Hey everyone, September is over! Wow, 2020 has been quite a year and there are still 3 months left. I’ve been trying my best to ignore the news, but there are so many things going on. Will life calm down in 2021? I really hope so, but who knows? Anyway, I’m looking forward to voting by mail-in ballot later this month. I hope you will exercise your right to vote. It’s so important. Just imagine how it’d feel to not have a vote. Billions of people still don’t have this privilege. So go out and vote! (Or stay in and vote by mail like everyone in Oregon.)
On the personal finance side, we had a great month in September. Our income streams came together to hit a YTD high. Yes! At the same time, our spending remained very low because we didn’t do much. We just stayed home, relaxed, and went for hikes in local natural areas. Also, virtual school started so we’re all glued to the screens for 10+ hours per day. I think optometrists are going to get a lot of customers with this kind of eye strain on kids. Our cash flow was great, but our net worth took a small hit. The stock market dropped a bit last month. I think that’s healthy after a strong run up over the last few months. The recovery is slowing down and investors are realizing that it’ll be a long slog, IMO.
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 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’ll see which goals need extra attention.
Many of my goals are not going well this year. I started out with reasonable goals and I won’t be able to accomplish many of them. My wife and son are home all day so I don’t have much time to work on these goals. That’s life, though. There will be setbacks and some years will be harder than others. We just need to survive 2020 and hope for better days ahead. It’s okay to have lower expectations this year.
- Real Estate Crowdfunding $150,000. In 2020, I added $28,000 to our RE crowdfunding investment with CrowdStreet. Several projects completed this year and I want to reinvest.
- FI Ratio > 110%. This is my main goal for 2020. The FI ratio is passive income divided by expense. Once we reach 100% consistently, then we’ll be set to retire in style. This goal is good so far. We’re at 133% for 2020 so far. I think we’ll be okay with this one.
- Saving rate > 50%. This one is really tough because I use gross income. If you make a lot of money, your tax rate is higher. If you don’t, then your expenses overwhelm the income. Only a few households can reach 50% saving rate. This year is going really well and we are saving 61%! Our spending is way lower than usual.
- Side hustle income > $5,000. We made $573 from charging electric scooters in September. The weather is starting to get colder and rainier so this side hustle won’t last too long. I plan to start pet sitting once things are back to normal. I also made $10 in 2 minutes with Product Tube, not bad.
- Content creation > 178 blog posts and videos. This is a huge amount, but we’re ahead of the pace. In September, I posted 13 blog posts and 9 videos! We ramped up the video releases.
- Refresh RB40. This one is on hold for now. I’ll get back to it when things are back to normal. I can’t focus when RB40Jr is home.
- 1,000 subscribers on our YouTube channel. Currently, we have 115 subscribers. This is a slow process that will take way more than one year. We’ll keep working on it.
- Visit Thailand. I wanted to visit my parents in the summer, but that got canceled. I still want to go, but the rules are stringent. We’ll have to see how the situation develops over the next few months.
- Travel hack 200,000 points. I don’t think we’ll accomplish this goal in 2020. There are too many other problems to deal with this year.
- Update our Will. I purchased Quicken WillMaker & Trust and made a Will. We’ll talk to a lawyer when things are back to normal. This will have to do for now.
- Happiness level > 9. My happiness level was dropped to 7 last month. My mom has dementia and it is getting bad. She wandered off, fell, and got hurt. It really stressed me out and I didn’t sleep well for a long time. She lives with my dad in Thailand so I can’t help much except to send money. She’ll have to go to a care facility very soon. If she still lived with us, she’d be in a facility already because I wouldn’t be able to take care of her. My dad said she functions like a 2-year-old toddler now. She can’t do anything by herself. Dementia is the worst. This is why I really want to go to Thailand this year.
Net Worth (+4% YTD)
I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we made. 2020 is crazy. I have no idea what the market is going to do next. Luckily, I learned from experience to keep investing. This year, our net worth is up 4% so far. That’s not great, but I’ll take it.
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. That spike at the end of the month is due to Zillow overvaluing our home. I need to decouple it somehow.
2020 Passive Income ($34,943 YTD)
Here is a quick summary of our passive income. You can see all the details on my Passive Income page.
Surprisingly, our passive income held up quite well.
- Real Estate Crowdfunding– RE crowdfunding is great this year. Several projects wrapped up and paid out. You can read more detail here on our RE crowdfunding income page.
- Rentals– We have two rental units and both our tenants have solid jobs. For now, they are both paying rent on time.
- Dividend– This one looks good so far, but I’m sure companies will cut dividends if this pandemic sticks around through 2021.
