Whoa, there is less than a month left in 2017. Where did the time go? If you’ve let some New Year resolutions slide until December (like me), then it’s probably too late. Well, there are a few goals that are WIP and those should be fine. However, it’s too late to start anything new. There just isn’t enough time because December is always busy with family stuff. RB40Jr only has two weeks of school left before the winter break. I won’t be able to do much once he’s home the whole day. Christmas will be here soon and another year will be over before we know it.
2017 has been a really great year for us so I’m a bit sad to see it go. The stock market has done extremely well this year and it is still rising. The tax reform is a reality and it should help keep the party hopping a while longer. Who knows? 2018 could be even better than 2017.
On the personal finance front, November was a great month for us. We visited Cancun for the first time and had a very nice vacation. We did a great job with travel hacking this year so it was a very affordable trip. I’ll write more about the travel hacking next time. The rest of the month was uneventful. We spent some money on winter clothes and a few household items, but we’re under budget. Okay, let’s go over my 2017 goals first and then I’ll share the details of our cash flow.
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This is it. The year is pretty much over and we just need to wrap up those WIP goals in December. I’ve been doing well for the most part and most goals are on tracks. There 3 goals that I won’t be able to finish this year – Pinterest, site redesign, and joining Toastmasters. I put off Toastmasters too long and it’s too late now. Next year, I’ll put it on the top of my list and get it done early on.
Check out my goal tracking spreadsheet and then read in detail below.
- Save $50,000 in our tax advantaged account– We’re done with this one! We saved $54,730 in our tax advantaged accounts and still have one month left. Once again, it feels great to finish this one. I’m not sure if I’ll keep this goal in 2018. This one is largely automated now.
- Dividend Income $11,500– I’ll update our passive income post next week and you can see the details there. In the first 11 months of 2017, we received $10,280 in dividend. We’re a bit behind the pace at 88%, but I’m optimistic. December will be a good month for dividend.
- FI ratio > 78% – The FI ratio 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. We’re doing much better than expected here.
- Net worth gain > VFORX– Our net worth gained 13.5% so far in 2017. That’s really good and I’m ecstatic with anything above 10% in 2017. However, it is 5% behind our benchmark. The VFORX (Vanguard’s 2040 fund.) I’m not going to worry about it too much.
- 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– My online income has been incredible this year and I made $61,130 so far. I met my online income goal at the end of June. I made more in 6 months than the whole 2016 blog income. Thank you all our readers. I’m very grateful for your support.
- Redesign Retire by 40 – I gave up on this one. It’s too much work. I’ll try to do a minor update in 2018 instead of a big redesign.
- Pinterest > 25,000 visits– I gave up on this one too. I haven’t been able to grow our Pinterest traffic. It’s just not my thing. Pinterest is not fun for me at all. Hopefully, Mrs. RB40 will take over our social media when she retires from her full time work.
- Fitness – November was an uneven month for fitness. We were in Cancun for 10 days so I didn’t work out, but we walked around a lot. The rest of November was routine and I made it to the gym on most days. Overall it was good and I give myself a B for the month. I walked about 8,080 steps per day which is more than my goal of 7,000 steps per day, nice!
- 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. It’s really tough to blog about fitness, though. I haven’t updated the site since school started.
- Join Toastmasters – I planned to join Toastmasters in November after we come back from our Cancun vacation, but it didn’t work out. There were too many things to do. I’m moving this one to 2018 and I’ll get it done early. Putting this one off was a mistake.
- RB40Jr’s after school programs –This fall, RB40Jr was on a soccer team. We really needed to get him out of the house because he’d get too much screen time if he stays at home. Soccer is a great activity, but he doesn’t follow directions very well. Hopefully, he’ll get better soon.
- See the total solar eclipse – We saw the eclipse from Newport Beach, OR. It was totally awesome.
- National Park – We visited Fort Vancouver National Monument over spring break. That’ll be it this year…
- International Trip – We visited Cancun and had a great time.
Net Worth (+13.5% 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. However, VFORX did extremely well this year and went up 18% so far. Our net worth increase is way behind, about 13.5%. VFORX is really killing it this year.
Recently, I’ve been nervous about the stock market. The valuation is getting too rich for me so I’m selling a few stocks and will try to sit on the cash for a while. Now that the tax reform passed, I’m bullish again. The stock market is high, but it will most likely keep going up in 2018. I’ll try to keep our asset allocation steady and avoid messing with it too much at this point.
Here is the picture of our net worth from the beginning of 2017, on Personal Capital. It is somewhat distorted because of Zillow. They pumped up the estimates of our properties earlier this year and then dropped since September. I haven’t changed my personal spreadsheet yet. Valuing real estate is always tough. If we don’t include real estate, then the graph would rise steadily throughout 2017.
