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May 2019 Goals and Financial Update


May 2019 Goals and Financial UpdateHey everyone, summer is here! The weather is perfect now in Portland, Oregon. For me, this is the best time of the year. After a long wet winter, we appreciate the warm sunny days and it’s not too hot yet. School is almost out too. RB40Jr has just 8 days of school left. They extended the school year a bit to make up for the snow days. That’s one reason why our spending was a bit higher in May. I had to prepare for the summer. I signed RB40Jr up for one week of soccer camp and purchased a few fun activities from Groupon. We’re staying in town this summer. It should be a lot of fun.

On the financial side, we did pretty well in May. Our net worth decreased a bit along with the stock market. It was a volatile month with all the tariffs thrown around. Fortunately, I already adjusted my asset allocation to be more conservative earlier this year. So I’m good to ride this one out. We’ll see how it goes in June. Our cash flow looks pretty good too. We spent a bit more than usual in May, but it’s still under budget. All in all, it was a good month.

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

2019 Goals

Here is my goal scheduling spreadsheet. It works really well. Try it out if you have a problem keeping up with your New Year goals. The key is to update the spreadsheet at least once a month to track your progress. This will remind you which goals need attention.

2019 Goal sheet

Financial Goals

  • Passive Income> $60,000. This one might be too ambitious. In 2018, we had $56,628 in passive income. This year it probably will be significantly less. We’re consolidating our properties so the rental income will drop sharply. I’ll use the proceeds to invest in dividend stocks and real estate crowdfunding. I’m not sure if we can generate $60,000 this year, but we’ll try. After 5 months, we had $18,080 in passive income. That’s way behind the pace. Next year, I’ll have to adjust my expectation accordingly.
  • FI Ratio > 100%. This is my main goal for 2019. The FI ratio is passive income divided by expense. Once we reach 100% consistently, then we’ll be set to retire in style. Our passive income is lower, but our expense decreased too. It seems to be working out. Our FI ratio is 108% YTD and we’re almost halfway through 2019. We just need to keep up the good work.
  • Save and invest > $100,000. Last year, we saved and invested $102,000! That was awesome and I hope to repeat it this year. However, it isn’t looking good. In 2018, my blog income was excellent, but it slowed down significantly this year. Consequently, it’s going to be very tough to save $100,000. So far, we saved and invested $36,190. That’s actually really good because our saving rate is 51% so far in 2019. I’ll grade this one on an academic scale.

Blog Goal

  • Update Retire by 40. I need to clean up the menu, sign up with some new affiliate partners, and rework a few affiliate posts/pages. This isn’t that difficult, but I have to find the time to do it. Then I’ll hire someone to install a new theme. This kind of work is very tedious for me so I usually put it off. I’m having a really rough time with it this year. All my attention has been on selling our condos. Everything else comes second this year.

Personal Goals

  • Travel Hack 100,000 points.Yes! This one is done. Both of us signed up for the Capital One Savor card and received a $500 cash bonus each. This is a great card, don’t miss out. Click through on the banner below and see if you can find the right card for you.
  • Consolidate down to 1 property. We are making solid progress here. We moved and both of our condos are for sale now. However, the real estate market in Portland slowed down tremendously. If these condos don’t sell by September, I might have to rent them out.
  • Drop weight to 130 pounds. I rarely make a weight loss goal because it never worked before. However, I think I’ll be able to do it this year. I’m intermittent fasting* and plan to exercise 5 days per week. Currently, my weight is 130 pounds. I just need to maintain this weight until the end of the year. I changed my goal to 130 pounds. Originally, I had it at 125 lbs. That’s too difficult and Mrs. RB40 thinks it’s too low.

*Here is how I do intermittent fasting. I only eat from noon until 8 pm on the weekdays. This cuts down on the calories and I don’t miss breakfast much. I’m busy getting RB40Jr off to school on the weekdays anyway. Try intermittent fasting if you want to lose weight. It really works. If you can’t do it by yourself, I highly recommend Martin Dasko’s Fasting Course. It was very helpful when I first started IF.

Fun Goals

  • Keep my happiness level at 8 or above. This is totally subjective. I’ll give myself a score at the end of the month and try to average about 8 this year. For May, I rate my happiness level at 7. Carrying 3 mortgages is no fun. Other than that, everything is going well.
  • Visit Chiang Mai for 6-10 weeks. I haven’t even started here. We’ll deal with this after the condos are sold. Originally, I wanted to visit Thailand in July, but I changed it to November. It’ll also be a shorter trip than I first planned, probably 2-3 weeks long.

