Hey, everyone! Summer break is almost over. Did you do everything you wanted? There are only a few weeks left before school starts. It’s already time for back to school shopping! Summer will be gone before you know it. We’ve had a great summer so far, but we’ll have to take it easy in August. My mom is back in Portland and we need to follow up on various medical issues. I planned to visit Boise in August, but we’re canceling that road trip. My mom needs to see quite a few doctors and we can’t travel anymore this year. That’s alright; there is plenty of stuff to do in Portland anyway.
On the financial front, July was awesome. Our income was higher than normal and our expense came in under budget. If we can hold it at this level for the rest of the year, 2018 will be a great success. Okay, I’ll go over my 2018 goals first and then share the details of our cash flow in July.
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 waited until summer, they just won’t get done. 2018 isn’t looking too good because the goals are more ambitious than previous years. You can get a quick status update from the chart and see the details below.
- Increase our real estate crowdfunding investmentto $100,000. In July, I invested $12,000 in a student housing project. University housing is supposed to be more resilient so I’m hopeful that this project will work out. You can read more about my investments at my real estate crowdfunding page. I’ll keep checking RealtyShares for more projects to invest in.
- FI ratio > 100%. The FI ratio is passive income divided by expense. So far, our FI ratio is 70% for 2018. This year is not looking good because our expense is higher than normal due to a major home repair and a pricey vacation. Some years are just harder than others. This year is going to be one of those and we need to learn from it. Actually, July helped a lot. If we can keep it up, we should look pretty good by the end of the year.
- Increase bond/cash allocation to 30%. Going to 30% bond/cash will beef up our opportunity fund. This is very slow going because I’m not in a big hurry. Currently, our bond/cash allocation is up to 23%. That’s not too bad and I’ll be happy if I can get it up to 25% by the end of the year.
- Travel hack 100,000 points. Finally, we finished a goal! We signed up for some new cards and use them to pay for the home repair and vacation. These points will come in handy for our vacation next year. It’ll be either Vietnam or Argentina.
- Minor Redesign RB40. This one is really difficult to do because I can’t seem to budget time for it. It’s already tough to writeand keep the site running. In May, I switched the site to https. That’s a big part of what I wanted to do this year. Next, I’ll need to work on the banner, logo, and a new theme. It’ll have to be after the summer, though.
- Blog 12 times at Fit by 40. This one is way behind now. I’m not motivated to write about fitness this year. I’m also taking the summer off from going to the gym because hanging out with an active 7 year old boy is plenty of exercise. For now, I’ll keep FB40 as a test site for the redesign. You can see how I started the site here – How to Start a Blog and Why You Should.
- Blog revenue $100,000. This one is going to be very difficult so I’m grading it on the academic system. Also, I changed the goal from blog “income” to blog “revenue.”Income is after taxes and expenses. Revenue is just gross income. The blog generated $53,432 so far in 2018. That’s really good. You can see more detail on my Blog Income page.
- Join Toastmasters. I visited a local club and it was a good experience. However, there are too many things going on right now. My mom needs help with her health. Also, school is out so I’m spending more time with RB40Jr. I just can’t squeeze Toastmasters into my schedule. This will have to be put off until RB40Jr is a lot 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. I changed the due date to 2020.
- Visit Iceland. Iceland was incredible. I got some nice pictures so check out my Iceland trip report
Net Worth (+2.6% 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 it’s been mostly flat since then. July was good, though. The stock market did quite well and it gave us a nice little boost. Our net worth is up 2.6% since the beginning of 2018.
My bet with Warren Buffett – I’ll benchmark our net worth against VFINX for 10 years starting in 2018. VFINX is up 4.6% since the beginning of 2018. Our net worth is up just 2.6% so we’re a bit behind. Our net worth is diverse so it does better when the market drops. It’s early in the race yet. Also, I haven’t updated our property prices in over a year so that part of our net worth is probably a bit low.
Here is a graph of our net worth on Personal Capital. It’s looking pretty good so far.
*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 my accounts and cash flow. It’s a great site for DIY investors.
2018 Passive Income ($29,102 YTD)
Here is a quick summary of our passive income. You can see all the details on 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. If we reinvest in P2P lending, it would look better. However, I like real estate crowdfunding much more so I’m investing new money there.
