Hey everyone, a chill is in the air. This October seemed colder than usual. The overnight temperature dipped into the 30s several times already. Brr… Luckily, Halloween was dry and not too cold. Our son went trick-or-treating with his friend and collected a huge stash. These are nice candies too. Let’s see how long this stash endures. He’s pretty good at saving. We even had one last Twix left from the previous year that we split a week ago. Actually, that’s amazing. Most of his friends eat their candy right away. RB40Jr is a natural saver. Also, his stash gets replenished at Christmas, Easter, and various other holidays.
On the financial side, we had a rough month. My dad got sick and checked into the hospital for a week. Luckily, Thailand has a public healthcare system. He went to the national hospital and it didn’t cost a lot of money. A weeklong stay, various tests, medication, and a walker cost around $500. He could have gone to a private hospital and spent a lot more. He’s back home now, but he’s still weak and couldn’t make money so there is the loss of income to consider. On top of that, one of our distant relatives passed away. That family was very good to us whenever we visited so my dad contributed $700 toward the funeral cost. They don’t really need it, but it’s custom. Anyway, I sent my dad $2,600 to help out last month. That’s more than usual and it messed up our cash flow numbers a bit. I’m glad to help out, though.
Our income was lower than usual, too. Our little neighborhood HOA spent $16,000 fixing up the shared backyard. They cut down trees, improved drainage, planted shrubs, and put in a lawn. Our slice cost $1,600. I guess I should feel lucky it didn’t cost more. Still, I didn’t really want a new lawn so it’s just another unplanned expense. That turned our rental income negative for the year. There were too many big expenses recently. That’s the problem with being a landlord/homeowner. On the other hand, I finally got a new tenant for our condo. The rental income should be better next month.
Okay, I’ll go over my goals first and then share the details of our net worth, cash flow, and savings.
Here is my goal scheduling spreadsheet. It works really well. Try it out if you have a problem with your New Year goals. The key is to update the spreadsheet at least once a month to track your progress.
Whew! The year is almost over. There isn’t much time left in 2019. We’re going to Thailand soon and it’ll be the holiday season after that. I don’t think I’m going to get much more done this year. Fortunately, most of the goals are on autopilot. They’ll keep improving until the end of 2019.
- Passive Income> $60,000.This goal was way too ambitious. We’re not going to make it this year. Our passive income is $37,627, way below target. I thought we could sell the condos quickly and reinvest the money. However, the process took much longer due to the housing market slow down. There is no way we can reach $60,000 this year. Next year should be better. I’m looking forward to a fresh start in 2020.
- 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 decreased this year, but our expense dropped even more. That’s why our FI ratio is 103%. It’s a big drop from September due to unexpected expenses.
- 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 insane (in a good way), 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 $67,477. That’s behind the pace, but it’s still quite good. Our saving rate is 50% so far in 2019.
- Update Retire by 40. I need to clean up the menu, sign up with 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. I also need to update the PHP (what the heck is this?) and refresh the 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. Ugh! I found out my theme won’t get updated anymore. I’ll need to move to a new theme soon. This is a lot more work than I expected.
- 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 here to find the right credit card for you.
- Consolidate down to 1 property. We sold a condo! Now, we just have one unit left on the market. Unfortunately, it didn’t sell. I found a tenant and it’s rented now. I give myself 75% for this one. That’s a C. It could be worse.
- 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 I can’t get that 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 Intermittent Fasting Course. It was very helpful when I first started IF.
- 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 October, I rate my happiness level at 7. I was worried about my parents. It was stressful. The rest of the month wasn’t too bad, though.
- Visit my parents in Chiang Mai. I booked our trip and spent very little. I used my Chase and American Airlines points to book almost everything. The only thing I paid for is the flight from Chiang Mai to Vietnam and that was cheap ($174 for three.) Travel hacking is awesome! We’ll visit Hanoi for 5 days and spend a day in Narita on the way home. This trip should be a lot of fun.
Net Worth (+14.3% YTD)
I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we made. 2019 is turning out to be a great year so far. That’s unexpected, but I’m happy with it. I’m being more conservative this year so our net worth lags behind the S&P 500 significantly. VFINX is doing amazingly well this year and it gained 21% so far. That’s way higher than usual. Anyway, I can’t complain because our net worth also gained 14.3%. Can the market keep this up? I seriously doubt it, but who knows… I think we’re in for a wild ride for the rest of 2019 and 2020.
Here is a graph of our investment from Personal Capital. October was a nice month.
*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.
2019 Passive Income ($37,627 YTD)
Here is a quick summary of our passive income. You can see all the details on my Passive Income page.
Our passive income looks good this year. The only problem is our rental income. There were too many unexpected repair and maintenance expenses. That’s the problem with rentals. There are endless repairs. However, rental income should improve significantly next year. I refinanced loans into one property and lowered our monthly cost. Our condo is rented now so the cash flow should improve significantly next month.
The bottom line is our FI ratio. It’s 105% this year. This shows we can cover our living expense with our passive income. That’s financial freedom!
*FI ratio = passive income/expense
Last month, we finally received a check for our 2 bedroom condo sale. I invested $40,000 with CrowdStreet and put the rest in VNQ (Vanguard REIT index.) Our passive income should increase with these additional investments.
