Portfolio Value Reaches $50,000!

I never thought I'd ever write that title, especially if you asked me 22 months ago.  But just yesterday I bout 56 shares of KMI which pushed my total portfolio value to more than $50,000! 

That put's me half way to my first $100,000, which most people say is the hardest.  I believe it now.  I've seen the money that I socked away start to trickle back to me in dividends and capital gains.  Once I get to the magical 100k mark the journey to 200k will be supported by that raging inferno. 

A short update after a long long pause but I feel good.

2013 3rd Quarter Dividend Updates

I save as much of my capital as I can every month in order to invest it into equities and index funds that will one day cover my expenses so that I can break out of Shawshank.  How am I doing now?  I noticed a drop in growth in my dividend income this quarter.  This was due to some purchases that I made after the ex-dividend date, meaning I didn't receive any income from those companies this quarter.  It is unfortunate but I'm not going to let that stop me.  My time line is not "4th quarter 2013."  My time line is "the future."  I picked up good quality companies at great prices.  I will be holding this portfolio for years to come so one missed quarter won't even be a blip on my radar.

Here are the dividends I received in quarter three 2013:

KO	$8.60
PM	$6.86
T	$15.22
COP	$21.16
KMI	$11.82
NSC	$10.54
INTC	$16.47
AFL	$5.64
AAPL	$18.43
SBSI	$14.73
JNJ	$10.42
MCD	$18.37
O	$6.72
PEP	$8.83
VNQ	$9.05
VBINX	$15.45
VTSMX	$13.44
VFIAX	$68.21

Total:  $279.96

This is a 13% increase over quarter two 2013 of $247.99 and brings my 2013 total up to $715.10.  My goal is to hit $1000.00 in dividend income for the 2013 calendar year.  I'm 71.5% of the way there.  I'm very confident that I will hit my goal.  Just looking at the math side of things I'll make at least $279.95 in quarter four plus any new purchases.  Very exciting!

August - September Expenses

I'm still around!  Haven't fallen off the earth yet, but some days that doesn't sound too bad.  The work cycle is back in full gear and will continue until winter break in December.  I shouldn't complain but that doesn't mean I won't.

I've been doing alright on the financial front.  The last few months have been gang buster on the income side.  I'm pretty sure this year will be the most money I've ever made and hopefully saved/invested.  Let's break into it.

Income
Paycheck:  ¥340,736
Part Time Job:  ¥33,104
2nd Part Time Job:  ¥25,585
TOTAL INCOME:  ¥399,425

August was a huge month for bringing in money.  I was on summer vacation from my main teaching gig so that allowed me to work more at other jobs and to increase my income.  This is nothing new and if you've kept up with my blog this is something that I've wanted to do for a while.  Normally I go home to the states but this year the GF and I took a short trip to Singapore, but for about six or seven solid weeks I had open wide and free.  Rather than using all that time playing video games, or watching movies (which I did do), I made some more money.

Expenses  (In Japanese Yen):

Rent	50000
Eating Out	42983
Groceries	14778
Transportation	9470
Bills	12552
Entertainment	4576
Misc	500
Alcohol	13632
Bike	5410
Medical	2550
Present	315
Travel	39860
Clothing	2000
Missing	225
Lodging	33448
Fees	460

Expenses ballooned this month as, like I said, I had lots of free time.  I didn't spend all my time working and did spend a lot of time with friends which led to beers and a few nights out on the town.  Still all of that taken into consideration I feel pretty good about my expenses here.  Travel and lodging really bumped my expenses for the aforementioned trip to Singapore.

TOTAL EXPENSES:  ¥236,520

TOTAL SAVINGS:  ¥166,666
SAVINGS RATE:  41.37%

My savings rates for the last few months have been:


July-August:  58.68

June-July:  52%

May-June:  64.07%

June-July:  52%

April:  47.34%

March:  42.85%

February:  65.43%

January:  47.36%

My average savings rate for the year is now:  52.43%.  My goal for the year is to hit 55%.  I've been saying this all year as my savings rate has slowly inched up, but I think I will hit this savings rate before my January 14th when my financial year ends.

