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August 2013 Goals and Financial Update

by retirebyforty on September 3, 2013 · 53 comments

in cash flow

August Highlights and Lowlights

Summer is almost over. :(

  • No new clothing challenge – Oh no! I purchased a new pair of sneakers from the Adidas employee store. It’s for next year after my current pair wears out though, so I don’t feel too bad about it.
  • Online Income – We had a great month in August. I will break down the online income in our monthly newsletter so if you’re curious, sign up with our email list.
  • Rental Income  – Finally a positive month! (+$1,304) We had 4 negative months in a row and we still have a lot of ground to make up. Hopefully, we’ll be able to continue the positive cash flow until at least the end of 2013.
  • P2P income from Prosper was very good in August at $172. The ROI is currently at 9.45% and we should be seeing around $80/month on average.
  • Dividend and interest income –  Came in pretty low at $171. September should be a lot better just because of the payout schedule.

Net Worth (+15% YTD, -1% MTM)

The stock market went down quite a bit in August (SP500 -4%.) Our net worth took a hit along with the stock market and we are down for the first time in 2013. It’s just -1% month to month though so it’s not so bad. I’m quite happy with our YTD progress so far and hopefully we can maintain at least 15% for 2013.

If you need help keeping track of your finances, try using Personal Capital to manage your budget and net worth. It can help you keep track of your income, expenses, and net worth, all in one place. Personal Capital is geared for investors and has many great tools. See my review of Personal Capital and how they helped me reduce what I’m paying in investment fees.

Personal Capital can help you keep track of how your investment is doing VS the indexes.

Saving (+$13,120 YTD)

Our expense was high in August, but our income was very good as well so it worked out.

Our saving this month is +$2,379.

Piggy Bank 2013

  • Earmarked for the 529: $0. We contributed $10,000 to RB40 Junior’s 529 fund, so we’re done with this one for the year.
  • Travel fund: $0. We are pretty much done with our travel this year.
  • Fun money:  +$160 = $1,000
  • Investment/Slush Fund: +$2,219 = $5,321
  • Taxes$2,666. We are done with taxes until next April. From my estimate, we probably need to send in around $1,000 next year.

Cash Flow

Income (target > $4,500)

On the income side, we had a great month. The big difference is the rental income. If we could have more positive rental income months, we’d be set.

  • Rentals: Finally, we had a month with minimal repair and maintenance. I spent $54 to fix a broken fence post and that was it. September will be more expensive because I’m doing more exterior maintenance work.
  • P2P lending: Our ROI rise to 9.45% last month. We didn’t see any defaults in that period (July)! That’s amazing and I know it won’t last. It would be great if we could rake in $172 every month. I think the next statement could be bad, though. There have been more defaults recently. Here is the last update – Peer to Peer Lending Is A Pretty Good Passive Investment.
  • Dividend and interest: August was a very slow dividend month. September should be much better.
  • Online income was great in August. My goal was to make $18,000 online in 2013. After 8 months, we netted about $19,300. Woohoo! The rest of the year is just gravy. Thank you for supporting us and signing up for products I wrote about. I will break down the income in the monthly Retire By 40 Newsletter, so sign up now if you haven’t yet (at the top of this post.)
  • Misc income: Pretty quiet this month. I just got $100 from my brother to help out with my parents visiting costs.

Expense (target < $4,000, not including tax)

We went over $4,000 this month and RB40 Jr. didn’t even start school yet. It’s time to figure out how to get our expense under control again. We did have a couple of surprises. Mrs. RB40 spent $255 to attend a memorial service in CA. I paid $150 for a prescription for my mom.

Cash and groceries: This is quite high for August. I made a mistake and gave us an extra $100 allowance, and Mrs. RB40 didn’t mention it. We also spent a lot on food because my parents are visiting. We’ll try to get it down to around $800 in September.

Transportation: We filled up just once in August for $40. At least this is under control.

RB40 Junior: No expense this month! Amazing! No diapers, no wipes, no toys, no clothes, no shoes, no extra hospital bills, and no daycare/preschool. This is it though. Next month, we’ll have $505 for preschool here.  We also need to get him a raincoat.

