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October 2018 Goals and Financial Update

October 2018 goalsDid you have a good Halloween? RB40Jr had a great run this year. Check out his candy haul. He went trick or treating in a nice neighborhood and they gave out quite a few full-size candy bars. Wow! I’ve never seen such a nice haul. Many families spent a lot of money on decorations and candy. That’s pretty awesome for the kids. Halloween has never been a big event for us, but I think that changed for our son this year. He’s looking forward to next Halloween already. Anyway, the Holiday Season is almost here. Thanksgiving and Christmas will be here before we know it. Then 2018 will be over…

Are you done with all your 2018 goals? There isn’t much time left. It’s probably best to give up on some and focus on finishing the rest at this point. I’m doing okay on my goals. Check them out.

I’ll go over my 2018 goals first and then share the details of our net worth and cash flow.

2018 Goals

This is my goal scheduling spreadsheet. Last year, I found that I needed to start these goals in the first half of the year. If I wait until summer, they just won’t get done. 2018 isn’t looking too good because the goals are more ambitious than previous years. You can get a quick status update from the chart and see the details below.

2018 goals

Financial Goals

  1. Increase our real estate crowdfunding investment to $100,000. October was a slow month with real estate crowdfunding income. Only one project paid out and we collected just $40.November should be much better. On the funding side, I invested $15,000 in October. However, I don’t think I’ll be able to increase our investment to $100,000 this year. This goal will probably be delayed until 2019. You can read more about my investments at the real estate crowdfunding page. Sign up with RealtyShares and see what projects are available.
  2. FI ratio > 100%. The FI ratio is passive income divided by expense. So far, our FI ratio is 81for 2018. This year is not looking good because our expense is higher than normal due to a major home repair and a pricey vacation. Some years are just harder than others. This year is going to be one of those and we need to learn from it.
  3. Increase bond/cash allocation to 30%. Going to 30% bond/cash will beef up our opportunity fund. This is very slow going because I’m not in a big hurry. Currently, our bond/cash allocation is up to 22.5%. That’s not too bad. The US stock market has been very volatile recently. The bond allocation really helps stabilize our portfolio.
  4. Travel hack 100,000 points. Done! We signed up for some new credit cards and collected quite a few points. These points will come in handy for our vacation next year. It looks like I’ll have to go to Thailand a couple of times in 2019.

Blog Goals

  1. Minor Redesign RB40. Done! This one was really difficult to do. I just didn’t have enough time. It is already tough to write and keep the site running. Anyway, I switched to https, got a new logo, and cleaned up the site a bit. I hope you like the cleaner look. I’ll get a new theme next year to improve the site even more
  2. Blog 12 times at Fit by 40. FAIL! I’m just not motivated to write about fitness this year. For now, I’ll keep FB40 as a test site for the redesign. You can see how I started the site here – How to Start a Blog and Why You Should.
  3. Blog revenue $100,000. This one is going to be very difficult so I’m grading it on the academic scale. Also, I changed the goal from blog “income” to blog “revenue.” Income is after taxes and expenses. Revenue is just gross income. Retire by 40 generated $73,447 so far in 2018. That’s actually really good. You can see more detail on my Blog Income page.

Personal Goals

  1. Join Toastmasters. FAIL! I visited a local club and it was a good experience. However, there are too many things going on right now. My mom needs help with her health. Also, when school was out during the summer, I spent more time with RB40Jr. I just can’t squeeze Toastmasters into my schedule. This will have to be put off until RB40Jr is a lot more independent.
  2. Not paying for leaf removal. Showdown in November.
  3. Consolidate down to one property. We plan to move into our rental duplex and sell off the other 2 properties. This one will definitely take more than one year. I changed the due date to 2020.

Fun Goal

  1. Visit Iceland. DONE! Iceland was incredible. I got some nice pictures so check out my Iceland trip report

Net Worth (+0.7% YTD)

I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we’ve made. 2018 has been uneven for us. The US stock market was very volatile in October and it gave up most of the gains since the New Year. Our net worth is up 0.7% year to date. That’s disappointing, but it happens sometimes. At this point, we just need to stick with our asset allocation, buckle up, and enjoy the rollercoaster ride.

My bet with Warren Buffett – I’ll benchmark our net worth against VFINX for 10 years starting in 2018. VFINX is up 0.7% for the year. That’s identical to our net worth gains. It’s early in the race yet. Also, I haven’t updated our property prices in over a year so that part of our net worth is probably a bit low.

Here is a graph of our net worth on Personal Capital. October was a tough month for investors. Our net worth dropped about $75,000.

Oct 2018 net worth

*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 my accounts and cash flow. It’s a great site for DIY investors.

2018 Passive Income ($42,562 YTD)

Here is a quick summary of our passive income. You can see all the details on my Passive Income page. We had a slow start in 2018 because one of our rentals was vacant for the first 2 months. It’s occupied now so the passive income is looking good. With just 2 months left in 2018, I’m not sure how we’ll do compare to 2017. I think we’ll be at about the same level when it’s all said and done.

2018 passive income

The only trouble spot now is P2P lending. We’re seeing more defaults and the interest payments aren’t enough to overcome the hits. If we reinvest in P2P lending, it would look better. However, I like real estate crowdfunding much more so I’m investing new money there.

