Well, February came and went in a hurry. Did you have a good month? How are you doing with your New Year’s resolutions? February is a particularly tough month for resolutions because 80% of them will fail by this time. Don’t give up yet, though. Once you make it through February, it should become a habit and the rest of the year will be easier.
Fitness goals in particular are tough to keep going. I notice that the gym is almost back to normal now. The New Year crowd has cleared out! However, I finally got on a roll and I’m doing very well with my fitness goals. Check out my pull up video below at the fitness goals. This was the most consecutive pull ups I’ve ever done. The form could be a lot better, though. Anyway, the point is – don’t give up on your New Year resolution yet. You might need to refine it a bit, but you need to commit and stick with it. On a side note, starting a blog to keep track of my new fitness goals has been amazing. It’s keeping me committed similar to blogging at Retire by 40, and this is the best start I’ve had in years. We’ll see if I can keep improving on my fitness throughout 2017.
On the financial front, things are going very well also. Our active and passive incomes were rolling in and our expenses were lower than average. That was partly due to the bad weather. We just hunkered down and didn’t do much. The days are starting to get warmer and longer so our expenses will probably increase soon. I’m really ready for nicer days, though. Okay, let’s go over my 2017 Goals first and then see how we did with our cash flow in January.
At the end of February, the year is 17% over. It’s still early and everyone should still be working on their goals.
This is my goal scheduling spreadsheet. Things are getting pushed off already, that’s not good. At least, I checked off one item. You can get a quick status update above and see the details below.
- Save $50,000 in our tax advantaged account – We’re doing very well here and saved $8,039 so far.
- Dividend Income $11,500 – I’ll update our passive income post next week and you can see the details there. In 2017, we received $1,581 in dividend so far.
- FI ratio > 78% – This is passive income/expense. Currently, our FI ratio is at 72% so far in 2017. That’s a bit lower than I’d like, but we’ll have a better picture at the end of the quarter.
- Net worth gain > VFORX – Our net worth gained 3.8% so far in 2017. This is 0.5% behind the 2040 target fund.
- Move RB40Jr’s 529 plan to Vanguard – I’ll have to put this off until after we’re done with taxes.
- Move Mrs. RB40’s IRAs to Vanguard – I’m putting this one off, too.
- Online income > $36,000/year – We’ve been doing very well this year and made $11,661 over the first 2 months of the year. This is great, but online income can be up and down. We need to work hard now before the slowdown in the summer.
- Redesign Retire by 40 – This one is a huge job and I’m not quite ready to start yet… I’ll put this off until May.
- Pinterest > 25,000 visits – I’m trying to grow traffic from Pinterest. We are a quite a bit behind the target at the moment. I’ll have to keep working on it.
- Fitness – February was a great month for fitness. I finally got into the groove and have been exercising almost every school day (when RB40Jr isn’t around). My averaged steps per day was ~7,600 steps which is better than my goal of 7,000 steps/day. I give myself an A in February. I also met my goal of doing 15 consecutive pull ups! Well, my form deteriorated badly in the 2nd half so I will need work on it for the rest of this year.
- Start a new site – Yes! I started a new site with a focus on fitness – Fit by 40. There isn’t much traffic, but that’s okay for now. I’m using this one mostly for personal improvement.
- Join Toastmasters – This one is schedule for the 2nd half of the year.
- RB40Jr’s after school programs – We just signed RB40Jr up for Wushu lessons (Chinese martial art). He is taking 2 lessons a week for 3 months. We’ll probably cut back to just once per week when the weather improves and there are other fun things to do.
- See the total solar eclipse – I reserved a campsite at the beach. We’re set for August.
- National Park – I’m not sure if we can accomplish this one in 2017. I’ll have to reserve a campsite soon before they are all booked up.
- International Trip – We plan to visit Cancun around November. It should be a cheap trip because we have plenty of reward points to use on flights and accommodations.
Whew! I have too many goals this year, but we just need to keep working on them. I’m pushing off the hard stuff already so that’s not a good sign. The most daunting goal is to redesign Retire by 40. It will be a lot of work and I’m not looking forward to it at all.
Net Worth (+3.8% YTD)
I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we’ve made. For 2017, I’ll make it simple and try to beat the Vanguard Target Retirement 2040 Fund, VFORX. Their current allocation is about 88% stocks and 12% bonds. I think this is a good measuring stick and we should be able beat it.
Our net worth increased about 3.8% so far in 2017. That’s really good, but VFORX did even better and gained 4.3% over the same period. The stock market is doing really well this year. We are a bit behind VFORX, but I’m still very happy with our progress. Our net worth gained about $85,000 since the beginning of the year. I can’t complain about that.
If you need help keeping track of your finances, try using Personal Capital to manage your investment accounts. We have many accounts and Personal Capital helps us see the big picture quickly. Also, I’m a huge fan of their awesome retirement calculator. You can read my review here – The Best Free Retirement Calculator.
February 2017 Cash Flow
We had another very good month financially! January was exceptional, but February was really good, too. Our income was higher than average and our expenses were lower. That’s a great recipe for building wealth. Let’s go over the details.
Take Home Income (target > $5,000)
Our take home income target is $5,000 and we came in above that in February at $8,401. Our income streams were all rolling in and we just need to keep it up.
Mrs. RB40’s paycheck: $5,408. Mrs. RB40 is doing very well at her day job. She got a raise and she is bringing in very good income. That’s one reason why she doesn’t want to quit working full time yet. She also doesn’t want to deal with health insurance uncertainties at this point. The employer sponsored health plan is working really well for us.
