August 2020 Goals & Financial Update

August 2020Hey everyone, August is over! You know what, I can’t wait until 2021. This year has been crazy. It’s been just one thing after another. At this point, I’ve completely given up and stopped caring. I’ll do my part and vote, but that’s about it. For now, I’ll ignore 99% of the news so I can keep my blood pressure down.

*Make sure to vote! Check your voter registration and vote early if you can.

Personally, August was a pretty good month for us. We took a couple of road trips in July so we didn’t do much in August. We just stayed home, played video games, read, watched movies, and relaxed. RB40Jr’s school is starting on Wednesday and we’re getting ready for that. It’ll be fully online which isn’t a problem for us. We prefer to hunker down at home until this whole COVID thing blows over anyway. We’re very lucky to be able to do that. Some of our friends are having a really hard time juggling school and work.

On the personal finance side, we did pretty well last month. Our income was down a bit, but our spending was very low as well. We were too lazy so we didn’t spend much. August was our cheapest month so far in 2020. Our net worth also hit a new high! I don’t think it will last, but I’m enjoying the feeling while I can. The stock market is unpredictable. Nobody knows what’s going to happen next. I really doubt it can stay at this elevated level.

Okay, I’ll go over my goals first and then share the details of our net worth, cash flow, and savings.

2020 Goals

Here is my goal scheduling spreadsheet. It works really well. Try it out if you can’t keep up with your New Year goals. The key is to go over the spreadsheet at least once a month to track your progress. That way, you’ll see which goals need extra attention.

August NY goals

Many of my goals are not going well this year. I started out with reasonable goals, but many are way behind. That’s life, though. Some years are harder than others. We just need to survive 2020 and hope 2021 will be better. It’s okay to have lower expectations this year.

Financial Goals

  • Real Estate Crowdfunding $150,000.Earlier this year, I added $25,000 to our RE crowdfunding investment with CrowdStreet. We have some extra cash after not spending much this year so I’m looking for a good project to invest in. Although, I’m afraid to commit a lot of money right now. The pandemic isn’t over yet and cash is king.
  • FI Ratio > 110%. This is my main goal for 2020. The FI ratio is passive income divided by expense. Once we reach 100% consistently, then we’ll be set to retire in style. This goal is good so far. We’re at 113% for 2020 so far. I think we’ll be okay with this one.
  • Saving rate > 50%. This one is really tough because I use gross income. If you make a lot of money, your tax rate is higher. If you don’t, then your expenses overwhelm the income. Only a few households can reach 50% saving rate. We’re at 60% this year! That’s really good. Let’s hope it holds up for the rest of 2020.
  • Side hustle income > $5,000. We resumed scooter charging in August and made about $500. At first, I thought other people needed more money than I do, but it seems like nobody was doing this side hustle. Gig workers can make more money with grocery/food delivery and pet/house sitting. Also, unemployed people don’t want to jeopardize their unemployment benefits so they’re not doing this. Scooter charging pays a lot less this year so it isn’t really worth it. We’re just retrieving and delivering the ones that are near our home. Also, I get a little exercise so that’s another good point.

Personal Branding

  • Content creation > 178 blog posts and videos. This is a huge amount, but we’re ahead of the pace. In August, I uploaded 10 blog posts and 3 videos! That’s quite good. We’ll try to post videos a bit more often.
  • Refresh RB40. This one is on hold for now. I’ll get back to it when things are back to normal. I can’t focus when RB40Jr is home.
  • 1,000 subscribers on Eat by 40! Currently, we have 106 subscribers. This is a slow process that will take more than one year. We’ll keep working on it. Oh, I changed the channel name to Retire by 40! Maybe it’ll get more traction…

Personal Goals

  • Visit Thailand. I wanted to visit my parents this summer, but that got canceled. We’ll try to go in December.
  • Travel hack 200,000 points. I don’t think we’ll accomplish this goal in 2020. There are too many other problems to deal with this year.
  • Update our Will. I purchased Quicken WillMaker & Trust and made a Will. We’ll talk to a lawyer when things are back to normal. This will have to do for now.
  • Happiness level > 8. My happiness level was very good in August – 8.5! We didn’t do much and just relaxed at home. Also, I ignored most news and stopped worrying about things I can’t control. I’ll worry more next year. Life is better when you avoid the news.

Net Worth (+5% YTD)

I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we made. 2020 is a strange year. The stock market crashed in March, but it came back to hit a new high in August! I don’t understand how the market is doing so well with millions of workers unemployed. But I’m very glad I’m an investor. For 2020, our net worth is up 5%! Wow, that’s not bad at all.

Personally, I think it will end badly. This feels like the dot com bubble to me. The stock market valuation is unrealistic. It will revert to mean at some point. So brace yourself. It will be a bumpy ride. The recession isn’t over yet.