Medical: My mom was prescribed a super expensive eye drop at $150. Man, that’s expensive for 2 oz.

Entertainment: $46.5 for sushi. I ran out of allowance and had to use the credit card.

Misc: Mrs. RB40 flew to CA to attend a memorial service. I spent $40 on the pair of running shoes.

Wrap Up August

Our expense was higher than usual this August, but luckily our income was high, too. I’ll work on our expense in September and hopefully we’ll get back under $4,000.

How about you? Did you have a good month? Any progress on your New Year Goals and Resolutions?

{ 53 comments… read them below or add one }

[email protected] September 3, 2013 at 2:16 am

Joe,
Congratulations on your online income. I know your rental property has been a big negative for you but it looks like its cash flowing again. Are you still planning to sell it? I love rentals and thankfully I have avoided major issues.

I linked to your retirement article on my latest post. Hope you had a good weekend.

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retirebyforty September 3, 2013 at 9:16 am

Thank you for the link. I’m planning to keep it for a couple more years. This year hasn’t been great, but I’m hoping we’ll see a big turn around next year.

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The Financial Blogger September 3, 2013 at 2:36 am

August was a terrible month in term of expenses for us. We had to invest for opening a daycare at home (starting today! yipee!) and this included not only daycare expenses but buying furniture for our kids bedroom (moving #3 with #1 ;-) ). On top of that, August was also the month of our vacation… so I rather not look at my credit card balance and wait until we cash some checks from the daycare! hahaha!

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retirebyforty September 3, 2013 at 9:16 am

The daycare investment will payoff soon. Good luck!

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The Warrior September 3, 2013 at 5:06 am

Congrats on having such a great month online income wise. Looking forward to seeing the numbers in the newsletter.

The Warrior
NetWorthWarrior.com

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Amanda L Grossman September 3, 2013 at 5:08 am

Great job on the positive rental income! I had a good month online as well.

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Holly@ClubThrifty September 3, 2013 at 5:23 am

August was expensive for us due to some unexpected car repairs. Fortunately, our income was enough to still have a decent month. I’m ready for fall =)

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retirebyforty September 3, 2013 at 9:18 am

I’m ready for Fall too. It should be a little cheaper.

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Holly@ClubThrifty September 4, 2013 at 4:55 am

I hope so. Summer absolutely sucked for our budget. I’m ready to get back to a normal life!

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Mom @ Three is Plenty September 3, 2013 at 6:09 am

Good work on the positive rental income!

Depending on what the eye drops were for, there may be cheaper options. Daughter Person kept getting pinkeye and passing it to me for a while – the first antibiotic eye drops I got were $150 *after* insurance paid part of them, after complaining to the doc, the second set of drops were $4 at Target. If she’ll need to take them again for some reason, see if there are cheaper options.

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retirebyforty September 3, 2013 at 9:19 am

Yeah, the doctor doesn’t think about the cost of these prescriptions. She only has to use it once though so we’re done with it.

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Mr. Utopia @ Personal Finance Utopia September 3, 2013 at 6:38 am

Awesome job surpassing your full 2013 online income goal just in just 8 months. You’ll have to set the bar higher next year!

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retirebyforty September 3, 2013 at 9:24 am

Thanks! We’ll see what happens next year. A 25% raise would be great.

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Insourcelife September 3, 2013 at 6:45 am

Another solid month. Glad to see that your real estate venture is bringing in some long needed positive cash flow!

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MonicaOnMoney September 3, 2013 at 7:07 am

Awesome job on the rental income! I’m working on my goal of paying down my mortgage in 10 years (hopefully sooner but that’s the plan for now!!).

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retirebyforty September 3, 2013 at 9:24 am

That’s a great plan. Good luck!

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Michelle September 3, 2013 at 7:42 am

Good job on your income, and good job with your online income! August was good for us too.

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Dear Debt September 3, 2013 at 7:56 am

Great job on the income! Yikes on those eye drops. Ouch. My income was very good as well, and debt payoff was good. Trying to keep the momentum going!

