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May 2013 Goals and Financial Update


May Highlights and Lowlights

  • Net worth – Our net worth is up 0.76% month to month. That’s pretty good considering I got a lot more conservative since late April. The stock market has been doing very well in 2013 and we haven’t had a negative month yet. We’ll see if this bullish trend can really hold for the rest of this year.
  • Online Income – We had a great month in the online income category. The biggest positive contributing factor is Midlife Finance. It is finally starting to make some income and really help increase the overall online revenue.
  • Rental Income is negative again this month due to the need to replace a sliding door. The 4 plex investment really isn’t going well at all. There are just too many repairs. The housing price is still trending up so I’m not going to stress out too much, but if things don’t get better soon, I’ll probably sell it off. REIT might be a better way to go for me.
  • P2P income from Prosper is over the $100 threshold for the first time in a long while. We only had two defaults and the ROI is stabilizing at around 9%.
  • Summer Vacation expenses – I booked our summer vacations and spent a ton of money this month. Our Seattle trip was pretty cheap at $144, but our 2 week trip to California will be much more expensive. Luckily, our online income was very nice this month, so we didn’t have to dip into our travel fund.
  • Tax – Two more checks we sent for taxes got cashed in early May. We sent in $322 for Oregon state income tax and $70 for Portland Arts tax. I’ll just take out from our tax fund and not count them in the cash flow.

Net Worth (+8.1% YTD, 0.76% MTM)

The stock market did very well in May. I rebalanced toward more bonds at the end of April so I missed out on some of the run up, but I’m still happy with our net worth gain so far. I still think the stock market will slow down during the summer and pick back up later this year. Don’t listen to me too much though, I’m not an expert.

If you need help keeping track of your finances, try using Personal Capital to manage your budget 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.

May Finance Personal Capital

My retirement accounts didn’t do very well VS the S&P 500 in May.

Saving (+$7,780 YTD)

The negative rental income put a damper on our income for the second month in a row. 🙁 Luckily, we had our best month of the year so far with our online income.

Our saving for March is only $1,343.

Piggy Bank 2013

  • 529 fund: + $500 = $2,500. The market seems a bit frothy right now so I’m keeping this fund in our savings account. I will send it over when I see a good buying opportunity.
  • Travel fund: +$500 = $1,800
  • Fun money: +$40 = $840
  • Investment/Slush Fund: +$303 = $2,640

Estimated Tax

  • Local taxes: -$392 = $2,666. We are done with taxes until next April. I’ll just keep this amount to send in next year. I think we’ll have to send in around $1,000 next year, but I’d like to have a little margin of safety.

May Finance Goals updateCash Flow

Income (target > $4,500)

On the income side, we did much better than April all because of the great online income this month. The dividend income and misc income help too.

  • Rentals: 2013 continue to look pretty bad. After this month, we are at about negative $1,000 so far this year. That’s not good at all. I think we’ll probably have another negative year in 2013. I think I’ll give it until 2015 and if we can’t turn the 4 plex around by then, I’ll sell it off.
  • P2P lending: Our ROI is stabilizing at 8.8%. That should translate to $75-$100/month, but some months are worse than others on the default front. We’ll see how it pan out at the end of the year. Here is an update I wrote recently – Peer to Peer lending isn’t as passive as I thought.
  • Dividend and interest: We had a very good month on this front. A couple of stocks got sold on my 10% stop orders though so our dividend income will drop soon. I’ll have to look for good deals on dividend stocks in the coming months.
  • Online income was awesome in May. There was one mistake though, one of our advertisers sent me $440 extra and this will be taken out of next month’s check. Things are going quite well on the online income front. Most of our income is now coming from affiliate referrals. 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: We had an interesting month here. We got $8 from a credit card settlement, $19 refund from Amazon AWS (web site service), $100 gift, $100 from my brother to help with grandma’s living expense, $30 in coins, and $10 bonus from Serve (AmEx.) A little bit here and there really added up.

Expense (target < $4,000, not including tax)

Our expense was higher than usual due to the summer vacation expenses. It was a long winter and we’re ready to get away for a bit.

Summer Fun and Vacation

  • Went to Portland Aquarium – $26
  • Seattle Trip – $144
  • Booked a camp site for July – $27
  • Booked a rental home for a week in Santa Barbara – $1,287

Wrap Up May

May could have been much worse if we didn’t get lucky with the online income. That seems to be the theme lately. Every month we’ll have one income that boosts us toward positive cash flow. We’ll see if we can stay lucky for the rest of this year.

How about you? Did you have a good month? Any progress on your New Year Goals and Resolutions?

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{ 24 comments… add one }
  • My Financial Independence Journey June 5, 2013, 6:07 am

    Nice work on your online income this year. My blog only pulls in about $10 a month – hopefully that will grow with time.

    Do you have any idea how many more repairs are needed on the 4plex? If you wanted to jump into REITs, now is probably a good time. They are getting killed at the moment – so good buys are popping up all over the place.

    • retirebyforty June 5, 2013, 2:12 pm

      Keep at it. It will get better. As far as I know, we need to repair the fireplace and then that’s it. You never know though because something always seem to come up. I’ll look into REITs. Thanks for the heads up.

