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January 2014 Goals and Financial Update

by retirebyforty on February 3, 2014 · 34 comments

in cash flow

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January was quite busy and the year is flying by already. Let’s go over our 2014 New Year resolutions first. Going over them at the beginning of every month will enable me to see how we’re doing and keep the momentum strong. 1) Invest $50,000 in tax advantaged accounts We saved $3,300 and we are about 6.6% toward our goal

  • Mrs. RB40 401k: +$1,450
  • My solo 401k: +$1,450 I will break down the business income and expense in our monthly newsletter so if you’re curious, sign up with our email list.
  • RB40 Jr’s 529: +$400
  • Roth IRA: $0

2) Generate $12,000 in passive income We made $1,194 and we are at about 10% to our goal.

3) Generate $50,000 from my online business. January was a great month and we are already about 15% toward our goal. I will break down the online income in our monthly newsletter so if you’re curious, sign up with our email list. 4) Get Leaner I’m trying to reduce my body fat percentage from 20% down to 17%. Right now, it is at about 19.2%. That’s not bad at all, but I know it’s easiest at the beginning. It will get much more difficult as I get leaner. BTW, I only lost about 2 lbs. Losing weight isn’t my focus this year. 5) Travel Take a family trip to Hawaii. We are in the planning stages for our trip. We’ll probably go in late April. 6) Blog Goal My goal last year was to surpass 100,00 pageviews in a month. I thought we wouldn’t make it, but we got a big boost from Yahoo and NPR at the end of December and went over on New Year’s Eve! Talk about cutting it close. This year I’m trying to exceed 120,000 pageviews/month. In January, we had about 112,000 pageviews so we are off to a good start.

Net Worth (-2% YTD, -2% MTM)

The stock market didn’t have a very good January and our net worth followed suit. The stock market can and will be volatile so you have to stick your target asset allocation and not panic when a correction occurs. The key is to keep investing and you’ll turn out fine in the long run. I’d like to see 8-10% increase in our net worth for 2014, but we’ll see how it goes. If you need help keeping track of your finances, try using Personal Capital to manage your cash flow 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 manage your cash flow

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.

Cash Flow

Need help managing budget?Take Home Income (target > $5,000)

Our take home income is quite a bit higher than usual this month at $9,860. A couple of my online income checks were late in 2013 due to some technical issues and they finally came in.

  • Mrs. RB40’s Paychecks: It doesn’t look like much because she is paying for our medical coverage, maxing out her 401k, contributing to our FSA, and deducting child care credits. This income is dependable which is a big plus in uncertain times.
  • Online income: My take home was really awesome at $5,991 this month. That’s already excluding tax withholding, retirement saving, and 529 saving so it’s quite nice. Those 2 big checks really boosted the number up. I will break down the online income in our monthly newsletter so if you’re curious, sign up with our email list.
  • Dividend and interest: January is always a slow month with dividend payments. Not much excitement here.
  • 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 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.
  • Rentals: The rentals are doing well so far in 2014. If we can keep this up, it’d be great. However, we have some big expenses this year as usual. The rental home needs new exterior paint and the lease is up in May.
  • Misc income: Returned something to Target and got $11 back.

Expense (target < $4,500)

We spent $3,551 in January. That’s well within our target of $4,500. We didn’t have any big line items like Christmas so that was nice. This month I used Personal Capital to track our expense and it worked pretty well except the housing expense. We pay property taxes once a year, but I want to show it on our monthly housing budget so I manually add that in. Housing: $2,163. Mortgage, HOA, and 1/12 property tax.

Manage your household cash flow

Our January expenses, excluding housing.

Cash allowance: $500 for discretionary spending. That’s actually not much for 2 people. $50 per week cash allowance each plus $100/month to Mrs. RB40 for editing. Groceries: $420. This is actually about 30% more than we usually spend on groceries because we are eating more organic food in 2014. Insurance: $188. That’s auto, home, and my life insurance. Utilities: $88. That’s just electricity for our condo. Healthcare/Medical: $71. Gym membership and deductible for Mrs. RB40’s glasses. RB40 Junior: $0 this month. Actually, I need to check with the preschool. I gave them the check for $292, but it didn’t get cashed so someone screwed up somewhere.

Surplus (+$6,310 YTD)

2014 is starting off quite well here at the RB40 household. Let’s hope we can continue our positive cash flow streak for the rest of the year. Our saving this month is +$6,310.

