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I've done the rounds of reading financial blogs as well as books and expert articles. From everything I read achieving FIRE is not some complicated thing. Invest early and often, live below your means, stay disciplined and continue to increase your investments. 

I'm lucky to have a partner that in many ways fits that mold. She does like to "shop". We aren't foodies, we haven't truly vacationed since our honeymoon 6 years ago, our nicest car is a 2010 Corolla. That said we do have our indulgences -- big ones. Certain things we won't compromise on. Ours kids. We spend well over $2,300 a month on Daycare related expenses. We aren't in a position to receive family help and we both work long hours. This gives us peace of mind. Our experience with this daycare is it's worth the cost. I'm sure we could probably get equivalent daycare cheaper. But not without some risk. This choice is safe. The other big cost is the townhouse we rent. We spend close to $2,600 here. As you can see it adds up fast. She also has student loans. 

A casual conversation with my wife about her retirement account and the degree it has been underfunded, followed by a mild dispute as to when to replace a 2009 Yaris hatchback with 90,000 miles on it, led me to call our first personal finance summit. My wife is totally on board and actually excited for it. Prior to this year, when I got my job promotion, my wife had been paying majority of rent and the majority of daycare. Now our payments are more evenly split. We make the same salary. However, I see less because health insurance comes out of my paycheck as does my pension payments. So I was surprised to find out she is unable to save when I can find 600-700 a month to save. Am I not contributing enough? It's a real possibility there is a bill she has that I'm not considering, this is why we need to have these conversations regular -- with two kids and soon to be a house transparency is important. Some explanations of the difference in contributions is I do things to create money like putting everything on rewards cards, paying it off immediately and investing the cash each month. I don't go out for lunch often and sometimes skip lunch all together. I currently have a much shorter commute, so gas may be a factor as well. I do get a tiny income stream from dividend growth investing and from a lending club account that I'm slowly transferring over to my Robinhood account. My wife also is pretty dependent on coffee.  

But we've made big plans and currently don't have a common vision. This year we plan on purchasing our first home. I want to make sure we are on the same page in terms of what we want and what we can afford. However, most of all I think we need to come up with family goals. Not just savings goals but a mission. What are we willing to spend money on and what won't we spend on. While there is a part of me that strongly envys the 65 percenters. I don't know if we will ever invest that percentage of our income. Not if it means never taking our kids to Disney World or sending them to subpar schools. But I do want to improve our discipline and build towards financial independence. We aren't wealthy by any standard. But we make more than most. We should be putting away more money. 
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I try not to be too reactionary. I spent the same $200 I was planning to spend. I didn't expect to go to the REIT well again. But with the market doing what it was doing I saw an opportunity and took it. I grabbed 4 shares of O for 198.04 or 49.51 per share. This brings my overall cost basis for O down to $53.99. Not bad for a 5.25% yielder with 22 years of dividend growth. The 91% payout ratio and the potential for rising interest rates is a little concerning. But the business model is still solid. Long-term leases, stable companies, built in rent increases.
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I'm excited to kick off 2018 with $6.70 in dividends. Last year this time I earned $4.66. I'll take it. My first dividends of the new year. Starting off slow, but have a feeling this year will be big for me.


PEP          $1.61
TIF           $1.50
DIS          $1.68
O              $1.91
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I'm not complaining about my future pension (well not too much). I know I'm lucky to have it. A paycheck for life that I'm eligible for at 60 with 25 years of service. I'll take it. Even if it isn't what it once was, or even currently is. I know many private sector employees would love a pension, even the third least generous pension in the state. I'm fortunate enough to be in a financial situation that allows me to plan outside of my pension. But like many state employees today, I am feeling the pension crunch.