July 2018 Cash Flow
Our cash flow was excellent in July. Mrs. RB40 had one of those 3 paycheck months and that boosted our income significantly. Our spending was also very good. We went on a 2-week road trip to California, but we didn’t spend much money because we stayed with families. Other than that, we had a low key month.
Check out my Sankey diagram and see more details below.
Take Home Income (target > $10,000)
For 2018, our monthly take home income target is $10,000. July was a great month because our take home was $12,438 after tax and retirement savings. (I had to put retirement savings in the expense column in the Sankey diagram.) My blog income was solid and that helped too.
- Mrs. RB40’s paychecks: $8,360. Woohoo! I live for these 3 paycheck months.
- Blog Income: $6,744. You can read more details on 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: $1019. 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: $1,460. More details at my Dividend Passive Income page.
- Real estate crowdfunding: $0. No payments this month. Read more at my Real Estate Crowdfunding Passive Income page.
- Prosper P2P lending: –$20. Ugh, I’m tired of these negative months from P2P lending. This is negative due to defaults.
- Interest Income: $20.
Monthly Expenses (target > $4,800)
For 2018, our monthly spending budget is $4,800/month, an increase of $300 from 2017. This does not include contributions to 401k, Roth IRA, and college savings. This year has been really tough and we went over budget many times already. July was great, though. We spent $4,244 and came in under budget. We need to keep this up for the rest of 2018.
- Housing: $2,365. Our housing expense is getting spendy. This category is over 50% of our expense most months. This includes mortgage, HOA fees, and property taxes.
- Groceries: $379. As expected, our grocery bill was lower than usual because we were out of town for 2 weeks. We cooked quite a few nifty dishes when we were home, though. Check them out.
Mrs. RB40 made avocado toast topped with freshly picked baby arugula. Mmmm… She also made these rustic blueberries empanadas. They weren’t too pretty, but they were delicious.
Brinjal eggplant curry. Mmmmm… This vegetarian dish turned out awesome for the adults. Junior didn’t like it much, but he ate it. The next dish is a tuna poke plate, a taste fo Hawaii.
Here is Mrs. RB40’s favorite Thai salad, the spicy roasted duck salad. I don’t see this dish in Thai restaurants anymore. I guess it’s not that popular, but we love it. The last dish here is a Filipino breakfast, the pork tocino with egg and rice. I cheated a bit here because the pork tocino was from the frozen section. Follow me on Instagram if you’d like to see more of my unglamorous early retirement lifestyle.
- Cash: $0.
- Transportation: $366. We share one car and we usually don’t drive much. In July, I got a new battery and an oil change to prepare for our road trip.
- Kid: $38. I got a new school backpack for RB40Jr.
- Pet: $0.
- Bills: $212. Electricity, credit card annual fee, and insurance (auto, home, term life, and umbrella.)
- Health: $86. Gym membership fee and the dentist bill.
- Travel: $1,006. We stayed at 3 hotels on our CA road trip. We also ate out quite a bit. Overall, I think this is pretty good for a 2 week vacation.
- Clothing: $0.
- Misc: I requested a refund for the latex mattress we purchased in May. I really liked how it felt, but it gave me back pain. That’s too bad. We got a cheaper memory foam mattress and it is working out better. We came out in the green for this exchange, $228.
- Pre-Tax Savings: $4,145. I contributed $2,000 to my 401k. Mrs. RB40 contributed $2,145 to hers.
- Extra Savings: $8,194. This is pretty incredible. July was the best month of 2018 yet.
Extra Savings 2018: $31,306
2018 is going very well and our extra savings totaled $31,306 so far. We sent a bunch of money to the IRS in April so we don’t have much left. 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.
Here is what I plan to do with our opportunity fund in 2018.
- Invest more in real estate crowdfunding. I just invested $12,000 in a student housing project.
- Pick up some dividend stock if I see a good deal. I purchased 50 shares of PM in April.
July 2018 Wrap Up
July was our best month in 2018 yet. Our income was high and our expense was under budget. It was great. August should be pretty good too. We’ll stay in Portland and I don’t have any big plans. We’ll go swimming at the pool and find some free/cheap activities around town. School is starting at the end of August so we need to do back to school shopping and get haircuts. I’m looking forward to having more time to myself again. Spending summer with RB40Jr is a lot of fun, but I’m ready to blog more frequently. It’s tough to get in the groove with this summer schedule (1 post per week).
Did you have a good July? Any big plan for August?
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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.
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