Hey everyone, how was your month of April? It flew by for us. The weather finally improved in Portland and activities picked up for us. RB40Jr started spring soccer and he enjoyed it for the most part. The soccer spring season is pretty relaxed. They play a game every week with no practices. I’m the assistant coach this season so I can help him out a bit more. We’re also practicing a bit on our own and that should improve his game. He’s not too bad, but he needs to be tenacious and go after the ball more. Some kids tend to stand back and try to strategize (or goof off.) But at this age, that doesn’t work. At this level, they just need to get in there and mix it up. Kids that go after the ball persistently are much more successful. Anyway, it’s fun coaching the soccer league. It’s not too serious at this level and most kids are having fun without a lot of pressure.
The other thing that kept me busy was helping my mom with her doctor appointments. She visited her primary care physician, got an MRI, followed up with the neurologist, and saw the dentist about a broken crown. Whew, that’s a lot of health related appointments in one month. Yeap, I’m officially a part of the sandwich generation now. Helping my mom and taking care of our son is a lot of work. It’s difficult to add any activities at this point. My mom is turning 70 in a few months so she’s not really that old. Her health is okay, but her analytical ability is in decline. She can’t decide anything on her own so I need to make many decisions for her. This is another big reason why I think retiring at 65 is a terrible idea. I know some people are still going strong and enjoying life to the fullest at 70, but I probably won’t be. My genetics aren’t that great so I’d better enjoy life while I’m young. Early retirement is the right choice for me.
On the personal finance side, we had a very good month. Our income was great and our expenses were low. Our passive income held steady and everything is rolling right along. Okay, let’s go over my 2018 Goals first and then I’ll share the details of our cash flow in April.
This is my goal scheduling spreadsheet. Last year, I found that I needed to start these goals in the first half of the year. If I wait until summer, they just won’t get done. The first 4 months were slow. It’s hard to get be motivated in the winter. Hopefully, I can get myself going now that the weather is warming up. You can get a quick status update from the chart and see the details below.
- Increase our real estate crowdfunding investment to $100,000. We’re doing well with this goal and now have $38,000 invested. I’m looking to invest more, but I haven’t found the right project to invest in yet.
- FI ratio > 100%. FI ratio is passive income divide by expense. So far, our FI ratio is 64% for 2018. This is slowly improving and I think we’ll do pretty well by the end of the year. Our expense was higher than usual in Q1 because we paid for our summer vacation to Iceland.
- Increase bond/cash allocation to 30%. Going to 30% bond/cash will beef up our opportunity fund. However, I’m not in a big hurry to do this because I think the stock market will go up this year. I plan to get to 30% before the end of 2018.
- Travel hack 100,000 points. We’re doing well with this one. Mrs. RB40 signed up for a card and we should get the bonus soon. That should push us over 100,000 points.
- Minor Redesign RB40. This one is really difficult to do because I can’t seem to budget time for it. It’s all I can do to write and keep the site running. I’ll work on this one in May.
- Blog 12 times at Fit by 40. This one is way behind now. I’m not motivated to write about fitness this year. At least, I’m still going to the gym regularly. For now, I’ll keep FB40 as test site for the redesign. You can see how I started the site here – How to Start a Blog and Why You Should.
- Blog income $100,000. This one is going to be very difficult so I’m grading it on the academic system. Q1 is the best quarter for blog income and we did very well. I made $23,344 so far in 2018. That’s actually pretty darn good, but we’re behind the pace. Maybe I should look at revenue instead. The taxes take a big bite out of the income. You can see more detail on my Blog Income page.
- Join Toastmasters. I visited a local club and it was a nice experience. However, there are too many things going on right now. My mom needs help with her various doctor appointments. Also, summer is coming up soon and I’ll spend more time with RB40Jr. I just can’t squeeze Toastmasters into my schedule. This will have to be put off until RB40Jr is more independent.
- Not paying for leaf removal. Showdown in November.
- Consolidate down to one property. We plan to move into our rental duplex and sell off the other 2 properties. This one will definitely take more than one year. Our rental condo is rented for at least a year so the earliest we will be able to consolidate is 2019.
- Visit Iceland. The trip is a go. I already booked our flight tickets, lodging, ferry, and rental car. Iceland is a very expensive country to visit, but it should be a great trip.
Net Worth (+0.2% YTD)
I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we’ve made. 2018 started off with a bang and we had a great month in January. However, the stock market turned volatile after that and we gave up all the gains. I still think 2018 will be a good year for the stock market, but nobody knows how it is going to turn out. There is so much uncertainty now.
My bet with Warren Buffett – I’ll benchmark our net worth against VFINX for 10 years starting in 2018. VFINX is down about 1% since the beginning of 2018. Our net worth is flat so we’re ahead for now. We’re doing well against VFINX so far, but it’s early yet. Our net worth is diverse so it does better when the market drops.
Here is a graph of our 2018 net worth on Personal Capital. Our net worth decreased a little bit in April even with good income. Some of our stock holdings had a rough month. Philip Morris and Altria both dropped 30% YTD. These have been great dividend stocks for years, but the party might be ending for tobacco stocks.
