The year is more than half over! I hope you’re enjoying summer as much as I am. RB40Jr is out of school and we’ve been doing fun activities around town. I never go out to lunch when I’m alone, but it’s nice to go try something new from a food cart with a tasting partner. So far, RB40Jr’s favorite lunch is the lamb gyro. Summer is great, but there are some downsides too. The first is that my exercise schedule crashed and burned. I haven’t been able to workout much at all. Second is that it’s tough to blog. Kindergarten was great because it gave me more time to myself. Now, it’s a lot more difficult to get a post published on schedule. That’s all right, though. Summer is supposed to be a lot of fun. Work and exercise can take the back seat for a few months.
On the financial front, June was an awesome month. Our income was great, but our expenses were a little higher than usual. The high income more than made up for it, though. Our monthly expense was higher than usual because we paid for our flight to visit California. There are other expenses, but travel was the big budget buster in June. You can see the detail in the cash flow section below.
Okay, let’s go over the 2017 goals first and then see the details of our cash flow in June.
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2017 Goals – half year review
At the end of June, the year is 50% over! Wow, time flies. It’s been a great 6 months and we have done very well with our goals. It’s time to do our half-year check up and see where we need to improve.
Here is my goal tracking spreadsheet. We’re looking really good except for the Pinterest goal. I’ll probably give up on that one unless Mrs. RB40 helps me out.
- Save $50,000 in our tax advantaged account– We’re doing very well here and have saved $35,925 into our 401(k) and the 529 college fund. I contributed $5,500 to each of our Roth IRAs in June. This bumped up our tax advantaged savings quite a bit and we should complete this one ahead of schedule.
- Dividend Income $11,500– I’ll update our passive income post next week and you can see the details there. In the first 6 months of 2017, we received $5,742 in dividend. We’re right at the 50% mark. The second half of the year is usually better than the first half so I’m very optimistic that we’ll meet this goal.
- FI ratio > 78% – This is passive income divided by expense. Currently, our FI ratio is 94%.That’s way ahead of our target and I’m quite happy with it. Hopefully, we can keep it up in the 2nd half of 2017.
- Net worth gain > VFORX– Our net worth gained 7.3% so far in 2017. That’s really good for just 6 months. However, it is 2% behind our benchmark. The VFORX (Vanguard’s 2040 fund) is up 9.3%. That’s nuts! We’re behind, but I’m not going to worry about it. Next year, I probably won’t bench mark our net worth against anything.
- Move RB40Jr’s 529 plan to Vanguard – Finished! You can read about our 529 plan transfer here.
- Move Mrs.RB40’s IRAs to Vanguard – Finished!
- Online income > $36,000/year– Our online income has been incredible this year and we made $38,619 so far. Woohoo! This goal is done. I made more in 6 months than the whole 2016 blog income. I’m really grateful to you, our readers. Thank you!
- Redesign Retire by 40– This one is a huge job and it is very daunting. I did some investigation in May, but couldn’t find a layout I liked. I’ll keep working on this. The redesign will be put on ice for the summer because I don’t have time to work on it.
- Pinterest > 25,000 visits– This one is a bust for sure. I haven’t been able to grow our Pinterest traffic and I’m getting discouraged. Pinterest is not fun for me at all.
- Fitness – June was a bad month for fitness. RB40Jr is out of school so I can’t go the gym much. We have been going to the pool often, but it’s not quite enough of a work out. In June, I walked about 7,040 steps per day. That’s just enough to pass my goal of 7,000 steps per day. Oh well, I’ll resume working out regularly when school starts in September.
- Start a new site – I started a new site with a focus on fitness– Fit by 40. There isn’t much traffic, but that’s okay. I’m using it mostly for self motivation. It’s working really well and I’m much more active this year than in 2016. I don’t know why blogging helps so much, but it works for me. I haven’t updated the site much since summer started. It will pick back up in September.
