Hey everyone, are you enjoying the long summer days? I’ve always loved summer, but this year has been extraordinary so far. Before summer began, I decided to cut back on blogging a bit and spend more time with our son. This is working out really well and we’re having a great time. Here was how we spent our time in June.
- 1st week – RB40Jr wrapped up first grade.
- 2nd and 3rd week – Road trip in Iceland. It was an incredible trip, but we’re very happy to be home.
- 4th week – Portland staycation. We met up with friends, played at old and new parks, went to the library, swam, shopped for new shoes, snuck out to eat dim sum without Mrs. RB40, and visited a farm store.
RB40Jr is such a lucky guy. He’s having the summer I always wanted as a kid. My parents were always busy so I had to entertain myself and babysit my younger brothers. Anyway, I can’t believe the first month of summer is already gone. This summer is flying by. July will be pretty similar to June. We’re going on a 2 week road trip to visit friends and families in California, then another staycation around Portland. It’ll be a blast.
On the financial front, June was an expensive month due to our vacation in the land of $20 hamburgers. Iceland is an amazing country, but it sure ain’t cheap. Other than that, everything is on track. Our passive income is rolling along nicely. Okay, I’ll go over my 2018 goals first and then share the details of our cash flow in June.
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 investment to $100,000. Now that we’re back from Iceland, I’m ready to invest more. I’ll check RealtyShares more often so I can find a good project to invest in.
- FI ratio > 100%. The FI ratio is passive income divided by expense. So far, our FI ratio is just 64% 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.
- 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. I can probably get 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 write and 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 is over, 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 how much money the site makes. The blog generated $45,115 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 various doctor appointments. 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 (+0.6% 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. At least we’re still positive for the year even with higher than normal expense.
My bet with Warren Buffett – I’ll benchmark our net worth against VFINX for 10 years starting in 2018. VFINX is up about 1% since the beginning of 2018. Our net worth is up just 0.6% 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.
Here is a graph of our net worth in June on Personal Capital. Our net worth was mostly flat.
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2018 Passive Income ($23,772 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.
June 2018 Cash Flow
Our cash flow was good in June. Our income was solid so we were able to deal with the high travel expense. That’s the only problem we had in June. Everything else looks okay.
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. June was another good month for us. Our take home was $10,127 after estimated tax and tax-advantaged savings. My blog income was solid usual and that helped a ton.
- Mrs. RB40’s paychecks: $5,455
- Blog Income: $6,070. 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: $925. 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: $1,081. More details at my Dividend Passive Income page.
- Real estate crowdfunding: $168. 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:$43. P2P lending was good last month.
- Interest Income: $16.
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. Last month we went over budget again and spent $6,136. The budget buster was our Iceland trip. I’m pretty sure the rest of 2018 will be much better on the expense side, but it will still be an unusually high expense year for us. We’ll see how it goes.
- 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: $523. Strangely, our grocery bill wasn’t any lower in June even with 2 weeks in Iceland. I think that’s because we purchased some food to bring to Iceland such as beef jerky, granola bars, and other snacks. We also stocked up when we came home. I didn’t cook too many impressive dishes in June. Here is the only one that I took a picture of – Thai chicken curry with Indian eggplants, mushrooms, potatoes, carrots, sweet onions, and bamboo shoots. Follow me on Instagram if you’d like to see more of my unglamorous early retirement lifestyle.
- Cash: $0.
- Transportation: $77. We share one car and we usually don’t drive much. This summer we’re taking some road trips, though. I’ll write all about our California road trip soon.
- Kid: $144. I signed RB40Jr up for the recreational soccer league in the fall. We also got him a new pair of shoes.
- Pet: $26.
- Bills: $202. Electricity, credit card annual fee, and insurance (auto, home, term life, and umbrella.)
- Health: $26. Gym membership fee.
- Travel: $2,549. This includes a couple of Airbnb rentals, extra insurance for the rental van, food, souvenirs, and attraction fees. Our Iceland trip actually cost around $7,000. We prepaid most of that so at least we didn’t get hit with the total bill.
- Clothing: $100. I realized my outer jacket was very shabby when I was in Iceland so I got a new one. We also got a new jacket and 2 shirts for RB40Jr.
- Misc: $15. This is for a pair of new kitchen shears and dough scraper.
- Pre-Tax Savings: $2,830. I contributed $1,400 to my 401k. Mrs. RB40 contributed $1,430 to hers.
- Extra Savings: $4,035
Extra Savings 2018: $23,112
2018 is going very well and our extra savings totaled $23,112 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.
- Pick up some dividend stock if I see a good deal. I purchased 50 shares of PM in April.
June 2018 Wrap Up
June was a good month for us. Our income was solid so we were able to deal with the higher than usual travel expense. The rest of 2018 should look better on the expense side. I don’t think we have any more big expense coming up this year.
July should be a good month, too. I’m going to California for 2 weeks, but I’m staying with my brothers most of the time. The trip should not be too expensive. We’ll take it slow this time and go see some roadside attractions. It should be a great trip. On the income side, it looks pretty good. There is some drop off due to the summer slowdown, but it isn’t bad. We’ll see how it goes.
Did you have a good June? Any big plans this summer?
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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.
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