One year of tracking my expenses

Last year, since August 2013, I started to track all my expenses cent by cent. I didn’t have a good knowledge of how much I spent and for what. Today, my feeling for my money is much better and I think that’s just of tracking my spending and think about how much I budget for the next month. The figures might be interesting, especially as I hope to decrease it for the upcoming 12 months.

Total expenses: € 23.028,10
-thereof fixed costs:  € 12.814,05
-thereof regular expenses: € 4.303,64
-thereof non-regular expenses: € 5.910,41

You can see, my fixed costs collect more than half of all my expenses (55 %) – I see a little improvement there, but I don’t think, that I can push these expenses below 50 %.

Regular expenses are mostly food at my office and restaurants (roughly 1.000 Euro for food at office and € 1.600 for restaurants). Normally, I should save A LOT of money in these two categories. But: going out for lunch in my office is a kind of “socializing and networking event”. I could easily bring my own food into office but I’m not sure if I want this actually. But I will try to reduce these expenses by -20 % so I could save 200 Euros per year. The other thing and “bigger problem” are the restaurant expenses. 95 % of these expenses are girlfriend-related as I don’t go to restaurants on my own. If I cut these activities with my girlfriend I have to look for another leisure-time activity (and probably that would also cost money like cinema or musicals – and I prefer a nice steak more than visiting a theatre.). I do not see very much room for improvement there… The third big category is the “Fun” section with expenses of € 960 over the last twelve months. That’s money I spent for activities like watching football, going to the cinema (I was twice ;-) ), partying, buying magazines, go swimming, etc. – I see a 10 % improvement here as I recognized, that I bought a lot of lottery tickets (that’s an office-thing… sometimes we buy lottery tickets for the change we get at lunch); last year I spent 86 Euros in damn lottery tickets! That’s crazy and I wasn’t aware of so much money we (or I) throw away literally.

My non-regular expenses are pretty high, due to my holidays and a decent amount I transferred to PokerStars (so that money isn’t a real expenditure). For the holiday and travelling part I’m in the same situation as I’m in the restaurant part; I’m not able to travel with my girlfriend in a very cheap way (like couch surfing or staying anywhere we could find via Airbnb) – she want some basics and it’s tough to neglect her wishes regarding neatness, food, pool and stuff like that – I must lie if I’d say I don’t like her 5* hotels… ;)
But I paid approx. € 200 for car related stuff and these expenses are gone now! I have to introduce a new category like “mobility” or something like that, but I’m sure that this would be an absolutely minor position in my spreadsheet. Another big part is charity and presents, but I don’t want to save money there.

I’m excited how much I could really save the next 12 months and I budget 22.500 Euro for these time period.

Dividend Income August 2014

August isn’t yet over, but I still received all my dividend payments for this month. My income from dividend was fairly good as I received € 69,10 after taxes and expenses – not less than four companies paid me for just owning their stocks this month! From AT&T I received € 20,41, from AbbVie € 11,65, Kinder Morgan Inc. paid € 23,84 and P&G transfered € 13,20in August. Last year I received zero from dividends, and compared to July the amount almost doubled.

“Liebster Blog Award”

A young fellow from Finland — The Dividend Way — nominated this blog for the so called “Liebster Blog Award” (sounds pretty german, right?). Of course, that award has nothing to do with quality – it’s merely kind of funny and reminds me of 90s email chain letters. :) That game is pretty easy: everyone who gets nominated has to answer five questions and nominates some other bloggers and ask them another five questions. In this way you get to know all the bloggers a little bit better and find a gigantic selection of new financial blogs.

edit: I created this post yesterday evening and scheduled it for today. In the meantime CaptainDividend announced, that he also nominated me for a “Liebster Blog Award”. OK, so there are another five questions for me (and as my first intention was to nominate CaptainDividend as well, I think I was just too slow… ;) ).

Here are the five questions TDW asked me:

1. What do you try to achieve with investing?
2. How would you spend your time if you didn’t have to think about money?
3. Have you invested in gold or silver?
4. How has your investment strategy developed during your investing history?
5. What has been your best investment(doesn’t have to be a stock)?

and these questions I got asked from CaptainDividend:

1. Why did you start your blog ?
2. What is your favorite tv series ?
3. What was your favorite car you’ve ever owned ?
4. What is your worst stock market or financial mishap ?
5. What if anything do you do for exercise ?

 

So here are my answers:

1. What do you try to achieve with investing?

Well, my first intention was just to save money and don’t spend my hard earned money for crappy shit I don’t really need. But within the last months I read so many success-stories from people who retired so much earlier, that I also want to try to save enough money to retire way earlier than at 65 (or probably later).

