Hey everyone, I hope you’re staying safe and healthy. March 2020 was a tough month for everyone. I feel very fortunate because we’re healthy and still financial independent. Our net worth experienced the biggest drop I’ve ever seen, but I’m not panicking yet. Our cash flow is still okay so we should make it through this pandemic in a good shape as long as we keep healthy. I know many families are struggling. Now is the time to learn about the FIRE movement and get down to the basics. Hopefully, we’ll have COVID-19 under control by the summer. If that’s the case, I think most households will be able to recover financially and start building wealth again. For now, just try to get through this period as best you can.
On the personal side, we were in lockdown most of March. It’s not too bad for us. We have a lot of projects to do and kept busy. I think we’re coping with the lockdown better than most families, but I’ll be happier when this is over. Well, that’s life. You just have to keep going and hope for better days ahead.
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 can’t keep up with your New Year goals. The key is to go over the spreadsheet at least once a month to track your progress. That way, you’ll see which goals need extra effort.
I’m not sure how realistic these goals are now. My wife and kid are home 24/7 and I can’t really focus. I’ll just do my best and see how it goes. It’s okay to have lower expectations for 2020.
- Real Estate Crowdfunding $150,000. Earlier this year, I added $25,000 to our RE crowdfunding investment with CrowdStreet. This will be it for a while because we’re low on cash now. During this pandemic, it’s best to conserve cash. I plan to complete this goal by the end of 2021.
- FI Ratio > 110%. 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. 2020 is going very well so far for this goal. Our expenses were low and our FI ratio looked great. We’re at 129% for the year. Q2 is not looking good, though. I’m sure our passive income will drop with the economy on lockdown mode.
- Saving rate > 50%. This one is really tough because I use pretax income. If you make a lot of money, your tax rate is higher. If you don’t, then your expenses overwhelm the income. I’m sure only a few people can reach 50% saving rate. We’re at 63% so far. That’s really good so far. We’ll see how it goes the rest of the year.
- Side hustle income > $5,000. Side hustling income is going down to $0. Scooter sharing companies are shuttered and I don’t want to do it anyway. I think we’ll have to put this off until 2021.
Branding (by 40)
- Content creation > 178 blog posts and videos. This is a huge amount, but we’re ahead of the pace. In March, I posted 10 blog posts and 3 videos. It was a tough month because we had to adjust to being in lockdown. I think April will be a bit better. All in all, this one is going well.
- Refresh RB40. This one is put on hold while I do taxes. I’ll probably hire someone to do this for me.
- 1,000 subscribers on Eat by 40! Currently, we have 76 subscribers. This is a slow process that will probably take more than one year. We’ll keep working on this one. I’m optimistic.
- Visit Thailand + 1. I’m putting this one on hold for now until the coronavirus problem improves. I’ll tentatively reschedule for November, but we’ll have to see how it goes.
- Travel hack 200,000 points. I applied for an Alaska Airlines card in January and I’m almost done with the spending. We should see the signup bonus next month.
- Update our Will. I haven’t started this one yet. Plenty of time for this one, hopefully…
- Happiness level > 9. March was a terrible month. Our governor closed the schools and ordered everyone to shelter in place. That’s not bad because it’s pretty similar to early retirement to me. However, I’m full of anger and resentment toward the federal government. They’re doing a terrible job with this pandemic. The president fired experts and surrounded himself with yes-men. They are screwing the pandemic response royally and it’s making me crazy. I’ll have to cut back on news and Twitter next month so I can calm down a bit.
Net Worth (-14.9% YTD)
I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we made. At first, I thought the COVID-19 pandemic would pass quickly and it wouldn’t be as bad as the 2008 Great Recession. However, that’s way off base. This is the biggest hit to the economy in my lifetime. Now, I just hope it doesn’t get worse than the Great Depression.
For 2020, our net worth is down by nearly 15%. That’s huge amount. It’s the biggest drop I’ve ever experienced. Luckily, our income is still okay so I’m not too worried yet. Eventually, we’ll recover. I just hope it takes 1-2 years max, but you never know.
Here is a chart of our net worth from 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.
2020 Passive Income ($11,199 YTD)
Here is a quick summary of our passive income. You can see all the details on my Passive Income page.
Our passive income looks good in Q1, but there is trouble on the horizon.
- Real Estate Crowdfunding – Some sponsors are suspending their payout. This is understandable. Lots of people can’t pay their rent right now and the stimulus bill suspended evictions.
- Rentals – Luckily, our tenants have secure jobs so they are paying rent. I spent $1,400 to remove a huge invasive tree so that set us back to the beginning of 2020. The rest of the year should be good.
- Dividend – This one looks good so far, but I’m sure some companies will cut dividends if this lockdown extends much longer.