Being part of a state pension system these days is both a blessing and a curse. Especially the NJ Teacher Pension and Annuity Fund. By now the story is almost famous once upon a time over 20 years ago, the government borrowed from a pension surplus to balance the budget, and then didn't contribute to the pension for nearly two decades. The result the pension isn't solvent and is the 3rd least generous in the nation. The result for all NJ Employees (but in my case I'll focus on the educators fund) contribute more and more, in order to receive less. The state has kicked in a ton of money which has stressed it's budget, and is still unable to contribute enough to close the gap. Do the math NJ workers. Your going to be paying more for less.

At the same time healthcare costs have ballooned out of control and for state workers percentage of their healthcare cost increases with every $5,000 of salary. I've had my take home pay decrease in a year because I crossed a healthcare salary threshold.

I only mention this because typically when you look at retirement numbers the more you contribute the better off you will be. But that is not the case with the pension system. Don't get me wrong I'm not complaining. If the pension is still there. It's nice to be able to have a salary for life. But the fear is where is the money coming. Here is a look at the contribution numbers in recent years.

TPAF Percent of salary contribution numbers

2004 5%
2005 5.5%
2011 6.5%
2012 7.5% (phase in over a 7 year period)

And this number is likely to increase further. The state treasurer cut the percentage the state can assume it will make on it's investments from 7.65 percent to 7%. This adds to the pressure for pension reform and increased contributions.

This is frightening to the average worker that may be asked to contribute close to 10 percent of their salary for an uncertain benefit. Oh and sorry for those of you that were hired after me. Your contributions are the same. But your benefit is even less. You will be working even longer for less.

If you were enrolled in the system in before July 2007 You can retire at 60. Your benefit is calculated as the average of your final 3 years of salary/55.

Hired after June 28, 2011 and you have to work until 65 and it's the average of your final 5 years salary/60.

It is essential that NJ employees plan to save outside of their pension fund. But many are feeling the squeeze in pension, healthcare, salary caps, and on the other side as taxpayers. I know for a fact many educators aren't able to save outside of their pension plan. Many of those that are, aren't saving enough.  I have heard from 40 somethings that have been saving $50-100 per paycheck.  What's worse is that those that are saving mostly do what's easy; speak to the 403(b) representatives that prey on teachers in the faculty rooms. In one sense these representatives are doing the teachers are service. They are visiting them and getting them to save early and often. But it comes at a cost -- Many 403(b) funds available to teachers have high management fees and mediocre performance that eat into the bottom line.


So the message to NJ state employees is this. Have a backup plan. Whether it is being frugal, a side gig, you need something. Save early, save often and be savvy about where you put your money. The fees and the quality of the investments matter. For me it's been the dividend fund I blog about and a Roth IRA. But you have to find what works for you.

Disclaimer
Material presented on 'Dividend Seedling' is for informational and entertainment purposes only and is the opinion of the author (a social studies teacher and not a financial advisor). None of the information should be relied on or taken as investing advice or a recommendation to invest. None of the information or opinions expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Please do your own research before making any investments. Do not making any purchases unless you are prepared to lose your entire investment.

Additional Disclosure I long everything.

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Well that didn't take long. Just the 4th day of the New Year and I made my first purchase of 2018.  5 shares of HCN @ $63.65 per share.  I had been looking to diversify my REITs which are comprised primarily of Realty Income. What I like about Welltower is I think it's a relatively safe model. The Baby Boomers are retiring and seniors are living longer than ever. I think as a long term play senior housing and outpatient care isn't going anywhere. The price is in the 52 week low territory and the main reasons for the price drop is the threat of higher interest rates is effecting the sector. Otherwise I have a company with 8 years of dividend growth, a solid model and a 5.5% yield. At 9.9 percent my portfolio is a little REIT heavy right now. I would like the number closer to 6-7% but I do think that I should be able to balance that over the course of the year.

Disclaimer
Material presented on 'Dividend Seedling' is for informational and entertainment purposes only and is the opinion of the author (a social studies teacher and not a financial advisor). None of the information should be relied on or taken as investing advice or a recommendation to invest. None of the information or opinions expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Please do your own research before making any investments. Do not making any purchases unless you are prepared to lose your entire investment.
Additional Disclosure I long everything.