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 in just a few minutes. Also, I’m a huge fan of their retirement calculator. You can read my review here – The Best Free Retirement Calculator.
November 2017 Cash Flow
We had a great month with our cash flow in November. Our income was good and our expense was under budget. Most of the Cancun vacation was paid for in October so we didn’t see a big travel expense last month. 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 $7,642. My online income is down quite a bit due to the holiday slowdown and higher than usual expense. I got a new business laptop, printer, tablet, router, and a few other small items. My old laptop is very slow and it was impacting the working condition. I got a Lenovo 510S and it’s very nice. Everything is blazing fast compare to my old laptop. Anyway, Mrs. RB40 got a bonus at work so our income still looks good even with my subpar online income in November.
Mrs. RB40’s paycheck: $7,199. Mrs. RB40 is doing very well at her day job. She got a raise earlier this year and she is bringing home 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 very well for us.
Rental income: $908.
Online Income: $2,866. My online income was below average in November due to various business expenses, but it is not too bad. 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: $1,972. These are the banner ads you see on Retire by 40. I hope to make about $1,500/month from these ads.
- Affiliates: $2,315. 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.
- Expenses: -$1,321. Business equipment, internet, hosting, email service, CDN, cell phone, etc…
Starting a blog is a great way to build your brand and generate some extra income. You can see my tutorial here – How to Start A Blog and Why You Should. Check it out if you’re thinking about blogging.
Dividend income: $658. You can see our dividend portfolio here.
- P2P lending: -$18. I’m slowing getting out of P2P lending. I just don’t think they will do well when the economy turns south.
- Realty Shares: $171. I started investing with Realty Sharesearlier this year. So far, I’ve invested in 2 commercial properties and 2 apartments. I like RealtyShares and I’m planning to invest much more next year. See how I’m doing with real estate crowdfunding here.
Misc: $394. Mrs. RB40’s dad sent us $120 for Christmas. There is a mysterious $274 electronic deposit to our bank account. I’m not sure where this came from and I’m trying to track it down.
Pre-tax savings: -$4,550. I sent $1,500 to my solo 401k. Mrs. RB40 saved $1,390 in her retirement account. We also added $1,660 to RB40Jr’s 529 account.
Expense (target < $4,500)
Our monthly expense target is $4,500 per month and we well under in November. The 10 days in Cancun meant we didn’t spend much money in Portland and most of that trip was already paid for. The only big personal expense we had in November was clothing. We got some winter clothing for everyone. My mom in particular needed warmer clothes this year. She is getting older and she can’t handle the cold as well as previous years. Other expenses were below average.
Housing: $2,347. 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: $312. Our grocery bill was very low last month because we were gone for 10 days.
Transportation: $1. This is for the parking meter. We share one car and usually don’t drive much.
Kid: $40. We got RB40Jr a Christmas present.
Bills: $219. Electricity and insurance (auto, home, term life, and umbrella).
Healthcare/Medical: $160. We had a few routine visits to the doctor office.
Entertainment: $26. This was my gym membership fee.
Travel: $359. This was the cash we withdrew from an ATM in Cancun.
Clothing: $261. Winter clothes.
YTD Extra Savings: $62,087
November was a good month and we saved $3,727 in addition to our tax advantaged savings. Our income is doing really well this year. So far in 2017, we saved $62,087 extra. This is much better than 2016. What did I do with the extra money?
- I stashed $30,000 in VNQI. This fund will be cashed out when Mrs. RB40 retires.
- I invested $18,000 with Realty Shares. This is working well so far and I’m planning to ramp it up much more next year.
- This year my online income is higher than normal and I could contribute to my i401k more. It looks like the business could kick in about $12,000 extra. We’ll have to wait until tax is done, but I’ll contribute the maximum to reduce our taxes.
- The rest is in our savings account for now. Higher online income also means we’ll pay more taxes next April, at least $5,000. I didn’t send in estimated tax because I didn’t have to pay in previous years. There should be no penalty in this case.
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 November 2017, Mrs. RB40 could retire early! We had a close month and it looks like we should be able to keep this up for the rest of 2017.
If we remove Mrs. RB40’s income from the spreadsheet, we’d still be ahead $1,269 in October! My online income is strong this year so this challenge has been a bit too easy. Online income could be fickle, though. Last year’s online income was much lower than 2017.
November 2017 wrap up
November 2017 was another solid month at the RB40 household. My online income was lower than normal, but still really good compared to 2016. Our expense came in well under budget even with our Cancun trip. Everything is just rolling right along this year. I’m going to miss 2017. It has been our best year in a long time.
Did you have a good November? It’s the holiday season and everything is slowing down. Let’s wrap up 2017 on a good note and get ready for 2018. Have a great December!
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.