Piggy Bank 2014

  • Travel fund: +$810.
  • Roth IRA fund: +$5,500. Let’s get one Roth IRA out of the way.
  • Slush Fund:  $0

I think we’ll do okay in February too. The big worry I have is the rental house lease renewal in May. I need to talk to our tenants and see if they want to renew or perhaps just buy the house. How about you? Did you have a good start to 2014? 

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{ 34 comments… read them below or add one }

Martin February 3, 2014 at 12:15 am

I really like how you hold yourself accountable Joe with these.

I was happy to wrestle my first real match in January, make money through my blog, and stay on top of my fitness. However, I want more! I don’t think I’m ever satisfied. I always feel like I should be doing more.

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retirebyforty February 3, 2014 at 9:53 am

That’s a young person’s game. :) I’m very satisfied with our January. Actually, I think I should do a bit less, but you gotta make hay while the sun shines.

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Dividend Growth Investor February 4, 2014 at 11:44 am

Hi Joe,

I think we have discussed this before, but if you were to sell your rentals and purchase REITs yielding 5%-6% today, how much would your monthly cash flow increase by?

I guess if you were to get $200K from the sale of your properties, and manage to invest in the likes of Realty Income or American Realty Capital Properties, you will be easily able to generate $900 – $1000 in monthly income, plus you will still have possibility of a positive capital appreciation over time.

Cheers and good luck in your goals this year!

Dividend Growth Investor

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retirebyforty February 5, 2014 at 8:55 am

Our monthly cash flow would be in a much better shape if we do that. Another option is to sell the rentals and payoff the primary mortgage. That would free up a lot of cash flow too.
Thanks!

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Clarisse @ Reach Financial Independence February 3, 2014 at 1:57 am

Oh, I love Hawaii too! For this year I’m planning to have a vacation, hopefully by summer.

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Fast Weekly February 3, 2014 at 3:50 am

Well you’re certainly on track for the year Joe. Plus, you got to enjoy a decisive win from your Seahawks. Life is good.
-Bryan

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retirebyforty February 3, 2014 at 9:55 am

The Seahawks was quite entertaining over the last 2 games. Thanks!

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Moneycone February 3, 2014 at 5:06 am

$0 for Jr? Consider yourself lucky! That almost never happens around here! :) These little ones are *expensive*!

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retirebyforty February 3, 2014 at 9:55 am

It should actually be $292. It will probably show up next month…

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Holly@ClubThrifty February 3, 2014 at 5:28 am

Great job this month!

My income turned out great even after a slow start after the holidays. I like having a spouse with a reliable paycheck as well. It takes a lot of the stress off of me.

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retirebyforty February 3, 2014 at 9:56 am

Having one steady paycheck is the way to go. I don’t know if we can give that up. :) Maybe in 10 years or so.

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Financial Samurai February 3, 2014 at 6:34 am

$6,310 surplus is huge! Nice work! Speaking of which, why work if you got so much surplus now? Any creeping thoughts of retiring by Mrs. RB40?

I hope things continue strong through the year.

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retirebyforty February 3, 2014 at 9:57 am

She just isn’t comfortable quitting at this point. Beside, she likes her job. Women value security much more than men. They really have to sure before they will pull the chord. Probably in 10 years or so.

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Ravi February 3, 2014 at 6:51 am

Like the material so far. Congratulations on your online income! I especially liked the $11 return at Target! Hilarious, I must say. I’m impressed by your level of detail in financial tracking. I do the same each month, but set rough targets (i.e. $1,300 rent/util, $1,300 credit card – grocery, gas, entertainment). I find it’s easier to set things into buckets that make sense. For Example, rent/util will fluctuate during the year, but I’ve come up with a target that should be close to the median or upper end of monthly expenses. Also, I just list a combined credit card target (includes almost everything I can charge like food, going out, gas, etc). Since I rarely use cash (why give up 1% in free cash back?), it seems to be a good tracking method. Plus, everything gets logged in Personal Capital… I seriously love technology!

Good luck on 2014 goals.

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retirebyforty February 3, 2014 at 9:58 am

Personal Capital is quite useful. We use cash for our discretionary spending. I find that we don’t spend as much when we do that. The 1% back is nice, but I’d spend more overall.

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Pretired Nick February 3, 2014 at 7:14 am

Looking good. Which island are you guys heading to? We’re visiting Maui in early April. Cannot wait. I finally learned to make sure I take my winter break earlier because I hated leaving here when it was already nice. Early March is about perfect for me. When you leave, it’s nasty and when you come back, it’s nearly spring.
Our year is off to a good start, but it’s mostly about getting our money organized this year. I just sold another piece of property so I have even more cash to figure out a place for. Good problem to have, I guess!

