Hey everyone, I hope you’re enjoying the long days of summer. RB40Jr has been out of school for a couple of weeks and he loves it. He doesn’t have to do school work and just fool around all day. It’s great to be a kid.
I’ve been taking it easy too. I’m on my summer schedule. That means 10-15 hours per day. This summer, I’ll post twice per week – one new post and one rewrite. Being a stay-at-home dad is job 1 in the summer. Our son will be a teenager before we know it. We’d better enjoy these days while we can.
On the financial side, we did very well in June. Our net worth increased along with the stock market. After just 6 months, our net worth increased by 10.5%. I’m very happy about that. I just hope the 2nd half of 2019 won’t erase that gain. Our cash flow was good in June too. Our income streams are working well. We made enough money to save 58% in June. That’s really good.
Okay, I’ll go over my goals first and then share the details of our net worth, cash flow, and savings.
Here is my goal scheduling spreadsheet. It works really well. Try it out if you have a problem keeping up with your New Year goals. The key is to update the spreadsheet at least once a month to track your progress. This month is particularly important because it’s the halfway mark. Some of these goals really need attention.
- Passive Income> $60,000.This one might be too ambitious. In 2018, we had $56,628 in passive income. This year we probably will have much less than that. We’re consolidating our properties so the rental income will drop sharply. I’ll use the proceeds to invest in dividend stocks and real estate crowdfunding. I’m not sure if we can generate $60,000 this year, but we’ll try. After 6 months, we had $23,602 in passive income. That’s not great, but our expense is lower too. We’ll see how it works out by the end of the year.
- FI Ratio > 100%.This is my main goal for 2019. The FI ratio is passive income divided by expense. Once we reach 100% consistently, then we’ll be set to retire in style. Our FI ratio is 116% halfway through 2019. That’s really good and we just need to keep at it.
- Save and invest > $100,000. Last year, we saved and invested $102,000! That was awesome and I hope to repeat it this year. However, it isn’t looking good. In 2018, my blog incomewas excellent, but it slowed down significantly this year. Consequently, it’s going to be very tough to save $100,000. So far, we saved and invested $43,598. That’s behind the pace, but it’s not too bad. Our saving rate is 52% so far in 2019. I’ll grade this one on an academic scale.
- Update Retire by 40. I need to clean up the menu, sign up with some new affiliate partners, and rework a few affiliate posts/pages. This isn’t that difficult, but I have to find the time to do it. Then I’ll hire someone to install a new theme. This kind of work is very tedious for me so I usually put it off. I’m having a really rough time with it this year. All my attention has been on selling our condos. Everything else comes second this year.
- Travel Hack 100,000 points. Yes! This one is done. Both of us signed up for the Capital One Savor card and received a $500 cash bonus each. This is a great card, don’t miss out. Click through on the banner below and see if you can find the right card for you.
- Consolidate down to 1 property. We are making solid progress here. We moved and both of our condos are for sale now. However, the real estate market in Portland slowed down tremendously. Recently, we accepted an offer, but we’ll have to see if it works out. The buyer is doing a 1031 exchange so there is a bigger chance of something going wrong.
- Drop weight to 130 pounds. I rarely make a weight loss goal because it never worked before. However, I think I’ll be able to do it this year. I’m intermittent fasting* and plan to exercise 5 days per week. Currently, my weight is 129 pounds. I just need to maintain this weight until the end of the year. I changed the goal to 130 pounds. Originally, I had it at 125 lbs. That’s too difficult and I can’t get that low.
*Here is how I do intermittent fasting. I only eat from noon until 8 pm on the weekdays. This cuts down on the calories and I don’t miss breakfast much. I’m busy getting RB40Jr off to school on the weekdays anyway. Try intermittent fasting if you want to lose weight. It really works. If you can’t do it by yourself, I highly recommend Martin Dasko’s Fasting Course. It was very helpful when I first started IF.
