October 2022 FIRE Update

Hey everyone! It’s November and the weather is turning cooler in the Pacific Northwest. The weather was warmer than usual for most of October, but the rain arrived in full force at the end of the month. The ground got completely saturated and many trees got uprooted all over the city. One of those was the huge old willow tree in our backyard. Miraculously, it missed all the houses. Also, it fell early in the morning and nobody was out in the yard. Whew! The bad news is that cleanup will cost quite a bit of money. One company came out and estimated $6,000… Jeez! They don’t even have to climb the tree. They just need to cut it up and haul it away. Let me know if you have a good tip on tree removal. Anyway, the backyard is shared by 4 houses so we’ll split the expense. Also, I can charge half of the expense to the rental because our house is a duplex. This is yet another unexpected expense. This year seems to be full of those.

On the personal finance side, things were better in October. Investors got optimistic and the stock market recovered a bit from the previous month. Our net worth improved a bit. Our cash flow was also pretty good. We spent some money on travel to help Mrs. RB40’s dad transition back home from the hospital. You can read more about it here – How Many Good Years Do You Have Left?  

Scary.

Today, I’ll share how I’m doing on my New Year goals. Then, I’ll show you our monthly cash flow. Here are the details.

2022 Goals

Here is my 2022 goal spreadsheet. It works really well. Try it out if you can’t keep up with your New Year goals. The key is to go over the spreadsheet at least once a month to track your progress. That way, you can see which goals need extra attention.

I’m not doing so well on my goals this year. The progress is very uneven.

Financial Goals

  • Real Estate Crowdfunding $200,000. I invested in an apartment renovation in North Carolina so we’re slowly getting there. The projects on CrowdStreet finish their funding phase very quickly. Many investors are taking money off the stock market to diversify. Real estate is doing much better than the stock market this year. It’s a great way to generate passive income.
  • FI Ratio > 110%. This is my main goal for 2022. The FI ratio is passive income divided by expense. So far, our FI ratio is 133%. The big payout from the real estate crowdfunding project helped a lot.
  • Sell rental condo. Our tenant decided to stay for another year. He’s a great tenant so I’m okay with it. The price isn’t great in that area anyway. Portland is still struggling with a lot of issues. Anyway, this goal got a fail.
  • Speculate crypto $10,000. Occasionally, procrastination is a good thing. I didn’t add much money to my crypto account this year, because I’m too afraid. Crypto is probably too volatile for me.

Health Goals

  • Unfortunately, I lost my fitness tracker in Bangkok. I have no idea how it happened. It probably just popped off my wrist. I’ll see if I can get a new one when it’s on sale.

Fun Goals

  • Travel 180 days – I spent 155 days traveling this year and I am exhausted. We spent the whole summer on the road while Mrs. RB40 was on a sabbatical. She could retire if she wants, but she plans to go back to work soon.
  • 1,000 subscribers on my YouTube channel. Currently, we have 1,443 subscribers on our YouTube channel. I don’t think I’m cut out to be a YouTuber. I just don’t have the personality for it. But we gained some subscribers this year so I met my goal.
  • Hot air balloon ride, zipline, and Disneyland. This isn’t looking good. I haven’t been able to squeeze these fun things into the schedule. We’ll probably put it off for now.
  • Happiness > 8. My happiness level stayed low in October. We are still dealing with health issues. I think next month will be better. Everyone is slowly recovering so the holidays should be good.  

Net Worth (-14.4% YTD)

Wow, the stock market did pretty well in October! Our net worth is still down, but it is a lot better than a month ago. I think investors are too optimistic. The Fed probably will continue to raise the interest rate. The labor market is still doing quite well so I don’t the Jay Powell will slow down yet. In my opinion, we should brace for more volatility until 2023.

I’ve been tracking our net worth since 2006. It is very motivating to see the progress. The power of compounding is unbelievable. Our net worth usually increases more than we earn almost every year. However, 2022 is turning out to be a terrible year. The stock market crashed and dragged our net worth down significantly. We diversified with real estate and other holdings so our portfolio is a bit more stable than the stock market. The decrease in our net worth isn’t fun, but we will continue to invest for the future.  

