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October 2011 Cash Flow


October 2011 shall be known henceforth as the month that the levee broke. In September, we had about $2,000 positive cash flow, but we gave it all back this month and then some.


Income October September
Mrs. RB40’s paycheck 2622 2984
rental income -3,104.00 468
side income 360 2222
dividend, interest, P2P lending, stock 568 278
Total income 446 5952
Housing -1,992 -1,992
food -177 0
cash allowance -560 -860
transportation -72 -153
pet -54 0
baby* (not counting daycare) -144 -42
bills (electric, insurance, internet) -257 -246
medical 0 -89
entertainment -132.00 -34.00
misc (IKEA) -641.00 -455.00
Total expense -4,028 -3871
saving (Income – Expense) 3,582 2,081

*There is a bit of fuzzy accounting here because I didn’t count the cost of baby daycare. We paid $1165 a month, but it is covered with DCAP from my paycheck. It is already deducted pre-tax and we wouldn’t have seen it anyway. Also, once I quit work, then I’ll be home to take care of the little guy so I think we can zero it out as we look forward to the future.

** I don’t count my paycheck here because we are trying to live on one paycheck.

Income (Target > $5,000)

Rental Income – I changed the accounting method here and I’m now showing all income – expense. The property tax is also baked in now.

We sent in $3,000 to repair the roof, chimney chases, and the crawl space. These repairs were deferred maintenance from the previous owner and they were expected. We also had 2 plumbing calls and a stove replacement costing about $700. Cleaning fee, year end yard work, and the leasing fee wiped out the rest of the rental income.

All in all, we came in at -$3,104 in October. It was not a good month, but things are looking up for November. All 4 units are now rented out. The section 8 payment from the city came though at the end of October, but didn’t make it into the October statement. We’ve been seeing the rents from only 2 units because the section 8 renter arrived in the middle of September and the first section 8 payment takes extra time to process (according to the property manager.) We should see positive cash flow here in November and onward.

Side Income – Took a step backward, but this is not unexpected because online income is not stable.

We actually made about $1,000 online in October. However, I purchased a laptop, phone, flash for the camera, and helped out with two giveaways. I haven’t withheld any tax this year and I want to minimize tax by buying any business related equipment in 2011. October was probably not the right month to do this, though.

October business expense

$400 laptop with the latest Intel Core 2 CPU!, $140 flash, $80 phone, and 2x $25 gift cards add up to an expensive month for business expense.

A bit more detail as requested.

We ended up with a net of $360 after the purchases. ($1,030 – $670)

The income this month all came from direct advertising.

We got banned from Google Adsense and they stiffed us our check for the last two months – $130. Thanks Google. I knew this was common after the first check from Google, but I was hoping it wouldn’t happen to us. I’m trying to get the ban remove, but I don’t have high hope. We had a bad malware attack in August and that probably led to some bad clicking. I’m trying media.net instead and it’s not doing that well so I will investigate other avenue. Yes, I’m bummed out, but life goes on.

Dividend, Interest, P2P lending, and Stock – The total for this one looks deceptively large.

Dividend – $12

Interest – $18

P2P – $17

I invested $1,000 with prosper.com. We’ll see if this works out in the long run.

Stock profit taking – $521

Took profit on some stocks.

Expense (Target < $4,000)

Housing – The housing expense is very high, but it’s stable at this point.

Food and Cash Allowance – I think about 90% of the cash allowance goes toward food, specifically groceries and eating out. My parents are visiting until the end of November so the food bill is going to be higher for a while.

Transportation – Kept it under $100 this month. I’m happy with this.

Baby – We purchased a bigger car seat for him. Diaper and food rounded out the rest.

Bills – stable.

Entertainment – This one is a bit high in October. Mrs. RB40 sent in her Toastmaster membership fee (she belongs to two clubs) and I spent $45 on 3 used XBOX games.

Misc – We got a new closet from IKEA. You can read all about it on the $440 baby gate post if you missed it. This category should go down next month.

October Cash Flow

All I can say is I’m glad October is gone. Our income falls way short of the target, but at least the expense was in the ball park. I don’t have a good feeling about November and December though. These are high expenditure months and I hope we can minimize the spending somewhat.

How about you? Did you have a good October? Did you know Halloween is the 2nd most expensive holiday now because everyone spends so much money on costumes?

