Hey everyone, I hope you are staying safe. 2020 is turning out to be a crazy year. There is one problem after another and we’re not even halfway through yet. Last week, I watched the George Floyd video and it was very upsetting. I support our law enforcement officers, but they need a lot more training in empathy and how to apply force. George Floyd may have made some mistakes, but he didn’t deserve to die. As a result of many recent upsetting events, protests erupted across the USA. That’s understandable because the system needs to change. However, the looting that followed in many cities is making everything worse. In Portland, there was rioting and looting Friday night. The mayor issued a curfew, but the protest continued on Saturday night. Fortunately, there was no looting so that’s an improvement. (Some businesses still got damaged, though.) Hopefully, things will calm down over the next few days. Our leaders need to do their job and make some changes so regular people can trust law enforcement again. 2020 is an impossible year to evaluate if you’re better off than 4 years ago.
On the personal finance side, we did pretty well last month. The stock market regained a lot of ground and our net worth improved. Our cash flow was okay too. Income is down, but we didn’t spend much so it worked out. Actually, it’s tough to write about personal finance with all this stuff going on. But, we need some normalcy too. So I’m doing my routine monthly post to get my mind back on track. I hope you can get back into the routine and stay safe as well.
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.
Many of my goals are screwed up this year. I started out with reasonable goals and I won’t be able to accomplish many of them. That’s life, though. We’ll have setbacks and some years will be harder than others. We need to survive 2020 the best we can and hope for better days ahead. 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 ratiois passive income divided by expense. Once we reach 100% consistently, then we’ll be set to retire in style. This goal is good so far. Our expenses were low and our FI ratio looked great. We’re at 117% so far. I think we’ll be good with this one.
- Saving rate > 50%. This one is really tough because I use gross 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 62% this year. That’s really good. Let’s hope it holds up for the rest of 2020.
- Side hustle income > $5,000. Side hustling income is down to $0. Scooter sharing companies are shuttered and I don’t want to do it anyway. A lot of people need extra income more than we do. We’ll put off all side hustles until the COVID-19 pandemic is done.
Branding (by 40)
- Content creation > 178 blog posts and videos. This is a huge amount, but we’re ahead of the pace. In May, I posted 11 blog posts and 3 videos. That’s not bad at all.
- Refresh RB40. This one is on hold for now. I’ll get back to it once I have more time.
- 1,000 subscribers on Eat by 40! Currently, we have 86 subscribers. This is a slow process that will probably take way more than one year. We’ll keep working on it.
- Visit Thailand + 1. It looks like we won’t be able to visit my parents this year. I’ll put this off until 2021.
- Travel hack 200,000 points. My Alaska Airlines points came in. I’ll probably apply for a new card in a few months. I don’t think we’ll accomplish this goal in 2020. There are too many other problems to deal with this year.
- Update our Will. I haven’t started this one yet. I’m still looking for an affordable option. The lawyers I talked to asked for over $2,500. That seems really high to me, but we really need to get this done.
- Happiness level > 9. My happiness level improved a little bit in May. School is almost over and we got used to homeschooling. The teachers are on furlough every Fridays so that helps a bit. We use that day to catch up on everything. I also cut way back on the news and social media so I’m a lot calmer. At least, until these last few days. Anyway, I’m trying to be calm and not get too emotionally invested in the news. Most of the month, my happiness level was good. I give May an 8. Our neighbor got puppies and they helped a lot too.
Net Worth (-3% YTD)
I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we made. 2020 is a tough year for investors. The stock market crashed in March due to the shutdown. However, it came back a ton in April and May. That’s really crazy because over 40 million workers are unemployed and the economy is in shamble. I don’t understand why the stock market is doing so well, but I’m very glad to be an investor. For 2020, our net worth is down 3%. That’s not bad at all. I just hope we get back to even by the end of 2020, modest goal this year.
Here is a chart of our investment 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 ($16,513 YTD)
Here is a quick summary of our passive income. You can see all the details on my Passive Income page.
Fortunately, our passive income is holding up well. The payout lags the economy a bit so we might have some bad news in the future, but for now, it’s good.
- Real Estate Crowdfunding– One of the apartment projects we invested in completed on 2/29. Whew! The sale went through and we got a nice payout from that one. RE crowdfunding is holding up surprisingly well. You can read more detail here on our RE crowdfunding income page.
