Hey everyone, did you have a good Easter and spring break? We had a relaxing day at home and Mrs. RB40 cooked a bunch of food. She also picked up The Last Jedi DVD from the library and we enjoyed the show tremendously. Last week was spring break for us. We didn’t go far and just had fun around town. RB40Jr had 4 playdates, went to the arcade, got books from the library, and enjoyed a fun science show from OMSI. It was a relaxing week. The weather warmed up nicely so we could go to the playground again. Unfortunately, now I have a bad case of seasonal allergies. I’m taking allergy meds, but it usually takes a few days to kick in. Oh well, that’s life. It’s never perfect, is it?
On the financial front, March was pretty good. The stock market was volatile again, but I didn’t lose any sleep over it. Our asset allocation is set at a comfortable level. I’m not going to worry about the stock market until we see a 20% drop from peak. Then, it will be time to start buying. For now, investors should double check their risk tolerance and asset allocation. If they are on spot, you don’t have to worry about volatility.
As for cash flow, we had a very good month. Our income was great and our expense was low. Everything is rolling right along now that our rental condo is occupied. Okay, let’s go over my 2018 Goals first and then I’ll share the details of our cash flow in March.
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 wait until summer, they just won’t get done. The first 3 months were slow. It’s hard to get be motivated in the winter. You can get a quick status update from the chart and see the details below.
- Increase our real estate crowdfunding investment to $100,000. We’re doing well with this goal and now have $38,000 invested. We’re low on cash, though. I’ll probably have to save up for a few months before I can invest in the next project.
- FI ratio > 100%. FI ratio is passive income/expense. Currently, our FI ratio is 62% in 2018. That’s still low, but it improved quite a bit from 41% last month. Our expense was higher than usual in Q1 because we paid for our summer vacation to Iceland.
- Increase bond/cash allocation to 30%. Going to 30% bond/cash will beef up our opportunity fund. However, I’m not in a big hurry to do this because I think the stock market will go up this year. I plan to get to 30% before the end of 2018.
- Travel hack 100,000 points. I got a head start on this one from last year. It’s on the back burner for now. I’ll sign up for new cards later this year when we have a big expense.
- Minor Redesign RB40. WIP
- Blog 12 times at Fit by 40.This one is behind a bit. I didn’t write a post in March. I’ll catch up next month. This is not an ambitious goal and I think it will help me stay on top of fitness. You can see how I started the site here – How to Start a Blog and Why You Should.
- Blog income $100,000.This one is going to be very difficult so I’m grading it on the academic system. Q1 is the best quarter for blog income and we did very well. I made $19,621 so far in 2018. That’s actually pretty darn good, but we’re still behind the pace. You can see more detail on my Blog Income page.
- Join Toastmasters. I visited a local club and I’ll join in April.
- 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. Our rental condo is rented for at least a year so the earliest we will be able to consolidate is 2019.
- Visit Iceland. The trip is a go. I already booked our flight tickets, lodging, ferry, and rental car. Iceland is a very expensive country to visit, but it should be a great trip.
Net Worth (+0.4% 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 we gave up all the gains. I expect that 2018 will be a good year for the stock market, but nobody knows how it is going to turn out. There is so much uncertainty now. It’s a going to be a wild ride this year so buckle up.
My bet with Warren Buffett – I’ll benchmark our net worth against VFINX for 10 years starting in 2018. VFINX dropped 3% in March. Our net worth also dropped about 0.5%. Currently, we’re beating VFINX by about 0.5%. That’s not too shabby.
Here is the picture of our net worth in 2018, on Personal Capital. Our net worth decreased a little bit in March even with good income. That’s what happens when the stock market drops. It really isn’t bad in the grand scheme of things. I know it will turn out okay in the long term so I’m not worried about the short term performance.
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2018 Passive Income ($9,744 YTD)
Here is a quick summary of our passive income. You can see all the details at 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 for the rest of 2018.
March 2018 Cash Flow
Our cash flow was very good in March. My blog income was much better than normal. The passive income finally got rolling. The only hiccup was P2P lending. We had a small negative month. Other than that, the engine was firing on all cylinders. Our expense was also low so it all worked out very well in March.