If you need some help keeping track of your finances, you should try using Personal Capital to manage your budget. It’s a great free budgeting tool. You can keep track of your income, expenses, and net worth, all in one place. Personal Capital is geared for investors and have many great tools. See my review of Personal Capital and how they helped me reduce what I’m paying in investment fees.

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{ 43 comments… add one }
  • Invest It Wisely November 9, 2011, 4:59 am

    You reminded me to buy a laptop before the year closes out. 😉

    • retirebyforty November 9, 2011, 10:25 am

      There should be some nice sales on Black Friday. Do you guys do that in CA?

  • 20'sFinances November 9, 2011, 5:40 am

    Your story is a reminder that investing in your future costs in the present. There are always going to be some upfront costs… but here’s to future income where you can sit by and have it roll in! P.S. Have you found a tenant for unit 4 yet?

    • retirebyforty November 9, 2011, 10:24 am

      Yes, all units are filled now. TGIF! Vacancy is the bane of any landlord’s existence.

  • Roshawn @ Watson Inc November 9, 2011, 5:52 am

    I second Kevin’s point. I’ll purchase a laptop next week (it’s time) and some relevant educational materials. You are stimulating the economy with a post 🙂

    • retirebyforty November 9, 2011, 10:23 am

      I’m glad to help the economy in anyway I can. Maybe you should wait for Black Friday sales?

      • Roshawn @ Watson Inc November 9, 2011, 9:24 pm

        That’s exactly what my wife said. I guess I’m a little impatient since the one I primarily use for blogging crashed on me on Saturday 🙁

        • retirebyforty November 10, 2011, 12:55 pm

          Sorry to hear that. You should search for a good deal now then. Business comes first! 🙂

  • PKamp3 November 9, 2011, 6:05 am

    And your side income came down – I’m sure it’ll bounce back quickly. Since you’re waiting on a renter, you’ll probably have one particularly good month to report on in the near future.

    • retirebyforty November 9, 2011, 10:23 am

      I think November will look a lot better.

  • Robert @ My Multiple Incomes November 9, 2011, 8:34 am

    Arghhh…I hate having to pay for maintenance issues, but the longer you wait, the more expensive they become.

    • retirebyforty November 9, 2011, 10:22 am

      I agree. It’s expensive now, but will get a lot more expensive if left untended.

  • Miss T @ Prairie Eco-Thrifter November 9, 2011, 9:44 am

    I have been thinking of buying some equipment as a business expense. Thanks for the reminder.

    • retirebyforty November 9, 2011, 10:22 am

      Let us know what you purchased. 🙂

  • funancials November 9, 2011, 9:52 am

    I know you purchased the laptop etc, but can you dive deeper into the 2k drop in side income? I don’t know if you include blogging income in this figure or not?

    • retirebyforty November 9, 2011, 10:21 am

      Updated per request. The revenue dropped from around $2,000 to $1,000. The income dropped even further due to the business expense so total income is only $360 this month. I expected online income to be up and down so this doesn’t surprise me much.

  • Brave New Life November 9, 2011, 1:35 pm

    Sucks about Adsense. Don’t expect to get your account opened back up. And if you open a second one (even with your wifes google account) they will detect it and shut you down again. I know this because I had this happen to me in the Android Market.

    • retirebyforty November 9, 2011, 4:09 pm

      I don’t have high hope, but I do know one person who got her account reinstated – Suba! 🙂
      I’ll have to find a good alternative to Adsense if they don’t reinstate the site.

  • Aaron Hung November 9, 2011, 2:10 pm

    I need a laptop to blog when I’m away, I know TigerDirect got some good deals though:)

    • retirebyforty November 9, 2011, 4:09 pm

      I’m sure there will be tons of good deals on Black Friday.

  • Don November 9, 2011, 2:23 pm

    Nice month!

    I bought a laptop a few months back, but I still need a cheap (but decent) camera and eventually a decent phone…

    I’ll probably buy the camera in the next few week, but I might hold off on the phone until next year.

    Good move taking some profits, the markets are looking more scary all the time!!!

  • YFS November 9, 2011, 4:23 pm

    Look at that side hustle income! I love it. Hey did you check on the section 8 payments and their timing? Also, make sure you have your property manager send you the actual section 8 contract. The contract will let you know the exact amount you should be receiving.

    I’m going through city and section 8 inspections now for my recent purchase. Those things are a pain in the rear. But, I already have a tenant in my home just need to pass the inspection to get checks. This tenant gets 100% assistance from the government.. Winning!

