January 2020 – Review

January overview

The first month of 2020 is over, so it is time for me to review my investing earnings for January.  This is the first time I can really compare my earnings from dividends based on the same month from the previous year. Personally, I am delighted with the difference, and I am starting to see the benefit of investing regularly in high quality dividend paying companies.

In January, I collected a dividend total of $71.77. This represents a massive 176% growth when compared to January 2019. Seen such an Increase after just over one year is very pleasing but I also know that this rate of growth will not be sustained over time as my portfolio increases.

The noticeable difference is Altria Group (MO) where I received a total of $31.08 this year. This is mainly due to the 30 extra shares that I bought in August of last year.

10 companies in total paid me dividends this year which is five extra from last year. This is because throughout 2019 I acquired shares in CTBI, DIS, PEP, and O. I also have a small position in Property Partners which is a crowd funding property website which also paid me a dividend of $3.65 for the month.

New Investment shares bought in January

Unfortunately, my broker, Degiro, does not offer to reinvest dividends but I have used the proceeds from January to buy 2 shares in SBSI which increases my expected forward dividend by $2.48.

I also initiated a position in two new companies at the beginning of January

Date	Ticker	Shares	Cost per share
2020-01-04	SKT	154	$14.50
2020-01-05	T	57	$38.98

Tanger Factory Outlet Center

I bought 154 shares in Tanger Factory Outlet Centers (SKT) which has over a whopping 9% dividend yield at the current price. For anyone who doesn’t know $SKT are a REIT which are one of the largest owners of outlet shopping centers in the US and Canada.

It is no secret that the retail sector is facing some strong resistance with the advent of online shopping from companies such as $AMZN. This has stalled $SKT growth opportunities since 2016 which according to their 2019 investor presentation shows only a couple of new malls acquired.

However Tanger does look strong financially. By law, REITs are required to distribute most of their taxable net income to shareholders through dividends payments. The funds from operations payout ratio is calculated in order to check if the REIT can meet this obligation.

Based on the company’s presentation, in 2019, the company had a payout ratio of 62% which is pretty solid to me. They also have a strong dividend growth and have increased their dividend each year from 1993.

While I understand this is a riskier play from me, I believe that if Tanger can keep its occupancy at current levels and keep its financial state in good shape, it could be in a good position to ride the Retail apocalypse wave.

AT&T

I also bought 57 shares of AT&T (T). $T is a dividend champion that provides telecommunications services in the United States and internationally. They have increased their dividends for 35 years in a row .The most recent dividend increase was in December 2019.

Acquiring DirecTV and Time Warner left AT&T with a massive debt load, but it’s making progress paying down the debt while still managing to invest in the business.

With a strong dividend and a stable business model AT&T looked like a decent buy this month.

Savings Rate

I never made it one of my goals but this year I am trying to make a conscious decision to increase our savings rate. I am keeping check on this by tracking my spending each month. Up until now, I wasn’t sure on what out savings rate actually was.

Our savings rate for Jan was 31%. This is sub divided into investments or long term savings which is cash that is solely used for investing.This accounted for 23% of overall spending. And short term savings which are didleys for Christmas and savings for holidays and days out. This accounted for 8% of spending. The short term savings is cash that we will spend while the long term savings is what we will invest.

It is quite clear that our personal expenses are quite high. There are a number of reasons to this. But the main reason is we have booked and paid for 2 holidays later this year.

To be honest, it is not something i am overly concerned about as I believe that you should enjoy yourself. Saving for the future is important, but being present in the now is just as important.

Still over the coming months I will keep tracking to see if there are areas where we could improve our decision making. Finding the right balance between enjoying our self and investing in our future will certainly be an interesting challenge over the coming year

Property investing

Not much to report here, we went for another viewing last week and are currently contemplating putting in an offer. Man I forgot how slow it is when your dealing with Bankers, Solicitors and estate agents but I hope next month might go a little bit quicker in terms of getting stuff done.

Summary

Overall, January has being a pretty solid month for me. I have seen solid growth from the same time last year. Iv seen a savings rate of over 20% and added significantly to my expected forward income. This may not be the most exciting approach for increasing ones Networth but remember, little seeds can grow into big trees.

Thanks for reading and Happy Investing!

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