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. March was a great month and we blew that target away. April should be very similar to this. My blog income will start to decrease in spring and then really drop off in the summer. That’s usually how the year goes.
- Mrs. RB40’s paychecks: $5,445
- Blog Income: $8,278. You can read more details at 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: $919. All our rentals are occupied. Read more at the Rental Property Passive Income page.
- Dividend Income: $1,155. The last month of the quarter is quite good for our dividend income. More details at my Dividend Passive Income page.
- Crowdfunding Income: –$44. Real estate crowdfunding was slow in March. We received just $40 payback. This should pick up as the year goes on. Two deals just closed and they will start paying out soon. Read more at my Real Estate Crowdfunding Passive Income page. P2P lending was negative this month at -$84. Two loans defaulted and it was a bad month on that front.
- Interest Income: $16.
Monthly Expenses (target > $4,800)
For 2018, our monthly expense should be under $4,800, an increase of $300 from 2017. This does not include contributions to 401k, Roth IRA, and college savings. We did pretty well in March and came in under budget for the first time this year. The first two months were tough because of our upcoming trip to Iceland. March was a bit more normal for us.
- Housing: $2,365. Our housing expense is getting spendy. This category is over 50% of our expense every month. There’s not much we can do at this point. This includes mortgage, HOA fees, and property tax.
- Groceries: $668. Our grocery bill was higher than normal in March. We went grocery shopping more often than usual. We ate very well at home and I cooked many delicious meals. I joined Instagram recently and have more food pictures to share. I hope you like them. Clockwise from top left – Nam Prik Ong – northern Thai dish, Khao Soi – curry noodle soup, Gaeng Hung Lay – braised pork belly curry, and Gai Yang Som Tum – grilled chicken with carrot salad. Yummm! These are all regional dishes from Thailand. Follow me on Instagram if you’d like to see more of my unglamorous early retirement lifestyle.
- Cash: $0. We didn’t withdraw any cash last month.
- Transportation: $21. We share one car and we don’t drive much. I drop RB40Jr off at school in the morning and go grocery shopping on the weekend. That’s about it. We drive more in the summer when we visit local attractions.
- Kid: $18. We went to an Easter egg hunt to help raise fund for a church. I also got RB40Jr a pair of shorts for the soccer team.
- Pet: $0.
- Bills: $294. Electricity and insurance (auto, home, term life, and umbrella.)
- Health: $96. Hematologist (nothing serious), dentist, and gym.
- Travel: $163. I booked our ferry ride to Vestmannaeyjar.
- Clothing: $365. Mrs. RB40 put off buying new clothes until our condo was rented out. It’s occupied now so she made a purchase. She brings home the bacon and health insurance so I can’t complain.
- 401k: $3,430. I contributed $2,000 to my 401k. Mrs. RB40 contributed $1,430 to hers.
- Extra Savings: $8,269
Extra Savings 2018: $12,242
2018 is off to a great start and our extra saving totaled $12,242 so far. Unfortunately, this will all go to the IRS in a couple of weeks. I didn’t send in estimated tax payments last year so we owe the tax man this year. I’ll do a better job this year and try not to owe so much. Once that’s over with then, I’ll put any extra savings into our opportunity fund. We keep about $10,000 in cash as our emergency fund. Anything above this, I’ll invest opportunistically.
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.
- Pay off the tax man…
March 2018 Wrap Up
Overall, March 2018 was a great month for us. Our income was awesome and our expense was under control. The net worth is down a bit due to market volatility, but that’s not a big deal. I believe in America and our investment should do well in the long term.
April should be about the same as March. It looks like the blog income will drop a little, but it should still be very good. Passive income will also drop a bit because the uneven dividend timing. Our expense should be pretty good too. I don’t think we have any big bills coming up in April. As for net worth, I’m not going to worry about it. The stock market looks like it will continue to fluctuate. Nobody know what it’s going to do so we should focus on what we can control – our saving rate. The stock market will do well in the long term so don’t worry about the volatility. Just stick to your plan and keep investing.
Did you have a good March? Spring is really nice, but seasonal allergies are knocking me down. Hopefully, the medication will kick in soon and my body adapts. Early spring is always tough. Have a great month!
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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.