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2017 has been fantastic and terrible all rolled into one. There were major changes with my career, some serious family challenges and the decision that 2018 will be the year that my wife and I buy our first house. In terms of personal finance I'm excited to say I was able to hit every goal I set in this young portfolio. 

2017

The Job
I like to start with the good. The transition from being a teacher to a district administrator is one of the most difficult to make. Everyone wants an experienced administrator, because it's in many ways an entirely different skill-set than being a highly effective teacher. Managing children is completely different than managing adults. Many of the skills evaluating programs, teachers, hiring, budgeting aren't part of the day-to-day job as a teacher. I was lucky enough to become a first time administrator this year. Sure it came with some costs -- losing the direct interaction with the kids. What I gained is incredible. I get seat at the decision-making table and the ability to affect real change beyond the four walls of a classroom. I have people looking to me to make a difference, parents, teachers, and students. I feel like I'm planning five weddings every day, but I wouldn't trade it for the world. 

Family
All that excitement comes at a cost -- time. I have less time for  everything. My kids are in daycare entirely too long. My house has never been messier, I have a mother with a terminal illness that I don't see enough, and by the time my wife comes home from work, I spent from work and then watching our children after work. It makes it clear to me why so many 20 and 30 somethings are trying to build portfolios that will let them retire in 10 years or less. Time is the one thing you can't get back. 

Money

This has been huge for me. The new job came with a higher salary. I finally could pull my weight in terms of my finances. My post tax salary increased by about $1,000 per month. It's amazing what salary based healthcare will take out of a paycheck. Also that didn't mean I had $1,000 more to invest. Renting a townhouse, with two kids in a corporate daycare costs money. We had been dipping into our savings account (with investments we were still able to add to our net worth overall) a little in order to cover the bills. So $600 of that $1,000 went to a higher rent contribution. This allowed us to maintain our savings, gave my wife a little breathing room and pay the daycare increase. So surely I invested the other $400 per month? I wish. I did double my Roth IRA contribution, But I also invested in the teachers that worked for me. Little things like cakes for long-time teachers that moved onto new jobs, bagels and fruit salad during large meetings. Believe it or not when working with a large staff, that adds up. It's also important. I'm nothing without these people. If I want to be effective at this new job, I need to show them I appreciate them. Also I had to upgrade my clothing. The new job requires me to be in a suit most days, and they aren't cheap. I didn't mind this because the bulk of this cost is upfront. My Robinhood account which I use for my dividends continued to grow as well (somehow). I went from making a regular deposit of $40 plus whatever I could side hustle, to making a regular $50 deposit plus whatever I could side hustle. The side hustles always have been the bulk of my deposits into this account. It comes from a lot of different places: dividends, rewards card purchases,payments on old Lending Club notes (what a mistake that was), and frugality.   

Review of 2017 Portfolio Goals

By every measure I achieved my goals. I was hoping to grow my dividend portfolio to 4k. Barring a catastrophe in the next couple of days, I'm finishing the year with nearly $6,400. I set out to make $100 in dividends. I earned $151.39. I wanted two holdings of $500. This was mainly because I was getting too buy happy and way too many positions of 1-2 shares. I have 3. 

2018

On the surface these goals seem modest. An 8k portfolio, when I already have nearly $6,400 and project for at least $210 in dividends without investing a dime, would normally be way too safe. At my current pace I easily make that goal. Same with the goal of $250 in dividends and a holding of 1k. I do hope I can shatter these goals, but I'm not changing them. The main reason is goal number 1 is a house. I'm very committed to not liquidating my dividend holdings for a deposit. I believe we have enough saved and our credit is good enough that it won't come to that. But without knowing exactly what my mortgage, taxes, moving costs, etc. I think it would be irresponsible to include a projection for 2018 that involves ramping up my investments at this time. 