October 2018 Cash Flow

Our cash flow was pretty good in October. My online income was a little lower than average, but not too much. Everything else looked good. Our expense was also lower than usual. I also saved extra in my i401k during the market dip. I maxed out my i401k contribution (JOE add link.) for 2018 and I can relax the rest of the year. You can see the detail below.

Here is the Sankey diagram for a quick overview.

October 2018 Sankey diagram

Take Home Income (target > $10,000)

For 2018, our monthly take-home income target is $10,000. We didn’t meet this goal in October. Our take home was much lower than usual, $5,905 after taxes and retirement savings. (I had to put retirement savings in the expense column in the Sankey diagram.) This is due to the extra-large 401k contributions I made. I contributed $6,000 to my i401k in October.

  • Mrs. RB40’s paychecks: $5,415.
  • Blog Income: $5,957. You can read more details on my Blog Income pageRB40Jr 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: $899. All our rentals are occupied and we didn’t have any big repairs last month. Next month will be worse, though. The stove stopped working and I’ll have to purchase a new one. Read more at the Rental Property Passive Income page.
  • Dividend Income: $1,377. More details at my Dividend Passive Income page.
  • Real estate crowdfunding: $40. We’re finally getting some traction here. Read more at my Real Estate Crowdfunding Passive Income page.
  • Prosper P2P lending: –$21. P2P lending isn’t doing so well this year.
  • Interest Income: $28.
  • Misc: $640. I got a deposit back from the dentist. We decided to fix my mom’s crown in Thailand instead of in the US.

Monthly Expenses (target > $4,800)

For 2018, our monthly spending budget is $4,800/month, an increase of $300 from 2017. This does not include contributions to 401k, Roth IRA, and college savings. This year has been really tough and we went over budget many times already. We did really well in October, though. We spent $3,865. That’s well under our budget. It’ll be tough to keep this up with the upcoming holiday season.

  • Housing: $2,386. Our housing expense is getting too high. This category is over 50% of our spending most months. This includes mortgage, HOA fees, and property taxes.
  • Groceries: $461. We spent less than average on groceries this month. Here are some of the dishes I cooked.

pizza Spicy Thai shrimp salad

Pizza! Fall is the perfect time to make pizza at home. The oven helps warm up the living area and the place smells great. Spicy Thai Shrimp Salad – Mmmm… I love spicy Thai salads. This one was salty, sweet, sour, and fresh. It’s really easy to make too.

butter chicken, dal, chickpea curry

We’re trying to eat more vegetables so I tried to cook more Indian dishes last month. The Butter Chicken turned out really well. Mr. Tako’s recipe is really good. Smooth and delicious. The Chickpea Curry and Dal were really good too.

enchiladas

Mrs. RB40 made enchiladas and salad with avocado dressing. Follow me on Instagram if you’d like to see more of my unglamorous early retirement lifestyle.

  • Transportation: $317. We share one car and we usually don’t drive much. I got an oil and automatic transmission fluid change so it was an expensive month in this category.
  • Kid: $146. This includes basketball practices and league fee at the community center, new pants, PTA fund raising, and a doctor bill.
  • Pet: $0.
  • Bills: $230. Electricity and insurance (auto, home, term life, and umbrella.)
  • Health: $26. Gym membership fee.
  • Travel: $242. Mrs. RB40 went to visit her parents in CA.
  • Clothing: $45.
  • Misc: $1. Mrs. RB40 ordered a few photo printouts.
  • Tax: $1,000. This is for my blog income. Estimated tax is about $3,000 per quarter this year.
  • Pre-Tax Savings: $7,430. I contributed $6,000 to my 401k. Mrs. RB40 contributed $1,430 to hers.
  • Extra Savings: $2,039.

2018 Savings

We saved $88,752 so far in 2018. Our saving rate this year is around 54%. That’s really good. (The savings rate is savings divided by total income.) However, it’s actually a bit depressing. Our net worth is about the same as it was in January. We saved a lot this year, but our net worth didn’t increase much. It’s like running in place. This happens sometimes when the stock market is volatile. Oh well, we just have to keep investing.

  • 401k: $38,129
  • Roth IRA: $11,000
  • 529 college savings: $4,600
  • Extra savings: $35,023

Some of the extra savings was used to pay tax to the IRS in April. The rest is invested in real estate crowdfunding.

October 2018 Wrap Up

All in all, October was a good month. Our cash flow was excellent and I finished contributing to my 401k. However, the stock market was volatile. Our net worth dropped almost $75,000 last month. I was too busy so I didn’t really notice it until I crunched the numbers for this post. Oh well, easy comes easy go. It’s actually better to ignore the short term stock market gyration. You won’t be tempted to pull the money out after a big drop. If you already have a solid strategy, then the best thing you can do is to let it ride.

Did you have a good October? Thanksgiving is coming up really soon. The turkeys are already available at our grocery store. It’s time to finish up all your goals. There won’t be much time left after November. Good luck!

*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.

Disclosure: We may receive a referral fee if you sign up with a service through the links on this page.

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