years time using a dollar cost averaging strategy. For now I am increasingly focused on tracking and uptaining dividends as it seems they are increasingly reaching a point where they will cover all my expenses when trailing both dividends and expenses for the last 12 months. These dividends - I hope - represents a recurrent revenue which will only grow for now - leaving me more to invest.

I try to make sure that my hunt for dividends does not make me take more risk (by choosing only industries with high yields and not diversifying).

Expenses
I really want to keep my expenses under $1600 per month or $19,200 annually though it is becoming increasingly more difficult. I have become increasingly willing to spend money and invest in stuff that brings me joy - furniture, food, etc. I believe I could cut a lot of spending if needed, however, probably about 20-30%. I am also looking into recurrent expenses (subscriptions, etc.) as there is a lot of value to be saved here.

Personal stuff
Honestly the last few months have been rough in regards to my own view on life. I am not sure what I want to do with my life and I feel that this wavering is seen as something weird and as a failure by other people. On top of that my personality is a bit rough because I tend to have a very low agreeableness. All of this means that I have a though time connecting with a lot of people right now and telling strangers about my life.

I do what I like; spend time with people, spend time with myself, some small projects, investing and gaming. Still my problems about what I should do with my life seems to cloud how nice things are - that I get to decide what I want to do all the time.

Goals
  • I hope to FIX my personal problems this year!! So I can be happy again.
  • Build portfolio to include more great stock, more diversification and dividends corresponding to expenses (based on 2018 forward-yield).
  • Invest more in myself. This year I'm looking to gain two new 'titles' / skills through programmes.
This is all for now. Have a great summer!

herp
Posts: 97
Joined: Sat Apr 08, 2017 1:11 pm

Re: the dollar journal

Post by herp » Sat Jul 28, 2018 9:28 am

thedollar wrote:
Sat Jul 28, 2018 8:27 am
These days it's not unusual to gain or drop 1+ year worth of expenses in a single month (!). Sick. Pretty awesome watching this unfold.
I just noticed that trend as well during the correction earlier this year. A daily swing could mean a month or two of expenses. It's a little unsettling at first, but then you remind yourself that it's only a quote and not a price you're forced to accept ;) There's also something calming about a decline, I feel like it takes some mania out of things.
Expenses
I really want to keep my expenses under $1600 per month or $19,200 annually though it is becoming increasingly more difficult. I have become increasingly willing to spend money and invest in stuff that brings me joy - furniture, food, etc. I believe I could cut a lot of spending if needed, however, probably about 20-30%. I am also looking into recurrent expenses (subscriptions, etc.) as there is a lot of value to be saved here.
I think spending money on things that bring you joy is what it's all about. When I started taking investing seriously and realized the power of compound interest, I became obsessed with cutting every expense possible. That definitely decreased my quality of life, and I've since loosened up. The actual expenses haven't even changed much, it's more a question of an attitude towards spending money.
Personal stuff
Honestly the last few months have been rough in regards to my own view on life. I am not sure what I want to do with my life and I feel that this wavering is seen as something weird and as a failure by other people. On top of that my personality is a bit rough because I tend to have a very low agreeableness. All of this means that I have a though time connecting with a lot of people right now and telling strangers about my life.

I do what I like; spend time with people, spend time with myself, some small projects, investing and gaming. Still my problems about what I should do with my life seems to cloud how nice things are - that I get to decide what I want to do all the time.
I think it's important to keep in mind that FI is not the end goal in life, but simply a path that gives you different options than most people. The big ones are increased freedom and time.
Goals
  • I hope to FIX my personal problems this year!! So I can be happy again.
  • Build portfolio to include more great stock, more diversification and dividends corresponding to expenses (based on 2018 forward-yield).
  • Invest more in myself. This year I'm looking to gain two new 'titles' / skills through programmes.
This is all for now. Have a great summer!
I like those goals, except trying to "fix" yourself. I feel uneasy about the whole idea of "changing yourself" because it hinges on changing your identity and makes you emotionally attached to it. Instead, just try to perform positive actions :)

thedollar
Posts: 39
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Sat Jul 28, 2018 11:26 am