Here is a chart of our investment from Personal Capital. *Sign up for a free account at Personal Capital to help manage your net worth and investment accounts. I log in almost every day to check on our accounts. It’s a great site for DIY investors.

August net worth

2020 Passive Income ($26,606 YTD)

Here is a quick summary of our passive income. You can see all the details on my Passive Income page.

August Passive Income

Surprisingly, our passive income is holding up quite well.

  • Real Estate Crowdfunding– RE crowdfunding is great this year. You can read more details here on our RE crowdfunding income page.
  • Rentals– We have two rental units and both our tenants have solid jobs. For now, they are both paying rent on time.
  • Dividend– This one looks good so far, but I’m sure companies will cut dividends if this pandemic sticks around through 2021.

Our FI ratio looks good so far at 113%. We didn’t spend much and our passive income is still holding up.

*FI ratio = passive income/expense

August 2020 Cash Flow

Our cash flow was good in August. Income was low, but our spending was lower too. We didn’t do much so we didn’t spend much.

This is the Sankey diagram for August. You can get a quick overview here and see the details below.

August Sankey

Gross Income (target > $13,000/month)

This year, I increased our income target to $13,000/month. If we make this much every month, we’ll be able to save around 50%. Unfortunately, our income dipped below $13,000 since May. The pandemic decreased my blog income substantially. I think it finally bottomed out. Next month should be better. For August, our gross income was $11,396. That’s a bit low, but good enough for 2020.

  • Mrs. RB40’s job: $8,528. Mrs. RB40’s job continues to be the pillar of our household income. We could survive without her income, but this whole pandemic would be a lot more stressful.
  • Blog Income: $1,242.
  • Real estate crowdfunding: $42. RE crowdfunding was slow last month. You can see how we’re doing at the RE Crowdfunding Passive Income page.
  • Rental Income: $598. Good rental income this month, no repair. Read more at the Rental Property Passive Income page.
  • Dividend Income: $555. Our dividend income was slow in August. See more details at my Dividend Passive Income page.
  • Interest Income: $1.
  • Side hustle: $500. We made about $500 by charging scooters around our home. RB40Jr gets 33% of this because he helped me collect the scooters.

Monthly Spending (target < $4,166/month)

This year, I plan to spend about $50,000 so our monthly spending budget is $4,166/month. For now, we are way under budget due to the lockdown. Like many families, we’re only spending money on housing and essential goods. In August, we spent $2,322. That’s our lowest month yet.

  • Housing: $1,168. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, and furnishing.
  • Parents: $10. My parents didn’t need extra money last month. I changed the auto-transfer amount to $10 so I don’t have to set it up again.
  • Groceries: $491. This is right around the average, good.

Here are some of the food we cooked last month. Check it out and subscribe to our food channel if you enjoy them.

Tiger Cries SAHD recipe

Pork Tocino SAHD Cooking

  • Travel: $0.
  • Entertainment: $164. We supported the local businesses and ordered some takeout meals.
  • Health: $0.
  • Bills: $23. My term life insurance payment.
  • Transportation: $504. Car insurance and gas. Also, I renewed the registration and paid for the annual parking pass. $195/year to park in the street. It’s getting more expensive.
  • Kid: $0.
  • Pet: $0.
  • Clothing: $115. Mrs. RB40 ordered online.
  • Misc: $0.

Others

I don’t count these as personal spending.

  • Taxes and deductions: $2,380.
  • 401k savings: $1,520. Mrs. RB40 contributed $1,520 to her 401k. I didn’t make a contribution last month.
  • Roth IRAs: $1,000. We contributed $500 each to our Roth IRAs.
  • 529 College Savings plan: $0. We contributed $4,000 earlier this year. We’re done for 2020.
  • Extra Savings: $4,021.

2020 Savings ($69,563 YTD)

So far, we saved $69,563. This part is going very well for us. Our expenses are much lower than normal and we were able to save a huge percentage of our income, 60%. That’s really good.

  • Joe’s 401k: $20,125.
  • Mrs. RB40’s 401k: $11,380
  • Roth IRAs: $7,000
  • 529 College Savings: $4,000
  • Extra savings: $20,516

YTD 2020 saving rate = 60%

August 2020 Wrap Up

Overall, August was a good month for us. Our net worth hit a new positive high and our cash flow was pretty good. More importantly, I feel good about life. We enjoyed the last month of summer and had a good time without spending much. Only a few months left until 2020 is over. I’m pretty sure 2021 will be better.

How about you? Did you have a good month? If you have kids, is school going okay?

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.

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37 thoughts on “August 2020 Goals & Financial Update”

  1. WoW ! Good job on the $26,606 of passive income so far this year !!! Quite impressive !! I guess, I should have started way early than 4 years ago to invest and retire at 40 like you, oh wait, I’m 40 ! lol ! Anyways, keep up the good work ! ???

