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October 2012 Cash Flow

by retirebyforty on November 2, 2012 · 31 comments

in cash flow

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October wasn’t a good month for us. The big expense on the 4-plex finally showed up and it threw a big monkey wrench into our monthly cash flow.

left my job in July 2012 and we were doing fine in the cash flow department until this month. It is essential to track your income and expenses before you make a big life changing decision like retirement or a career change. You can use Quicken, Personal Capital, or a plain old Excel spreadsheet, but don’t retire without figuring out your monthly cash flow first. There will always be surprises so you also need to keep a bigger emergency fund if you’re not working full time anymore.

October cash flow

October 2012 cash flow

Income Oct Sept
Mrs. RB40′s paycheck

3,814

2813.85

Rental income

-4,572

789.48

Online Revenue

536

-296

dividend, interest

244

1191.38

P2P

131

121.78

misc

0

50

Total income

153

4670

 
Expense
Housing

-2,097

-2097

cash allowance

-600

-619.12

transportation

-71

-46.52

pet

-61

-47.99

baby

-58

0

bills

-249

-238.56

medical

0

45

entertainment

-128

0

misc

-18

-52

Total expense

-3,282

-3056

   
saving (Income – Expense)

-3,129

1614.22

Income (Target > $4,500)

Mrs. RB40′s paychecks: Woohoo! A 3 paychecks month! Unfortunately this wasn’t enough to overcome the next category.

Rental Properties: Yeap, this is it. We paid $5,199 to paint the 4 plex and garage. This is a big expense, but we should still be in the positive for 2012. I’ll do a year end update in December.

Online Revenue: $536 Oh no! Our online business had a lot of expenses again in October, but at least we are in the positive territory this month.

  • Media.net (CPC ad network): $419. This was for September. It was a big month for us because we had a lot of referral traffic from Yahoo! Finance. Our usual payment here is around $100-$200.
  • Affiliate: $78 from Consumer Track (Quicken Loans and credit checking.)
  • Affiliate: $57 from How to Engineer Your Layoff.
  • Freelance: $834. Writing and advertising.
  • Staff writers for new sites: -$80. New sites are slowly gaining traffic. Midlife Finance and Ready To Quit My Job!
  • 3 years of hosting: -$252
  • World Domination Summit 2013 ticket: -$507
  • Amazon CloudFront: -$2. CDN for the blog.

Dividend & Interest: 

  • Dividend portfolio: $199. A pathetically small payout month with dividend from GE, CCJ, and LEG.
  • Interest: $45. This is up a bit because I just transferred our cash saving to the new CIT saving account. Their interest rate is 0.25% higher than ING so you might want to open an account at CIT if you have $25,000 or more to deposit.

P2P Lending: $131. Currently, I’m getting 12.32% interest from prosper.com. I’m seeing more late payments and defaults, but the ROI is still over 10% so I can’t complain.

Misc.: $0. No extra money this month. :(

Expenses (Target < $4,000)

Cash Allowance: $600. On target.

Transportation: $71. I drove to Sea-Tac to pick up my mom so we spent a bit more on gas than usual.

Pets and Baby: $61 and $58. Mostly food here.

Bills: $249. Stable.

Entertainment: $87 for Mrs. RB40′s Toastmaster membership and $40 for a dress.

Misc: $18. I mailed a package through USPS and picked up some stamps.

October Cash Flow

We didn’t do too well this month, but it was expected. We could absorb one or two of these bad months per year and still come out ahead overall. There is still one big repair left at the 4-plex. It needs some drainage work and then it should be mostly smooth sailing after that. October was a set back and this is why we have a big emergency fund. I’m pretty sure we’ll get back on track next month.

October 2012 saving surplus

How about you? Did you have a good month?

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. It can help you 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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{ 31 comments… read them below or add one }

JT November 2, 2012 at 5:58 am

Sorry about the poor cash flow, but at least you won’t have to paint again for awhile. November should be much better and you can add to savings again.

For me, October wasn’t all that bad. I would say an average month overall.

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retirebyforty November 3, 2012 at 8:03 am

November should be average. Hopefully we don’t have any big emergencies. Black Friday….

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Thomas S. Moore November 2, 2012 at 6:11 am

The first thing I notice was the increase in pay and quickly thought extra paycheck. Its sucks you spent so much to paint the home. How much do you have invested to the $131 return? I want to get that up to about $500 per month.

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retirebyforty November 3, 2012 at 8:04 am

I have about 10,000 at Prosper. My target is about 10% per year.

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Thomas S. Moore November 8, 2012 at 12:40 pm

Seems like it might be worth it putting 10k in prosper next year and see if it does better than my stocks.

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retirebyforty November 8, 2012 at 8:48 pm

Prosper is doing better than my stocks this year. I don’t want to put too much into P2P though. If we have another recession, the default rate will go through the roof.

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Noel November 2, 2012 at 6:52 am

Wow! I agree with Thomas. That’s a lot for paint. I personally have had a good month decreasing spending and trying to widdle down my debt. It seems like my paycheck doesn’t go as far as it used to. I’m always looking for supplemental income. I’m thinking about turning my hobby into a part-time job.