- Keep my happiness level at 8 or above. This is totally subjective. I’ll give myself a score at the end of the month and try to average about 8 this year. For June, I rate my happiness level at 8. Summer is here and we’re enjoying it. Also, we accepted an offer on our condo so that’s less stress for me.
- Visit Chiang Mai for 6-10 weeks. I haven’t even started here. We’ll deal with this after the condos are sold. Originally, I wanted to visit Thailand in July, but I changed it to November.
Net Worth (+10.5% YTD)
I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we’ve made. 2019 is turning out to be a good year so far for the stock market. That’s unexpected. I’m being more conservative this year so our net worth lags behind the S&P 500 quite a bit. VFINX is doing amazingly well this year and it gained 17% already. It’s crazy. I’m very happy with our net worth gains so far. 10.5% is really good for half a year. This was my goal for 2019. I still think we’re in for a wild ride for the rest of 2019, though. I don’t think the stock market can keep this up, but who knows.
Here is a graph of our investment portfolio on Personal Capital.
*Sign up for a free account at Personal Capital to help manage your net worth and investment accounts. I log in almost every day to check on our accounts. It’s a great site for DIY investors.
2019 Passive Income ($23,614 YTD)
Here is a quick summary of our passive income. You can see all the details on my Passive Income page.
Generally, things look good. The rental income is slower than last year, but that’s expected. We’re consolidating down to one property. That will reduce our rental income, but our cost of living is lower as well. Our FI ratio* tells me that it’s working as planned. It is looking really good at 116%. However, we haven’t taken our annual vacation yet. We’re going to Thailand in November and that will reduce our FI ration.
FI ratio = passive income/expense
Once we sold our condos, we will have some cash infusion. I’ll invest it in real estate crowdfunding and dividend stocks. Our passive income should increase with these additional investments. But it will take time to execute. You’ll have to follow along and see how it plays out.
2019 Cash Flow
Our cash flow was good in June. Our income streams were solid and our spending was under control. Everything looks good to me. The only bigger than normal expense was in the parent category. My parent is on a trip to Japan, Korea, and Taiwan. I’m helping them out with hotels and some spending money.
We also spent more than usual in the “kid” category. My son is on summer break and we’re spending some money on “fun” stuff. He isn’t going to day camp so this is still much cheaper than what other kids spent.
Here is the Sankey diagram for June. You can get a quick overview here and see the details below. I made a little change here and added a layer in the middle. This way, it’s easier to separate savings, taxes, and spending.
Gross Income (target > $12,000/month)
For 2019, our gross income target is $12,000/month. We met this goal most of the time. In previous years, I tracked take-home income and it was all over the place due to the deductions. This year, I’ll track gross income. Last month, we grossed $12,777. That’s about normal.
- Mrs. RB40’s paychecks: $8,188.
- Blog Income: $3,022. June was a good month for us, but I can see the summer slowdown coming. Next month will be a rough month on the online income line item. You can read more details on my Blog Income page. RB40Jr is on the payroll now as model and photographer. The income will go straight into his Roth IRA. I’m excited to see how this experiment will turn out.
- Rental Income: $165. It looks like our rental income is stabilizing to around $200 per month. That’s not a huge amount, but it really helps with our housing baseline. Read more at the Rental Property Passive Income page.
- Dividend Income: $1,138. The dividend income was great last month. See more details at my Dividend Passive Income page.
- Real estate crowdfunding: $102. June was a slow month. I think next month will be better. Read more at my Real Estate Crowdfunding Passive Income page.
- Interest Income: $17.
- Side hustle: $145. Mrs. RB40 got $100 in gift money from her dad. She also sold a few things and made $45. Not bad.
Monthly Spending (target < $4,000/month)
For the rest of 2019, our personal spending budget is $4,000/month. I decreased it from $5,000 per month. Our housing expense is significantly lower since we moved into our duplex. This decreased our monthly spending significantly. In June, we spent $3,595. That’s a bit higher than normal but still came under budget. You can see the detail below.
Overall, it was a good month.