Our FI ratio looks good so far at 133%. We didn’t spend much this year.
*FI ratio = passive income/expense
September 2020 Cash Flow
Our cash flow was excellent in September. Our various income streams came together and hit a YTD high. Yes! It was our best month in a long while.
This is the Sankey diagram for September. You can get a quick overview here and see the details below.
Gross Income (target > $13,000/month)
This year, I increased our income target increased to $13,000/month. If we make this much every month, we should be able to save around 50%. Unfortunately, our income streams stumbled during the pandemic. My blog income decreased substantially. IMO, people are not as interested in early retirement when the economy stumbles. There are more important problems to worry about, right? Also, I haven’t been able to focus so maybe my writing quality dropped. Anyway, September was a rare good month for our income streams. They were all pretty strong. Oh, we also finally got our tax refund. That’s another reason why our income was higher than usual.
- Mrs. RB40’s job: $8,518. Mrs. RB40’s job continues to be the pillar of our household income. We will survive without her income, but this whole pandemic would be a lot more stressful.
- Blog Income: $2,742. The best month since February.
- Real estate crowdfunding: $1,846. RE crowdfunding was excellent last month. A project completed and we got a nice little payout. You can see how we’re doing at the RE Crowdfunding Passive Income page.
- Rental Income: $641. Good rental income this month, no repairs. Read more at the Rental Property Passive Income page.
- Dividend Income: $1,938. Our dividend income was very good in September. See more details on my Dividend Passive Income page.
- Interest Income: $1.
- Side hustle: $583. We made about $573 by charging scooters around our home. RB40Jr gets 50% of this because he helped me collect the scooters. I also made $10 in 2 minutes with Product Tube, not bad!
- Misc: $2,270. We finally got our tax refund back from the IRS. Now, where is my stimulus?!
Monthly Spending (target < $4,166/month)
This year, I plan to spend about $50,000 so our monthly spending budget is $4,166/month. For now, we are way under budget due to the pandemic. Like many families, we cut back and didn’t spend much so we can conserve some cash. However, we spent some money on entertainment and clothing last month. Our total was still pretty low, just $2,718. Not bad at all.
- Housing: $1,152. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, repair, and furnishing.
- Parents: $500. I’m sending $500/month to my parents.
- Groceries: $501. This is right around the average. Here are a few dishes we cooked. Check them out and subscribe to our YouTube channel!
- Travel: $0. I’m ready for another road trip…
- Entertainment: $164. We supported the local businesses and ordered some takeout. I also ordered several Gunpla plastic models for fun. I’ll share some pictures on my Instagram after we put them together.
- Health: $30. I checked in with my dentist and hygienist.
- Bills: $23. My term life insurance payment.
- Transportation: $128. Car insurance, gas, and public transportation.
- Kid: $0. I got some new clothes and shoes for our son, but I’ll put them under clothing.
- Pet: $0.
- Clothing: $166. Our son is growing so quickly so I got him some new clothes and shoes. I also get a few things for myself. Most of my clothes are so old and ratty. They are comfortable so I rarely buy new stuff until they fall apart.
- Misc: $45. Mrs. RB40 picked up some heating pads for our aching old bodies. Also, a few other small items.
I don’t count these as personal spending.
- Taxes and deductions: $2,380.
- 401k savings: $4,770. Mrs. RB40 contributed $1,520 to her 401k. I contributed $3,250 to my i401k. Yes! I maxed out my retirement contribution for the year, $19,500.
- Roth IRAs: $1,000. We contributed $500 each to our Roth IRAs every month.
- 529 College Savings plan: $0. We contributed $4,000 earlier this year. We’re done for 2020.
- Extra Savings: $7,671.
2020 Savings ($83,004 YTD)
Wow, that’s a lot of money saved. We are very fortunate to be able to do this. 2020 is a crazy year, but our expenses are much lower than usual. Our income streams are also holding up relatively well so we are getting through this pandemic pretty well.
- Joe’s 401k: $23,375. I can contribute to my i401k as an employee and the employer. So my total contribution is usually higher than the max.
- Mrs. RB40’s 401k: $14,420
- Roth IRAs: $9,000
- 529 College Savings: $4,000
- Extra savings: $32,209
YTD 2020 saving rate = 62%
September 2020 Wrap Up
Overall, September was a great month for us. Our net worth dropped a bit, but it’s no big deal. Cash flow is much more important on a monthly basis. Personal finance was good, but I was stressed out about other things. I was worried about my mom and politics was insane last month. I really hope the news cycles will slow down next year.
How about you? Did you have a good month? Are you tired of all the craziness in the US yet? It’s stressful even if you don’t care about politics.
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.