2. How would you spend your time if you didn’t have to think about money?

Probably travelling around the world and taking pictures.

3. Have you invested in gold or silver?

Nope, neither gold nor silver nor any other physical raw materials. That tiny gold bars or coins are a few grams of metal that don’t earn money, don’t pay dividends or do anything else useful – gold is just lying in a safe at your bank (which costs money, by the way). Of course, Warren Buffett has explained it way better than I could, so read this article about not investing in gold.

4. How has your investment strategy developed during your investing history?

I’m thinking more about companies in general – which companies are old, which firm produces things and can sell these things for ages, which brand is recognized around the world, etc. And I don’t read any of these market-insider-apocalyptical-prophet’s articles anymore.

5. What has been your best investment(doesn’t have to be a stock)?

This one, for sure (but as mentioned in the blog post it’s a divestment and not an investment)! Each day I owned that car, I burnt money – so if you’re able to use public transport, a bike or your feet and walk all your everyday commutes, sell your car – it just costs money.

 

1. Why did you start your blog ?

Initially, I wanted to introduce a kind of “financial diary” for myself. I was afraid that I couldn’t save the money and that diary should have been a little help for myself. When I remember right, the first version of the blog wasn’t publicly available actually. After finding and enjoying so many blogs, I decided to make it also “public” because I think it’s such a great way to get connected with other people from all over the world and you can learn a lot through the blogs.

2. What is your favorite tv series ?

Tough to say as I don’t watch TV a lot. I saw the first season of “The Blacklist” and that’s the only one tv series I got hooked on the last years. And I have to admit, that I know each and every single “King of Queens” episode – and I just noticed, that the last episode was aired seven years ago. Man… I’m getting really old.

3. What was your favorite car you’ve ever owned ?

In fact, I just owned one car and that was the one I sold a few months ago. ;) It was an Audi A3 and I liked it anyway – but in general it was just a ton of metal that cost me more than thousand Euros a year.

4. What is your worst stock market or financial mishap ?

Oh boy… I made so many terrible decisions. When I was a teenager and the whole eBay thing came up I wanted to buy a cool laptop and in the late 90s that wasn’t cheap. And of course I got tricked – I don’t remember how much money it was exactly, but for me it was definitively a huge amount of money and I never did something with eBay again. I also made some strange stock buying and selling decisions like buying Johnson & Johnson and Google stocks, just to sell them 5 weeks later. Unfortunately, I discovered all these useful blogs three years later…

5. What if anything do you do for exercise ?

I was playing football (=soccer) when I was younger regularly. But as I get older, I have to admit I cannot take the same pace as the young guns anymore… Nowadays I play it just for fun and not competitive anymore. I also try to go to gym at least twice a week.

 

Hmm… which bloggers should I nominate? Many have already been nominated, but as far as I could see, this one are still unmentioned:

CaptainDividend (edit: ok, too late :) )
Dividenden Sammler
Mrs.
EconoWiser

And here are my questions:

1. How many stocks do you want to have in your portfolio finally?
2. Do you have any vices?
3. What do you think about ethical values in investing? Do you invest – just for example – in tobacco/oil/weapons manufacturers?
4. How much time per day or week do you spend reading financial blogs or thinking about which stock to buy next?
5. What’s your favourite sports team?

Recent Buy: Eaton Corp. PLC

Last days were a little bit busy so I couldn’t post anything even if I had something to tell. I added a new company into my portfolio: Eaton Corp. PLC, originally an Irish company, that produces and offers power control products & services and components for mobile and industrial applications. They offer dozens of products and many sectors such like aerospace, transportation, or hydraulics and I think such a diversified product portfolio is very promising. And I also like the financial figures which I summarized in some charts below:

eaton

You can see the book value per share and dividends increased constantly, EPS dropped in 2009 drastically but recovered in recent years. I think someone who’s invested into Eaton Corp. could be glad about receiving dividends which increase annually and after the recent drop of Eaton’s stock price, also in value. I bought 40 shares at exactly € 50,00 – unfortunately I missed the ex-date for the next dividend paymant (again!) so I’ll receive just one dividend payment from Eaton this year in November.