Net Worth (+6.4% YTD)

I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we’ve made. 2019 is turning out to be a good year so far for the stock market. That’s unexpected. I’m being more conservative this year so our net worth lags behind the S&P 500 quite a bit. I’m still very happy with our net worth gains. 6.4% is really good in the grand scheme of things. Also, the stock market took a big step back in May. Tariff Man is out of control. He’s going after Mexico now and the market didn’t like that. We’ll see how it goes in June. The stock market is volatile this year so prepare for a wild ride.

Here is a graph of our investment portfolio on 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.

May Personal Capital

2019 Passive Income ($14,768 YTD)

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

2019 passive income

Generally, things look good. The rental income is slower than last year, but that’s expected. We’re consolidating down to one property. That will reduce our rental income, but our cost of living will be lower as well. Our FI ratio* tells me that it’s working as planned. It is looking good at 108%. Hopefully, it will stay above 100% for the rest of 2019.

*FI ratio = passive income/expense

Once we sold our condos, we will have some cash infusion. I’ll invest it in real estate crowdfunding and dividend stocks. Our passive income should increase with these additional investments. But it will take time to execute. You’ll have to follow along and see how it plays out.

2019 Cash Flow

Our cash flow was good in May. Our income streams were solid and our spending was reasonable. Everything looks good to me. The only unusual expense is in the parent category. My parent is going on a trip to Japan, Korea, and Taiwan. I’m helping them out with part of the flight tickets and hotels.

Here is the Sankey diagram for May. You can get a quick overview here and see the details below. I made a little change here and added a layer in the middle. This way, it’s easier to separate savings, taxes, and spending.

May cash flow Sankey Diagram

Gross Income (target > $12,000/month)

For 2019, our gross income target is $12,000/month. We met this goal most of the time. In previous years, I tracked take-home income and it was all over the place due to the deductions. This year, I’ll track gross income. Last month, we grossed $13,548. That’s about normal.

  • Mrs. RB40’s paychecks: $7,984.
  • Blog Income: $4,052. May was a good month for us, but I can feel the summer slowdown coming. Next month probably will be a bit worse. You can read more details on my Blog Income pageRB40Jr 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: $194. It looks like our rental income is stabilizing to around $200 per month. That’s not a huge amount, but it really helps with our housing baseline. Read more at the Rental Property Passive Income page.
  • Dividend Income: $1013. The dividend income was great last month. See more details at my Dividend Passive Income page.
  • Real estate crowdfunding: $289. My real estate crowdfunding investment is starting to pay off. Read more at my Real Estate Crowdfunding Passive Income page.
  • Interest Income: $17.
  • Side hustle: $0. No extra side income this month.

Monthly Spending (target < $4,000/month)

For the rest of 2019, our monthly spending budget is $4,000/month. I decreased it from $5,000 per month. Our housing expense is significantly lower since we moved into our duplex. In May, we spent $3,394. That’s a bit higher than normal, but still good enough. You can see the detail below.

  • Housing: $1263. Our housing expense is a bit higher than usual. I decided to add furnishing and home improvement in this category. Last month, we got a used dining table ($220) and screens for the balcony doors ($40.) This category includes mortgage, HOA fees, property taxes, utilities, home improvement, and furnishing.
  • Groceries: $443. We had a good month with groceries. I’m happy if we kept it under $500. Check out what I cooked.
May food pictures

Truthfully, I’ve been uninspired lately. I’m a bit bored and don’t know what to cook for dinner. Luckily, there was a nice sale on Memorial Day weekend. This rib eye steak and shrimp (huge!) were $5.99/lbs. That was a great dinner and very affordable. On the right is bucatini pasta with meatballs. Sometimes I have to resort to pasta too.

May food 2

Here are the same shrimps that were on sale. I made North Shore Shrimp Scampi. This dish was awesome. The secret is a lot of garlic and butter. Next, Mrs. RB40 made “healthy” nachos. It was delicious. No meat and she used unsalted tortilla chips. It worked out quite well.

May food 3

We ate out a few times last month. On the left is a big bowl of Phnom Penh noodle soup. It was excellent. I was out running errands and decided to get some pho. I guess this isn’t exactly pho, but close enough for me. We also went out for Happy Hours pizza. $4 drinks and $5 margherita pizza! You can’t beat that price.