- Rentals– We have two rental units and both our tenants have good jobs. For now, they are both paying rent on time.
- Dividend– This one looks good so far, but I’m sure some companies will cut dividends if this pandemic sticks around much longer.
The stock market is priced very optimistically. I really don’t think the economy will recover that quickly. I guess we’ll have to see. IMO, there is more pain to come in 2020.
Our FI ratio looks great so far at 117%. We didn’t spend much and our passive income was good.
*FI ratio = passive income/expense
May 2020 Cash Flow
Our cash flow was good in May. Our income streams were good except for side income. That one will be $0 for a long time. That’s okay, though. Our spending was very low also. That’s probably the only good thing about being in lockdown. We’re spending way less than usual.
This is the Sankey diagram for April. 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 around 50%. May marked the first time our income dipped below $13,000. Our passive income and blog income dropped a bit. Our gross income was $12,246 last month. Let’s see what went wrong.
- Mrs. RB40’s job: $8,518. 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: $2,564. My blog income continued to drop. Hopefully, it will bottom out soon. 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 $4,000 in his Roth IRA now. That’s a great head start in life.
- Rental Income: $456. We had a good month with the rentals. I fixed a few things, but no big bills. Read more at the Rental Property Passive Income page.
- Dividend Income: $662. Our dividend income was slow in May. See more details at my Dividend Passive Income page.
- Real estate crowdfunding: $39. RE crowdfunding was slow last month as well. Three projects have suspended payout so far. We’re still doing pretty well this year because 2 projects completed on time. You can see how we’re doing at the RE Crowdfunding Passive Income page.
- Interest Income: $7.
- Side hustle: $0. No side hustling for a while due to COVID-19.
Monthly Spending (target < $4,166/month)
This year, I plan to spend about $50,000 so our monthly spending budget is $4,166/month. For now, we are way under budget due to the lockdown. Like most families, we’re only spending money on basic goods and minimal luxury items. In May, we spent $2,803. That’s quite good.
- Housing: $1,342. 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: $500. My dad can’t make any money due to the shutdown so my brothers and I sent him more money than usual.
- Groceries: $449. Normally, we spend about $550/month on groceries. We stocked up in March so April looks better than usual.
Here are some of the dishes I made last month. Check them out and subscribe to our channel on YouTube!
This one is a bit harder to make because you need a lot of ingredients, but it is so worth it.
This Thai dessert is so easy to make and it is delicious. You just need to get mango, coconut milk, and the right kind of sticky rice.
We made this in our crockpot – super easy and pretty healthy.
- Travel: $0. Yup…
- Entertainment: $208. We relaxed a bit and ordered takeout from our friends’ restaurants. It’s really tough to be in that business right now.
- Health: $157. Our dental and doctor offices opened in May and we went in for our regular scheduled checkups.
- Bills: $23. My term life insurance payment.
- Transportation: $67. Car insurance. We didn’t drive much and didn’t need to get gas.
- Kid: $43. RB40Jr got a new electric toothbrush and a replacement gear shifter for his bike.
- Pet: $0.
- Clothing: $0.
- Misc: $14. I ordered a few things from Amazon
I don’t count these as personal spending.
- Taxes and deductions: $2,550.
- 401k savings: $3,145. I contributed $1,625 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: $0. We contributed $4,000 earlier this year. I think we’re done for 2020.
- Extra Savings: $2,748. I had to borrow some money from our savings account this month.
2020 Savings ($46,540 YTD)
So far, we saved $46,540. This part is going very well for us. Our expense was lower than normal and we were able to save a huge percentage of our income, 62%. That’s really good.
- Joe’s 401k: $18,500.
- RB40’s 401k: $7,580
- Roth IRAs: $5,000
- 529 College Savings: $4,000
- Extra savings: $11,460
YTD 2020 saving rate = 62%
May 2020 Wrap Up
Overall, May 2020 was a good month financially. Our net worth increased due to our investment. Our cash flow was good even with reduced income. I feel very fortunate to be in this position. I keep thinking our family would have been in big trouble 30 years ago when my parents ran a small Thai restaurant. Luckily, my brothers and I are handling this crisis okay so far. Let’s hope it’s over soon.
How about you? Did you have a good month? Take care and be safe!
Source: Retire By 40