Fall has arrived. Are you getting chilly where you live? The transition to cooler weather felt abrupt for us. It was summer when we went to Hawaii for a week and it was fall when we got back. I’m a bit sad because I love the long hot summer days filled with fun activities. Mrs. RB40 enjoys autumn, though. I drag her out on the weekends too much during the summer so she’s ready to hunker down and break out the crock pot. The good news is that the rain and cooler temperature will help bring the wildfire under control. When we left, the Eagle Creek Fire was raging near Portland. This was the worse wildfire near Portland that I’ve seen in 20 years. The ashes were raining down and the air quality was terrible for days on end. It felt apocalyptic. This massive fire was started by a teenager playing with fireworks on the hiking trail. It’s ridiculous that the kid isn’t getting penalized (yet.) Anyway, the fire is currently 46% contained and that’s much better than before. I’m sure it’ll be over with soon because the rainy season is here.
On the financial front, September was a good month for us. Our income was good and our expenses were under budget. September is usually a very slow month for online income because a lot of people were on vacation in August. (The payment for August arrived in September.) Our other income streams were good, though. On the expense side, we spent a bit more than usual due to our trip to Hawaii, but it’s not too bad. We were still under budget so it’s all good.
Okay, let’s go over my 2017 goals first and then you can see the details of our cash flow.
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At the end of September, the year is 3/4 over. We’re in the last quarter of the year. 2017 is practically over. Soon, Halloween will be here, then Thanksgiving, and Christmas. It’s going to be a busy few months. That’s why we really should get as many goals accomplished as possible in the first half of the year. It’s always really difficult to start something new with all the holidays coming up.
Personally, I’ve been doing pretty well with most of my goals. The yearlong goals are on track. There are 2 goals that I won’t be able to accomplish this year and I gave up on those – Pinterest and site redesign. For the rest of 2017, I’ll focus on fitness, Toastmasters, and our international trip. Fitness will be the toughest one out of these 3. It’s always difficult to regularly workout when there are interruptions such as vacation and holidays.
Check out my goal tracking spreadsheet.
- Save $50,000 in our tax advantaged account – We’re doing very well here and have saved $46,290 in our retirement accounts and the 529 college fund. We’re way ahead on this goal and should be done with it in October.
- Dividend Income $11,500– I’ll update our passive incomepost next week and you can see the details there. In the first 9 months of 2017, we received $8,522 in dividend. We’re right on pace at 74%, that’s great! This goal should be completed by the end of the year.
- FI ratio > 78% – The FI ratio is passive income divided by expense. Currently, our FI ratio is 98%! 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 10.6% so far in 2017. That’s really good and I’m satisfied with 10% in 2017. However, it is 4% behind our benchmark. The VFORX (Vanguard’s 2040 fund) is up 14%. 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 $54,042 so far. I was able to meet 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 really 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. Mrs. RB40 will be our media person when she retires from her full time work.
- Fitness – September was not a bad month for fitness. School started and I was able to get back to regular exercise again. We had a one week vacation and I didn’t work out on those days, but we walked a ton. I also missed a few days when I had to do some errands. Overall it was okay and I give myself a B for September. I walked about 8,720 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. The site was on hiatus until school started. However, I’m finding it hard to get back to blogging about fitness. I’ll just blog every 2 weeks or so.
- Join Toastmasters – I plan to join Toastmasters in November after we come back from our Cancun vacation. I found a club near where we live so it should be easy.
- RB40Jr’s after school programs –This fall, RB40Jr is in a soccer team. We really need 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 direction 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 are heading to Cancun in November. I booked our tickets with point and also booked our hotels last week. We’re set for this trip to Mexico.
Net Worth (+10.6% 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. Now that we’re 3/4 of the way through 2017, we are way behind, about 4%. VFORX is really killing it this year.
Our net worth is up 10.6% so far in 2017. That’s really good at this stage of our lives and I’m happy for 10% gain in 2017. Recently, I’m nervous about the market and I shifted some of our stock allocation to bond. I want to be a little more conservative and I don’t mind a little less gain over the next couple of years. We are a bit behind VFORX, but it isn’t a big deal to me. Next year, we’ll probably just avoid benchmarking altogether. It doesn’t seem to add anything useful.
Here is the picture of our net worth (investment) on Personal Capital. Our investment did pretty well in September, but Zillow decreased the estimate on our properties. I haven’t changed my personal spreadsheet yet. Valuing real estate is always tough.