  • The Dividend Guy June 5, 2013, 7:02 am

    It’s interesting to read about someone who has problem with their rental property. Not to say that I’m happy to hear that your cash flow for this investment is negative (this sucks!) but I think too many people think that being a landlord is simply to see the cash coming in your bank account each 1st of the month. It’s actually way more complicated than that.

    On the other side, don’t be discouraged, each month, you are building equity in your rental property and one day, you won’t have repairs to make, the mortgage will be small and you will be racking money in your bank account 🙂

    • retirebyforty June 5, 2013, 2:13 pm

      The rental home is actually going pretty well because there aren’t a lot of repairs. The 4 plex is too old and the previous owner didn’t maintain it as well. Hopefully we’ll see less repairs soon.

  • Michelle June 5, 2013, 7:37 am

    Good job with the online income. I’m hoping to increase mine more and hopefully have it become more stable!

  • John S @ Frugal Rules June 5, 2013, 7:52 am

    Looks like a great month overall. We had a very good May as well both with income and growth in the market. It’ll be interesting to see if the recent down days are indicative of something else going on. If so, I plan on getting in a little more to take advantage of some pullbacks.

    • retirebyforty June 5, 2013, 2:14 pm

      I’m waiting a little bit too. I have cash, but it’s hard to jump back in while it’s dropping like this.

  • Pretired Nick June 5, 2013, 8:20 am

    Man, your fourplex issues sound familiar. That’s been the story of my life. If you think owning one is a pain, wait until you try to sell it! I’m in inspection hell right now trying to get rid of mine. Hopefully it’ll close this time.

    • retirebyforty June 5, 2013, 2:14 pm

      Good luck! I’m not looking forward to the whole process. Will you write about it?

      • Pretired Nick June 7, 2013, 7:40 am

        I definitely will. I just want it safely closed before I tell that story.

  • Your Daily Finance June 5, 2013, 8:53 am

    Almost 4k in online income looking good. Sorry to about the over payment having to be taken out next month. Life in general for May was great! Nothing on the online income front yet as I just started my blog and I have a goal in mind for the end of the year.

  • Interesting that you are thinking about getting rid of rental property and replace it with REITs. My mother-in-law is looking into buying rental property (3 family where she lives in one unit), and says that the rental income will pay off the mortgage. She doesn’t understand why my wife and I are still renting. (we live in NYC…housing is EXPENSIVE!) I’ve considered being a landlord in the future…but I’m sure its not as easy as it sounds.

    • retirebyforty June 5, 2013, 2:15 pm

      Actually, I think living in one unit and renting out the others is a great idea. The problem multiplies when you’re not on location. I wouldn’t mind something like that in the future.

  • krantcents June 5, 2013, 11:12 am

    Hey, I got the same $8 credit card settlement. Income property has it ups and downs. It is a lot better when you get into larger units. When I sent from a 9 unit to a 24 unit, I starte dto see the economies of scale. Sure the expense sare higher, but so is the income.

    • retirebyforty June 5, 2013, 2:16 pm

      OK, thanks for the input. I don’t think we’ll go that big though. We’ll see…

  • jim June 5, 2013, 1:02 pm

    Too bad about the rental expenses. On the bright side, the repair bills for the property can’t go on forever. Things will quiet down in the long run, you shouldn’ have random $5000 repair bills every year after the major systems are replaced or repaired.

  • Always heartening to see your personal portfolio reflect the market–people often forget that major trends are often far from what we see personally.

  • thepotatohead June 5, 2013, 7:30 pm

    Been thinking about looking into the peer to peer lending. Sounds like you are doing decent with that. 9% would be pretty good if you can consistently get that.

  • I am looking at my investments, mutual funds and individual stocks, and I am hesitant to count any of this current bump in the market as real growth in income. I think this bump is temporary (just look at the drop in the Nikkei Index). I try and not get too excited about upward rushes.

    Do you regret selling the good dividend producing stocks in an automatic order? Would the future dividend income have been equal to or more than the money gained in the one time sale?

    I am attempting to build a portfolio of dividend paying stocks to buy and hold for the very long run. My dividend income this year will be just under $100 but I am only getting started.

    • retirebyforty June 7, 2013, 9:07 am

      Yeah, I don’t like how the stop worked. It would have been better if the market really tanked…
      The way it is fluctuating right now doesn’t work well with stops.
      I’ll pick up more dividend stocks later this year.

  • Arties Lionel Trains June 6, 2013, 1:20 pm

    Joe – Nice to see you’ve got a vacation planned. This reminds me of a Seinfeld episode where George is out or work and goes on a vacation. Sorry about the rental property, this is the reason I’ve never delved into rentals but I know a lot of people like it as an investment.

    Off topic — Anyone notice their Adsense ads aren’t showing up a lot lately? I thought it was just me but I checked several other sites and they aren’t their either. Like right now as I’m posting.

    Is it just me?
    Is their anyway to monitor them?

    • retirebyforty June 7, 2013, 9:08 am

      Even retired bloggers need vacations. 🙂
      Adsense looks ok here. I’m not sure how to monitor them.

  • Financial Samurai June 7, 2013, 9:18 am

    Great to see a surge in online income! Nice. I hope the summer doesn’t slow down too much as folks go out and play.

  • Hannah June 13, 2013, 5:34 am

    Great work with your income. Wish I could see through my funds in such an explicit and clearly segregated manner. Conservative approach works best after retirement. Happy holiday in California, it’s a wonderful place to relax and have fun 🙂

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