herp wrote:
Sat Jul 28, 2018 9:28 am
I just noticed that trend as well during the correction earlier this year. A daily swing could mean a month or two of expenses. It's a little unsettling at first, but then you remind yourself that it's only a quote and not a price you're forced to accept There's also something calming about a decline, I feel like it takes some mania out of things.
I definitely know what you mean. The psychology of watching your net worth increase or decline at these numbers are complex. That's also one of the reasons I'm moving to the focus of dividends instead. Price simply doesn't mean a lot if you don't plan on selling your shares ever but declines and gains means a lot psychologically.
herp wrote:
Sat Jul 28, 2018 9:28 am
I like those goals, except trying to "fix" yourself. I feel uneasy about the whole idea of "changing yourself" because it hinges on changing your identity and makes you emotionally attached to it. Instead, just try to perform positive actions
Well... Maybe I should elaborate. I find it hard to "human" in regards to certain paradigmes.
  • Survival/evolution/being an animal paradigme: This one is easy to nail. It's easy to survive, just breathe (should be automatic). Don't starve to death. Breeding; not really important for survival.
  • FIRE paradigme: Amass assets. Live within your means. Check.
  • Social paradigme: I suck at this paradigme. Have random job, be seen as social loser by certain people/peers. Do not have a job, be financial independent but no career track and just do whatever you want = be seen as social loser. Not able to agree with people,, be social outcast. Seriously, horrible paradigme!
  • ERE paradigme: Go to a pretty low annual spend (like $7,000). Can't do this either atm. These people are pretty nice though since they don't hate you or alienate you for not doing/being able to do what they do.
I think each paradigme holds a key to their own form of meaning of life. Be a social king if you love social acknowledgement. Survive and breed, that's just pretty basic. Be FIRE if that means something to you (certainly does to me!).

I don't think they are mutually exclusive either. You could have success in multiple of these paradigmes. Having problems within a single paradigme could also mean huge problems for your life. That's exactly where I'm at right now. I have some problems within the social paradigme. Pretty much solved the financial one which is great. But life can't be great until I fix the other one since it affects me.

I could try to just perform positive actions - I see your point since you should focus on stuff you can actually alter within your life. However, I like to overthink things so I've come up with some other ideas to try to engineer my way out of social paradigme trouble. One example is simply preparing answers for when strangers, friends and peers asks me what I'm doing with my life / doing currently / up to. Think about it - a huge part of the social paradigme is how you present something and storytelling.

herp
Posts: 97
Joined: Sat Apr 08, 2017 1:11 pm

Re: the dollar journal

Post by herp » Sat Jul 28, 2018 2:04 pm

thedollar wrote:
Sat Jul 28, 2018 11:26 am
Well... Maybe I should elaborate. I find it hard to "human" in regards to certain paradigmes.
  • Survival/evolution/being an animal paradigme: This one is easy to nail. It's easy to survive, just breathe (should be automatic). Don't starve to death. Breeding; not really important for survival.
  • FIRE paradigme: Amass assets. Live within your means. Check.
  • Social paradigme: I suck at this paradigme. Have random job, be seen as social loser by certain people/peers. Do not have a job, be financial independent but no career track and just do whatever you want = be seen as social loser. Not able to agree with people,, be social outcast. Seriously, horrible paradigme!
  • ERE paradigme: Go to a pretty low annual spend (like $7,000). Can't do this either atm. These people are pretty nice though since they don't hate you or alienate you for not doing/being able to do what they do.
I think each paradigme holds a key to their own form of meaning of life. Be a social king if you love social acknowledgement. Survive and breed, that's just pretty basic. Be FIRE if that means something to you (certainly does to me!).

I don't think they are mutually exclusive either. You could have success in multiple of these paradigmes. Having problems within a single paradigme could also mean huge problems for your life. That's exactly where I'm at right now. I have some problems within the social paradigme. Pretty much solved the financial one which is great. But life can't be great until I fix the other one since it affects me.