Income and Expenses July 2014

My income and expenses in July were as follows:

Rent (incl. groceries): -€ 800,00
Gym membership: -€ 109,00
Garage: € 0,00
Health-insurance: -€ 74,89
LC insurance: -€ 16,00
Food @ work: -€ 42,00
Restaurants: -€ 74,00
Sport: -€ 22,00
Entertainment: -€ 117,50
Food: -€ 16,00
Household: -€ 18,00
Bicycle: € -5,00
Clothes: -€ 45,00
VISA: -€ 101,50
Bank charges: -€ 15,00

Total expenses: -€ 1.455,89

Total Income: € 3.173,00

Saved Money: € 546,45

Saving-rate: 17 %

July’s saving-rate is ridiculously low because my budget for August is higher than normally. I added € 900 for August because I have to pay the rest for my “big” holiday in September. Therefore my budget for August is € 2.600 (the usual € 1.700 plus € 900 for the trip). The saving-rate doesn’t look very impressive, but the overall expenses for July do! I’m very happy, that my total expenses were way below my budgeted € 1.700 for the whole month. I think I should make a closer look on my figures, because I’m more than € 200 below my planned expenses – or is it just a result of the missing car?

Dividend Income July

July is over and it’s time to summarize my dividend income in that month. I received € 35,72 in dividends, coming from Pepsico (€11,36), Coca Cola (€11,59) and General Electric (€12,77). As an absolute figure, that 35 Euro are not overwhelming, but compared to my dividend income from last year’s July, it increased by more than 300 %, because in 2013 I just received Coke’s €11,31. The first months of each quarter are also always the low-paying-months in my portfolio, so I’m looking forward to August and especially September as these months should flow more passive income into my account than July.

In 2014 I received a total in passive income of almost € 400 (€325 from dividends, €67 from interest).

Portfolio Update July

Holy moly… last days of July were crucial, right? Markets lost some percentage points; S%P 500 and Dow Jones both lost -3 % in one week, within one month german index DAX lost more than -7 %. What did I do in July? Invest heavily. :)

In total, I invested almost € 9.000 in that single month – which is an absolute personal record and I think I’ll not beat that for a long time. I bought shares of four companies (Kinder Morgan Inc., Abbvie, McDonald’s and Wells Fargo & Co.).

In June, I bought adidas and Coach Inc. – damn, what a timing! Coach trades -15 % at the moment and adidas performance is even worse, trading -20 % below my entry price. Unfortunately my portfolio is not complete yet – if my portfolio were already big enough, I would purchase additional shares of adidas and Coach. But I still want to increase my holdings and I also want to avoid one of my first investment fails which was 1.) rebuying too early a falling stock for cost averaging and 2.) selling too fast when prices drop. I set up a kind of “cooling off” phase of at least 6 month (maybe 12 months are better?) before I add some shares to an existing position. And selling one of those or both companies isn’t an option for me, as I think that these two companies are still good firms which are going to turn upward again.

I’ll monitor a handful of companies within the next days and can’t await invest again. ;-)

These stocks decreased by -10% (or more) in recent weeks

I’m regularly checking my watchlist and during the last couple days and weeks some stocks fell by more than 10 %. Time to buy some stocks on a good price? I am not sure yet. Some companies are probably good choices (BASF, LVMH, Deere & Co) – I try to figure out if a buy on current price levels is a good thing or not.

Deere & Co.

Deere & Co. is world-leader in manufacturing heavy equipment such as tractors, harvesters, bulldozers, excavators and diesel engines (under the brand name John Deere). That company was founded in 1837 and is listed in the S&P 500 index. Twelve weeks ago, on 7 May, DE cost $94,53 per share – currently the stock trades around $85,50; not quite -10% but almost. ;-)

Financials for Deere & Co. look pretty good I think. The 10 year EPS grew steadily, also the book value per share and dividends. Below the historical data:

Year EPS change/year BVPS change/year Dividend change/year payout ratio
2013 9,09 19,13% 27,46 55,67% 1,99 11,17% 22%
2012 7,63 15,08% 17,64 5,31% 1,79 17,76% 23%
2011 6,63 52,41% 16,75 12,42% 1,52 31,03% 23%
2010 4,35 111,17% 14,90 30,82% 1,16 3,57% 27%
2009 2,06 -56,17% 11,39 -26,37% 1,12 5,66% 54%
2008 4,70 17,50% 15,47 -4,98% 1,06 16,48% 23%
2007 4,00 11,42% 16,28 -1,27% 0,91 16,67% 23%
2006 3,59 22,32% 16,49 14,04% 0,78 28,93% 22%
2005 2,94 5,58% 14,46 11,66% 0,61 14,15% 21%
2004 2,78 110,61% 12,95 57,54% 0,53 20,45% 19%
2003 1,32 8,22 0,44 33%

deere

I think that’s a history everyone who’s interested in buying stocks, is looking for. Except one single year – 2009, financial crisis – Deere & Co. could increase the Earnings Per Share. Also dividends have been increased during that timeframe and I personally like the low payout ratio, which was below 25 %. DividendMantra also thinks that DE is a solid investment, therefore he bought some stocks in July and thinks about increasing his stake in August.