***Important*** My best advice is to stay the course. Do not stop investing. You need to keep investing when the stock market is down. Eventually, the stock market will recover and you will do very well as long as you keep investing through the downturn.

Here is a chart of our net worth from 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.

2022 Passive Income: $62,778 YTD

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

Our passive income is strong this year. In particular, real estate crowdfunding paid out nicely. Also, our rentals are performing much better than the last few years. It’s nice to be diversified.

*FI ratio = passive income/expense

October 2022 Cash Flow

Mrs. RB40 is back to work now, but I’ll exclude her income from our monthly cash flow. It’ll give us a better picture of what life will be like after she retires. Honestly, it hasn’t been great. We need to draw from savings almost every month. However, passive income is a bit lumpy. We’ll have a better picture when we look over a longer period.

Here is the Sankey diagram of our cash flow. You can get a quick overview from the diagram and see the details below.

Gross Income: $4,317

Our gross income was actually pretty good last month. The hustle was mostly from the tax refund. I finally finished our tax return and filed it. I also sold an item on Ebay. Next year, I’ll probably focus more on finding a good side hustle or two.     

  • Blog income: $1,500. My blog income was okay. Blogging income is 50% passive, at best. If I work less, my income drops too.
  • Real estate crowdfunding: $0. No payout from real estate crowdfunding last month. You can read more on the RE Crowdfunding Passive Income page.
  • Rental income: $723. We had a nice month at the rental. I think we’ll have a good year with rental income. Things are much smoother than the previous years.
  • Dividend Income: $967. Good month with dividends.
  • Interest Income: $11
  • Side hustle & Misc: $920. I got the tax refund check and sold an item on Ebay.

Monthly Spending: $3,867

This year, I plan to spend about $50,000. So our monthly spending budget is $4,166. In October, we did well. However, we spent quite a bit on the parent category. See why we flew down to California in the travel section below.

Here are the details. Actually, I’ll only focus on a few categories to keep it simpler.  

  • Housing: $1,199. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, repair, and furnishing. The price of utilities increased a little this year.
  • Parent/travel: $1,751. I send $250 to my parents every month to help with their living expenses. In October, Mrs. RB40’s dad was hospitalized due to a fall. We took turn to help him transition back home. I went for 12 days then Mrs. RB40 went for a week. I also purchased some cameras and a smart phone for him. That way we can keep a closer eye on him. And he can order grocery deliveries while his mobility is limited.  
  • Groceries: $275. We didn’t spend much on groceries because of the trip to California. Mrs. RB40’s dad doesn’t cook at all so I had to scrounge and eat creatively. You can see more pictures in this post – A Taste of Bachelor Living.
Ramen and Vienna sausages. Yum!

Taxes and deductions

I don’t count these as personal spending.

  • Taxes and deductions: $450 

October 2022 wrap up

Whew! October was a rough month, but things are getting better. We are recovering from our health issues and the rest of 2022 should be good. The stock market probably will continue to be volatile for a while. However, that isn’t a bad thing as long as we keep investing. In the long run, we’ll benefit from this economic downturn.

All right, that’s it today. How was October for you?

Passive income is the key to early retirement. These days, I’m investing in commercial properties with CrowdStreet. They have many projects across the United States. Go check them out!

Disclosure: We may receive a referral fee if you purchase or signup for 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. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.
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16 thoughts on “October 2022 FIRE Update”

  1. Big unexpected financial expenses are rough on the budget.

    One of my rental properties in September experienced a flood in the basement due to a sewer line backup. It cost quite some money to pump out all the water, fix the sump pump, and repair all the mechanicals in the basement.

    That experience was not fun.

    Glad the rebound of the stock market helped offset the pain of this unexpected expense.

