My Mom’s Portfolio : Dividend Income Report Out May 2017

Hi everyone,

How are you doing? I am doing fine as I am now travelling home from China. I was for one week in the city Dalian, which is in the north of China . I am writing this blog post on the plane from Shanghai to Helsinki. From there, I fly back to Brussels. A long journey…

Did my mom travel in May 2017 ? Of course she did…She went for a mid week to the German region Mosel and she did visit the town Koblenz. I never visited this city but when she showed me the pictures it looked a really cosy and nice city to visit.

Take a look at the official Koblenz tourism website. 

It looks a really nice and interesting region to visit one day.

What happened in May 2017 ?

In the month of May, the BEL20 index rallied to more than 4.000 points. 4.000 points dated back from early 2008. Now early June, the BEL20 index is back at 3.900 points. The expectation is that the European markets can rally further when the economy becomes stronger. We will see…

I also read an article that a quarter of American adults can’t pay all their monthly bills; 44% have less than $400 in cash. In another article about retirees in the USA at he website The Motley Fool, I read five stats that did blow me away…

• One out of every three Americans has no retirement savings whatsoever

That’s the latest out of a recent GoBankingRates survey, which also found that among those who have saved, 56% are sitting on less than $10,000. Given that most retirees can’t survive on Social Security alone, that paints a pretty bleak picture.

• Over 40% of single seniors 65 and over get at least 90% of their income from Social Security

And frankly, that’s asking way too much. Social Security is only designed to replace about 40% of the typical worker’s pre-retirement income. Most people, however, need at least 70% of their previous earnings to pay the bills in retirement, which explains why more than 25 million Americans aged 60 and older live at or below the poverty level .

• Only 51% of Americans are confident they’re saving enough 

In its latest retirement survey, Transamerica found that only about half of workers feel they’re building a nest egg that will sustain them in retirement. Given the number of people who aren’t saving anything, this certainly isn’t shocking. As a result, more than one-third of Americans expect to work in retirement. And it’s not just because they want the mental stimulation. A large number of Americans feel they’ll have no choice but to remain employed in some capacity during retirement to supplement their limited income. That said, a recent TD Ameritrade study found that one in 10 retirees winds up going back to work to combat boredom . It pays to keep your skills up-to-date later on in your career so that you have the option to continue working during your golden years.

• Outliving their savings is what 60% of older Americans fear the most

In an Allianz study, 60% of baby boomers admitted that they’re more concerned with running out of money during retirement than actually dying. Seeing as how 30% of workers 55 and over have yet to start building a nest egg, it’s a valid fear. The average healthy couple will spend $377,000 on healthcare in retirement  If you have a known medical issue going into retirement, you can, and should, expect that number to climb. Furthermore, that $377,000 doesn’t even take long-term care expenditures, like nursing home fees, into account. Another report by the Employee Benefit Research Institute found also that 46% of seniors spend more money during their first two years of retirement than during their working years. Meanwhile, 33% of households uphold this spending pattern for six years into retirement.

• Seniors are the fastest-growing group of bankruptcy filers in the USA

Back in 1991, only 2.1% of bankruptcy filers were 65 or older. By 2007, that number had climbed to 7%. Though untapped retirement accounts are typically protected in bankruptcy, or at least up to a certain limit, filing for bankruptcy can wreak utter havoc on your credit. And without a job or income stream to convince lenders otherwise, you may have a hard time opening credit cards, securing transportation, or renting a home as a senior if you’re forced to go this route.

Shocking statistics don’t you think? That’s why some Americans move abroad to lower their standard living expenses and their healthcare costs.

In Belgium, I don’t think the situation is that bad but I could be wrong. I definitely know that government and the Social Security system will consume all your savings and wealth if you can’t pay the bills. A shocking reality you better prepare for…read here our blog post about that topic.

 How you can lose all your net worth and make also your kids poorer…

Now you can read our Dividend Income May 2017 Report Out for my mom’s portfolio.

Dividends received in May 2017

During the month of May 2017, we received 209,57$ dividend income.

This dividend income was composed of 191,07$ monthly payments and 18,50 Dollar from high yield quarterly paying ETF’s . We achieved the objective of 200$ as we set as a new monthly target for the monthly income last month. Remember that this is more than the average Belgian is saving…. read following blog post “Saving Belgian has no appetite for risk…our reflection.” if you want to know more how much an average Belgian family saves per month.

Here you find the overview of all dividend payouts during the year 2017 compared to 2016.

Portfolio management

During the month of May, we also executed some changes in our Mom’s portfolio. We sold our position in a quarterly paying ETF as there was a strong downtrend due to an underlying dividend cut of one company. In my mom’s portfolio we also focus on capital protection. We don’t want to lose money and give away dividend payouts with capital losses.

We added one position. A monthly dividend paying Busines Development company (BDC) with a 12% dividend payout. This company will pay us 38,67$ per month going forward bringing our monthly $ total around 190$ per month. That’s our current monthly total.

The total value of the portfolio is still around 20k. The sale of the ETF and the new purchase balanced itself out.

Dividend Income Growth

Now my mom’s dividend income is growing above the 1000$ mark.  We have now a total of 1235,60$.

We achieved our yearly objective of 2017 !! HURRAY!!! We did set 1200$ as our yearly 2017 objective for my mom’s portfolio.

Were we too conservative in our objective setting at the beginning of the year ? Well…we don’t think so as we didn’t know what our average dividend yield would be. Would we be able to put together a good portfolio? Would the stock markets continue to rally? Many unknown factors…

So we did set a 2017 objective with a modest yield of 6% on an invested amount of 20k. Now we are 5 months through the year and we can tick the box “Goal Achieved” on one of our 2017 objectives. This is the second objective that we completed. We also completed one of our Travel objectives with our city trip to Paris. Read here our blog post “City Break Report: Experience Paris, the city of love”

Completing objectives is always a great feeling.

Going forward

We are now in June 2017. We still have our cash position untouched. Can we grow our monthly dividend income further to 250$ now? It is surely possible. We did a few simulations with possible buy’s and impact on the dividend income per month. We will evaluate this month.

How are you doing with managing your finances? Do you put your money at work and grow your cash flow tree? We hope so ! We end with a final quote as usual. This time with a quote of Robert Kiyosaki. Do you know Robert? I love his book “Poor dad, rich dad”. Did you read that one? It was an eye opener for me.

How was your month of retirement savings? How do you generate money for your retirement? Let us know….

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