Spring is finally here! I’m so happy because we had such a wet and cold winter this year. The weather is warming up and we can do more activities outdoors. Last week was spring break for us and we had a great staycation. I took it easy and spent almost all my time being a stay-at-home dad. I’m ready for RB40Jr to go back to school, though. It’s exhausting to spend all day with a rambunctious little boy.
One of my goals this year was to visit a national park, but our summer is rapidly filling up. In July, we’re heading to California for Mrs. RB40’s high school reunion. In August, we’re going camping at the beach to see the total eclipse. Those are the big events, but I’m sure we’ll be busy with sports and all kind of stuff in between. I was hoping to go camping at a national park this year, but we settled for a day trip instead.
We visited the Fort Vancouver National Historic Site during spring break. Fort Vancouver was a Hudson’s Bay Company fur trading outpost that was established in 1824. The current fort is a reconstruction that carefully replicated the original community. It was great to show our kid all the olden day stuff. He has never seen or heard about these kinds of things before. RB40Jr learned about the blacksmith, carpenter, baker, surgeon, outhouse, water well, and many other things. (I had to use an outhouse when I was his age…) The Pearson Air Museum was also on the fort grounds so we enjoyed that as well. We had a great day out and checked one goal off my list, nice!
On the financial front, things are pretty fabulous. Our active and passive incomes were doing very well and our expenses have been low in Q1. It has been a great year so far. Okay, let’s go over my 2017 goals first and then see how we did with our cash flow in March. I’ll also comment on how we did in Q1.
At the end of March, the year is 25% over. It’s still early, but we already passed the first quarter. If you’re on track or a bit behind on your goals, then keep at it. However, we really need to evaluate the goals that are really falling behind. We may need to change our approach if we want to accomplish those goals, or maybe we just need revise the goal. It’s still early and we can still catch up. It will be much more difficult to make up ground later in the year.
This is my goal scheduling spreadsheet. Things are generally pretty good. The only one that’s in trouble is the Pinterest goal. All in all, it’s not too bad for the first quarter of 2017.
- Save $50,000 in our tax advantaged account– We’re doing very well here and have saved $13,865 so far. This one is right on track.
- Dividend Income $11,500– I’ll update our passive income post next week and you can see the details there. In 2017, we received $2,658 in dividend so far. This is a bit behind. I recently added $3,000 to this account so I’m pretty sure the dividend income will meet our goal by the end of the year.
- FI ratio > 96% – This is passive income divide by expense. Currently, our FI ratio is at96% in 2017. That’s much better than our goal of 78%. Our expenses were low in Q1 2017 and that makes our FI ratio look really good. I don’t think we can keep this up for the whole year, but I’d be happy if we come in at 78%.
- Net worth gain > VFORX– Our net worth gained 4.4% so far in 2017. That’s really good for just 3 months. However, it is about 1% behind our benchmark. The VFORX (2040 fund) is up 5.4%. That’s incredible. We’re behind, but I’m not going to worry about it. We’ll see how the rest of 2017 goes. The stock market can’t keep going at this pace.
- Move RB40Jr’s 529 plan to Vanguard– I’ll try to get this done in April.
- Move Mrs.RB40’s IRAs to Vanguard – I’ll try to get this done in April as well.
- Online income > $36,000/year– We’ve been doing incredibly well this year and made $18,393 in the Q1, 2017. We’re already half way to our goal and I’m really grateful to you, our readers. Hopefully, we can keep up this pace for the rest of 2017. Online income can be up and down. We need to work hard now before the summer slowdown.
- 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 need to do something different or we’ll never accomplish this goal. I’ll do some research next month and see how we can improve.
- Fitness– March was a pretty good month for fitness. I made it to the gym almost every weekday. I took a week off during spring break to be a stay-at-home dad. Hopefully, that won’t set me back too much. I needed a week to rest anyway. In Q1, I walked 6,650 steps per day. That’s not bad, but it’s way behind my goal of 7,000 steps per day. That’s a big deficit and I’m not sure if I can catch up. The weather is getting nicer so that should help.
- 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 scheduled for the 2nd half of the year.
- RB40Jr’s after school programs– We signed RB40Jr up for Wushu (Chinese martial art) lessons. He was reluctant at first but now he talks about it all the time. He is taking 2 lessons per week for 3 months. We’ll probably cut back to just once a 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– We visited Fort Vancouver over spring break. We didn’t go camping because our summer schedule didn’t have time for it.
