Whew, August is over. It was a wild month, that’s for sure. We were very busy trying to cram in as much fun as we can before the rain starts. We went camping at the beach, hiked at Mt. Saint Helens, went to concerts, and attended various festivities around town. We are all worn out and I’m really looking forward to school starting up again. We also spent 2 weekends doing DIY on the rental duplex. August was a busy month.
Of course, the stock markets around the world were having their own wild rides in August. The S&P 500 Index gave up all its gain and was at -4% year-to-date on August 31st. It looks like the wild ride isn’t over yet because the S&P 500 dropped 3% further on September 1st! We are investing for the long term so I’m not losing much sleep over the volatility. The majority of our investments are in low cost Vanguard funds and solid dividend stocks. We have a few speculative stocks, but they are just a tiny sliver of our net worth. With this style of investment, we just need to concentrate on adding as much to our investment as we can. We don’t need to pay much attention to the short term volatility. I’m confident that the stock market will recovered by the time we need to withdraw from our retirement fund in 2035.
On the personal finance side, August wasn’t a very good month for us. We spent more than usual due to trips and DIY fixes at the rental. Let’s see how I did with my 2015 goals first and then I’ll share our cash flow.
Invest $50,000 in our tax advantaged accounts (progress at 79%)
We added $10,598 to our tax advantaged accounts in August. I have been looking for an opportunity to contribute to our Roth IRA and i401k so the mini crash was welcomed. Everything is still down, but I’m glad I picked up a few shares at a discount. We added $5,000 to our Roth, $3,500 to my i401k, $1,698 to Mrs. RB40’s 401k, and $400 to RB40jr’s 529 account.
That’s $39,632 so far in 2015. With the extra contribution this month, it looks like we should be able to meet this goal handily.
Surpass $50,000 in RB40 Junior’s 529 account (about $6,900 to go)
RB40jr currently has $43,114 in his 529. We contribute $400 per month via auto deduction. The stock market is down so this account is down too. I don’t think we will be able to meet the $50,000 goal in 2015. Unfortunately, we don’t have enough extra cash to make the extra contribution here unless we have a windfall in the next 4 months.
Generate $10,000 from our dividend portfolio (progress at 65%)
We made $640 in dividends last month. We are at $6,522 so far this year. It looks like we are on pace to complete this goal.
Exercise 120 times (I gave up tracking…)
I went to the gym once in August… This is one area that I haven’t been doing well in early retirement. Summer was tough because our schedule was so flexible. I hope to get back to the gym once school starts up again. Next year, I will need to make a better goal and get Mrs. RB40 onboard. She is exercise-averse.
Try 6 new restaurants in Portland (Done!)
We tried 2 new restaurants in August. We are at 7 so far in 2015.
Pambiche is a great authentic Cuban restaurant in a colorful building on the east side of town. I had Rabo Encendido, oxtail on fire. The dish was so flavorful; it had me gnawing on the bones. Yum… Mrs. RB40 had fish in coconut milk stew. Jr had a beef, bacon, and olive empanada. Those dishes were really good, too. We’ll have to go back to try the whole menu.
We also tried Wow Burger. This was a working lunch when we were having our DIY weekend at the rental. The burger was good, but there are better burger joints in Portland.
Visit a foreign country (WIP)
We are heading off to Costa Rica in September! It will be the rainy season, but I think we will still have a great time. We got RB40jr’s passport and renewed mine. It’s been 6 years since we left the country and I’m really looking forward to traveling again.
Net Worth (+0% so far in 2015)
Needless to say, August wasn’t good for our net worth because of the stock market drop. Our net worth is now at almost the same level as it was on January 1st. I guess that’s not bad because the S&P 500 dropped almost 4% YTD.
Check out how our portfolio performed compare to the S&P 500. Our portfolio didn’t drop as much as the S&P 500 because we have bonds and other alternative investments. We also added money this year so that pushed us to 0% instead of -1.76%.
If you need help keeping track of your finances, try using Personal Capital to manage your portfolio. Also check out their fantastic retirement calculator. You can read my review here – The Best Free Retirement Calculator.
Take Home Income (target > $5,000)
Our take home income was lower than usual in August at only $3,742. The biggest contributor to that is the negative cash flow on the rental due to the repairs. All the income streams were on the low side in August. That happens sometimes.
Mrs. RB40’s Paychecks: $4,658.
Rental income: -$605. We spent $923 on replacing a sink, 2 faucets, and 2 toilets. That dropped us into the negative territory. Hopefully, we don’t have any more big repairs this year.
Online income: $2,716. Online income was a little low in August. I attribute that to the summer slowdown. I’m hoping it will increase once vacation season is over. I will break down the online income and expenses in our monthly newsletter so if you’re curious, sign up with our email list.
Dividend: $640. Our dividend payout is always a little low in the 2nd month of the quarter. You can see our dividend portfolio here.
Interest: $9. Interest rate is quite low so this will be small in the foreseeable future.
P2P lending: $86. Our ROI hovers around 7% and I’m not too hopeful for the prospect of P2P lending when the economy goes south. I’m slowly reducing our investment in this column.
Misc income: $0. No extra income this month. 🙁
Expense (target < $4,500)
Our personal expense actually came in under budget at $4,332. That’s actually pretty amazing because we had some big expenses in August. Mrs. RB40 took a trip to DC for a job interview. We had a camping trip to the beach. I booked some hotels in Costa Rica. We also paid for passport processing fees.
Housing: $2,228. Mortgage, HOA, and property tax.
Cash Allowance: $200.
Groceries: $241. Hmm… Grocery bill was down. I guess that’s due to the out of town trips.
Child/Dependent: Refunded $42. RB40jr refused to take the level 3 swimming class so we canceled.
Entertainment: $74. Gym membership fee and we ate out a few times.
Misc: $1,237. This is mostly travel cost as mentioned above. I also got a Kindle Fire and Mrs. RB40 got a new pair of sandals.
Transportation: $34. Not including gasoline for out of town trips.
Pre-Tax Saving: $3,598. My solo 40k, Mrs. RB40’s 401k, and Junior’s 529 account.
Extra Saving ($12,042 so far in 2015)
Unfortunately, we had negative cash flow in August, -$590. That’s not good at all, but I guess it happens. Once we get back from Costa Rica, we should be able to hunker down and reduce our monthly expense.
Misc fund: $2,042.
Extra retirement fund: So far we sent $10k from our extra saving to fund our Roth IRA and my i401k.
Overall, August was a rough month for us financially. Our income was lower than usual and our expense was relatively high. Summer is over so we should be able to cut back for the rest of 2015. Our income in September will be better, but we will have another high expense month due to our Costa Rica trip. The last quarter of 2015 should be much better, though.
Did you have a good August? Anyone have travel plans in September or are we the only one taking a vacation after school starts?
Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
Joe also 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 DIY investors analyze their portfolio and plan for retirement.