January is over! Did you have a good start in 2017? It’s been tough to get going in real life this year because the weather was so bad in Portland. We had a bunch of snow days and the whole town slowed down to a crawl for quite a while. I couldn’t go to gym much because school was canceled due to bad weather and I had to supervise RB40Jr. Hopefully February will be better with fitness.
On the other hand, things are going pretty well on the financial front. Our income was much higher than usual and our expenses were very low in January. That’s partly due to bad weather. We just hunkered down at home and didn’t go out much. We haven’t gone out to eat since we came back from Thailand in November! On that trip, we ate out every day and we just got tired of it. It’s been nice to cook and eat at home. We also didn’t want to go out much when it’s rainy and cold. Okay, let’s go over my 2017 Goals first and then see how we did with our cash flow in January.
This is my goal scheduling spreadsheet. Things are getting pushed off already, that’s not good. At least, I checked off one item. You can get a quick status update from the chart and see the details below.
- Save $50,000 in our tax advantaged account – Going well here.
- Dividend Income $11,500 – I’ll update our passive income post next week and you can see the details there.
- FI ratio > 78% – This is passive income/expense. Currently, our FI ratio is at 91% so far in 2017! That’s really awesome. We didn’t spend much money in January and that helped a lot.
- Net worth gain > VFORX – We’re about 0.5% behind the 2040 target fund. Not good so far.
- Move RB40Jr’s 529 plan to Vanguard – I’ll have to put this off until after we’re done with taxes.
- Move Mrs. RB40’s IRAs to Vanguard – I’m putting this one off, too.
- Online income > $36,000/year – We had a very good month and we’re ahead of the curve here. You can see the detail below in the cash flow section.
- Redesign Retire by 40 – This one is a huge job and I’m not quite ready to start yet…
- Pinterest > 25,000 visits – I’m trying to grow traffic from Pinterest. The growth is slow and steady.
- Fitness – January was a really bad month for fitness. The weather was just so bad and RB40Jr’s school was canceled a bunch of times. I averaged ~5,100 steps per day which is way below my goal of 7,000 steps/day. You can see my fitness log here if you’re interested. I’ll give myself a C- in January.
- Start a new site – Yes! I started a new site with a focus on fitness – Fit by 40. You can see how I started the site here – How to Start a Blog and Why You Should.
- Join Toastmasters – I’m putting this off until the 2nd half of the year.
- RB40Jr’s after school programs – I wanted to start this in February, but I’m going to delay it until March. We’ll probably sign him up for a martial art program.
- See the total solar eclipse – I reserved a campsite at the beach. We’re set for August.
- National Park – Not sure about this one year. I’ll have to reserve a campsite soon before they are all booked up.
- International Trip – I think we’ll visit Cancun this year. We haven’t been there yet.
Whew! I may have too many goals this year.
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 make it simple and try to beat the Vanguard Target Retirement 2040 Fund, VFORX. Their current allocation is about 88% stocks and 12% bonds at the end of 2016. I think this is a good measuring stick and we should be able beat it.
In January, our net worth increased about 1.2%. VFORX did very well and gained 1.7%. We are a bit behind, but I’m not too worried. The year is still young. I’m sure we’ll gain on VFORX soon.
If you need help keeping track of your finances, try using Personal Capital to manage your investment accounts. We have many accounts and Personal Capital helps us see the big picture quickly. Also, I’m a huge fan of their awesome retirement calculator. You can read my review here – The Best Free Retirement Calculator.
January 2017 Cash Flow
We had a really good month in January. I think this is the best month we’ve had in years as far as finance goes. Our income streams were all on a roll and we didn’t spend much money at all.
Take Home Income (target > $5,000)
Our take home income target is $5,000 and we came in way above that in January at $12,700! It was an extraordinary month and I’d love a few more like this in 2017. Here are the details.
Mrs. RB40’s paycheck: $8,401. I love these 3 paycheck months!
