Monthly Update July 2015

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July was insane! Not only did I hit a car with our Toyota and needed a replacement, I already searched, found and bought a new car, I sold nearly all BDCs, I was on a buying spree in the oil (drilling) sector and on top of all I took 4 days of for a short camping vacation on a nice lake. When I’m looking back, I can’t believe it all happened in one month.
Needless to say, the expenditures are over the top this month. To smooth out the very high costs for the “new” car, we’ll raise a credit for half of the sum. The “new” Volkswagen (10 years old) costs us 8200€, my part are 4100€. 2000€ will be financed over one year. On the other side I sold our Toyota for 800€ (bought him for 3000€ two years ago).

(assuming €:$ 1:1.1 currency exchange rate )

Income

Day Job Paycheck $4529
Dividend Income $95
Selling my crashed car $880

Total Income $5504

Expense

Total Expense $4272

Saved Net Income 22%

Ouch! I managed to save 22% of my net income this is a new record low. And viewing forward to August where we’ll have our next two week vacation – it’s a bad saving time for me. But despite my (unforeseen) expenses, I managed to contribute $3300 to my broker account(saved over the last months).

 

Purchases

Stock Units Price Date Cost
NOV 45 $43.98 2015-07-15 $1979.10
KMI 50 $37.62 2015-07-15 $1881.00
ESV 100 $19.28 2015-07-17 $1928
NE 150 $13.62 2015-07-17 $2043
SDRL 250 $8.75 2015-07-20 $2187.50
STAG 50 $18.78 2015-07-28 $939.00
GILD 10 $115.70 2015-07-28 $1157.00
CPSI 25 $45.08 2015-07-31 $1127.00

 

Wow! What a buying spree! As I’m writing this report over a month later, it’s real pain to even type it in. What was I thinking regarding the insane overweighting in the offshore drilling sector? I know, I was thinking – “This is the bottom” – “It will rise again like it did back in march and finally the crude price will recover from this lows”. As we all know it wasn’t the low – in fact it was miles away and it is now projected the crude price will more likely stay depressed through 2016. We’ll see how long Noble will pay a this hefty dividend, it’s very likely they’ll cut the dividend soon. I also added new positions in KMI (I was waiting for this for a really long time – and hindsight – I should have waited a bit more) and NOV. Going forward I will continue to add to my energy positions, as long as the crude price will stay in this low regions. But maybe I will skip the offshore drillers for now.
On the sunny side I also bought into a new REIT – STAG an industrial REIT, I added to my GILD holding after the great quarter release and I added a new micro cap stock CPSI which is developing and selling IT solutions to small rural and community hospitals. I’m always on the search for interesting small cap companies which are paying a dividend. The market cap of CPSI (520M) only gets undercut by TIS (248M). Going forward, I will start adding smaller positions of $1000, because my broker commissions are $5 per trade which is about 0.5%.

Sells

170 shares of NMFC (closed position)
200 shares of TCPC (closed position)
200 shares of HTGC (reduced position)
800 shares of PSEC (closed position)
 

Another wow! I sold nearly all BDCs which means I’ll receive a tremendous cut in my dividend earnings. I don’t know if it was prudent to exchange these credit companies for offshore drillers, but at least for everything else I bought this month. Going forward, I still want to spice up the yield with some BDCs but obviously not with that much of an over exposure. I see MAIN as my safest bet in this sector and HTGC and TPVG as complementary plays. HTGC has a great track record but needs to deliver – TPVG on the other side is a relative new player which still has a really low leverage on his equity (0.25) and thus has much more room to grow. Both are technology focused BDCs and more like venture capital investors. Of all three MAIN should be my biggest holding.
And by the way WPC also includes a BDC, but as it is only a small part of the company I still see WPC more as a NNN REIT.

 

Dividends

PSEC $56.64
MAIN $12.79
WPC $25.95
Total $95.39

 
Obviously after last month dividend earnings, everything will be underwhelming, however the $95 will help to grow my snow ball too. As you can see PSEC still payed me a hefty dividend which will be missing for all future months. But this isn’t something bad, because I really didn’t like the way the management was doing business and more over for not communicating what is going on. I don’t want these kind of companies in my portfolio.
 

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Monthly Update June 2015

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June was another quiet month relating to my stock exchange activity. But I used some spare time to upgraded my computer with a new SSD and a new harddrive. Additional to my annual payment of my automobile club membership and some tax repayment from 2013 – this resulted in very high expenditures this month.

(assuming €:$ 1:1.1 currency exchange rate )

Income

Day Job Paycheck $3920
Dividend Income $309

Total Income $4229

Expense

Total Expense $1912

Saved Net Income 56%

Again, I contributed nothing to my broker account.

This month I cost averaged ARCP and HTGC, both are now overweight in my portfolio. I will trim them back when they are in a more friendly price territory.

 

Purchases

Stock Units Price Date Cost
HTGC 200 $11.75 2015-06-15 $2350
ARCP 300 $8.19 2015-06-25 $2457

 

Sells


 

No sells this time, but I’m still looking for a good exit from the still falling PSEC.