- Join Toastmasters – This one is scheduled for the 2nd half of the year after school starts.
- RB40Jr’s after school programs – RB40Jr is now going to Wushu (Chinese martial art) classes and soccer practice. He doesn’t like these activities because group activities are difficult for him. He’d rather stay home and goof off, but he needs to learn to be a part of a team. I hope these activities will help him develop more grit.
- See the total solar eclipse– I reserved a campsite at the beach and we’re set for August. I’m really looking forward to this trip.
- National Park– We visited Fort Vancouver National Monument over spring break. Joshua Tree National Park is next. It’s pretty close to where we’re going for vacation.
- International Trip– We plan to visit Mexico in November. It should be a cheap trip because we have plenty of reward points to use on flights and accommodations. We got 4 free nights at a Hyatt so I’m going to book a room at the Hyatt Ziva. I’ve never been to an all inclusive resort before so it’d be interesting to see if we like it. Normally, we like to mingle with the locals.
Net Worth (+7.3% 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 benchmark our progress with the Vanguard Target Retirement 2040 Fund, VFORX. Their current allocation is about 52% US equity, 35% international equity, and 13% bonds. I thought this was a good measuring stick and we should be able beat it. Now that we’re half way through 2017, we are way behind at -2%! The international sector did great in the first half of 2017.
Anyway, our net worth is up 7.3% in the first half of 2017. That’s really good at this stage of our life. I’d be extremely happy to get 10% gain in 2017. We are a bit behind VFORX, but it isn’t a big deal to me. Next year, we’ll probably just avoid benchmarking altogether. It doesn’t seem to add anything useful.
Here is the picture of our net worth over the first half of 2017 on Personal Capital. Our stock investment had minimal gain in June. I’m anxious to see how the rest of 2017 is going to turn out. Our properties did quite well in June and helped increase our net worth.
The big movements are the 529 plan and Mrs. RB40’s accounts being transferred.
If you need help keeping track of your finances, try using Personal Capital to help manage your investment accounts. We have many accounts and Personal Capital shows me the big picture. Also, I’m a huge fan of their awesome retirement calculator. You can read my review here – The Best Free Retirement Calculator.
June 2017 Cash Flow
We had another great month with our cash flow. We spent more than usual, but our income was really good. 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 at $13,027. Our income streams were firing on all cylinders and we just need to keep this up.
Mrs. RB40’s paycheck: $5,630. Mrs. RB40 is doing very well at her day job. She got a raise earlier this year and she is bringing in great income and benefits. That’s one reason why she isn’t ready to quit working full time yet. She also doesn’t want to deal with health insurance uncertainties at this point. Her employer sponsored health plan is working really well for us.
Rental income: $966. I installed a new bathtub drain lever and did some minor clean up around the duplex.
Online Income: $7,928. Our online income was great in June. This year I’m focusing on increasing our income so Mrs. RB40 can retire sooner. I’m placing 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: $2,000. These are the banner ads you see on Retire by 40. I hope to make about $1,500/month from these ads.
- Affiliates: $6,098. These are referral fees from affiliate links. If a reader signs up for a service through our affiliate link, then we sometimes earn a referral fee. One example is the Personal Capital link at the net worth section above.
- Brand promotion: $0. I’m cutting way back and probably won’t make any money in this category going forward.
- Expenses: -$169. Internet, email service, CDN, cell phone, meals, etc…
Starting a blog is a great way to build your brand and generate some extra income. Thank you for your support!
Dividend income: $1,296. Dividend income was great in June. You can see our dividend portfolio here.
- P2P lending: $80. I’m slowing getting out of P2P lending. I just don’t think they will do well when the economy turns south.
- Realty Shares:$0. I funded my first deal at RealtyShares earlier this year. It’s a commercial property in Arizona. I like RealtyShares and I’ll try to invest in another property when we have some cash.
- 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.