 

GlaxoSmithKline

GSK is a british pharmaceutical company. Unfortunately the figures are not that good as for example Deere’s – I’m not 100% sure if GSK would be a solid investment, because their Book Value is decreasing recent years and also their EPS ist not really growing the last 5 years. Also their payout ratio is really high! GSK’s price fell from 1.591,5 pence on 20 June, to 1.435 pence (again not 10 % exactly, but when I started with this idea, the price was a little bit lower). Have a look:

Year EPS change/year BVPS change/year Dividend change/year payout ratio
2013 110,50 18,95% 131,00 21,30% 76,00 -1,30% 69%
2012 92,90 -11,19% 108,00 -25,52% 77,00 14,93% 83%
2011 104,60 225,86% 145,00 -7,64% 67,00 6,35% 64%
2010 32,10 -70,58% 157,00 -11,30% 63,00 6,78% 196%
2009 109,10 23,14% 177,00 26,43% 59,00 7,27% 54%
2008 88,60 -10,60% 140,00 -12,50% 55,00 10,00% 62%
2007 99,10 3,77% 160,00 1,91% 50,00 8,70% 50%
2006 95,50 15,62% 157,00 27,64% 46,00 9,52% 48%
2005 82,60 21,29% 123,00 23,00% 42,00 -2,33% 51%
2004 68,10 -11,79% 100,00 -23,08% 43,00 7,50% 63%
2003 77,20 130,00 40,00 52%

all figures in British pence

gsk

 

LVMH

LVMH Moët Hennessy – Louis Vuitton S.A., official name, is a french company, operating around the world. Especially newly wealthy persons in Asia and Middle East are keen on that traditional and expensive brands LVMH has in their portfolio. What Coca Cola is in beverages, LVMH is in fashion and luxury products. Not only wearables but also alcoholic beverages and ships are sold by that company. The 10 year financials look pretty awesome:

Year EPS change/year BVPS change/year Dividend change/year payout ratio
2013 6,83 0,15% 52,57 8,75% 3,10 6,90% 45%
2012 6,82 9,47% 48,34 9,34% 2,90 11,54% 43%
2011 6,23 -1,42% 44,21 26,10% 2,60 23,81% 42%
2010 6,32 70,81% 35,06 24,64% 2,10 27,27% 33%
2009 3,70 -13,15% 28,13 6,84% 1,65 3,12% 45%
2008 4,26 0,95% 26,33 11,28% 1,60 0,00% 38%
2007 4,22 7,11% 23,66 9,33% 1,60 14,29% 38%
2006 3,94 29,61% 21,64 12,07% 1,40 21,74% 36%
2005 3,04 47,57% 19,31 26,54% 1,15 21,05% 38%
2004 2,06 39,19% 15,26 6,27% 0,95 11,76% 46%
2003 1,48 14,36 0,85 57%

all figures in Euro

lvmh

Nice figures, right? EPS growing for 10 years in a row, BVPS growing for 10 years in a row, dividends increasing in 9 out of 10 years, payout ratio is below 50 % which is also okay I think. P/E ratio is a little bit high maybe, but is that a reason not to buy such a company? LVMH’s price dropped from € 146,30 on 20 July, to € 128,10.

 

Tesco plc

One british company again. Tesco is a retailer, also operating in the whole world and is the third-biggest retailer in the world (behind Wal-Mart and Carrefour). But Tesco is suffering from price wars in the United Kingdom (Lidl and also Aldi entered the market few years ago) and in US they completely retreated from market last year. But even in hard times the figures don’t look THAT bad:

Year EPS change/year BVPS change/year Dividend change/year payout ratio
2014 23,72 24,45% 182,00 -12,08% 14,76 0,00% 62%
2013 19,06 -51,41% 207,00 -6,33% 14,76 0,00% 77%
2012 39,23 14,54% 221,00 7,80% 14,76 0,27% 38%
2011 34,25 17,33% 205,00 10,22% 14,72 8,80% 43%
2010 29,19 8,11% 186,00 13,41% 13,53 10,18% 46%
2009 27,00 0,00% 164,00 9,33% 12,28 8,96% 45%
2008 27,00 12,50% 150,00 13,64% 11,27 12,36% 42%
2007 24,00 20,00% 132,00 10,00% 10,03 12,57% 42%
2006 20,00 11,11% 120,00 2,56% 8,91 14,23% 45%
2005 18,00 20,00% 117,00 7,34% 7,80 11,43% 43%
2004 15,00 109,00 7,00 47%

tesco

You can see that from 2004 until 2012 business went well, then the EPS dropped by 50 % and BVPS is also decreasing since 2013. Another uncomfortable fact is the non-existent dividend increase during last four years. On the opposite, the P/E ratio is absolutely low around 10. Maybe investing in Tesco would a little bit  risky, especially if I know that there are companies like DE and LVMH are also available for lower prices… Tesco trades around 258 British pence and decreased by -15% compared to the closing price on 30 May (303,50 pence).

 

Xilinx Inc.

That’s my last company I’m writing about for today. Xilinx is an US company, producing and developing programmable  integrated circuits and other logic devices. Compared to the above mentioned companies, Xilinx Inc. is a pretty young company, founded in 1984. After missing analyst’s estimates regarding revenues, the stock fell by -14 % compared to closing price on 22 July ($48,15) and closed at $41,13 today. Here the financial figures for the last decade:

Year EPS change/year BVPS change/year Dividend change/year payout ratio
2013 1,79 -8,21% 11,24 9,44% 0,97 14,12% 54%
2012 1,95 -18,41% 10,27 12,49% 0,85 16,44% 44%
2011 2,39 85,27% 9,13 17,81% 0,73 14,06% 31%
2010 1,29 -1,53% 7,75 22,82% 0,64 10,34% 50%
2009 1,31 4,80% 6,31 5,87% 0,58 7,41% 44%
2008 1,25 22,55% 5,96 -0,50% 0,54 20,00% 43%
2007 1,02 2,00% 5,99 -24,84% 0,45 32,35% 44%
2006 1,00 14,94% 7,97 4,46% 0,34 30,77% 34%
2005 0,87 2,35% 7,63 6,56% 0,26 73,33% 30%
2004 0,85 136,11% 7,16 24,52% 0,15 18%
2003 0,36 5,75 0,00 0%

xilinx

I think the financials are looking not horrible. EPS made a huge jump in 2011 by 85 %. Since then, EPS is decreasing – maybe an additional reserach would be usefull what happened in 2011 respectively since then. Xilinx started to pay dividends in 2004 and was able to increase them each year – payout ratio is a little bit over 50 % which is probably acceptable. P/E is also relatively high with 20. I’m not 100 % convinced to buy that stock now, but I’ll have a closer eye on that company for sure.

Today I bought two dividend stocks

The first one is Wells Fargo & Co. I have that company on my watchlist for more than one year and during that time, the performance was just great. As my holdings in the financial sector was pretty low, I grabbed 54 shares @ € 37,60. I’m generally not too keen on banks but I think that WFC is one of just few companies in that sector I’m confident they’ll still exist in 30 years or so. A nice side effect: WFC distributes a dividend for almost 20 years (even during the crisis in 2008/2009) and was also able to increase the dividends. Currently, the annual dividend of $1,40 is covered by an EPS of $4,02 — the payout ratio is on a comfortable 35 % level.

The second one is McDonald’s. MCD is a dividend aristocrat, paying dividends for almost 40 consecutive years. I extremely like that simple business, combined with a strong brand and the ability to recognize and react on trends and each generation’s lifestyle (compare a menu of the 1980s with one of the 2010s). Although in a more healthy society and even if it’s en vogue to live vegan and “healthy” – I believe that McDonald’s and that idea of eating will also exist in 30 or even 50 years. For sure in another way, but still in a profitable way. I bought 30 shares of MCD @ € 73,00.

With that two stocks in my portfolio, my dividends for 2014 increase by approx. 45 Euros as I qualified for the next two payments in September and December.

Recent Buy: AbbVie

Well, I have a kind of buying spree recent weeks as I bought 50 (at € 40,93) shares of biopharmaceutical company AbbVie Inc.

AbbVie is a separated company of Abbott Laborities, which was founded in 1888. The idea behind this split was to separate two divisions in biopharmaceutical research (AbbVie) and in medical products (Abbot Laboratories). As AbbVie is listed just for 1,5 years, there are no informative historical data available. But the original company Abbott Laborities has a strong track record and is paying dividends for more than 30 years! And as my Healthcare share in my portfolio is pretty low at the moment, I think that is a nice long term investment for sure.