    Reply
  2. We had a big tree fall in our backyard a year or two ago. Somewhere we heard a guy would cut it up and haul it off for free just to get the firewood. We contacted him and that was the deal. I tried to give him a couple hundred bucks but he would not take it, he did let me make a same sized donation to his church which I did. We had gotten a $1,500 dollar quote from a tree service to do the same thing so we got a great deal! Ramen and vienna’s? You should put some kind of warning on the post title if you are going to include obscene photos like that, yikes!

    Reply
    • I’ll look around, but I don’t think that will work in Portland. Also, willow wood doesn’t burn well. It burns fast and doesn’t give off much heat. Heh heh, the ramen was great. I haven’t eaten it like that in 20 years. It’ll probably be 20 more years before I repeat.

      Reply
  3. Sounds like you had a rough month Joe! It’s tough when things don’t go your way financially, but it’s just one month. There’s always going to be good ones and bad ones. As long as it all balances out in the end you’ll do just fine.

    Keep your chin up!

    Reply
  4. Nice work Joe. How did you find the work of producing YouTube content compares to blogging?

    Also, I think you meant to say the Fed will continue to raise, not cut the interest rate 🙂

    I’m trying to consider giving as part of my passive income portfolio, do you consider that only during the months once your income is above a certain threshold?

    Reply
    • I like making YouTube clips, but it takes a lot of time. I can only do blogging or YouTube. Doing both is too difficult for me right now. Currently, we only give to the school whenever they ask. We plan to give more when we’re older.
      If all goes well, we’ll use most of our Social Security benefits for donation.

      Reply
  5. Wow, you’d think that someone would want the tree for free firewood. Maybe you can post a local ad that just says, “Free firewood, come get it.” LOL.

    My son got the same dinosaur Halloween costume this year. It was hilarious. I ended up seeing about seven of them though, so it wasn’t too unique.

    Great job on the FI Ratio. I’m looking forward to where it ends up with EOY dividends.

    Reply
  6. You say,
    “Real estate is doing much better than the stock market this year. It’s a great way to generate passive income.”

    After reading an article in Canada’s “Globe and Mail” the other day, I would be a little careful with real estate. The article relates to a study done by a Boston research company about the delinquencies by both US and Canadian companies in paying the rent in October. This paragraph particularly got my attention:

    “In many U.S. sectors, the delinquency rates were much higher that the 37-per-cent average. Educators, car dealers, restaurants and retailers all had rates well over 40 per cent. The automotive sectors and restaurants were particularly hard hit, recording their highest delinquency rates for 2022, at 49 per cent.”

    Also for Canada: “Nearly half of all restaurants surveyed – 49 per cent – could not pay their rent in October, up 13 percentage points.”

    I don’t know about anyone else but this is pretty scary to me.
    You should be able to read the article without a subscription here:

    “Small businesses defaulting on rent are canaries in the coal mine for North America’s economy”
    https://www.theglobeandmail.com/business/article-small-businesses-defaulting-on-rent-are-the-canaries-in-the-coal-mine/

    You ask, ” How was October for you?”

    Well, my book sales (both print editions and ebook editions) have dropped quite dramatically. But the positive side is that at 73 years old I still have not had to touch my Retirement Portfolio of Dividend Stocks or my Prosperity Account of GICs and bank deposits (in mid-lower six figures) this year. I did a calculation the other day and concluded that if I spend $8,000 a month for the next 5 years I can live off my Prosperity Account and whatever little money I make from books and a small government-related pension of $660 a month. In 5 years, my Retirement Portfolio of Dividend Stocks without touching it could possibly reach $2.5 million CAN. At 78 years old, this should be enough to comfortably retire on.

    Reply
    • Thank you for the link. Small businesses are struggling. That’s bad news. Hopefully, things will improve in 2023.
      I need to research residential real estate, but I think it’s still doing okay. The rent is still going up. That means people can still pay the rent.
      That’s unfortunate about the book sales. I think people’s habits are changing. It seems people don’t want to read much anymore. The blog traffic is going down for me as well. There are just too many things competing for attention now.

      Reply

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