  • Transportation: $55. I filled up a couple of times. We don’t drive much so our transportation cost is minimal.
  • Cash: $80. We haven’t used the ATM in a while and ran out of cash.
  • Parent: $709. My parents are taking a trip to Japan, Korea, and Taiwan. I’m helping them with this trip.
  • Kid: $233. I booked a week of soccer camp for our son ($185.) We went to book fair at school and he spent $35 there. Lastly, I took him cloth shopping and spent $18.
  • Pet: $18.
  • Bills: $153. Insurance (auto, home, term life, and umbrella).
  • Health: $44. This was for the gym membership fee and allergy pills.
  • Travel: $35. Mrs. RB40 went on a short business trip. Travel hacking is a great way to reduce your travel expense.
  • Clothing: $100. Mrs. RB40 purchased 2 pairs of jeans ($90.) I got a new cap ($10.)
  • Entertainment: $187. I spent some money on Groupon for summer entertainment. We got mini golf ($12.50), arcade ($25), and laser tag ($39.) These should come in handy when school is out. We ate out a few times last month ($66.) I got Minecraft ($10) and Portal 2 ($5) for our old Xbox. Lastly, I booked a campsite at the beach for one night ($29.) We’re ready for summer!
  • Misc: $75. Ugh! This was the annual fee for Mrs. RB40’s Alaska Airlines card. I think we’ll cancel it next year. The perks aren’t that good. She gets one companion ticket, but she only goes to California so the price isn’t that high. It’d be more worth it if we take a trip further out.

Monthly savings, taxes, and deductions

I don’t count these as personal spending.

  • Taxes and deductions: $3,274.
  • 401k accounts: $3,480. I contributed $2,000 to my 401k. RB40 contributed $1,480 to hers.
  • Roth IRAs: $1,000. We contributed $500 each to our Roth IRAs.
  • 529 College Savings plan: $2,865. This is about half of the contributions we plan to make to the college savings plan this year. I had to borrow $466 from savings to make this contribution.
  • Extra Savings: -$466. I had to dip into our savings to contribute to the 529 plan.

2019 Savings

We saved $36,190 so far in 2019. Our current saving rate is 51%. The dollar amount isn’t that great, but the saving rate is excellent. I’ll try to maintain it around 50% this year. Here are our savings so far in 2019.

  • Joe’s 401k: $12,000.
  • Mrs. RB40’s 401k: $7,350
  • Roth IRAs: $5,000
  • 529 College Savings: $2,865
  • Extra savings: $8,975

YTD 2019 saving rate = 51%.

May 2019 Wrap Up

All in all, we had a solid month. Our net worth decreased a bit thanks to the Tariff Man, but we’re still up for the year. We’ll see how 2019 plays out. The market might drop further, but I’m already conservative with our asset allocation. I’m not too worried right now. On the cash flow side, everything looks good. Our spending is reasonable. I don’t feel like we’re missing out on anything. May was a good month for us. Now, if we can just sell those 2 condos… Have a great summer!

How about you? Did you have a good month? Are you making some progress on your New Year goals?

*Sign up for a free account at Personal Capital to help manage your investment accounts. I log in almost every day to check on my investment. It’s a great site for DIY investors.

Disclosure: We may receive a referral fee if you sign up with a service through the links on this page.

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, the job became too stressful and Joe retired from his engineering career to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle.

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.

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{ 34 comments… add one }
  • Passive Cash June 5, 2019, 10:49 am

    Love your monthly write-ups. I’m sure you’ll enjoy flipping the rental income to an even more passive investment. Thanks for sharing!

  • Only eight days of school left? You all must get done sooner than we do. Just two more summers left before the kiddo starts kindergarten and then we’ll really notice a difference in the times of year that way.

    If the mortgages are your biggest source of stress / unhappiness right now, I’d say you’re doing well.

  • Sport of Money June 4, 2019, 7:04 pm

    It’s nice to see that your expenses can adjust with your passive income. Despite having a lower passive income this year, your FI Ratio actually increased. That is quite impressive. No wonder you have no problems retiring at such a young age.

    Just curious – do you know why there is a year-over-year drop in your online revenue?

    • retirebyforty June 5, 2019, 8:32 pm

      Yes, our biggest affiliate went out of business. Another big one really slowed down in 2019 as well. I think it’s market saturation.
      We need to find an affiliate that fits well. That’s actually quite difficult to do.