Biking, One Year Later.

It doesn’t seem like that long ago, but almost one year ago to the day I implemented a change in my life that has had a profound effect.  I started biking.  Not just to the grocery store or every other Monday.  I started biking everywhere: work, the store, parties, friend’s places, the beach, even Costco. 

My change in energy and reduction in stress should be reward and fulfilling enough to encourage the change to a bicycle only life style.  However the rewards have gone far beyond that.

First let’s look at the financial aspect.  So far I’ve spent what most people would consider an enormous amount of money on my bike, accessories, tools, etc.  In fact my total comes in at $2,746.01*.  That’s everything from the original bike purchase to the new tires, chain cleaner, and specialized tools.  Like I said, many people would look at that number and scoff!  Far be it from me to point out that driving a car, especially in Japan, will cost you more than $3,000 a year on just gas and insurance alone, never mind parking, repairs, oh, and the car itself.  The biggest difference however is that my bike is making me money.

I make money a few ways.  The first and most lucrative is from a transportation reimbursement I receive from my job.  Most Japanese companies will pay for their employees train pass.  This money is paid differently depending on the company but my school pays me monthly for the exact cost of taking the train daily.  Others will give you a big lump sum and you can buy yourself a one, three, or six month pass usually with a bit of a discount.  My school has opted to pay the actual daily cost.  That’s fine with me!  From my apartment to my school is ¥450 one way so ¥900 round trip, or about $9 a day.  Multiply that by five days a week and every week I bike instead of taking the train I am pocketing about $45.  Put that out over a year and we are talking about some real money.  I have a few part time jobs that also pay for my train fare when I work there.  Again I bike to these locations and pocket the train fare.

Gympact is the second way I make money.  Gympact is an iPhone/Android app that pays you for working out.  You can check their website for all the details but in general I receive about $1 to $2 a week from them.  Sounds like chump change on a weekly basis but put that over and year and it’s about $50-$100, just for doing what I am doing anyway.  Easy money!

Last I am able to reduce my expenses by biking.  I don’t need to have a gym membership.  I don’t need own a car or pay for anything car related.  I am reducing my risk of health problems in the future.  The list of benefits goes on.  This is probably the biggest category where my bike pays me money.  Some might call it the “opportunity cost” but I prefer the term “opportunity profit”.  The choices I am making are freeing up more money for other ventures like investing.  Because this is difficult to measure however I don’t include any of the opportunity profit in my following calculation.

One of my main goals when I switched to biking was to one day have the bike pay for itself.  That is, money I receive as transportation expenses or from Gympact will one day exceed what I paid for the bike itself.  It might take two or three years but my bike is an asset that pays for itself over time.  Where are we now, one year from when I started.

Total Cost:  $2746.01

Transportation Reimbursement:  1169.28

Gympact:  $50.00

Total Cost to me (Total Cost – Transportation Reimbursement – Gympact):  $1526.73

WOW!  After just one year I’m 42% on my way to completely free transportation.  This speaks volumes to me that I made the right choice.  If I were try to calculate any opportunity profit as well I’m sure I would have exceed the cost of everything months ago.

The cost side of this equation has also stabilized.  With most everything I’ll ever need to work on my bike and haul things around I don’t see the costs ever creeping past $3300 dollars.  Certainly I would like to get some clip less peddles, and eventually a nice trailer, but even including the cost of those items a bike has been a huge win all around that will just continue to help me reach my goal of financial independence.

