Finding Motiviation

You don't need me to say it, but here it goes anyway.  I've been neglecting this site.  Just look at the amount of updates since January?  Two?  Yeah, that's full on neglect.

"Why?"  It's not like I've given up on my dream of very early retirement.  I haven't stopped investing in dividend paying stocks.  I'm still living a low cost lifestyle (at least compared to others in a first world country).  My income and expenses are still updated almost daily.  I'm still riding a bike to 90% of my destinations.

So what's the rub?

Motiviation.

I lack it.

How do you find motivation then?  Well, finding it in other people is a start.  I recently had the opportunity to hook up with the excellent blogger of fifighter.com during his time here in Japan.  We had some beers, ate some great chicken (Torikizoku is so good!), and sang some sweet sweet karaoke.  Somewhere in there we also talked a lot about investing.  I was particularly interested in what he had to say as his road to FI is through real estate investing, while mine, so far, is through dividend growth stocks.  Both have their advantages and disadvantages of course, but a lot of what he said made sense and the numbers really don't lie.

While I'm living here in Japan it makes sense to continue on the path I've started on, but if/when I return to the states, well, boy do I have a lot to think about!

Not only did I get a lot of information from him, but there is nothing like meeting a successful investor in the flesh to fill your typing figures with motivation.

I feel a new urge to try and communicate with the world where I am at in my journey.  Here's hoping it lasts and lasts.

Mental Wins

When I first started on my journey to financial independence I looked for every last scrap of blog post I could find in order to motivate myself to keep pushing forward.  This world, weather your in Japan or Jersey, has many temptations, and almost all of those cost money.  The goal however was to not just save my money but to invest it wisely so that over time my passive income would grow larger than my expenses and at that moment I would have the choice to exit the rat race.

Ohhhh so tempting....

It's not always easy.  I'm a big gamer and with new consoles like the PS4 and Xbox One (both of which I could run out and buy right now if I wanted) as well as the number of games they promise, it's very difficult not to purchase them with the click of a button.  I also like technology and my "screens."  For the last four or five years I've survived on a 24" Samsung TV that displays everything in beautiful 1080p, its just in 24 inches.  I'm constantly tempted by much larger 40 and 50 inch TVs.  Heck, even a 32 inch is technically a 100 % increase in screen real estate.  But, no.  I've managed to avoid all that lifestyle creep.

Not exactly what I have but you get the idea...

How?  By reading others blogs and following others' stories.  One such man is the one and only Dividend Mantra.  This man needs no introduction, as if you are reading my blog, I'm sure you've read his.  DM is a monster when it comes to blogging and picking winning stocks.  I can't lie, a bunch of stocks I've purchased have been based on his advice.

I followed his blog religiously, and remember very specifically an article he wrote that struck a jealous chord in me.  It was back in May of 2012, and I was just a little beginner still excited by each email I would receive from OptionsXpress about an incoming dividend (I still get excited, it's just they come so often now!).  DM, because he is the man, keeps great records and is willing to share them with all of us online.  He updates us every month on the value of his "Freedom Fund," his name for his portfolio that will set him free.  Let me preface this by saying that I completely understand he puts very little value in the value (hehe) of his portfolio.  By that, I mean, his barometer for success is his dividend income not the overall value of this portfolio.  In fact, many times he's stated he wouldn't mind seeing the value of the overall market (and in correlation the value of his portfolio) fall so he can pick up stocks at a better price.

Having said that, it still holds true that the bigger the value of your portfolio the more dividend income you're likely to receive.  You'd have to agree it would be very difficult for a $10,000 portfolio to bring in the same kind of dividend income as a $68,000 portfolio.  So, you'll understand when back in May of 2012 I read DM's post about the value of his portfolio reaching $68,000 while I was sitting there with just under $10,000 in all of my investment accounts.  Granted DM had been investing for a good year or two before me, but still it's hard not to look how far others have climbed and realize how much farther you have to go yourself.

Well, it was quite the mental win for me when just this last week I was updating my spreadsheet and low and behold, my total portfolio value crossed the $68,000 mark!  I couldn't believe it.  I was now that guy standing tall, on a milestone peak that just a few short years earlier I was looking up at!  It felt great and I really needed to tell the world!

Again the value of the portfolio is really just a mental win, the real victory is the financial win because my forward annual dividends crossed $2,000 a year!  That's right!  I've basically bought back more than a month and a half of my life, every year, for the rest of my life!  That to me is amazing, and quite motivating to boot!

Whew...  That was a lot of exclamation points.