    • retirebyforty November 9, 2011, 4:36 pm

      The property manager said the tenant moved in mid month September and it takes some time for the section 8 payment to come through. I talked to him at the end of October after I received the monthly statement and he said the check came in and I should see it in the next statement. I’ll ask him to send me a copy of the contract.
      100% payment from the city is a nice win.

  • Lindy Mint November 9, 2011, 4:39 pm

    Good idea to get those blog expenses in now. October may not have been a great month to do it, but November and December probably wouldn’t have been any better.

    My October was kind of ugly too. I had a major car repair that I felt okay about because we used our emergency fund, but now my accounts have frowny faces.

    • retirebyforty November 10, 2011, 12:53 pm

      You’re right. The last quarter of the year is always expensive. We have to pay property tax in November so I don’t have a good feeling for this month either.

  • Aloysa November 9, 2011, 5:38 pm

    You got attacked by a malware AND banned by Google? What the hell happened?
    You are trying to live on one paycheck. This is one of my long-term goals!

    • retirebyforty November 10, 2011, 12:54 pm

      Yeah, I got 3 malware attacks over the summer. The last one brought in tons of traffic, but I think those also generated some clicks. I changed theme and things seem to be better for now.

  • SB @ One Cent At A Time November 9, 2011, 10:15 pm

    Joe did the letter from Google say ‘Improper clicks’ or ‘you are risk to our customers’ or “not abiding by google” policies? In my very early stage I was risk to their customers. I now think that would be probably due to missing privacy page and having more than three add blocks on front page.

    It really hurts

    • retirebyforty November 10, 2011, 12:56 pm

      I got significant risk. I’m still suspecting the malware attacks. I’ve had the privacy policy page up way before I started adsense.

  • Financial Samurai November 9, 2011, 10:26 pm

    Man, I hear you on rental expenses. Sucks man.

    There’s a lot better income generation than Adsense. Not to worry man.

    • retirebyforty November 10, 2011, 12:57 pm

      I like Adsense because it’s very passive. I’ll have to find something to replace it. Oh well…

  • Hunter - Financially Consumed November 10, 2011, 5:51 am

    I jump through way too many hoops for G too…with zero payback so far. It’s ironic that our sites would probably look a whole lot more appealing to paying advertisers without the clutter of Adsense.

    • retirebyforty November 10, 2011, 12:57 pm

      They have a monopoly, what can we do….

    • marissa November 13, 2011, 3:36 pm

      You are the 6th blogger that I’ve seen get banned after their first check. Maybe its a systematic policy.

  • Christa November 10, 2011, 8:49 am

    I too want to purchase a laptop, but I do think I’ll wait until Black Friday. My husband thinks Apple’s the only way to go, but for my purposes, I think a PC could work.

    • retirebyforty November 10, 2011, 12:58 pm

      Good luck on your search. PC is still so much cheaper than an Apple laptop.

  • Jeff @ Sustainable life blog November 10, 2011, 9:16 am

    Looks like you had a rough go in october joe. Glad that everything is rented out and things are on the up-and-up with your rentals./
    That sucks about adsense, hopefully they will let you back in

    • retirebyforty November 10, 2011, 12:59 pm

      Thanks! Hopefully things will start to look up next month.

  • Squirrelers November 10, 2011, 11:26 am

    When it comes to rentals, those expenses will be there. In general, we all have months where we have to spend a considerable amount of money. It’s just the way it is, be it home repairs, car purchase, vacations, etc.

    With the online income, that’s up and down, but it looks like you had a better month in September – which tells you what’s possible.

    I’m thinking this is just one of those months, the way it looks on paper, and next month will look better. You guys are doing great, it seems!

    • retirebyforty November 10, 2011, 1:00 pm

      That’s true. I have to learn more about fluctuating income before I leave my day job. I guess we’ll have to have a bigger pile of cash on hand.

  • Evan November 17, 2011, 1:33 pm

    I love that you purchased a reasonable laptop…I consistently fight with my friends about this topic. My argument? Most people don’t do anything on a computer outside the word processor, listening to music and streaming some videos and almost any laptop on the market can do that today!

    • retirebyforty November 17, 2011, 9:55 pm

      I have a powerful desktop already so I don’t need another powerful computer. All I use on this laptop is MS office and internet browser. I wouldn’t want to spend more than $500 for that.

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