    Reply
  2. Hello Joe – Interesting post. Yes August has been quite good for us. Well particularly for us who invest in quality dividend-paying stocks. I have seen my net worth go up significantly. I am getting into oil stocks right now. They are undervalued right now. When things turn and the Covid-19 is gone, these stocks will rebound. I do have a large position in cash. Cash is king. Hoping to invest in real estate in 2021, when this industry goes south from people defaulting on mortgage loans – 2008 again, but not as bad.

    By the way, I read your how to start a blog page article. Very nice. Excellent info. I found your blog from reading a comment you posted on Financial Samurai’s site. Another great guy. He inspired me to stat my own blog website. I like how both of you recommend networking and working with other bloggers. I do not have as much traffic as you and Sam but I will eventually. I just launched my blog in July 4th 2020. One post a week. Every Thursday.

    Economy Chief

    Reply
  3. Hi Joe. I hope you hang in there. Mr. Plastic Picker just stopped watching the political news as he was like you getting very stressed about everything. Is there vegan Thai cooking? I really think the world is moving to more plant-based, “flexitarian” and sustainable cooking. I think if you do more Thai cooking with that angle, you’d get really into a niche but growing area and then also help the earth. In my real job, I’m working on bringing these amazing speakers who do culinary medicine and pediatric gastrointestinal medicine together to talk about plant-based eating in kids. On Instagram, it’s all about plant-based. Just a thought. Averting food waste and plant-based eating, those are my suggestions for your food channel.

    Reply
    • There are lots of Thai vegan recipes, but I only know how to make a few. Unfortunately, my son does not like my vegan dishes at all. He’d eat a few bites and then say he’s full. I need to learn some new vegan dishes the next time I go back to visit.

      Reply
  4. Looking good. Can’t complain from my end. BTW, I just saw the most recent news about Thailand that they are planning to open up in October for “regular” tourism. It’s still kinda sucks as they are planning to restrict visits only to Phuket and you have to stay 14 days inside a hotel.

    I’m giving up on Thailand this year.

    Reply
  5. Hi Joe, I’m glad to see you still have a great happiness score – at the end of the day, this is what counts the most.
    I’m like you, the state of the financial markets doesn’t make sense to me. I have some cash that I’ve been holding on to, waiting to invest when it dips, which isn’t happening. That seems to be the story of my investing life!

    Reply
  6. Nice stats Joe, very impressive.

    What do you think led to the downfall in blog traffic due to the pandemic? I would have expected it to be the reverse with so many people unable to work.

    Reply
    • I think people are too stressed out. Nobody wants to read about early retirement right now. Too many other problems so people will stick it out in their job for now. That’s my theory. Hopefully, things will go back to normal next year.

      Reply
  7. Great going. I’m always amazed by how low your spending is. I’d love to see an updated blog post about your approach to RB40Jr’s 529. I see that you only saved 4k in his 529 this year, whereas you had 20.5k extra savings elsewhere. Do you already have his 529 pretty well funded? I have a 3.5 yr old and a 1 yr old and I’m trying to save $40k in each of their 529s by the time they are 4 yrs old so that I can front load their 529s. Anyways, would love a little more insight into your thinking there! Thanks!

    Reply
    • Our son’s 529 is very well funded now. The value is nearly $100,000 due to the stock market. Also, we just found out Mrs. RB40’s dad opened another 529 account for him. So his college education should be covered.
      Frontloading is a great idea. We did that when he was young and it paid off.

      Reply
  8. OMG I just saw your tweet about your neighbor in your old neighborhood getting pepper-sprayed and nearly run over by Trump supporters just because she was going out for a walk in her neighborhood.

    How awful!

    Reply
  9. I’m with you on giving up on the news – it’s always so slanted in one direction or another anymore that it’s hard to sift through and know what the facts really are.

    We had a rough month spending time with my brother and sister-in-law… they love to spend money like it’s going out of style. And that meant we spent a good amount of money, too. Fortunately, we’re heading out on Friday back to our road trip so we can get back to being our frugal, comfortable selves. 🙂

    Reply
  10. “Hey everyone, August is over! You know what, I can’t wait until 2021.” — so badly let’s skip the last day of August 😉 Haha.

    Glad you’re stepping away from some of that anxiety-driving media that are outside your “circle of control”. It can be overwhelming. It’s hard enough to deal with internal struggles, family, etc. in this year.

    Scooter charging — I’m interested, got a post on this side gig?

    Reply
  11. Ignoring news is probably a good idea right now. Things are crazy down in the US right now. 🙁

    I feel that international travel won’t be happening at all this year. Not sure if you’ll be able to visit Thailand.