What's interesting about this is that it didn't "seem" so difficult.  Staying the course has become easier.  I don't mean it's always easy to not spend money and invest it, and I don't mean the journey hasn't been long (two and half years at this point).  What I'm trying to say is that it seems very natural, to me, that I'm where I'm at now.  I suppose that makes sense as I've watch my investments grow every step of the way.  Watched and tracked how my dividends have increased and seen the compounding effect of time.  I'm sure this must be how it was for DM, and every other blog I read about where people are investing and chasing their dreams.  However, when I was starting out it I had to fight just to obtain $8.00 a year in dividend income.  Now my portfolio generates this and more automatically.

There are still many other FI bloggers out there with portfolios bigger than mine, and that's fine.  We are all going to the same destination, we are just taking different roads and at different points on those paths.  I'm not a very competitive guy but I do like to see where I measure up with others who are similar to me.  Who knows, maybe somebody reading this is in my position two and a half years ago. If you are, let me tell you, stay the course.  It's worth it.

Bike Update

This blog has been dormant for quite some time. I haven’t felt the inspiration for any new posts, especially when I read other blogs that seem to cover exactly what I would have written about anyway, and they did a better job.  I can’t promise that anything is going to change dramatically after this post either, but I suppose it’s good to wipe away the cobwebs every now and then. 

I sat down recently over one of my many excel spreadsheets and updated some numbers only to find that I am within striking distance of one of my long term goals:  having my bike pay for itself

I probably could have done a better job giving updates on this but to make a longer story short, back in 2012 I decided to invest a pretty big chunk of capital into a nice bike, $1,000 to be exact.  The fun didn’t stop there however, as I also needed a lock, riding glasses, tools, parts, etc.  I’ve kept track of everything and the total so far is $2,685.21.  Yep, the accessories, tools, and equipment cost more than the bike itself.

But I wanted all of this stuff for free.  No, not just free.  I wanted it to make me money.  I wanted my bike to become an income producing asset.

In Japan, your employer pays for your transportation to and from work.  So, if you have to take the train and the fare is 500 yen your employer will then refund you 500 yen on your next paycheck.  If you ride your bike however, you can pocket the 500 yen (500 yen is about $5).  My train fare to work is almost double what it is in my example, 900 yen.  So every day that I decide to get on the ole war horse and bike to work I get to pocket almost 9 bucks.  That money really adds up over time, enough to even cover the cost of the bike and its satellite costs.

I started back in September of 2012 and since that time I’ve collected $2,305.74 in work related travel compensation.  That leaves me with only $379.47 to go.  I’m confident that by August or September not only will my bike be paid off but it will start paying me!  Notice how I haven’t included a single cent from not having to pay for gas, insurance, car maintenance, car parking, etc. in my calculations.  If I were to include that cost savings as well, my bike would have been in the black many months ago.  Nor am I including the money that my money is making from being invested.  Again, it would just put me into the black faster.  But, I’m only looking at cold hard cash that I have collected in hand. 

Even more than the money is the health related benefits.  I wasn’t overweight before so I wasn’t looking to drop any pounds, but I feel confident that I can drink a few beers during the week and not have to worry about it.  I sleep soundly at night, and my GF says I’m looking the best she’s seen in a while.  It also feels good to know that I am in the beginning of my 30’s and probably the healthiest person in my group of friends.  I think of this time as a critical point where if you don’t start taking care of your body it’s going to take more time and energy to dig yourself out of a hole.  The sooner I start getting in fit condition the easier it will be to keep my body like that.

I’ve also learned more about my community and neighborhood.  In case of another earthquake I would know how to get home in case public transportation stopped.  I could even help other foreigners who might not know the way.

When I owned a car I knew how to change my oil, and put gas in the tank (or waste money rather).  Anything else beyond that was beyond me.  Now, I’m my own mechanic.  I’ve learned how to change brake and shifter cables, align my derailleurs, clean a chain, replace brake pads, and use clip-less pedals.  Just about the only thing I haven’t done yet is change my bottom bracket, but even that wouldn’t take much effort.  The beauty of a bike is in its simplicity.  Anybody can look at one and pretty much “get” how it works.  Then it’s just a few youtube videos to learn the tricks and you’re off and running.  I never used to have confidence in my car because it was always braking down, and I even had good mechanics in my family.  But with a bike I never ever have to worry again about being late or abandoned on the side of the road because of an overheating radiator, or a failed alternator.

The only drawback that I can think of is that I don’t get an hour and a half on the train to read, study, listen to music, or play videogames anymore.  Not that that’s a bad thing, and not that those activities can’t be done any other time of day.  I still find a lot of time to sit in front of the old TV.

I suppose the only thing I might have done differently was to look at a used bike versus a new bike.  Unfortunately I was on a limited time line when I bought my bike, plus I got a great deal on it from the company that makes my bike.  Still, I could have saved probably another $500 or so by searching Craigslist more. 

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