Rental income: $886. Our rental income was good. I had to fix quite a few things, but they were all things I could do. I replaced a kitchen faucet, caulked 2 bathtubs, repaired a light fixture, and replaced a few light bulbs. The routine maintenance took time, but didn’t cost that much.
Online Income: $5,745. We had another great month with online income. This year I’m focusing on increasing our income so Mrs. RB40 can retire sooner. I’m adding more affiliate links and focusing on writing relevant articles that will be helpful to investors. Here is how we generated online income last month.
- Banner ads: $1,894. These are the banner ads you see on Retire by 40. Q4 is the best period for banner ads and we’re starting to see some slowdown in this area.
- Affiliates: $3,585. These are referral fees from affiliate links. If a reader signs up for a service through our links, then we sometime earn a referral fee. You can see an example from the Starting a blog post below. It seems Q1 is really good for affiliate income. Maybe everyone was making New Year resolutions and they’re trying to improve their finances? This will slow down quite a bit in the summer.
- Brand promotion: $880. I worked with 2 companies to promote their brands.
- Expenses: -$516. Internet, email service, CDN, cell phone, hosting, meals, nutrition supplements, etc…
Starting a blog is a great way to build your brand and generate some extra income. Also, you may notice that I wrote off nutrition supplements in the blog expense above. This is because I’m writing a fitness blog and these are work related. (I may need to consult a business tax expert about this…) Thank you for your support!
Dividend income: $689. Dividend income is usually lower in the 2nd month of the quarter. We’ll get a better picture at the end of the quarter.
Crowdfunding: $51. This is a bit low.
- P2P lending: $51. I’m slowing getting out of P2P lending. I just don’t think they will do well when the economy turns south.
- KickFurther: $0. I invested about $1,300 at Kickfuther. Kickfurther is similar to P2P lending, but investors lend to small businesses instead of individual borrowers. The big difference here is the money will be used to fund inventory. The investors own the inventory and we can vote to liquidate the inventory if the business can’t sell it. You can read more about them next week when I go over our passive income.
- Realty Shares: $0. I just funded my first deal at RealtyShares. It’s a commercial property in Arizona. I started with $8,000 and I’ll probably add more if I see a good deal. The Arizona deal is still pending so we haven’t received any payback yet.
Pre-tax savings: -$4,390. I sent $3,000 to my solo 401k. Mrs. RB40 saved $1,390 in her retirement account.
Expense (target < $4,500)
Our monthly expense target was $4,500 per month and we spent just $3,673. We had another cold and wet month so we mostly stayed home and didn’t go out and spend money. The only exception is RB40Jr’s birthday party. We took eight of his closest friends to play Laser Tag and arcade games. We spent nearly $200 and I feel that’s too much. Next year, we’ll have a small party at home and they can play video games on TV instead. Oh well, live and learn.
Housing: $2,289. This includes the mortgage, HOA, and property tax. Housing is a huge part of our monthly expense. We may have to move to a cheaper location to reduce this expense.
Cash Allowance: $0. We didn’t take any cash out last month. We’re almost completely out now so we’ll need to drop by the ATM this month.
Groceries: $469. This is pretty good for a family of 3. Our kid doesn’t eat much.
Transportation: $50. This is gasoline and car maintenance. I just filled up twice in February.
Kid: $209. RB40Jr’s birthday party. Next year, we’ll just buy the new Nintendo and the kids can play at home…
Bills: $269. Electricity and insurance (auto, home, term life, and umbrella).
Entertainment: $26. Gym membership fee. We went out a couple of times, but we discussed the blog so that’s a business expense. This is another reason why everyone should start a blog. 8)
Travel, Clothing, Misc: $88. Mrs. RB40 went to Hawaii on a business trip and brought back Kona coffee and chocolate macadamias. Unfortunately, we didn’t plan well and didn’t go with her. Next time…
YTD Extra Savings: $14,315
February was a very good month and we saved $4,728. Our income exceeded our expenses again and it is great! This is when you feel rich, when you have plenty of positive cash flow. So far in 2017, we saved $14,315 extra. This is already more than the whole 2016 so we’re doing really well this year. Now I can contribute to our Roth IRA early and get them out of the way. I’ll try to do that in the next few weeks.
Can Mrs. RB40 retire?
This is a new section I’m adding for 2017. I want to see what happens if Mrs. RB40 stops working full-time. Basically, I will remove Mrs. RB40’s income from our spreadsheet and stop contributing to our tax-advantaged accounts.
Drum roll please … for February 2017, Mrs. RB40 could retire early! We had a great month and it would be awesome if we can continue this for the rest of the year.
If we remove Mrs. RB40’s income from the spreadsheet, we’d still be ahead $3,711 in February. This is due to our excellent online income in February. Hopefully, we can keep it up for the rest of 2017. We’ll see how things look after the summer slowdown.
February 2017 wrap up
We had another very good financial month at the RB40 household. Our income streams were firing on all cylinders and our expenses were low. March is looking good too so Q1 should be excellent overall. We haven’t had great financial months like this since I was working full-time so this feels good. Now, on to March! Ugh, I’ll have to do our taxes…
Did you have a good February? We are doing well financially, but the winter is really getting to me. I’m very cranky and I get mad easily after such a long winter. We are all ready for nicer weather.