Highlights and Lowlights
Whew! Here is the last article to close out 2013. We had a great December on all fronts and 2013 was very good overall. Now, I’m ready to face 2014.
- Online Income – We continue to do well with online income and didn’t slow down much in December. I will break down the online income in our monthly newsletter so if you’re curious, sign up with our email list.
- Rental Income - For 2013, we had a small positive cash flow year with our rentals at +$1,163. That’s not great, but I’ll take it. This is a $1,036 increase from 2012.
- P2P income from Prosper was good in December at $156. We didn’t have any defaults and the ROI rose slowly to settle at 8.92% this month. We should be seeing around $80/month on average. In 2013, we made $872 with P2P lending. This is increase of $48 from 2012. That’s expected with no new money going into P2P.
- Dividend and interest income – December is always a great month for dividends. We collected $1087, but January will be much less. For 2013, we made $8,036 from dividend and interest. That’s an increase of $1,245 from 2012.
Net Worth (+25% YTD, +4.9% MTM)
I updated our properties’ values and that gave us a big boost. I only do this a couple of times per year and it’s nice to see the increase. The stock market also had a great year in 2013. The S&P500 increased about 30% and I hope you were a stock investor this year.
Our net worth increased 25% last year and that’s amazing! I hope 2014 will be even better, but I don’t see how we can beat 25%. Actually, I hope to increase our net worth by 10% in 2014. We will need a lot of help from the stock market and the real estate market to achieve that.
If you need help keeping track of your finances, try using Personal Capital to manage your investment and cash flow. 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 has a great Investment Checkup tool. It will help you keep an eye on your asset allocation so you don’t drift too far from your target. I need to sell some US stocks and buy internal funds soon.
Surplus (+$28,254 YTD)
We did quite well with our cash flow in 2013 and had a surplus every month. My online income was much higher than expected and that was a big factor.
Our saving this month is +$2,884.
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: $1,000
- Investment/Slush Fund: +$2,884 = $15,098. All of this went into my solo 401(k).
- 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.
Take Home Income (target > $5,000)
I’m raising our take home income target from $4,500 to $5,000. It’s a small increase and we should be able to meet it.
- Rentals: As mentioned in the opening, the rentals are doing better in 2013 overall. I think the 4 plex is still negative cash flow, though. I will need to sit down and crank the numbers. 2014 should be better for the 4 plex because I don’t think there are any big repairs scheduled. The rental home did well in 2013, but we need to paint both the exterior and interior next year. I also might just sell them off if I can get the right price for them. We’ll see how it goes.
- P2P lending: Our current ROI is 8.92%. I’m still hoping we can raise it to 10% at some point. The income seems to be more stable now. P2P lending also became very passive for me so I’m happy with it. See my last update - Peer to Peer Lending Is A Pretty Good Passive Investment.
- Dividend and interest: We had a nice dividend and interest income year and I will try to increase it even more in 2014. My goal is to eventually hit $10,000, but that might be a couple of years off. For 2014, we’ll shoot for $9,000.
- Online income was good in December (+$2,810.) 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: I redeemed my credit card credit for $57 cash back this month.
Expense (target < $4,500)
We spent $4,040 in December. That’s a little over our old target of $4,000. Our expense budget has been the same for over 2 years so I’m giving us a big raise. I think I’ll give us a 3% raise every year to keep up with inflation from now on.
- Cash and groceries: Next year, I’m going to break out groceries to its own category. We have been using cash at our grocery store so that’s why it’s difficult to keep track of. I’ll use a debit card from now on. Our store don’t take credit.
- RB40 Junior: Kids are not cheap! This month, we paid for preschool, childcare at the gym, and some new clothes.
- Entertainment: I booked us a 3 night stay in a yurt at the beach next summer. This should be a lot of fun.
- Misc: Mrs. RB40 is getting new glasses so she can use up her FSA ($264.) This should be reimbursed next month.
Wrap Up 2013
I think we did very well with our cash flow in 2013. We had positive cash flow every month and we were able to save and invest. Next year, I’m going to revamp this series and do a better job taking taxes and retirement contributions into account. My self employment tax estimate might be a bit low so I’ll need to work on that.
How about you? Did you have a good 2013? Happy New Year!