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retirebyforty November 3, 2012 at 8:05 am

That’s what I thought too. It’s a big place and the garage is free standing.

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Lance@MoneyLife&More November 2, 2012 at 7:11 am

Having big expenses like that is part of being a landlord. It is good you had a reserve to cover it and even if you break even on cash flow at least your tennants paid down the mortgage some this year!

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retirebyforty November 3, 2012 at 8:06 am

At least we have positive cash flow on the rentals so it’s covered. It would suck to have negative cash flow and then pay a big repair bill.

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Sustainable Life Blog November 2, 2012 at 8:12 am

Oh man joe it looks like you got killed this month. Not too bad though that it was a 3 paycheck month for the editor-in-chief and you were able to get some of it back. Very helpful for those of us (like me) that are curious about rental properties to see expenses and cash flows for others. Would really enjoy a Year end cash flow post on the properties you own.

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retirebyforty November 3, 2012 at 8:07 am

I’ll do a year end summary in December. It will be a tax prep too…

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Christa November 2, 2012 at 10:16 am

I think you did great despite such a big hit. Hiring painters is worth the expense.

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retirebyforty November 3, 2012 at 8:08 am

It was time to repaint. The previous owner had negative cash flow and put off a bunch of repairs.

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Kathleen @ Frugal Portland November 2, 2012 at 10:39 am

Oof! But you’ll be fine. Can’t wait to see the year-end report!

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Financial Samurai November 2, 2012 at 12:11 pm

Ah, but at least the paint is 100% deductible!

Nice job on the How To Engineer Your Layoff affiliate income before the price increase! Big bucks! :)

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Financial Samurai November 2, 2012 at 12:14 pm

Oh, and to answer your question on October income/expenses… no new out of the blue expenses thank goodness, and savings is the same as I’m basically saving 100% of my passive income a month as I live off my online income. More motivating to try and write more and generate more that way!

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retirebyforty November 3, 2012 at 8:08 am

That’s great to hear about the 100% saving. Hopefully we’ll get there in a couple of years.

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20's Finances November 2, 2012 at 1:05 pm

It looks bad, but when you take out the painting costs, it was a good month. I too like those months when I get 3 paychecks within the same month. Our month was pretty normal – another positive month.

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20's Finances November 2, 2012 at 1:08 pm

Oh, I forgot to ask – is your P2P income reported here just the interest? or principle and interest combined?

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retirebyforty November 3, 2012 at 8:09 am

It’s interest minus defaults.

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Evan November 2, 2012 at 2:24 pm

Wow $419 from Media that is amazing! Was the paint job a necessity?

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retirebyforty November 3, 2012 at 8:11 am

Yeah, that was a awesome month. I don’t know if I’ll get back there for a while. The previous put off painting for a long while and we knew we had to repaint at some point. At least we got it done before the rain started.

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Crystal @ Prairie Ecothrifter November 2, 2012 at 11:12 pm

Sorry about a rough month, but I bet November will be awesome! Good luck! It will totally help that the painting is all done. :-)

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bill November 3, 2012 at 6:49 am

Your expenses don’t include property taxes or insurance premiums?

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retirebyforty November 3, 2012 at 8:02 am

The property tax and insurance premium are baked in to the “rental property” category.

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Jeremiah November 3, 2012 at 10:40 pm

This doesn’t look like a bad month at all… Sure – the big negative cash flow is a bummer, but spending that cash on new paint may have some real returns.

Speaking of which, what was painted? Exterior only on the 4-plex and garage???

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Edward November 4, 2012 at 1:20 pm

Numbers don’t look too bad considering the big one time landlord expense. Out along southern Cali coast you also have to tent for drywood termites every 8-10 years (can run a few thousand). Do rental units get charged much higher premiums by your insurance company? Do you also carry a large umbrella liability policy?

Ha, as a hardcore Quicken user, I decided against a ‘baby’ category when we had our son. Sure I was curious about the cost to raise a baby, but, to me, it didn’t seem right to keep count. So, baby supplies went into general household category, baby clothes went into general clothing category, etc. I just managed the general categories (all 61 of them… yikes!)

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retirebyforty November 5, 2012 at 8:34 am

I pay about $1200 per year for the 4 plex insurance. That is quite a bit more than my home. We do carry an umbrella policy.
61 categories are too much for me. :)

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Brick by Brick Investing November 5, 2012 at 11:07 am

As always great detail in explaining your monthly activity. I get ideas from seeing posts like this. Thank you. It seems as if the rental property will be all set soon and you won’t have to worry about a drastic cost in the near future. October was a decent dividend month for me, but November will be horrible. I only have 1 or 2 stocks paying dividends. Keep up the good work.

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retirebyforty November 7, 2012 at 1:58 pm

I think 2013 will be better for the 4 plex and then 2014 and beyond should be smooth sailing. I think our November will be OK for dividends. It’s the first month of the quarter that’s pretty dry for us. :)

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