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retirebyforty February 3, 2014 at 10:00 am

We are going to the Big Island. At first we wanted to go at the end of March, but the timing didn’t work out. I hate leaving the pacific NW when the weather is nice too. We have the perfect summer here. Congratulation on your sales. What will you do with the cash? I don’t know if I’d want to put a lot in the market right now.

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writing2reality February 3, 2014 at 7:18 am

Congratulations Joe on a huge month! Even excluding the fact some of the online income dollars came from 2013, that is still a huge month for online income. Should have no problem nailing your goals this year at this rate.

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Done by Forty February 3, 2014 at 8:10 am

That’s great to see how well your online business is doing, Joe! I’ll have to dig into your updates via email to see the details: interesting stuff.

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Fig @ Figuring Money Out February 3, 2014 at 9:45 am

Sounds like the year is off to a great start for you! Can’t wait to see you hit all these goals! :)

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Moon February 3, 2014 at 12:40 pm

We have over $4000 surplus too this month but a big part of it is because we got paid 3 times in January. We will be in deficit in February since we have to pay for the hotels in Australia, and that’s also when the first mortgage for the rental kicks in (and we don’t get much out of the rental income since they keep the first month as leasing fee). Good news is that we got a 2 year lease for full asking price/rent for our property, only after 2 weeks on the market. So hopefully we don’t have to worry about it again until February 2016!

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retirebyforty February 5, 2014 at 8:51 am

I love those 3 paychecks months. Great progress on your rental. Just 2 weeks on the market. I hope we can rent our place out that quickly.

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jane savers @ solving the money puzzle February 3, 2014 at 3:38 pm

Do you pay your property taxes in advance or are they really all due on one certain day of the year?

My Canadian property taxes are due in installments on the last day of March, May, July and September. If I was on a fixed income (pension, disability, unemployment or welfare) I could pay 3 days later to give me time to pay after I receive my monthly government cheque.

I have my city as part of my online banking bill list and I just pay a set amount with every cheque so that I never have to come up with a large chunk of change. My property taxes will be almost $3 000 this year.

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retirebyforty February 5, 2014 at 8:52 am

We have the option to pay in 1,2, or 3 installments. We get a small discount if we pay it all at once so that’s what we do. They are due in November and we save up throughout the year for that.

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Justin @ Decisive Dollar February 3, 2014 at 4:08 pm

Awesome progress in just one month! This post has provided me with a good shot of motivation, which went missing the past couple of weeks. Thank you!

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Little House February 4, 2014 at 6:53 am

That’s some awesome progress! Looks like 2014 is shaping up to be a stellar year for quite a few of us. :)

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payitoff February 4, 2014 at 4:11 pm

wow! good job getting Roth IRA done on the first month of the year!

how long do you plan to contribute on RBJr.’s 529? any goal amount to cap at?

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retirebyforty February 5, 2014 at 8:56 am

We plan to save the cost of a 4 year public college. That’s projected to be around $300,000 in 2030. Kind of crazy, but we’ll see how it goes.

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Dividend Mantra February 4, 2014 at 5:45 pm

Joe,

Another awe-inspiring month. Your online income is really fantastic!

I bet you don’t miss that engineering job too much now, do you? :)

Keep up the great work.

Best wishes!

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retirebyforty February 5, 2014 at 8:59 am

Thanks! I don’t miss the old job at all, just the regular paychecks. :)

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MayanQueen February 4, 2014 at 6:07 pm

Joe,
Who is your life insurance carrier? My husband and I have this funky insurance in which the premiums are returned at the end of certain term if the insurance is not used at all (Cancer and Heart life insurance). If one of us ends up in the hospital they give a certain amount of money for the days that we are in the hospital, etc. Aparently the premium is deducted before taxes are calculated and withdrawn from my paycheck. I recently got another life insurance offer to pay around $120 / month for two people for coverage of $100,000 each. We haven’t done any changes yet, I want to learn more about it.

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retirebyforty February 5, 2014 at 9:01 am

I went with MetLife. $120/month sounds very expensive. I guess you are a bit older than I am. Make sure to shop around because the price can varies. I got basic term life insurance because that’s all we need at this point.

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Beta J March 18, 2014 at 4:02 pm

So glad to see you sharing these numbers! Do you find that putting them online helps keep you accountable? We just started to do that (and just started to get serious about getting out of debt, too) so I’m hoping it helps!

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retirebyforty March 19, 2014 at 9:25 am

It really does help me be more accountable. If I don’t share these, I don’t have much incentive to track everything so closely. Good luck with your debt.

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