2019 Cash Flow
Our cash flow was rough in October. Our rental income was negative and we had some unexpected expenses. I also moved some cash into RB40Jr’s 529 account. Consequently, our saving rate for the month was way lower than usual, 35%. Oh well, we all have a bad month sometimes.
Here is the Sankey diagram for October. You can get a quick overview here and see the details below.
Gross Income (target > $12,000/month)
For 2019, our gross income target is $12,000/month. We met this goal for most months. In previous years, I tracked take-home income and it was all over the place due to the deductions. This year, I track gross income instead. In October, we grossed $12,173 (including investment loss.) Whew! We barely made it.
- Mrs. RB40’s paychecks: $8,163.
- Blog Income: $3,341. Not too bad. This is right in-line with our monthly average. Q4 should be much better for blog income. 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 Loss: –$1,595. It was a tough month on the rental front. Our HOA repaired the backyard and it cost us $1,600. We also spent $300 to repair a rotted window. Read more at the Rental Property Passive Income page.
- Dividend Income: $1,006. Our dividend income was good last month. See more details on my Dividend Passive Income page.
- Real estate crowdfunding: $332. We also had a good month with RE crowdfunding. I think the rest of 2019 should continue to be good. Read more at my RE Crowdfunding Passive Income page.
- Interest Income: $25.
- Side hustle: $901. We made $700 from charging scooters! That’s awesome. However, it’s getting more difficult due to the rain and cold weather. I think this income will drop a ton over the next few months. We’ll be lucky to make $300 next month. (I’m splitting this with RB40Jr. I put his take in his UMTA account and invest it in the Fidelity ZERO total market fund.) Mrs. RB40 deposit $201 into our checking account. Most of this is a gift from her parent.
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. This helped a lot. In October, we spent $5,188. That’s higher than normal due to the money I sent my parent. That account has a good balance now so I probably don’t need to send any more money for the rest of 2019. Next year, I’ll set up an auto deposit so it doesn’t disrupt our cash flow.
- Housing: $983. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, and furnishing.
- Groceries: $468. This was a bit below average. Check out what we cooked.
On the left is Pad Rad Nah. It’s a noodle dish from Thailand. This one turned out really well. Next, I made 2 pizzas – a thin crust and a pan pizza. The carbon steel skillet worked great for this. Although, the thick crust needed more than pepperoni. Next time, I’ll pile on more toppings.
Mrs. RB40 made an onion and fennel seed tart. This one worked out really well, too. I tasted better than I thought. On the right is my tuna (canned) kimchi stew. I really liked this dish. It was super easy to make and RB40Jr even ate some. It wasn’t as spicy as it looked.
This last one is a Korean streetfood dish – spicy chicken rabokki. I saw this dish on YouTube and decided to try it. It was delicious! I’ll put up a recipe soon. BTW, rabokki = ramen + tteokbokki.
- Transportation: $79. I filled up once in October. I also paid $40 to renew my license.
- Cash: $0. No cash withdrawal last month.
- Parents: $2,670. I sent $2,600 to my parents. Also, I ordered some supplements for my mom.
- Kid: $66. We went to the Portland Trailblazers game, ate out, and paid the dentist. Not bad for all those.
- Pet: $34.
- Bills: $211. Insurance (auto, home, term life, and umbrella).
- Health: $100. Dentist and prescription.
- Travel: $382. We got our visa for Vietnam and paid for cat sitting.
- Clothing: $16.
- Entertainment: $179. We ate out several times in October. Mrs. RB40 got a ticket for Mesmerica, a light show.
- Misc: $0.
I don’t count these as personal spending.
- Taxes and deductions: $2,774.
- 401k savings: $2,980. I contributed $1,500 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: $2,000.
- Extra Savings: -$1,769. I had to borrow some money from our old savings because I wanted to finish contributing to the college savings plan.
We saved $67,477 so far in 2019. Our current saving rate is 51%. I’ll be very happy if we can maintain it above 50% this year. That’s an excellent saving rate.
- Joe’s 401k: $18,500.
- Mrs. RB40’s401k: $15,490
- Roth IRAs: $10,000
- 529 College Savings: $4,865
- Extra savings: $18,622
YTD 2019 saving rate = 50%
October 2019 Wrap Up
All in all, October was okay. Our net worth increased a bit thanks to the stock market. We already surpassed my target of +10% net worth in 2019. That’s very good. Let’s hope we can keep it above 10% until the end of the year.
On the cash flow side, it was a bit tougher. Our rental income was bad and it pushed us into the red for the year. I’m hopeful for the last 2 months, though. We should be back in the positive side next month because our condo is rented now. Unfortunately, we spent more than usual last month. Most of that was due to sending money to my parents. I don’t feel bad about it, though. We’re glad we can help out. That’s what money is for – to take care of your loved ones. It’s a good thing that they have access to affordable healthcare in Thailand.
Anyway, October is over. It wasn’t a great month, but we’re moving on. November and December should be much better. We’ll coast the rest of this year and start over again in 2020. I’m looking forward to it. Next year should be much smoother for us financially.
How about you? Did you have a good month? Are you making progress on your New Year goals?
*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 investment. It’s a great site for DIY investors.
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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.