 

Dividends

PSEC $42.48
MAIN $32.90 (includes a special dividend)
NMFC $49.13
BP $29.75
TCPC $61.20
HP $23.38
ESV $10.20
RDS-B $31.02
GILD $14.62
Total $308.83

Wow!! I earned $308.83 in dividends this month! This is an all time high and again this is mainly due to the high BDC exposure (over 60%!).
But nevertheless I’m proud to achieve such a number after only one year of investing! After trimming my BDC holdings in the near future, it will need a long time to achieve such numbers again. But on the other side it will give me much more confidence in the stability of my dividend payments.

 

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Monthly Update May 2015

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The last months were rather busy for me, but now I’ve found some time to complete my monthly reports.
May was a quiet month. I tried to zero my expenses to counter my high expenditures from March and April. My tax prepayment increased and I’ll subtract nearly $1050 from every salary income to reflect this. Every three month I will pay the tax in advance and this won’t be listed as an “expense” any more. To speed up my time involved in the income/expense part, I’ll only list my final expense number and highlight only extraordinary expenditures.

(assuming €:$ 1:1.1 currency exchange rate )

Income

Day Job Paycheck $3435
Dividend Income $173

Total Income $3608

Expense

Total Expense $1171

Saved Net Income 68%

I contributed nothing to my broker account.

Again I received the biggest dividends from my BDC holdings (62% of $173) and I will most definitely exit most positions. In the long run, I don’t want to own more than 3 BDCs in my portfolio (with maximum of 10% of my portfolio cost value). Unfortunately my biggest BDC holding PSEC keeps going down and I will try to exit this position with averaging down first. In hindsight this wasn’t the right move and I should’ve exited this position instantly.
MAIN will be a core holding and I want to complement this BDC by another internal managed quality BDC – my choice is Hercules Technology Growth Capital (HTGC).

Additional I added the international operating REIT W.P. Carey to my portfolio as it complements my ARCP holding (both are Triple Net Reits) but WPC adds more international exposure to my REIT portfolio. I’d love to add the Realty Company but I can’t justify the much higher Price/FFO ratio.

 

Purchases

Stock Units Price Date Cost
PSEC 200 $7.60 2015-05-06 $1520
HTGC 200 $13.28 2015-05-07 $2656
WPC 32 $63.29 2015-05-19 $2025

 

Sells


 

No sells this time, but I’m looking for a good exit from PSEC.

 

Dividends

PSEC $42.48
MAIN $12.43
HCP $24.01
TIS $26.78
OHI $7.65
AAPL $6.63
HTGC $52.70
Total $173.04

I earned $173.04 in dividends this month! As already written 62% is coming from highly leveraged financial companies which is a bigger risk because of the threat of cutting dividends (as seen with FSC and PSEC). MAIN should be excluded because they continue to increase NAV and dividends. On the other side, 38% of my dividends are coming from an increasing count of quality companies.

 

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Monthly Update April 2015

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April was another good and busy month. The tax situation is still some kind of unclear, but at least I could limit it to a tangible range. Every three month I have to pay ca. $3144 in advance. So I will deduct $1050 every month from my paycheck income. And even this sum will be not enough because I will get another paycheck raise in july and the currency exchange rate is about 20% higher this year than which was originally assumed by the tax office. I will keep my 13th paycheck/Christmas money end of year as an emergency fund for this reason. Hopefully I’ll reach my contribution goal this year without it. Maybe I’ll find some additional freelance jobs – that would be great!

(assuming €:$ 1:1.1 currency exchange rate )

Income

Day Job Paycheck $3712
Dividend Income $205

Total Income $3917

Expense

Home Expenses $612
Transportation $260
Insurance $407
Gifts $44
Obligations $1813
Business Expense $5
Entertainment $26
Miscellaneous $5

Total Expense $3172

Saved Net Income 19%

I contributed ca. $4400 to my broker account.

Again I had a big tax payment of $1813 – the tax consultant “forgot” to forward me the notice of a near doubled quarter prepayment tax sum for this year from last December. 🙁
Needless to say, she is fired – which puts me in the situation of making the tax declaration for last year all by my own. This will be interesting!
Another big payment was a car repair of $260. Hopefully the old Toyota will keep it up!

When I subtract the one time payment of the tax and deduct the one third of the next tax prepayment, I’ll get $1366 expenses and a saving rate of 65% which is very nice. Tracking my costs is not only for seeing where the money is gone but also to see how low I could put my running expenses and how far I have to push the dividend income to break even. Right now it’s already 15% of $1366! This is really motivating for me!

Nevertheless the biggest chunk of the dividends came from high yielding BDCs which is not something I want to rely on. So I keep pushing forward aiming more on DGI stocks, some more low yielder/growth stocks and I will continue to reduce my BDCs. This means a decreasing portfolio yield but hopefully a more reliable dividend income stream in the future.
Unfortunately, I missed the last crude oil low in march and didn’t bought more oil stocks and didn’t averaged down some of my offshore drillers. Now I feel regret, but I think this will be a constant state of mind while investing in the market. It will take time to mute these feelings and just keep going. Reading financial community blogs helps me a lot, because everybody feels a little regret to bought to early, to late etc. – it’s all part of the game.
And maybe the oil price comes down again for whatever reason and I can load up again – I still miss some big US oil stocks in my portfolio.