Pre-tax savings: -$2,890. I sent $1,500 to my solo 401k. Mrs. RB40 saved $1,390 in her retirement account. We did not contribute to our kid’s Oregon 529 plan in June.
Expense (target < $4,500)
Our monthly expense target was $4,500 per month and we spent $5,098. The big expense was the flight tickets to visit California in July. RB40Jr also had some camps and other summer activities. Summer is a bit more expensive for us because of vacation and other fun activities.
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
Groceries: $444. This is good for a family of 4. My mom is staying with us for a while. I’m pretty happy as long as we keep it under $500.
Transportation: $29. This is for gasoline and parking. We share one car and don’t drive much.
Kid: $366. This includes the RB40Jr’s Wushu lessons, ice cream, new shirts, summer camp, and a birthday present for a friend.
Bills: $236. Electricity and insurance (auto, home, term life, and umbrella).
Healthcare/Medical: $120. Mrs. RB40 lost her prescription sunglasses and had to get a new pair.
Entertainment: $52. We ate out just once in June, great job! This category also includes my gym membership fee.
Travel: $1,204. Three tickets to southern CA. We used the companion fare ticket from Alaska airline for this and the bill is pretty expensive. I thought flying is supposed to be cheap this year.
Clothing: $357. Mrs. RB40 purchased a nice dress and a few other things.
YTD Extra Savings: $38,318
June was a great month and we saved $7,929 in addition to our tax advantaged savings. Our income exceeded our expenses by a large margin and it felt great! This is when you feel rich – plenty of positive cash flow. So far in 2017, we saved $38,318 extra. This is already more than the whole 2016 so we’re doing really well this year.
I just sent $11,000 of this fund to our Roth IRA. I stashed the rest in VNQI to be used for Mrs. RB40 early retirement fund.
Can Mrs. RB40 retire?
This is a new section I added 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 June 2017, Mrs. RB40 could retire early! We had another great month and it would be awesome if we can keep this up for the rest of the year.
If we remove Mrs. RB40’s income from the spreadsheet, we’d still be ahead $5,189 in June! This is due to our excellent online income. 2017 is looking really good so far.
June 2017 wrap up
June 2017 was another solid month at the RB40 household. Our income streams were firing on all cylinders. Our expenses were higher than usual, but not by a huge margin. Everything is just going really well this year. We haven’t had a great streak like this in a long time so we feel good. Usually, our finance has more ups and downs.
July is looking much slower on the online income front. Traffic is down and our affiliate income is slowing down accordingly. Our expense should be under budget, though. We already paid for our flights and hotel so our travel bill shouldn’t be too high.
*Oh yeah, if you’re going to retire early, summer is the best time to do it. There are a ton of fun activities to do. Retiring in the winter is the pits. You’ll be stuck at home all day and that’s not a good way to transition into what should be a fun phase of life.
Did you have a good June? What’s your plan for the summer?
Bonus: Cheap Eats
Gai Yang, Som Tum carrot salad, and Thai sticky rice. This is classic Thai food.
Gai Yang is grilled chicken marinated in coconut milk, curry powder, sugar, ground pepper, minced lemongrass, cilantro stems, and garlic. There are many recipes of Gai Yang on the internet and it is easy to make. Try it out! The great dipping sauce to the right is Mai Ploy sweet chili sauce. You can see the bottle on Amazon, but probably should buy it locally. The price is very high on Amazon.
The Gai Yang is usually eaten with Som Tum, a green papaya salad. We used carrot instead because our grocery store doesn’t carry green papaya. This meal would be great with regular steam rice, but the Thai sticky rice made it awesome. I really can’t describe why I love Thai sticky rice so much. It just elevated the whole meal for me. So delicious!
This meal is very affordable because all the ingredients are cheap. The chicken drumsticks are the cheapest part of chicken for some reason. Carrots and sticky rice are also very affordable. Four servings of this meal cost less than $5.
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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