Here is a break down of everything I’ve bought:

Bike

 $1,000.00

Lock

 $360.00

Pump

 $37.50

Pedals

 $20.00

Handle Bar Bag

 $126.73

Fenders

 $60.64

Lights

 $40.00

Breaks

 $62.50

Transportation

 $10.50

Knog Lights

 $100.00

Bike Bag

 $162.00

Map Case

 $30.00

Break Cleaner

 $3.65

Chain Cleaner

 $12.00

Brushes

 $5.00

Lube

 $8.00

Tire

 $40.00

Tubes

 $50.00

Tire

 $36.59

Rack

 $60.22

Panniers

 $123.68

10mm bit

 $11.00

Torque wrench

 $32.00

5 Plyers set

 $19.00

Shifter

 $2.00

Brake cables

 $10.00

Bike Parking April

 $15.00

3 Month Pass

 $44.00

Pannier back pack

 $40.00

Trailer

 $178.00

3 Month Pass

 $44.00

Tool box

 $2.00

May - July Savings Rates Update

It’s been some time since I posted an update here.  I haven’t been feeling motivated lately for some reason to keep my blog updated but I am forcing myself to do it today.  My frugal habits haven’t slipped by any means.  In fact I’ve made more money recently than in most months of the year so far.  I was hit with taxes however which lowered my income.  Here are my updates for the periods of May – June and June- July.

May – June Income

Main Job:  ¥321,421

Part Time Job:  ¥22,149

TOTAL:  ¥343,570

June – July Income

Main Job:  ¥284,715

Part Time Job:  ¥7,917

2^nd Part Time Job:  ¥27,000

Gympact:  ¥991

TOTAL:  ¥320,623

Not bad on the income side.  I did some extra work on the weekends to bring in more money.  Gympact kicked in a little extra cash as well.  This also goes into the bike pay down fund, which I hope to update in another post as I am coming up on my one-year anniversary of biking.  June – July’s salary was lower as I got hit with taxes, which is a major bummer.  This will occur for four months but is also one of the reasons I am working extra to pay for them.

May – June Expenses

TOTAL:  ¥123,424

June – July Expenses

TOTAL:  ¥153,904

I won’t post the breakdown of the expenses, as this post will end up being too long.  In June however I had to pay double rent, which led to higher than normal expenses.  This is the last payment I have to make like this however so next year (if I’m still living here) I won’t have to worry about this.

All in all I ended up with savings rates of:

May-June:  64.07%

June-July:  52%

My savings rates for the year so far have been:

April:  47.34%

March:  42.85%

February:  65.43%

January:  47.36%

My average savings rate for the year so far is 53%.  My goal is to hit 55% for the year.  I am 2% under my goal.  I think for the next few months I’ll continue to miss my 55% goal but once I have my taxes paid my paycheck will be higher than normal.  I am still confident that I will meet or exceed my goal.

I’m hoping to find more motivation in the coming weeks.  I am on summer vacation right now so I don’t have to go back to work until the beginning of September but I am still paid 100% of my salary (pretty sweet I know).  I want to use this time wisely, and one goal is to get back to this blog.  There are still things I would like to update my readers on like my current portfolio and my bike pay down which may be the subject of the next few blog posts.

Is it really so easy?

I'll be honest, I've gotten used to getting emails from optionsxpress.com now.  I get updates about thing like webinars, newsletters, etc.  Of course I also get emails about pending dividends.  All of these things have become just another email in my inbox.

When I first started investing back in January of 2012 I remember getting one of my first emails saying that I would receive an $8.00ish dividend from Pepsi Co. I believe.  A light went off in my head and I remember thinking "It can't be this easy."  Okay sure, $8.00 isn't a whole lot of money really.  A few beers or a meal at a fast food restaurant.  But it was free.  Or at least it felt like free.  Someone was just "giving" me $8.00.  It felt too easy.

Of course I was getting that $8.00 because I had given the company almost two hundreds times that amount.  But the crazy thing was was that I didn't have any plans for that money anyway.  I normally had been spending that money on student loan payments so it wasn't as if my life felt affected in any way.  Except that now I was investing instead of paying off my debts.  I'll also add that my life has been pretty sweet.  Even while paying down my debts aggressively I traveled, ate and drank out, visited home, and bought gadgets.  Maybe I've reigned in some of that spending a bit, but that reduced spending has in no way affected my happiness.  In fact the reduced spending, increased investing, and perpetually raising dividends have put me into a state of euphoria.  Well that and the bike riding.  