    Reply
  12. You can encourage other people to:
    Check their voter registration
    Make a plan for how they are going to vote as soon as possible
    Vote early if they can (including by absentee ballot)

    And maybe encourage people not to vote for Trump? Some of the personal finance community seems to believe his rhetoric and ignores his actions, even though they will have major negative consequences on the economy and everybody but a small handful of families (the few whose wealth has grown by billions of dollars during the pandemic). Like the social security tax “holiday” that will have to be paid back by companies next year. Or just everything that has caused the pandemic to be prolonged and more dangerous in the US. (That’s even ignoring the blatant and dangerous racism and fear-mongering.)

    You’ve got a platform! You don’t have to keep your eyes glued to the news, but I think we have to do more this time around than we did 4 years ago or we’re going to end up getting the same outcome, but even worse.

    Reply
  13. Another solid month, Joe. Congratulations on the savings rate and FI ratio. I strive to be as consistent as you are!

    Similarly, I haven’t stopped caring, but I have taken a step back from the dumpster fire that is the world right now. I’ll continue to take action, but need some mental balance right now, too.

    Reply
  14. Very impressive month with low spending, especially in Portland. Curious to see why you have term life insurance? My husband and I retired last year and have 2 kids and right now we’re not carrying any life insurance. Also, what do you think of Quicken software for Will and Trust? We still need to get this taken care of ourselves.

    I still don’t know our August spending, but we are averaging a bit over 2k per month. We don’t have a mortgage but live just south of Seattle. It’s our first year of retirement so I’m tracking our expenses more closely. We have a 3 year old that goes to a Cooperative Preschool. It looks like it will open for an in-person outdoor class. We’re actually looking forward to it since we have been on a lockdown since February when our 2nd was born.

    Reply
    • I got a small term life insurance when I retired. I had coverage from work before that. We just wanted to make sure our son can go to college in case something happens to me. Life would be a lot more difficult for my wife and kid if I’m not around. Social Security would help, but I think the child benefit stops when they turn 18.
      Quicken Will and Trust is a pretty good stopgap. The Will is pretty easy. The Trust is complicated and I’m not done yet. Once things are back to normal, I’d probably try to find an affordable lawyer.
      $2k per month is really good. Nice job. Good luck with school!

      Reply
  15. I’m confused. You have 2 rental units that pay you a total of only $598/mo. How is it possible that rentals in Portland Oregon bring in only $300/mo. each? What am I missing.

    Reply
    • That’s after mortgage, property tax, HOA, insurance, utilities, etc…
      The rent for 2 units is around $2,700, but the income is $600/month, at the most.
      Factor in maintenance and repair, we’d be lucky to see $4,000/year.
      It takes time for rentals to make good income.

      Reply
  16. A solid month Joe, with some very low spending! Great job!

    I think you’re right to focus on the things you can control. Worrying about all the chaos in the world is just going to make you sick, afraid, and upset at the world.

    Reject that negative mindset and embrace the beautiful, joyful, and understanding attitudes around you. You’ll feel better, and the world will look a little brighter every day. A world where you just keep winning.

    Keep it up Joe!

    Reply
  17. Agree that this year has been hard on everyone throughout the world. Hope next year is better.

    The markets have been crazy with the rebound. Never expected my moonshot investing style to outperform both during the pandemic and coming out of the recession.

    For a single person like me, being stuck at home is no fun. Especially since the Bay Area is still locked down. Managed to get some equipment for a garage gym which is keeping me sane.

    Reply
  18. Hey, there’s still a day left in August – LOL.

    I’ve given up on a lot, but I simply can’t stop caring. I see something wrong and I just need to try to fix it. That’s why I fought so hard against MLM/pyramid schemes. But, as you mentioned with your blood pressure, sometimes you have to move on. Sadly, ignoring the news is a thing. Well, I didn’t mind it as much as when the news was dominated by the first white iPhone!!! or whatever Kardashian person is doing now.

    Distance learning broke me and I don’t have a traditional job. Even a professional teacher wouldn’t try to teach kids in K and 1st grade in different rooms at the same time… and they control the curriculum. Fortunately, it looks like our private school is going to be able to do in-person learning. My wife is getting deployed for a bit in October, so it is a big win.

    $500 from scooters seems great! It’s good to see that moving forward.

    I don’t see how this market can end well. It can land for a few years, but there are long term problems.

    Finally, if your recipe makes a tiger cry, I need to be the farthest away possible.

    Reply
    • I didn’t want to wait until next week. 🙂
      I’m just taking the rest of 2020 off to deal with family problems. RB40Jr is starting virtual school. My parents have health issues. I’m already stressed out. Next year, I’ll care more.
      Scooter charging is great. I go out more and get a little exercise.

      Reply

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