I could try to just perform positive actions - I see your point since you should focus on stuff you can actually alter within your life. However, I like to overthink things so I've come up with some other ideas to try to engineer my way out of social paradigme trouble. One example is simply preparing answers for when strangers, friends and peers asks me what I'm doing with my life / doing currently / up to. Think about it - a huge part of the social paradigme is how you present something and storytelling.
That's some great insight!

I think just about everyone needs some kind of social acknowledgement, and I can definitely relate to not doing too well in this area. I get along with most people reasonably well on a casual level, but I tend to put up some kind of protective barrier that's hard to break and prevents me from truly bonding with new people even after a considerable amount of time. I guess it's a level of social anxiety and I suppose putting yourself in situations where you're otherwise comfortable is a good approach to try to break it down. Additionally, continually giving yourself a bit of exposure to what makes you feel uncomfortable can really take you far in the long term and reduce anxiety.

Having prepared answers on hand for common questions I think is not a bad idea at all.

Anyway, those were just some random ramblings :)

thedollar
Posts: 39
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Mon Aug 13, 2018 3:36 pm

Adding layers of security.

- 4% rule (check)
- 2% rule (check)
- Dividends corresponds to expenses (hopefully this year)

I am more and more attracted by the idea of following a dividend income strategy. The idea is to cover my annual expenses by annual dividends from 100+ public companies. The advantage would be:

- Adding an extra layer of security
- Dividends are rarely cut - especially if you have high diversification
- Dividends often increase more than inflation
- No need to worry about change in principal value and market volatility, focus is on recurring income
- No need to worry about inflation / rates / low future returns

The current plan is to reach parity between expenses and dividend income this year. From then on I would hope to at least have the dividend rise with inflation. My goal would be to get dividend hikes, dividend reinvestments or work to invest a small sum to have a 10-15% dividend increase each year. Forecast:

10 years forecast
- 10% annual real increase: 2.6x expenses received in dividends
- 15% annual real increase: 4.0x expenses received in dividends

20 years forecast
- 10% annual real increase: 6.7x expenses received in dividends
- 15% annual real increase: 16.4x expenses received in dividends

30 years forecast
- 10% annual real increase: 17.5x expenses received in dividends
- 15% annual real increase: 66.2x expenses received in dividends

From here on out in this journal I might consider reporting monthly dividend income and expenses.

July:
- Income
-- Dividends: $572 (YoY: 87.8% increase)
-- TTM Dividends: $1,146 (LM: 2.1% increase)
- Expenses
-- Expenses: $1,532
-- TTM Expenses: $1,834

Total networth increase: +107,615 Danish kroners (~ +$16,781)

Dividends received:
BAC - $23.76
PEP - $25.04 (15.2% dividend increase)
KO - $29.25
CHR - $25.99 (3.7% dividend increase)
RCL - $15
JYSK - $80.99
NKE - $10
MRK - $26.4
MO - $25.9
PM - $34.2 (6.5% dividend increase)
GEELY - $44.2
TRYG - $53.88
TSM - $65.55
GE - $19.44
CMCSA - $17.48
CSCO - $31.68
MDT - $20 (9% dividend increase)
DIS - $23.52
Last edited by thedollar on Fri Aug 31, 2018 10:12 am, edited 1 time in total.

herp
Posts: 97
Joined: Sat Apr 08, 2017 1:11 pm

Re: the dollar journal

Post by herp » Mon Aug 13, 2018 4:21 pm

Ah, the ever popular dividend income approach. Allow me to provide some arguments against the approach, as I'm not a fan.

First, it seeems overly conservative as the effective WR will be lower than needed. Second, it's usually tax inefficient if we're talking normal taxable accounts. Third, you're letting publicly listed companies dictate your spending. Fourth, it's a false safety net as dividends can be slashed at any time (I believe this happened during The Great Recession, but admittedly I haven't dug into the details). Fifth, fewer public companies are paying dividends now as compared to several decades ago.

Food for thought, at least.