Rental income: $1,064. Our rental income was great too. There were no maintenance calls last month so all the rent went into the bank account. We’ll need to save this for exterior painting later this year.
Online Income: $5,916. I had a great month with online income. This year I’m focusing on increasing our income so Mrs. RB40 can retire soon. I’m adding more affiliate links and focusing on writing relevant articles that will be helpful to investors.
- Banner ads: $1,953. These are the banner ads you see on Retire by 40. Q4 is particularly good for banner ads due to the holiday season.
- Affiliates: $3,320. These are referral fees from affiliate links. If a reader signs up for a service through our links, then we sometime earn a referral fee. You can see an example from the Starting a blog link right below.
- Brand promotion: $800. I worked with an insurance company to promote their brand.
- Expenses: -$157. Internet, email service, CDN, cell phone, hosting, etc…
Thank you for your support! Starting a blog is a great way to build your brand and generate some extra income.
Dividend income: $892. Dividend income was steady in January.
Crowdfunding: $126. Not bad
- P2P lending: $65. I’m slowing getting out of P2P lending. I just don’t think they will do well when the economy turns south.
- KickFurther: $62. I have about $2,000 invested here. 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. The investors own the inventory and we can vote to liquidate the inventory if the business can’t sell it. You can find out more andreceive $5 to start through this link.
- Realty Shares: $0. I just funded my first deal at RealtyShares. It’s a commercial property in Arizona. I started with $8,000 and I’m willing to add a little more if I see a good deal. The extra income in January came in really handy to help me fund this deal.
Pre-tax savings: -$3,649. I sent $1,500 to my solo 401k. Mrs. RB40 saved $2,085 in her retirement account.
Expense (target < $4,500)
Our monthly expense target was $4,500 per month and we did great. Portland had an unusually cold winter so we mostly stayed home and didn’t go out and spend money. We spent more on our heating bill, but everything else was way lower than usual. Our main pass time was reading and watching movies at home. All in all, we had a great month expense wise and spent just $3,183.
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 make an improvement in this category.
Cash Allowance: $0. We didn’t take any cash out last month. We’re almost completely out now so we’ll need to drop by the ATM this month.
Groceries: $407. This is pretty good considering we didn’t eat out at all.
Transportation: $23. This is gasoline and car maintenance. I just filled up once in January.
Kid: $30. RB40Jr goes to public school now so we don’t have to pay for childcare anymore. I love it! This $30 is for his birthday present.
Bills: $299. Electricity and insurance (auto, home, term life, and umbrella).
Healthcare/Medical: $86. Mrs. RB40 and Junior went to the dentist to get their teeth cleaned.
Entertainment: $49. Gym membership fee. Ahh… We ordered pizza once in January.
Travel, Clothing, Misc: $0. January was a quiet month.
YTD Extra Savings: $9,587
Wow! January was an awesome month. We haven’t been able to save this much since I quit working full time in 2012. Everything came together just right. This was very timely because I was wondering where I’d get the money to invest at RealtyShares. We have some cash, but I don’t want to drain our liquidity too much. Anyway, I invested $8,000 and I’ll leave the rest in our bank account for now.
Can Mrs. RB40 retire?
This is a new section I’m adding for 2017. I want to see what happens if Mrs. RB40 stop 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 … so far in 2017, Mrs. RB40 could retire early! We had a really good month and it would be great if we can continue this for the rest of the year.
As of now, we’re ahead $2,686. I’m sure this will erode as our expenses increase back to the normal level. It’s a nice start, though.
January 2017 wrap up
We had one of the best financial months we’ve had in years and it felt great. This is the way to start a new year. I think February will be pretty good too. My online income should do pretty well and we don’t have any huge expenses coming up. I’m also getting better with my fitness goal. It was a rough start due to bad weather, but I’m starting to get into the groove now. Okay, on to February!
Did you have a good January? This winter has been terrible, but I guess it’s good for the pocketbook because we’ve done quite well. I’m sure my vitamin D level is dangerously low now, though.
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.
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