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retirebyforty September 3, 2013 at 9:25 am

Great job. Keep it up!

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Pretired Nick September 3, 2013 at 9:30 am

Looks great, man! My August was so bad from an expense perspective I don’t even want to talk about it! Yikes!

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retirebyforty September 3, 2013 at 1:51 pm

Probably the 4 plex huh? Hope September is better.

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Andrew@LivingRichCheaply September 3, 2013 at 10:35 am

My wife and I bought adidas sneakers at the clearance rack of an outlet for under $20…they were nice sneakers…it pains me to pay more for sneakers even though I know that that was a rare find. My wife wasn’t working this summer after the baby came so we took a hit, but we didn’t really spend too much either as we mostly stayed home. I did have a bachelor party…I’m the best man…so that was an expensive night…
You’re doing great with the online income…I’d be happy if my online income (0) covers hosting costs!

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retirebyforty September 3, 2013 at 1:52 pm

$20 is CHEAP! It’s hard for me to find sneakers at the outlet. They are always out of my size. Keep working on it, the online income will get better with time. Good luck.

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Dennis September 3, 2013 at 11:17 am

I’m sure you have covered this somewhere, but can you remind me how you manage the “Piggy Bank” ? e.g., 529, Travel fund, Fun money, Taxes

I am retiring next year and imagine having a few similar categories (perhaps adding “House Maintenance” to ensure funds are available for big house repairs).

Do you do this with cash in envelopes, multiple bank accounts (real or virtual) ?

thanks

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retirebyforty September 3, 2013 at 1:53 pm

Actually, I just keep track of it here on the blog. :)
It’s all in the saving or investment account in real life.

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Mike September 3, 2013 at 4:19 pm

Sounds like you are getting started! I’ve just been able to hit my first $500 month and plan to keep growing to it. I also am starting to contribute a little to a Roth IRA since I am now 25/26. It won’t be much at first, but hey, it has to start somewhere!

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Don September 3, 2013 at 4:21 pm

contributed $10,000 to RB40 Junior’s 529 fund! what a great start!

About 5 years ago, I put in $2,000 into my son’s 529 plan by mistake, and skipped the following year because I “put in so much” ha… Now each year I put in about that much, and I expect to put away much more in the future.

Start out at 10k at such a young age is awesome! nicely done!

Thanks for sharing your info, it was a good read.

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retirebyforty September 3, 2013 at 11:17 pm

I’d like to build up the 529 to about $50,000 in a few years and then I’ll slow down after that.
College is going to be so expensive…

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Chris September 5, 2013 at 7:04 pm

Joe, I presume you’ve already maxed other pre-tax investment types for you and MrsRB40? I think that you do, but I know that if it were a choice between 529 for the kiddo, and Roth for both of you and/or 401K, I’d go with the latter, only because the 529 shows up for the child when the request any loans for education (although I know you’ve got a lot more time than I do prior to college days).

Congratulations on a pretty darn good month! :-)

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retirebyforty September 5, 2013 at 11:46 pm

Mrs. RB40 already maxed out her 401k and Roth IRA. I haven’t contributed to 401k yet this year. I’m going to open a solo 401k and need to get it done soon.

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Dividend Mantra September 3, 2013 at 6:23 pm

Joe,

Great month! Glad to see the rental property came out alright this month. I know you’ve had a rough go of it so far.

Awesome job on the online income! I’d love to be anywhere even close to that. That’s fantastic!

I’m also looking forward to the dividends in September. Should be a record. :)

Best wishes!

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retirebyforty September 3, 2013 at 11:18 pm

Thanks! I’m sure your online income will keep increasing. You’ve got a great blog.
September and December should be very nice. I’m looking forward to them too. :)
Good luck to you as well.

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Jane Savers @ Solving The Money Puzzle September 3, 2013 at 6:40 pm

My numbers have been too depressing to look at all summer. Debt grew and savings shrunk.

Is there a limit on how much you can put in the education fund every year? In Canada the government will provide a match percentage in to an RESP (registered education savings plan) for each child. You can get between $400 and $500 for each child free from the government every year but millions of families choose not to participate and let free money pass them by.