Like I said I'm used to getting the emails now.  "Pending cash dividend..." it usually says.  Then the amount and a date and a "amounts might not show up right away" blah blah blah.  What I'm still not used to is the feeling of how easy this all seems.  

How is this not the norm!?  Doesn't everybody want freedom?

After all sites that taught me how/why to get on this road get more hits in an hour than I have since the inception of this blog (just passed 10,000 after a year and a half!  Wahoo!)  I'm no rocket scientist.  In fact to share a little secret with you I've never even looked at a balance sheet since a marketing class in college.  And yet here I am, on my way.  How/Why/WTF are people not figuring this out?

I know I am on my way because I've done the math and I see where it goes.  I was skeptical at first.  Especially when I went into the red for a spill.  But the longer I've been on this path the more I am convinced I'm on my way to a place called Choice.  It will be bumpy.  But I am going there nonetheless.  

Death Of Teacher.

Don't let me scare you with the blog title there.  I'm not dead nor am I dying in the traditional sense.

I've been feeling very depressed lately and haven't felt the energy to keep regular updates on the blog.  Don't worry I didn't fall out of my frugal habits, as the monthly expense updates have shown, but things at work have taken a turn for the worse and the money isn't feeling "worth it" anymore.

Well I suppose to get specific my job is now half a dream and half a nightmare.  Unfortunately the nightmare half keeps me up at night, stresses me out, and is changing me.  Even my GF points out that "I never used to say things like that," "Never used to talk like that about work," etc.

Normally I'd just throw in the towel and call it a day.  I'm a guy with experience and think my skills are valuable.  I'm pretty sure It wouldn't be all that difficult to find some part time gigs that pay me up to what I am making now while having more flexible hours, or just getting a new job.  I also have a good work ethic.  Which in this case means I want to stay loyal to the "dream" part of my job.  There are quite a few students who are counting on me to be there for them.  This is what is keeping me there now.

However that means having to put up with the "nightmare" half which I really really really don't want to do.  But my contract runs until next March.  All it seems I can do is count the days ever so slowly.

I'm trying to expand my options using TreeHouse to learn how to program iOS applications.  I'm pretty impressed so far with the trial lessons they make available on their website.  At only $25 a month it seems like a frugal/smart way to improve my skills and possibly move into a new career.

It's three more weeks until summer vacation which means I'll get about two months to relax.  I already know that it won't be easy as I'm just going to be counting the days until term two starts and that will keep me up at night.  I'd like to be very productive during these two months however and focus on TreeHouse as well as working part time to earn some extra cash.

A blog I like to read often is called Rob Evolves.  On there he posted a link to a Saturday Morning Breakfast Cereal comic that really opened my eyes.  I'll reproduce the text of the comic here but please check out his blog and SMBC as well.

"Here is something true:  One day you will be dead.
Here is something false:  You only live once.
It takes about seven years to master something.
If you live to be 88 after age 11, that is, you have 11 opportunities to be great at something.
These are your lifetimes.
Most people never let themselves die.
Some are afraid of death.
Some think they are already ghosts.
But you have many lives.
Spend a life writing poems.
Spend another building things.
Spend a life looking for facts.
Spend another looking for the Truth.
These are your lifetimes.
Use them."

I feel that the teacher in me is slowly being killed at my current position.   I'm finding it harder and harder to push the peddles on my bike each morning and feel like I can't peddle away fast enough at the end of the day.  That's never a good way to start or end your days.  I've been a teacher in Japan for nearly six years and if I finish my contract it would be a little under seven years.  Almost one life.

I'm not afraid of "death" in the sense of changing myself but I am worried about what it means for my FI journey.

I could continue this life on life support for another seven years, spend another life, and be FI as a teacher.  But I don't think that is the journey I want to take anymore.  After all it's not about killing yourself to get to FI.  I really don't want to spend my time at a job I hate becoming a bitter husk of a once formerly happy and energetic man just to limp across the finish line and be spat out a different person.

And yet I feel that staying through to the end of my contract is in a way doing the same thing.  I'll finish up in March bitter and unhappy.  Not that a change in my life at that point can't turn things around again.  But the feeling of free fall and loss of control over the next several months will drive me crazy.