  • Abigail @ipickuppennies June 4, 2019, 12:56 pm

    I had a good month where I was able to put away $1,800 into my SEP-IRA and another $500 into savings, along with a few smaller goals. Not quite as good as you, but comparison is the thief of joy, right? I’m set to have another good month for June/July (my financial months start midway through the month), which is exciting!

    • retirebyforty June 5, 2019, 8:30 pm

      That’s really good. You have to remember that we have 2 people. Everyone’s situation is different.
      Good luck in June!

  • Aron Musk June 4, 2019, 10:15 am

    Your blog is generating nice revenue, congratulations! Also, your wife earns pretty good money.

  • GYM June 3, 2019, 7:50 pm

    The Tariff Man got me too!

    Your rib eye looks delicious and the shrimp scampi too! Those look like huge shrimp. I make it often but haven’t done so in a while. I used to use paprika and flour and lately I just use butter and garlic and it tastes just as good without the mess.

    Keep up the great work Joe, hope the condos sell- I should be listing mine soon too. Are you “staging” your condos or just leaving them bare?

    • retirebyforty June 4, 2019, 10:23 am

      Those shrimps were awesome. I think 20 makes a pound. They go on sale occasionally at Safeway. I love them.
      I use flour and paprika with these and left the shells on. It worked really well.
      We are not staging. The realtor doesn’t think we need to. Good luck with your condo. The market slowed down tremendously this year in Portland. 🙁

  • Dividend Diplomats June 3, 2019, 7:34 pm

    RB40 –

    If that’s not being uninspired, relating to your food, then you can be uninspired around our house anytime! Food looks incredible and great job keeping that under budget. Further, that’s nice of you to help out with the family travel bill – is that a first or has that been common?

    Additionally, I know your dividend income will have a nice pop this month, have to love quarter ends.

    Nice job and great pizza/beer combo – that def. is one helluva deal.


    • retirebyforty June 4, 2019, 10:20 am

      Thanks! I only took these pictures in May. Normally, I have more to choose from.
      I’m helping out my parent out starting this year. My mom is living with my dad in Thailand now and I try to help out financially.
      Previously, she lived with us and we absorbed her living cost.

  • Matt @ The Working At Home Man June 3, 2019, 1:22 pm

    Hi Retire by 40
    Looks like your really killing it with the returns for the last couple of years. Once you realign your affiliates, you will be smashing it!
    Loving the Sankey diagram. I haven’t seen one of those before!

    • retirebyforty June 4, 2019, 10:17 am

      It’s a tough business. I feel like we lucked out the last 2 years and found the perfect affiliate. They went out of business and that had a huge impact on our revenue. I haven’t been able to find a good replacement.

  • freddy smidlap June 3, 2019, 12:00 pm

    we don’t really have specific goals but the money part is going very well for us. i have a couple of individual stocks that are really carrying the individual stock portfolio to a 30+% gain even with the tariff man. we’ll see how long it last but i’m going to ride the wave for the long haul.

    that is a great price for those ribeyes. looks like a great job cooking them too.

    • retirebyforty June 4, 2019, 9:58 am

      30% gain is fantastic. You’re right about the long haul. If you think long term, the volatility shouldn’t matter. The Tariff Man will only be here for another year or 5…
      The ribeyes were awesome. We cooked 2 and ate too much. First world problem. 🙂

  • Tawcan June 3, 2019, 10:43 am

    The happiness level is definitely something that need a bit more work and focus. I wouldn’t sweat too much about a blog design update. Contents are the key.

    • retirebyforty June 4, 2019, 9:56 am

      You’re right about the blog. I’m not worried, but that’s why it is so slow going. This redesign will take 5 years… 🙂

  • mary w June 3, 2019, 9:39 am

    Regarding the Alaska Airlines credit card, if you cancel within the first 30 days they will refund the annual fee. Also you can call up and say that you’re considering cancelling (true!) but want to see if there are any additional incentives to stay. They may offer to waive the fee or give you points/statement credit (e.g., spend 2K and get 10,000 points or make one purchase and get $50 statement credit).

    • retirebyforty June 3, 2019, 10:28 am

      I will ask Mrs. RB40 to give them a call. She hates dealing with the credit card company, though. Thank you for your suggestion!