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.
September 2017 Cash Flow
We had a good month with our cash flow in September. Our income was solid and our expense was under budget. There were some issues, but we worked through them. 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 $8,581. This is a bit below average for 2017 due to slow online income. Everything else is in line with the average.
Mrs. RB40’s paycheck: $5,142. 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: $931.
Online Income: $4,295. My online income was below average in September, but it’s still very good. 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: $1,606. These are the banner ads you see on Retire by 40. I hope to make about $1,500/month from these ads.
- Affiliates: $2,905. 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.
- Brand promotion: $0. I’m cutting way back and probably won’t make much money in this category going forward.
- Expenses: -$216. Internet, email service, CDN, cell phone, meals, 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: $1043. You can see our dividend portfolio here.
- P2P lending: $44. 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 started investing with Realty Sharesearlier this year. So far, I’ve invested in a 2 commercial properties and an apartment complex. I like RealtyShares and I’m planning to invest much more next year. See how I’m doing with real estate crowdfunding here.
- KickFurther: $0. 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. I’m also getting out of this one. Small businesses have way too many problems. You can read more about them next week when I go over our passive income.
Pre-tax savings: -$2,890. I sent $1,500 to my solo 401k. Mrs. RB40 saved $1,390 in her retirement account.
Expense (target < $4,500)
Our monthly expense target is $4,500 per month and we barely came in under that limit at $4,478. Whew! This was actually really good considering we went to Hawaii. Our trip didn’t cost much because Mrs. RB40 was there on a business trip. We just tagged along and I paid for our flight with points.
Other expenses that were higher than average – medical and clothes. Mrs. RB40 and Junior visited the hospital a few times in September. She has good coverage so it wasn’t a big deal financially. It could have cost a lot more if we didn’t have good insurance. As for clothing, Mrs. RB40 is updating her work wardrobe and our clothing bill will be a bit high in future months.
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
Groceries: $454. Our grocery bill was average last month.
Transportation: $35. This is for gasoline and parking. We share one car and usually don’t drive much.
Kid: $46. We got some back to school stuff for RB40Jr.
Bills: $190. Electricity and insurance (auto, home, term life, and umbrella).
Healthcare/Medical: $141. Mrs. RB40 has a minor surgery and also went to ER when the incision bled later that evening. RB40Jr had a few doctor appointments for his hearing impairment, an MRI, and picked up his hearing aid. I’m really grateful that we have good medical insurance coverage. These visits probably would have cost over $10,000 if we didn’t have insurance.
Entertainment: $126. This was for eating out, gym membership, whey protein, and a used XBOX game.
Travel: $713. Last month, we went to Hawaii. The cost of the trip was around $600. I also purchased a few other things to bring along on this trip – rash guards, inflatable life jacket, and snorkeling mask for Junior.
Clothing: $335. Mrs. RB40 is updating her work wardrobe. It’s not cheap, but she needs newer and better clothes for her job. Her income is much higher than her clothing expense so it’s worth it.
Misc: $130. Groan… We forgot to pay Portland’s art tax in April so we had to pay a little penalty. Oh well, I don’t mind supporting the art. I also got a new electric kettle from Amazon.
YTD Extra Savings: $54,592
September was a good month and we saved $4,103 in addition to our tax advantaged savings. Our income is doing really well this year. So far in 2017, we saved $54,592 extra. This is much better than 2016. What I did 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.
- The rest is in our savings account for now. My online income is much higher than last year and we’ll have to pay more taxes next April, at least $5,000.
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 September 2017, Mrs. RB40 could retire early! We had another good 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 $1,851 in September! 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.
September 2017 wrap up
September 2017 was another solid month at the RB40 household. My online income was lower than average, but still really good compare to 2016. Our expense was lower than budgeted so we could save some extra money. Everything is just going really great this year. We haven’t had a nice streak like this in a long time so we feel good. Usually, our finance has more ups and downs.
I think October should be better than September. School is back in session and most people are done with vacation. Our blog traffic is up about 14% in September and the income should follows suit. Also, our expense should be low because we don’t have any big plan in October. We probably won’t do too much for Halloween this year. RB40Jr just isn’t into it and I’m fine with that.
Did you have a good September? What’s your plan for October? We’re starting to hunker down and don’t plan to do much.