We’ll just have to wait and see how 2020 turns out. If COVID-19 is under control by June, I think we’ll be fine. Otherwise, it’s going to be a painful year.
Our FI ratio looks great this year. We didn’t spend much in Q1 and our passive income surpassed our expenses.
*FI ratio = passive income/expense
March 2020 Cash Flow
Our cash flow wasn’t great last month. The biggest issue was the rental income. We had a negative month due to maintenance. Also, I stuffed more money than usual into my i401k savings. I had to borrow from my savings account. If the market keeps going down, I’ll max out my 401k contributions next month then take it easy the rest of 2020. Overall, March was okay. April is going to be ugly, though.
This is the Sankey diagram for March. You can get a quick overview here and see the details below.
Gross Income (target > $13,000/month)
This year, our gross income target increased to $13,000/month. If we make this much every month, we’ll be able to save a good amount. I’m optimistic because our blog and rental income are good so far. If these two continue to do well, it shouldn’t be too difficult to meet our income target. In March, our gross income was 13,386.
- Mrs. RB40’s job: $8,690. Mrs. RB40’s job continues to be the pillar of our household income. We could survive without her income, but life would be more stressful.
- Blog Income: $3,691. My blog income was good last month. You can read more details on my Blog Income page. Also, RB40Jr is on the payroll now as a model, YouTuber, and photographer. His income will go straight into his Roth IRA. He has about $3,500 in his Roth IRA now. That’s a great head start in life.
- Rental Income: –$992. We spent $1,400 to remove a huge invasive tree on the property. That set us back to the beginning of 2020. Hopefully, this will be the last expensive maintenance item in a while. I think we should be able to generate about $500/month if nothing goes wrong. Read more at the Rental Property Passive Income page.
- Dividend Income: $1975. Our dividend income was good. See more details at my Dividend Passive Income page.
- Real estate crowdfunding: $13. RE crowdfunding was very slow last month. Some sponsors already notified us that payout will be delayed due to COVID-19. We’ll have to wait and see how 2020 turns out. You can see how we’re doing at the RE Crowdfunding Passive Income page.
- Interest Income: $10.
- Side hustle: $0. No side hustling for a while due to COVID-19.
Monthly Spending (target < $4,166/month)
This year, I want to spend about $50,000 so our monthly spending budget is $4,166/month. March was a good month for us. We spent $2,918. That’s pretty good.
- Housing: $1,253. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, and furnishing. Our housing cost decreased significantly from previous years. We moved into our duplex and we can share some expenses with our tenant. This helps a lot.
- Parents: $400. I’m sending $400/month to my parents to help out with healthcare and living expenses. This year, my brothers are helping out so it should be better than last year
- Groceries: $651. We spent more than usual to stock up a little.
Here are some of the dishes I made last month.
Spaghetti Pad Kee Mao
Lemon bar & Mango coconut rice
- Travel: $12. Mrs. RB40 had a business trip at the beginning of the month.
- Entertainment: $138. We ordered take-out a few times to help support the local businesses.
- Health: $220. Health care stuff.
- Bills: $23. My term life insurance payment.
- Transportation: $123. Gas, maintenance, and insurance.
- Kid: $7. School fundraiser.
- Pet: $20.
- Clothing: $0.
- Misc: $2.
I don’t count these as personal spending.
- Taxes and deductions: $2,880.
- 401k savings: $6,395. I contributed $4,875 to my 401k. Mrs. RB40 contributed $1,520 to her 401k.
- Roth IRAs: $1,000. We contributed $500 each to our Roth IRAs.
- 529 College Savings plan: $2,000. I contributed $2,000 to our son’s 529 plan.
- Extra Savings: -$1,806. I had to borrow some money from our savings account this month.
2020 Savings ($29,721 YTD)
So far, we saved $29,721. This is a great way to start off the year. Our expense was lower than usual and we were able to save a huge percentage last month, 68%. That’s really good.
- Joe’s 401k: $15,250.
- Mrs. RB40’s401k: $4,540
- Roth IRAs: $3,000
- 529 College Savings: $4,000
- Extra savings: $2,931
YTD 2020 saving rate = 63%
March 2020 Wrap Up
Overall, March 2020 was the worst month I’ve ever had financially. Our net worth dropped a huge amount. Our cash flow is still okay so I can’t complain too much. Passive income and blog income are starting to look iffy too. We’ll see how those are in April. I suspect both net worth and cash flow will be worse next month. We should be okay, though. We live frugally and my wife still has a solid job. Other families are struggling a lot more. Anyway, let’s hunker down and get through the next few months.
How about you? Did you have an okay month? Hang in there and stay healthy!
Source: Retire By 40