It is with some sadness and a heavy heart that I bring to you this last quarterly dividend report. I had been making it a point to increase my dividend income and had been doing a good job of it this year, but circumstances have forced me to change direction. You see, the dividend stocks were in my retirement account which I am taking as a lump sum to pay off some outstanding tax debt. I will probably write more about that decision later.
So in preparation for the distribution, I did allow some of my stocks to get called out so the dividend income is a bit lower compared to last quarter. But had I not had to make this decision, I am sure that I would have been able to meet my goals for the rest of the year. At least that’s my story and I’m sticking to it.
You can see from the graph that the income was down from the first 2 quarters of this year. Like I said, I allowed SDRL and STX primarily to have some shares called away without buying those back which I would have done if the portfolio had kept going. But since I knew that I was arriving at this decision to liquidate, I just went with the cash and have been totally in cash since mid-September.
Nevertheless, I think it was a good experience to focus on dividend income over the past 12 months. This is exactly what I will need to do someday when I retire, namely wring cash out of my investments so that I don’t have to tap into the principal.
Now, my focus will be to eliminate a bunch of other debt so that I can aggressively invest and put together a nice portfolio of cash spewing assets. But for now, I think debt elimination will provide a better return on my investment since the interest rates are high enough and the savings are all tax free. So that’s where I will be putting my energies which means that you can be looking forward to debt reports. Yippee!
I am sitting in a public cafeteria catching up on some email and other stuff after getting back from Honduras and couldn’t help over hearing a young lady that was sitting 2 tables away. I wasn’t listening on purpose, but there was almost no one else in the room, and she talked really loud! Then a couple ladies sat at the table next to me (again one was loud) so I could hear her comments as well. It was interesting to hear the contrasting comments.
Lady Number One
The first lady was complaining about life and bemoaning her financial situation. At one point, she stated to the individual on the other end of the phone, “Why Am I not rich?” Well, since I got several details about your life during my 90 minutes working on my blog, I might be able to offer a few hints.
- You are a single mom. She stated that it was hard to support herself as a single mom to the guy on the other end of the line. I know it was a guy since she thanked him for his child support. There is no doubt that single moms have it incredibly tough especially with so many deadbeat fathers out there. At least she has the luxury of a decent relationship with the father of her child such that she can communicate on the phone. And it sounds like he is paying his support.
- You don’t have an education. I know this because she stated that she had decided to go finally go for her GED. I would guess her to be in her mid-20’s so I would suspect that she isn’t making much more than minimum wage if she is going for her GED and complaining about how tough it is to pay rent. No doubt that education has some correlation with income.
- You have maintained a quasi-victim mentality. I say this because she joked on the same call that she was “holding out to marry rich” (like I said, she must have a good relationship with the father of her child). And maybe it is not a victim mentality per se, but you can’t wait for someone to save you. And maybe she is waking up to that fact since she is going to be working on her GED and who knows after that. Kudos on that front!
The Second Lady
Contrast that to the second lady who offered this sound financial advice. She was telling a co-worker that:
- She was paying an extra $120 per month toward her mortgage to pay it off in half the time. Obviously, she is somebody who doesn’t like debt and must not have higher interest rate debt that she should be paying off first.
- She has 10% of her paycheck put away for retirement. She knows the importance of paying oneself first and preparing for the future.
She also looked to be about the same age.
I found it an interesting contrast good for a blog post. I also wonder if lady #1 heard what I heard and if she did, what she thought of it. So if there is a lesson to be learned, speak quietly in public places. You never know if a blogger is sitting at the next table or two.
I still don’t make a lot from blogging at least in terms of what you might expect for the amount of effort I am putting into it. But I am still able to net several hundred dollars a month after expenses so I have been using that extra money to pay off debt. I have already paid off a credit card and another credit line saving me plenty in terms of interest and about $200 per month in payments. This will help my monthly cash flow for years to come.
Now I am targeting my Discover Card since the interest is so high. I have been working on this for the past few months. In December, the balance was $8809. Currently, it is $7928 so I have managed to pay off $881. I know that it is not the greatest progress, but I am still pretty encouraged. I will be making a regular payment and adding an extra payment from my blogging income. I have been holding some money back in my blogging PayPal account in order to cover expenses associated with building two blogs.
Have a Little Cushion Now
But now, I have a little bit of a cushion so I just completed the transfer into the bank. Of course, it will take a few business days to make the move, but I will now go and make an extra payment to the Discover Card bill. In about ten days, my regular payment will go out as well so I will be knocking out a nice chunk by the time I get my next statement.
If I can continue to do this each and every month, I should have the card paid off by roughly the end of September. Of course, if I can actually grow my earnings which I should be doing since I am part of the $30,000 online income Challenge, I will be able to get it paid off even quicker and begin working on the next credit card with the regular payment plus extra blogging income.
Trying to Stay Angry
I really need to try and stay angry and focused on eliminating all of my debt. I know that I have a long haul ahead. I figure it will take anywhere from 6-10 years to get everything paid off. During that time, I will be adding college debt to the equation as well since the kids are getting to that age.
Now I haven’t had a chance to sit down and try to map each month out along the way and set anticipated targets. I suppose I could do that, but I think that would not work well for my psyche. I think the best thing for me to do right now is to continue to avoid any type of consumer debt, resign myself to the fact that I will be adding loans for college albeit at an interest rate preferable to credit card debt, and use any extra blogging income for additional payments in order to speed up the process.
So that is the plan. I think it is a decent one. It may not be the best, but it is what will be working for me. I will be sure to keep everyone updated from time to time.