2Birds1Stone
Posts: 294
Joined: Thu Nov 19, 2015 11:20 am

Re: the dollar journal

Post by 2Birds1Stone » Mon Aug 13, 2018 6:50 pm

I'm also in favor of a total return approach. herp made some good points, and I have seen dividends get cut first hand.

thedollar
Posts: 39
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Tue Aug 14, 2018 12:49 am

@herp @2Birds1Stone

I get where you're coming from. Just to be clear I do not chase high yields nor do I omit non-yielding stock. I basically follow the same manual "index" strategy as always so my largest holdings are FANGs atm since they have the highest market cap. So diversification is not taking an impact and taxes would be the same.

Only difference is that I now count in dividends since I find it more exciting and tangible. My thesis is that dividends will never be cut as severely as stock value. I know there are no guarantees.

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Eureka
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Re: the dollar journal

Post by Eureka » Mon Aug 20, 2018 10:57 am

Furniture??

thedollar
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Re: the dollar journal

Post by thedollar » Fri Aug 31, 2018 10:11 am

Small dividend increase in Danish kroners, however, small decrease in USD. 12 months average expenses lowered by 7% (!).

Recent purchases:
SBUX: Strong growth historically and looking forward. Strong dividend increases.
Merlin Entertainments: Revenue forecast is strong and historically as well. Strong brand and I believe there's an opportunity to grow this company even more by investing in more locations.
LeoVegas AB: Very strong growth. Nice dividends and valuations. Regulations might harm this business but I believe regulation will ultimately serve as a guard against competition (10+ years). Gambling isn't going anywhere.
ITW: Strong dividend case and seems like a stable stock to own.
Gazprom: 7% yield, 8% next year. Around P/E 3. Probably my most risky stock to date. I'll take it.
Ping An Insurance Group: Big company, awesome growth. Awesome potential. And diversification through holding an Asian company.
O: My first REIT and my first monthly dividend income.
CCI: Another REIT - feels like it has some more growth potential than O.

August:
- Income
-- Dividends: $958 (YoY: -0.8% decrease)
-- TTM Dividends: $1,146 (LM: -0.06% increase)
- Expenses
-- Expenses: $2.239
-- TTM Expenses: $1,703

Total networth increase: +41,306 Danish kroners (~ +$6,444)

Dividends received:
JPM - $39.2
VZ - $46.61
T - $60
SBUX - $27 - 20% increase!
AAPL - $115.34
ABBV - $28.8
O - $19.8
PG - $35.86
CAT - $15.48 - 10% increase!
NOVO - $192.25
PANDORA - $347.34
SAMSUNG - $31.48
C - $24.3 - 41% increase!
DFDS - $0 - Cut their dividend compared to last year
Last edited by thedollar on Fri Aug 31, 2018 10:32 am, edited 1 time in total.

thedollar
Posts: 39
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Fri Aug 31, 2018 10:30 am

Eureka wrote:
Mon Aug 20, 2018 10:57 am
Furniture??
Freedom or furniture? That's the question.

For now I'll take a couch... and a TV.

thedollar
Posts: 39
Joined: Tue Feb 21, 2017 4:07 am

Study of expenditures

Post by thedollar » Sun Sep 16, 2018 12:01 am

  • Expenditure monthly (x 12 months x 25 years = investments needed at 4% rule)
  • Rent: ...............................$646.........($193,877)
  • Utilities: ..........................$200.........($60,000)
  • Food: ..............................$313.........($93,750)
  • Cantine: ..........................$63...........($18,750)
  • Transport: .......................$39...........($11,719)
  • Cloud services: ................$11...........($3,328)
  • Unemployment insurance: $68..........($20,438)
  • Travel: .............................$156.........($46,875)
  • Misc: ................................$156.........($46,875)
  • Total: ...............................$1,652....($495,611)
This would be the ideal budget for me and covered by $495,611 invested.

Obviously cantine, transport and unemployment insurance (around $50,000 invested) could be dropped if I choose to RE. Rent and utilities actually surprised me a bit, that they need such high amounts of investments to be covered.

jennypenny
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Location: Stepford USA

Re: the dollar journal

Post by jennypenny » Sun Sep 16, 2018 6:27 am

I like how simply you've shown the amounts and how much is needed to cover them. I might try that. DH gets fidgety when I whip out a spreadsheet.

Sorry ... what is 'cantine"?

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