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retirebyforty September 3, 2013 at 11:19 pm

You can put as much as you’d like in the education fund, but you only get to deduct about $4000 in tax. No matching. :(
Hope things turn around for you soon.

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One Cent at a Time September 3, 2013 at 7:07 pm

$19k in 8 months, Joe I am jealous! On my proper I am only earning little over 6% in first three months. Are you holding B and C category notes too?

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retirebyforty September 3, 2013 at 11:20 pm

I have all categories. 6% is not bad, but even the A notes default so it will go down a bit. Good luck!

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C. the Romanian September 3, 2013 at 10:47 pm

Congrats on finally getting that positive rental month! That must feel pretty sweet after the past few months. Also, your online income is really nice and I am sure it is a big factor of your net worth increase. Things are looking great!

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retirebyforty September 3, 2013 at 11:20 pm

It feels great to see a positive month with the rentals. I hope we can keep it up for the rest of this year.

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moneystepper September 3, 2013 at 11:12 pm

It seemed like an expensive month regarding outgoings, and a bit of a kick from the stocks.

However, very impressive online and rental income made it look like a pretty good month.

If you can get that annual growth up to 20% by year-end (which you are on course to do), a 20% annual growth in net wealth will certainly put you in a good place in a few years!

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retirebyforty September 3, 2013 at 11:22 pm

Yeah, we need to control the expense a bit better. I think it should be better in the Fall.
At this point in life, I would be extremely happy with 10% annual growth. :)

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Little House September 4, 2013 at 6:56 am

Congrats on your progress so far this year! I think I’m moving in the right direction on mine, but I really need to revisit my goals again (good thing I blog about them, or I’d totally forget what I said I’d do!)

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retirebyforty September 4, 2013 at 3:18 pm

I had too many things on my list. I’ll keep it small and simple next year.

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Evan September 4, 2013 at 8:56 am

August was not a great month for me – the drop in equities destroyed any gains lol

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Squirrelers September 4, 2013 at 10:59 am

Very good month for you Joe, congrats. Nice side income. Hope you’re not feeling too bad about the $46 for sushi, as you can afford it :)

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retirebyforty September 4, 2013 at 3:19 pm

I’m not guilty at all. That’s takeout sushi for 5 people. :)

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Buy & Hold Blog September 4, 2013 at 12:38 pm

Nice write-up detailing your expenses and savings. It helps readers like me to see how we’re doing. Keep up the good work. I’ll have to check into Personal Capital you mentioned in the post. I’m using Mint right now, but don’t want to change it.

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Jacob @ Cash Cow Couple September 5, 2013 at 1:43 pm

Love how thorough this was. Congrats on the whole thing, it appears you and the family are doing quite well. Keep up the great work, it’s inspiring!

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retirebyforty September 5, 2013 at 11:44 pm

Thanks! I’ll work on cutting the expense next month.

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davidmichael September 7, 2013 at 9:03 am

Thanks Joe for introducing me to P2P Lending. Our savings account is getting a slim 0.85% and IBonds are 1.18%. Not much happening with our cash bucket as a result. Will test the water soon with our first foray with $2500 for 100 loans at $25 to spread the risk at Prosper.

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retirebyforty September 7, 2013 at 9:53 am

Good luck! Read some articles at lendacdemy.com for some tips on how to screen good loans.

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My Own Advisor September 8, 2013 at 5:52 pm

Wow, great online income!!

Cheers,
Mark

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davidmichael September 14, 2013 at 9:44 am

Joe,
Can you review how you invest at Prosper. Do you use the Automatic Investing Program?
And, what filters do you use? And, levels (AA-E, etc) Glad to see you are doing well there.

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retirebyforty September 14, 2013 at 12:40 pm

Sure, I will write a post on that soon.
It’s almost the same as what I had at the bottom of this post.
http://retireby40.org/2013/02/peer-peer-lending-passive-thought/
I do use the automatic investing program. I’m investing in B to E right now.

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