- Housing: $1,042. Our housing expense is a bit higher than usual. This category includes mortgage, HOA fees, property taxes, utilities, home improvement, and furnishing.
- Groceries: $652. Wow, this was way higher than average. I guess it’s just because of the timing. Normally, I tried to keep it under $500. Check out what we cooked.
Mrs. RB40 made a cherry citrus galette. It was amazing. She said she’ll stick with galette and never make pie again. Next is my grilled ham, cheese, and egg sandwich for lunch. I usually have leftover for lunch, but RB40Jr is pickier. So I’m making easy lunches for us this summer.
Mmm…. I made a big bowl of spicy Thai beef salad. It was great. RB40Jr didn’t like it much, though. One of the ingredients is lime juice and he didn’t like the sourness. I loved it, though. Hopefully, he’ll learn to like other more complex flavors as he grows. Next is my BBQ ribs plate. It’s the perfect summer meal. So good.
We ate out only twice last month. We went to a sushi restaurant near our home. RB40jr loves the California roll and that’s about it. He really needs to branch out. We also tried a new Indian restaurant nearby. It was so good! Mrs. RB40 and I enjoyed all these dishes tremendously. Unfortunately, RB40Jr is not a big fan of Indian food. He said it was too spicy.
- Transportation: $0. I filled up for our camping trip, but that’s it. I put that in the travel category.
- Cash: $0. We didn’t need to withdraw cash last month.
- Parent: $1,000. My parents are on a trip to Japan, Korea, and Taiwan. I put $1,000 into their account to use.
- Kid: $320. RB40Jr is out of school and we spent quite a bit on entertainment. Mrs. RB40 took him to the zoo. I got new soccer cleats for him. We also spent quite a bit on various summer projects and fun backyard toys.
- Pet: $0.
- Bills: $154. Insurance (auto, home, term life, and umbrella).
- Health: $0.
- Travel: $132. RB40Jr and I went on a short camping trip at the beach. Jeez, even a small trip cost a lot. We had fun so I can’t complain. Travel hacking is a great way to reduce your travel expense.
- Clothing: $190. Mrs. RB40 purchased a nice pair of work pants.
- Entertainment: $94. We ate out twice last month.
- Misc: $10. Mrs. RB40 sent a gift to her cousin.
I don’t count these as personal spending.
- Taxes and deductions: $1,774.
- 401k savings: $2,480. I contributed $1,000 to my 401k. RB40 contributed $1,480 to hers.
- Roth IRAs: $1,000. We contributed $500 each to our Roth IRAs.
- 529 College Savings plan: $0.
- Extra Savings: $3,928. This went into our saving account. It’s nice to have a little extra cushion.
We saved $43,598 so far in 2019. Our current saving rate is 52%. I’ll be very happy if we can maintain it above 50% this year. That’s a very good saving rate.
- Joe’s 401k: $13,000.
- Mrs. RB40’s401k: $8,830
- Roth IRAs: $6,000
- 529 College Savings: $2,865
- Extra savings: $12,903
YTD 2019 saving rate = 52%.
June 2019 Wrap Up
All in all, we had a solid month. Our net worth increased tremendously due to the stock market. We already surpassed my 2019 target, +10% net worth. That’s perfect. Let’s hope the rest of 2019 will be relatively smooth. I’m nervous about the stock market. How long can it keep rising?
On the cash flow side, everything was good. Our June spending was about average. Next month, my parent will be back in Thailand so I don’t have to send them much money. However, my online income will be down significantly. I’m pretty sure it will still work out, though. Our expense is low enough to absorb a few months of lower income. Overall, things are going very well.
How about you? Did you have a good month? Are you making some progress on your New Year goals?
*Sign up for a free account at Personal Capital to help manage your investments. I log in almost every day to check on my accounts and cash flow. It’s a great site for DIY investors.
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Source: Retire By 40
Originally posted 2019-07-01 10:00:05. Republished by Blog Post Promoter