 

Purchases

Stock Units Price Date Cost
GILD 20 $96.85 2015-04-01 $1937
T 61 $32.44 2015-04-17 $1979
TIS 90 22.40 2015-04-27 $2016
GILD 20 102.35 2015-04-27 $2045
OHI 50 37.64 2015-04-27 $1882
AAPL 15 129.70 2015-04-29 $1945

 

Sells

400 shares of FSIC
 

I sold another BDC and was on a little shopping frenzy! I looked into growth stocks and couldn’t take my eyes from Gilead(GILD) a biotech company with massive cash flow – very low P/E and a big pipeline with new drugs. It reminds me a little bit of apple. Big cash flow and a very high “one product risk”. Gilead is relying mostly on his Hepatitis C drug – Harvoni. I read a lot of articles and analysis on seeking alpha and I’m really convinced about Gilead! Just now they reported and more than doubled(!) the already high EPS from last quarter. This is insane. Speaking about regret I don’t want to miss the boat again, like I did on Apple.

And … I bought Apple too 🙂 – they reported another great quarter – again – and this time I thought it’s time to leave the hesitation behind and buy it! I just love the forecast, the dividend growth and the cash flow. Unfortunately the price isn’t that great, it’s more about fair value (scroll down to AAPL).

I also loaded up on another healthcare REIT – Omega Healthcare Investors(OHI). Together with HCP, I have covered this sector very well. Maybe NHI looks also very good, but I’d wait for a better price.

I also used a little bit of margin to buy AT&T at a good price. Hopefully the DTV merger will give this company some long awaited growth boost.

Additionally I added a more riskier dividend paying micro cap stock: TIS – Orchids Paper Product. Inspired by a purchase from Dividend Pipeline – I took a quick look and really like the growth ambition of this company. Let’s wait and see.

 

Dividends

PSEC $42.48
MAIN $12.43
FSIC $75.75
BLT $74.40
Total $205.43

I earned $205.43 in dividends this month! Wow nearly as much as last month! But as you can see, with a very high BDC exposure.

 

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Monthly Update March 2015

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March was a wonderful month, but the most expensive so far. Moreover, I’ve a problem with the tax deduction from my gross basis. I really don’t know how to deduct a sum, I don’t really know, but a year after? This is frustrating, as I’ve to pay more then $3666 in tax in march and april. This is nearly twice as much, as I had anticipated and deducted all months before on the balance sheet(one third of this quarter payment). So what now? I’m tending to stop writing about my income/expenses because of this fact. The numbers are not correct otherwise. I’ll still track my income/expenses every month for myself to control the costs. Maybe for the blog, it only matters how much I can transfer to my broker account? What do you say?

(assuming €:$ 1:1.07 currency exchange rate )

Income

Day Job Paycheck $4550
Dividend Income $229

Total Income $4779

Expense

Home Expenses $603
Daily Living $746
Transportation $200
Insurance $396
Gifts $439
Obligations $1780
Business Expense $912
Vacation $310
Miscellaneous $3

Total Expense $5389

Saved Net Income -11%

When I subtract the tax obligation of $1780 from the income and expenses, it would be something like this:

Income: $2999
Expenses: $3609
Saving rate: -20%

So what about the rest of the cost explosion? I had to pay the tax consultant for closing a company and preparing the tax forms for 2013, which costs me about $912.
I bought some expensive gifts for my girlfriend, we made two weeks of holiday which includes one week in beautiful Italy and one week with my family in Germany. I went shopping and bought me some nice clothes($364). I agree – this has absolutely nothing to do with frugality and I will be more then frugal in the coming months!

Again I contributed nothing to my account.

Purchases

Stock Units Price Date Cost
ARCP 200 10.22 2015-03-02 $2044
HCP 50 40.45 2015-03-06 $2022
ARCP 200 9.36 2015-03-10 $1872
RDS.B 33 61.80 2015-03-10 $2039

 

Sells

Nothing.
 

Again, I bought into ARCP after reading their business update and found no additional frauds or risks other than the coming costs of class action law suit settlement fees, forensic accounting/legal fees, etc. And I anticipated the reinstatement of the dividend end of march. Looking back now – this was a mistake! Why didn’t I learn and waited for the actual reinstatement?
And I bought another REIT, this time one which is indeed paying a dividend and doing so for the last 29 years! HCP one of the biggest healthcare REITs available.
And again I added to energy with a new position in Shell!

Dividends

PSEC $42.48
MAIN $12.43
NMFC $49.13
BP $30.00
TCPC $61.20
HP $23.38
ESV $10.20
Total $228.82

 

I earned $228.82 in dividends this month! Wow nearly as much as december!

 

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