Perhaps that is just part of the journey from one life to the next.

My goal is still financial independence but the path to get there is changing.

April - May Expenses

The months keep rolling on and the temperature keeps rising.  I really enjoy this time of year in Japan.  It’s right before the rainy season hits in which, next to winter, is my least favorite time.  But for a brief period it’s warm enough to bike in just shorts and a t-shirt, stay out enjoying the company of friends till all hours, and basically hit the out doors any time.  Picnics and days at the beach (as well as the end of the first term of school and summer break) are just over the hill.

Of course I still have a job which means I only really get to enjoy about 7 or 8 days max of this fine fine weather.  The other days are spent in a suit and tie in a classroom.  I don’t mind teaching, it’s a challenging, and very rewarding field.  Sure I get upset at students, and not every less plan I make is a winner.  But, it sure beats the nine to five in other fields. 

Alas teaching is still mandatory.  I must teach in order to live.  I’m aiming to one day have everything in my life be about choices.  One day I can choose to get up and go teach while the next day maybe enjoy one of those picnics or days at the beach.  In order to achieve this level of freedom I have to be careful with my money and that is why I track my expenses every month, down to my very last yen.  I do this myself in an excel workbook of my own design.  Let’s see how I did:

INCOME

Paycheck:  ¥299,484

Gympact:  ¥1,000

TOTAL:  ¥300,484

Income fell this month.  I didn’t do any work at my part time job during the March to April pay period.  I was on vacation and also preparing for the new school year that began in April.  It’s too bad that I couldn’t get any extra work in but at the same time I didn’t want to push myself beyond what I know I can handle.  In addition my job forgot to add my raise onto my paycheck (it was added to the next paycheck) and the transportation expense I thought I was going to receive is now being split up monthly so I’ll be seeing that next month.

EXPENSES

Rent:  ¥50,100

Eating Out:  ¥28,963

Groceries:  ¥15,784

Transportation:  ¥3,730

Bills:  ¥7,905

Entertainment:  ¥300

Alcohol:  ¥3,993

Bike:  ¥14,847

Travel:  ¥30,440

School Supplies:  ¥520

Fees:  ¥1,944

TOTAL:  ¥158,526

SAVINGS RATE:  47.34%

Expenses were certainly higher this month.  I paid off my credit card which included my bullet train ticket to Hiroshima in March for the bike trip I took with my GF.  It also included some bike tools like a large torque wrench, some players, and bits.  I’m happy to report there has been little to no activity on the CC lately so the coming months will be quite nice.

My savings rate for this month was 47.34% and here are the savings rates for the year.

March  42.85%

February  65.43%

January  47.36%

My average savings rate for the year is 51.88%.  This is below my target goal of 55%.  Due to the setback in receiving my raise and the extra expenses this month I once against missed my target goal.  The high savings rate for February is helping to keep my average up.  I’ve been busy at work so I haven’t been going out lately which means I see higher rates going forward for the rest of the year.  August in particular will be a good month as I get six weeks paid vacation during which time I can still work at other jobs. 

How's everybody else doing?

March – April Expenses and 1st Quarter Dividends

Things have been quite hectic lately with my school moving locations, a new route to bike, new students and lesson plans, etc.  It doesn’t mean I’ve forgotten about investing however or living a frugal life.  I can always do better at both but just giving it a shot puts me on the front lines of a happy fulfilling life where my time is my own.

I track my expenses from the 15^th of one month to the 14^th of the next.  Here is what happened from March to April (Numbers are in Japanese Yen):

Income:

Paycheck:  299,904

Part-time Job:  18,394

Questionnaire:  500

Selling stuff:  1,240

TOTAL:  320,038

My income was pretty much where I thought it would be.  Down quite a bit from February but that’s only because February had quite a spike in it with the STEP Eiken test and discovering 50 hours of unused vacation time from my part-time job.  Next month I will receive a raise at work (which was forgotten on my April check so I’ll get double the raise in May) and also start receiving travel expenses monthly.

