April Activity + Options

Hi folks,

April has been a busy month so far. I’ve done a couple of transactions.

1. I bought 10 additional Peugeot PSA shares at a price of €17,80 each. This is a very small increase but for tactical reasons. Almost 2 years ago I bought 90 Peugeot shares, without having DGI in my mind. I’ve been holding on since then but I would like to quit the position when the stock trades a little bit higher. My objective was to own 100 shares so I am able to sell covered calls on the shares. This way I can boost the profits a little. The transaction fees of around €10 should be covered multiple times by the option premium. Even if it’s only a profit of €20-50, it’s easy money.

2. Sold naked put 1 NN P MAY 2017 28,00 for a premium of €51,55. NN Group is a Dutch based insurance and investment firm. They were trading at a price of €28,85 at the moment of writing but I didn’t intend to buy them. I would rather keep the cash I have now. The option strikes in less than 30 days and my goal is to rack in the premium. It’s a solid company with a big dividend and good earnings. Next to this, I think NN Group did make a good deal buying Delta Lloyd.

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3. Sold naked put 1 AH P MAY 2017 18,00 for a premium of €24,55. Ahold Delhaize was trading at around €18,75 when I wrote the option. Once again I don’t intend to buy them, just to rack in the premium. Nonetheless I wouldn’t mind owning them at all. Then I would just sell covered calls…

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I’m just a bit short of available cash after my following buys which is why I rather keep the cash in my wallet for better opportunities. However I do like to place a little bet on the price of a stock.

4. Bought 12 shares of dividend aristocrat Johnson & Johnson. This buy was long, long overdue and a lack of them would be a stain on each DGI’s palmares. I took advantage of the small price drop after the earnings announcements last week to buy them at a price of $121,24. I should have bought them way earlier on, but hindsight is 20/20. It’s not a big position, but I’m trying to allocate my capital smartly and if the price would drop more, I’ll buy again. This will raise the net yearly dividend by $22,85. I expect them to increase the dividend soon because they already distributed the same amount for 4 quarters so the time has come.

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5. Initiated a small position of 7 shares W.W. Grainger. This industrial supplier company has taken a beating since the earnings report due to lower price settings. However, the MRO market seems to have enormous potential and plenty of room for improvement. The stocks were acquired for a price of $206 each. They have a history of increasing dividends for about 45 years. This adds a net $20,33 to my yearly dividend income. I expect them to increase the dividend next quarter too.

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6. Acquisition of 35 shares of chemical company LyondellBasell. However they do operate in a cyclical chemical sector, they manage to gather nice earnings and decent margins. They also buy back shares at a high rate and steady dividend increases are forecasted. For a summary of my reasons to buy the stock, I gladly refer you to LyondellBasell Analysis from The Investment Doctor on Seeking Alpha. It is worth reading. At a current dividend of $3.40/share, the net dividend addition comes in at $70,80. This stock too, is expected to raise its dividend next quarter.

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7. Last but not least: in March I had already sold 1 General Mills in-the-money Put OCT 2017 strike $67,50 for a premium of $922,5. I would like to own 100 shares of GIS to grow my dividend portfolio. Because the price dropped even further, I wrote another one but out-the-money this time. 1 General Mills Put OCT 2017 strike $55,00 was sold for $202,5. I don’t expect the stock to go lower than $55 and the premium can decrease my average costs on the first put option when exercised.

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I don’t have all the cash available right now if all options would be exercised. However, I will make sure the money will be available when the strike comes close.

Bonus: Unilever recently confirmed it is raising its quarterly dividend by 12%. This means, based on my 110 stocks, an increase of €11,86 without lifting a finger. Gotta love the game!

Dollar dividends converted, my future yearly dividend income should stand around €1,947.

How was your activity so far?

Financial goals by age 25

However most people specify a certain date or year to reach FIRE, I don’t. I do have a number in my mind but I don’t focus myself on it. The journey towards FIRE should be enjoyed and many obstacles will cross the path. In my case, it doesn’t make much sense to fix a certain FIRE date. In my current stage of life and the coming years, my whole life will (or should) be determined. Will I have a partner, kids, a real estate property with mortgage,…? Who knows… The future is too uncertain for me to just toss a date on FIRE. The parameters can vary heavily.

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A thing with a fixed FIRE date is, what are you going to do when you hit the date but not reach FIRE? Are you gonna be unhappy? All the years of investing didn’t pay off eventually? Was it one big lie? Is living on lower standards an option to yet reach FIRE? No, it’s nothing more than a long-term guideline which adapts accordingly to one’s life in my opinion. FIRE isn’t the ultimate goal, happiness is.

Now let’s satisfy the number craving people:

At 01/01/2021, I will be 25 years old. I want my net worth to reach €250,000 or receive €5,750 in yearly dividends. The reasons I write this as an ‘or’-goal are the following: I can’t forecast stock market movements neither dividend increases. The date gives me a little under 3 years and 9 months to reach the goal.

I don’t think of FIRE as a one-lap sprint. To me it’s more interesting to set temporary milestones along the way to keep motivation high on the mid-term. This way it doesn’t seem like forever to get along with the process.

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March Income

Finally got the paycheck raise! I was already promoted in Q3 2016 but had to wait untill this month to see it on my bank account. I got a €151 raise so my job income stands around €1,732 right now. Thanks to the retributions of the past months and promotion bonus, job income in march stand at €3,764.

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Side hustlin’ income:

€305

Now let’s look at the dividend numbers:

Novartis AG: €58,34
Unilever PLC: €24,37
Novo Nordisk A/S B: €18,87
RD Shell B: €51,42
Imperial Brands PLC: €32,81

IBM: $7,50
Allergan: $2,94
Gilead Sciences: $15,47

= €210,09 dividends

Trade Income:

Veolia Environment, sold. Profit: €244,42

I didn’t plan to sell Veolia, as this was an experiment in the fiscal benefits of turbo’s. However, markets were turning a bit the wrong way for my put option in General Mills. I needed to secure some cash in case the option was exercised. I had expected my bonus to arrive in February but it didn’t so I had to secure my cash position temporarily (2 weeks). Too bad for the experiment, but the position managed to make a 15% profit in 1 month. Can’t complain.

March income: €4523,51

Best monthly income ever. In normal circumstances, it would take me a little over 2 months to earn this amount of cash.

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