  • Tom @ Dividends Diversify June 3, 2019, 7:06 am

    Good job with the money Joe. But that serving of asparagus looks good and really caught my attention alongside the surf and turf! Tom

  • Kevin @WhenImRetired June 3, 2019, 6:42 am

    Nice job this month, Joe! I’ve been looking to start intermittent fasting myself to lose some extra body fat before the summer really starts, but wasn’t sure how effective it would be with someone of my body type. I’m a relatively short guy that’s been hanging around 135-140 all my life. It seems like you might have been in my range as well so I wanted to pick your brain on it. Any tips for starting up the IF-ing?

    • retirebyforty June 3, 2019, 10:27 am

      Sure, you can PM me or just comment here.
      I think it will be very effective over the first few months, then you’ll plateau.
      For me, I just did it cold turkey. I stop eating breakfast on the weekdays and avoid snacking at night.
      In the morning, I have coffee and go to the gym. When I get back, I work on my blog. That keeps me occupied so I don’t think about food. More coffee helps too. On the weekend, I eat breakfast and don’t worry about snacking at night.
      You could start gradually too. Martin has a good guide for that.

      • Kevin @WhenImRetired June 4, 2019, 10:36 am

        Thanks Joe! Ive just started cold turkey as well today and will see how it goes. When I was in school I never really had too much of a problem with avoiding breakfast, so hopefully this isn’t too much of a change from that time period. Will report back with my results!

  • Lazy Man and Money June 3, 2019, 6:05 am

    I loved the “Tariff Man is out of control” line.

    I hope you get those condos sold soon and start getting that money invested. I’m curious if you can hit the 150 FI ratio once that happens. All of our real estate (investment and primary residence) will have their mortgages paid off around the same time. So we’ll see our FI ratio jump a huge amount around 2027.

    • retirebyforty June 3, 2019, 10:23 am

      I hope so too. I don’t think our FI ratio will climb that high because the amount of money isn’t that huge. It will help.

  • Xrayvsn June 3, 2019, 4:00 am

    Savings rate of >50% is excellent and honestly that is more important than the dollar amount. It means you are living on less than half of your income streams and is a solid definition of living below your means.

    It is interesting but there is a sentiment out there that because of 2020 being an election year that the administration won’t let the stock market slide anymore and likely will do something to boost it because it will create a more positive feeling and likely influence voting that way. Who knows. But it is an interesting theory.

    • retirebyforty June 3, 2019, 10:22 am

      Thanks! We have to make the best of the situation. Even with lower income, it’s still a good accomplishment to save 50%. I’m happy with that.
      Maybe the Tariff Man thinks there is plenty of time to turn it around. 2020 is a whole year away. My theory is that he doesn’t really care if he wins or not. He already ticked off the win and he’s anxious to conquer the next challenge.

  • Dave @ Accidental FIRE June 3, 2019, 1:54 am

    “Tariff Man”, yeah, he got me too. Great update and congrats on meeting some goal so early.

    • retirebyforty June 3, 2019, 10:20 am

      Those are the easy ones. 🙂 I have no idea what the Tariff Man is doing. It’s like he can’t control himself. I’d hate to work for him.

  • David @iretiredyoung June 3, 2019, 12:56 am

    I think that maybe I’m getting the hang of this early retirement lark because, of all your metrics, the one I like the most is the happiness target. With thinking like that, I feel my priorities are heading in a good direction. Hope you get rid of the properties/mortgages soon so that you can hit your 8 target.

    • retirebyforty June 3, 2019, 10:19 am

      I like the happiness grading too, but it’s tough right now for me. Once our condos sold, life will improve immeasurably. Background stress is not good for me.

  • Mr. Tako June 2, 2019, 11:51 pm

    Man, two properties for sale right now? Good luck! Absolutely nothing is moving in my neighborhood. There’s several good properties that have been sitting on the market for months. Even the homes where they’re motivated sellers (dropping the price, fixing things buyers want, etc).

    The RE market is just really slow right now. Best of luck!

    Looks like everything else financial is going pretty good for you Joe! Have a great summer! We’ve still got 16 days of school left! 🙂

    • retirebyforty June 3, 2019, 10:18 am

      It’s really tough, quite a change from 2 years ago. That’s the problem with RE investing. You have to get the timing right. But life doesn’t always allow you to do so. At least, our finance is healthy enough to carry 3 mortgages for a while. I really hope one unit sells soon.

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