- 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.
Whew! I have too many goals this year, but we just need to keep working on them. I think we’re doing very well so far and most goals are on track. Let’s look at the two goals that are in trouble.
- Fitness – This one is actually not too bad. My steps per day is behind my goal, but at least I exercise very consistently now. I’ll try to catch up on the steps now that the weather is nicer.
- Pinterest – I have a confession here. I hate Pinterest. This is probably why I haven’t been able to grow our traffic there much. I’ll read up on how to do more on Pinterest in April…
Net Worth (+4.4% 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 thought this was a good measuring stick and we should be able beat it. Now that we’re a quarter into 2017, I can see that it’d be really tough to beat VFORX if the stock market is doing well. We’ll try a different benchmark next year. Maybe we should use the 2030 fund instead of 2040. It should be a bit more conservative.
Our net worth increased about 4.4% so far in 2017. That’s amazing for 3 months. I doubt the stock market can keep up this pace of gain. For the rest of 2017, I’m going to be more conservative and bulk up our bond index fund. I’m very happy with our net worth gain so far this year so more bond would help steady the portfolio. We are a bit behind VFORX, but it isn’t a big deal to me.
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.
March 2017 Cash Flow
We had another very good month financially. Our income was much higher than average and we kept our expense low. 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 at $9,578. Our income streams were all rolling in and we just need to keep it up.
Mrs. RB40’s paycheck: $5,190. Mrs. RB40 is doing 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: $957. Our rental income was good.
Online Income: $6,732. 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: $1,918. These are the banner ads you see on Retire by 40.
- Affiliates: $4,699. These are referral fees from affiliate links. If a reader signs up for a service through our links, then we sometimes 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?
- Brand promotion: $400. I worked with a company to promote their brand.
- Expenses: -$284. Internet, email service, CDN, cell phone, hosting, 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: $988. Dividend income was good in March. You can see our dividend portfolio here.
- P2P lending: $85. 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 in January. It’s a commercial property in Arizona and the expected ROI is 17%. That’s pretty high. I hope they can deliver.
- 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 overour passive income.
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 $3,558. That’s not too bad at all.
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: $489. This is good for a family of 3. I’m pretty happy as long as we keep it under $500.
Transportation: $88. This is gasoline and an oil change. I’d love to do our own oil change, but I can’t work on the car at my condo. Mrs. RB40 also renewed her license.
Kid: $219. RB40Jr started his Wushu lessons. This is a basic Chinese martial art. Kids learn how to kick, punch, and block. They don’t have sparring, though, which is okay with me for now. He can change to something more physical later. Now, he just needs to learn the basic moves and stretches.
Bills: $273. Electricity and insurance (auto, home, term life, and umbrella).
Healthcare/Medical: $56. I went to the dentist for teeth cleaning.
Entertainment: $141. This one is higher than usual. I took RB40Jr to a few places for spring break. We visited a trampoline park. That was pretty good for an hour. A half day at Fort Vancouver was great, too. Mrs. RB40 renewed her Toastmasters membership. We also got a few things for Easter. We went out a couple of times, but we discussed the blog in detail, so that’s a business expense. This is another reason why everyone should start a blog. 8)
Travel, Clothing, Misc: $3. I got a long sleeve shirt for Junior.
YTD Extra Savings: $18,923
March was a very good month and we saved $6,020. 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 $18,923 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 March 2017, Mrs. RB40 could retire early! We had another 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 $5,220 in March! This is due to our excellent online income. Hopefully, we can keep it up for the rest of 2017. We’ll see how things look after the summer slowdown.
Q1 2017 wrap up
Q1 2017 was a great quarter at the RB40 household. Our income streams were firing on all cylinders and our expenses were low. Everything is just going really well. We haven’t had a great streak like this in a long time so we feel good. Usually, we have ups and downs. We just have to keep this up for the rest of 2017. Now on to April. I plan to finish taxes and file them. Then, I’ll transfer our 529 College Savings Plan and Mrs. RB40’s IRAs to Vanguard. Those things will keep me busy and out of trouble.
Did you have a good March? I’m really glad spring is here. The weather is slowly warming up and we got a bit more sun shine. It was a very wet and cold winter so I’m really happy that spring has arrived.
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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