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2018 Passive Income ($12,458 YTD)
Here is a quick summary of our passive income. You can see all the details at my new Passive Income page. We had a slow start in 2018 because one of our rentals was vacant for the first 2 months. It’s occupied now so the passive income is looking better. Hopefully, it’ll be smooth sailing for the rest of 2018. The only trouble spot now is P2P lending. We’re seeing more defaults and the interest payments aren’t enough to overcome the hits. I will look into selling these loans off. It’s probably better to get out fast.
April 2018 Cash Flow
Our cash flow was good in April. Our income was great and our expense was reasonable. The only hiccup was P2P lending. We had another small negative month, -$44. This is not looking good. It might be best to just sell the loans at this point. There is a way to do that, but I haven’t tried it yet. I will put this on my to do list in May.
Check out my Sankey diagram and see the details below.
Take Home Income (target > $10,000)
For 2018, our monthly take home income target is $10,000. April was a good month and we did pretty well. My blog income was good and it is still holding up well. It usually drops off in the summer when everyone is on vacation. We’ll see how it goes this year.
- Mrs. RB40’s paychecks: $5,875
- Blog Income: $5,354. You can read more details at my Blog Income page. RB40Jr is on the payroll now as model and photographer. The income will go straight into his Roth IRA. I’m excited to see how this experiment will turn out.
- Rental Income: $902. All our rentals are occupied and we didn’t have any big repairs last month. Read more at the Rental Property Passive Income page.
- Dividend Income: $999. More details at my Dividend Passive Income page.
- Real estate crowdfunding: $239. RealtyShares is starting to pick up now and it is looking good. Read more at my Real Estate Crowdfunding Passive Income page.
- Prosper P2P lending: -$44. P2P lending was negative last month.
- Interest Income: $15.
Monthly Expenses (target > $4,800)
For 2018, our monthly expense budget is $4,800/month, an increase of $300 from 2017. This does not include contributions to 401k, Roth IRA, and college savings. We did pretty well in April and came in under budget at $3,804. We didn’t have a big expense in April.
- Housing: $2,365. Our housing expense is getting spendy. This category is over 50% of our expense every month. There’s not much we can do at this point. This includes mortgage, HOA fees, and property taxes.
- Groceries: $448. Our grocery bill was under control in April. I cooked many delicious meals and at well this month. Check out some pictures. Clockwise from top left – Pacific sole with shallot and caper sauce, Pajeon Korean seafood pancake with gyoza, Mrs. RB40’s baked empanadas, Shrimp tacos with mimosa. Yummm! Follow me on Instagramif you’d like to see more of my unglamorous early retirement lifestyle.
- Cash: $180.
- Transportation: $64. We share one car and we don’t drive much. I drop RB40Jr off at school in the morning and go grocery shopping on the weekend. That’s about it. We drive more in the summer when we visit local attractions.
- Kid: $59. RB40Jr got a Lego set from Ebay for $21. We spent $30 on his art to help the school raise funds. Lastly, he went to an indoor playground with his friend for $8.
- Pet: $34.
- Bills: $240. Electricity and insurance (auto, home, term life, and umbrella.)
- Health: $328. Dentist, eye specialist, vitamins, and gym.
- Travel: $0.
- Clothing: $20. RB40Jr got 2 new shorts from WMT.
- Misc: $67.
- 401k: $3,060. I contributed $1,630 to my 401k. Mrs. RB40 contributed $1,430 to hers.
- Extra Savings: $6,475
Extra Savings 2018: $17,917
2018 is going very well and our extra saving totaled $17,917 so far. Unfortunately, about $10,000 went to the IRS in April. I didn’t send in estimated tax payments last year so we owed the tax man. I’ll do a better job this year and try not to owe as much. At least, taxes are done. Now I can focus on investing our extra savings.
Here is what I plan to do with our opportunity fund in 2018.
- Invest more in real estate crowdfunding.
- Pick up some dividend stock if I see a good deal. I purchased 50 shares of PM in April.
April 2018 Wrap Up
Overall, April 2018 went well for us. Our income was good and our expense was under budget. Our net worth went down a bit due to the IRS payment, but that’s not a big deal. I think the rest of 2018 should be pretty good. We’ll see how it goes.
May should be pretty similar to April. It looks like the blog income will stay about the same. Passive income might drop a bit because I need to get new window blinds for one rental unit. Our expense should be good next month because we don’t have a big expense planned in May. As for net worth, it depends on the stock market. I’m not too worried about it, though. Nobody knows what the market is going to do so we should focus on what we can control – our saving rate. The stock market will do well in the long term so don’t worry about short term volatility. Just stick to your plan and keep investing.
Did you have a good April? It was a busy month for me. May should be more relaxed because we have fewer healthcare appointments. Hopefully, I can get going on some of my New Year goals. Time is running out because summer is approaching fast. It will be really hard to get anything done once RB40Jr is out of school.
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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.