Expenses:

Rent:  50,100

Eating Out:  45,364

Groceries:  10,578

Transportation:  4,950

Bills:  6,696

Entertainment:  1,200

Alcohol:  4,817

Bike:  18,666

Medical:  550

Present:  25,701

Videogames:  1,515

Lodging:  12,770

TOTAL:  182,907

SAVINGS RATE:  42.85%

AVERAGE SAVINGS RATE 2013:  51.88%

Expenses came in a bit harsh this month with some winners and a few losers.  I bought my GF a nice present for Valentine’s Day in February which means I had to pay the CC in March.  A few drinking parties with the new teachers at my school plus the spring break bug to get out and catch some brews with friends had me forking over more cash for “catheter and tube” drinks.  Bills and Medical were wayyyy down and have been down compared to last year.  I canceled my postpaid phone and went prepaid in January and I’ve been taking much better care of my teeth so my dental visits are just for checkups and maybe an x-ray. 

My yearly goal for the year is to save 55% of my income.  So far my average is 51.88%.  I’m not very worried about this going forward as I mentioned I’m receiving a raise at work and I’ll start to collect transportation expense for the train even though I am taking my bike.  In addition I don’t have any big plans for the summer so I will try to get some time in at my part time job while still collecting a paycheck from my employer (I get paid summer, winter, and spring breaks).  In addition there are still two more STEP Eiken tests this year which will help to pad my bottom line.

1^st Quarter Dividends

As I buy more stocks I get paid more dividends.  It’s that simple really.  My first quarter of 2013 saw a blowout compared to last year.

Total Dividends Received 1^st Quarter 2013:  $178.96

Total Dividends Received 1^st Quarter 2012:  $44.17

Wow!  A more than 300% increase over last year!  I’m pretty happy with that!  Of course the best part is that all of these dividends are being reinvested so they will pay me more the next time around.  And if the company decides to increase the dividend, well, it just doesn’t get any better. 

Double Whammy

As anybody investing in stocks knows the market is pretty expensive right now.  Almost anything that I bought a year ago is up ten to twenty percent!  The market has recovered all of its value that it lost in the crash of 2008 and I'm not sure if it is showing any signs of slowing down.  Of course this makes things like the value of my portfolio look nice but in reality it's not the game that I want to be playing.  Not that it's impossible, but it is certainly more difficult to find value in this market.

Another problem that effects us expats is the exchange rate.  As any expate living abroad and sending money home is aware the exchange rate is like an extra hoop you have to bring into the equation.  For expats it's having to line up two scopes before we can pull the trigger on a deal. 

In the last two or three years living in Japan has been great!  The Japanese yen grew to new heights that had never been seen.  Of course this was not good for Japanese businesses as their products were now more expensive and exports fell.  But for us expats using yen to buy US dollars it was a breath of fresh air.  I never thought I'd ever see the day when 75 yen would buy me 1 US dollar.  Those were the days I lived in for the last three or so years.  It was like everything was 25% off including stocks, plane tickets, and gadgets.

This is not the story as of late.  Due to a change in the Japanese government, renewed consumer confidence, and an aggressive stimulus plan the yen has taveled back to being on par with the US dollar.  This means a big change for me and my salary. 

I did my best to abstain from squandering my money on frivilous items and focused on putting everything I could into stocks even during the days of a strong yen.  But I also developed an expectation of how much I could buy with my yen.  For an example let's say I was making $60,000 US dollars last year.  I did my best to save and invest and mangaged to achieve an almost %50 savings rate.  Now my salary has fallen to almost $45,000 a year.  If I continue at the same spending rate as last year my savings rate will fall to almost 33%.  Of course this isn't a complete apples to apples comparison but the point is my yen will no longer buy me the huge number of shares that it used to.

This has led me to a cross roads where I have to make a few important decisions.  Do I pick up another job and try to earn more?  Do I continue to invest in US dividend growth stocks?  Do I change my focus to the Japan domestic  market?  Where can I reduce expenses more?

Honestly I haven't made a decision yet concerning any of these.  Any other expats out there what's your take on the situation?