I think something would also be amiss if I didn't include some non-financial goals. I want to continue to be a fantastic father to my two little ones. I want to carve out some more time for my wife. I've heard of too many relationships that end because of this. I'm not sure anything is a greater cost on finances, children, and myself then divorce or a bad marriage. I love my wife. I'm a product of a divorce. I don't want my children to go down that road.  This is probably the goal that needs the most work. I also want to continue to grow in this new position. I've wanted this for so long, I can't allow myself to fail. It's a ton of work, but it's a dream job. I also hope to continue blogging, it keeps me focused on my financial goals. 



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I'm going to keep this about December and not make the big end of the year/goals post. I'm still going through my thoughts there. But not surprising the year closed with another fantastic month. When all is said and done in December I will have earned 26.55. This compares to just $8.70. I was hoping for a record month but didn't quite get there. The reason being that Pepsi paid a dividend last quarter and is paying me again in January. I think the fact that this time last year, I was writing about hoping to crack the $10 mark and this year I'm on the verge of $30 speaks for itself. Here are my December dividends.

INN           .34
SBUX       .60
WFC         .78
ADM        .32
DFS        1.75
AMGN   1.15
TGT       6.20
EMR      2.43
JNJ          .84
UL           .84
O            1.06
FLO       1.70
CMP      3.60
DUK     3.56
GM       1.14
BAC       .24
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I generally don't view REIT investments as safe and stable. But O seems to be the exception. 21 years of dividend growth, monthly payouts, and 12% off it's 52 week high. What I love even more is long term leases with built in increases. Today I was able to grab 4 more shares at 55.68 per share. This is exciting because even it takes my dividend projections for next year to $210.54. That is if I don't make a single buy or dividend raise. This puts me well on track to achieve my goal of $250 in dividends in 2018. In fact I may need a more ambitious goal. Life is good.

Disclaimer
Material presented on 'Dividend Seedling' is for informational and entertainment purposes only and is the opinion of the author (a social studies teacher and not a financial advisor). None of the information should be relied on or taken as investing advice or a recommendation to invest. None of the information or opinions expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Please do your own research before making any investments. Do not making any purchases unless you are prepared to lose your entire investment.
Additional Disclosure I long everything.
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When I sold GE last month at 18 dollars a share it was a difficult decision. It was a loss. The company had a big name and a long history. Many were talking about this being the price to get in on. For the record I do believe GE long term will be alright. But they did cut their dividend. They have issues. There really isn't a clear vision going forward. There are cash flow issues. Largely they've been flat until the big drop. I have been trying to keep my emotions out of my investments. I think I've been doing a pretty good job of it. In this case my decision to sell my shares of GE came down to the emotions saying the opposite. I asked myself four questions... Would I invest in GE now had I not owned shares. The answer was no. Aside from the name and the valuation what reason do I have to invest in this company? The reasons weren't persuasive. What's the cost of selling? Nothing. Could the money be invested better elsewhere? Yes.

Today I bought 10 shares of HBI at 20.50 per share. At 2.96 the yield is better. At 30.9% the payout ratio is excellent. As is the 12.5% pe/ratio. It's a product that doesn't need to reinvent itself in that people will always be buying socks, t-shirts, and underwear. The dividend has increased the last 3 years and is operating at discount being down nearly 15% over the last three months. Morning Star has given HBI a 5 star rating and 10 of 14 analysts rate HBI a buy or strong buy. It feels good to be buying again.

Disclaimer
Material presented on 'Dividend Seedling' is for informational and entertainment purposes only and is the opinion of the author (a social studies teacher and not a financial advisor). None of the information should be relied on or taken as investing advice or a recommendation to invest. None of the information or opinions expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Please do your own research before making any investments. Do not making any purchases unless you are prepared to lose your entire investment.
Additional Disclosure I long everything.

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Another double digit dividend month thanks largely to owning shares of T. $10.98 in total dividends and below is the breakdown.  Last year this time I had $3.71 in dividends. Life is good.


T          6.86
KMI       .50
ABBV  2.56
O          1.06
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