September 2019 Financial UpdateHey everyone, autumn is here. Our heater kicked on for the first time last week. Brrr… My bones are already starting to ache and the temperature is only in the 60s. Now I know why retirees move south for warmer weather.

September flew by. I crossed a ton of stuff on my to-do list and it looks much more manageable now. I still have a few big items left, but I should be able to take care of them in October.

On the financial side, we had a pretty good month.

  • Our net worth increased a bit.
  • I gave up on selling our 1 bedroom condo. Now I’m looking for a tenant.
  • Our monthly cash flow was acceptable and we saved 46% of our income. That’s lower than my target of 50%, but still very good.
  • We made over $500 charging scooters in September! Read more in the cash flow section.

Overall, we had a good month. Our income was lower than usual because of a repair bill at the rental. Next month should look much better especially if I can find a new tenant.

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 with your New Year goals. The key is to update the spreadsheet at least once a month to track your progress.

Whew! September flew by, didn’t it? We only have 3 months left in 2019 and it will be New Year before you know it. This is the last chance to make a push for the finish line. Pretty soon, it’ll be the holiday season and nobody will get much done then. Unfortunately, it looks like I was too ambitious this year. Quite a few goals are behind the pace (75%.) The biggest problem is Updating Retire by 40. I’ll focus on this one in October and November. Hopefully, I’ll get it done before Thanksgiving. The other goals are on autopilot at this point.

Financial Goals

  • Passive Income> $60,000.This goal was way too ambitious. We’re not going to complete it this year. 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 113%. It’s fantastic and we just need to keep at it.
  • 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 $63,454. That’s behind the pace, but it’s still really good. Our saving rate is 51% so far in 2019.

Blog Goal

  • 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.

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 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, I don’t think it’s going to sell. I’m screening tenants now. Let’s get rented and I’ll call this one done.
  • 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.

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 September, I rate my happiness level at 8. I was too busy. There were so many things to do. Fortunately, I finished most of the things on my to-do list. I’m more relaxed now.

happiness level

  • Visit my parent 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. The only thing left is to get the visa for Vietnam.

Net Worth (+12.7% 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 18% so far. That’s way higher than usual. Anyway, I can’t complain because our net worth also gained 12.7%. 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.

Here is a graph of our net worth on Personal Capital.

net worth

*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 ($34,556 YTD)

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

2019 passive income

Our passive income looks really good this year. The only problem is our rental income. I replaced a balcony door in September and it cost $1,322. That wiped out our rental income for the month and then some. That’s the problem with rentals. There are endless repairs. However, rental income should improve significantly next year. I’ll rent out the 1 bedroom condo and it will help a lot.

The bottom line is our FI ratio. It’s 113% 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. Next year should be way better.

2019 Cash Flow

Our cash flow was great in September. The income streams were mostly solid. The only hiccup was from the rental income. Our dividend income was awesome, though. This is the first time we broke through the $2,000/month level. VNQ gave it a big boost. It feels great.

On the spending side, it looks okay. Our housing expense was higher than usual. I got a couple of rugs to prepare for the winter. Hardwood flooring looks nice, but it’s cold. I also sent $1,000 to my parent.

Here is the Sankey diagram for September. 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. Last month, we grossed $12,531 ( including investment loss.) Whew! We barely made it.

  • Mrs. RB40’s paychecks: $7,946.
  • Blog Income: $2,814. Not bad at all. 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 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 Loss: –$1,037. I spent $1,322 to replace our tenant’s balcony door. We got a fiber door so it should last a very long time. Read more at the Rental Property Passive Income page.
  • Dividend Income: $2,031. Our dividend income was fantastic last month. We broke the $2,000/month barrier for the first time. The VNQ dividend came in and gave us a big boost. See more details at my Dividend Passive Income page.
  • Real estate crowdfunding: $228. 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: $19.
  • Side hustle: $530. We made $530 from charging scooters. That’s really good. 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.)

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 September, we spent $3,975. Oh man, we barely made it. We had a couple of big expenses last month. I sent my parent $1,000 to help out. I also purchased some rugs to get ready for winter. Lastly, I initiated a refinancing process. The appraisal fee was $550. You can see the detail below.

  • Housing: $1,888. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, and furnishing. Last month was higher than usual because I spent $350 on rugs and $550 on the appraisal fee for refinancing.
  • Groceries: $603. This was a bit above average. Check out what we cooked.

cooking september 1

I made shrimp scampi with pasta. It was great. The secret is you have to put a lot of butter. On the right, I made okonomiyaki. It’s Japanese cabbage pancake. This is a very easy meal to make, but you need quite a few Japanese ingredients.

september cooking 2

The first picture is DIY khoa soi (Thai curry noodle.) I had leftover curry so I threw in some squash, frozen vegetables, sausages, and some pasta. It was an awesome lunch. On the right is a Thai dish call – Crying Tiger. It’s grilled beef served with a spicy dipping sauce (Jaew) and sticky rice. We enjoyed this one a lot too. I can’t wait for our trip to Thailand.

Here I made Chazuke, Japanese comfort food. I’m training how to be a food YouTuber so forgive my shaky video. Hopefully, the video quality will improve soon. I’m not very good at making clips yet.

  • Transportation: $92. I filled up once in September. The rest was for auto insurance.
  • Cash: $0. No cash withdrawal last month.
  • Parent: $1,000. I sent $1,000 to my parent. My mom needs more assistance so my dad can’t work much these days.
  • Kid: $20. Finally, we had a cheap month for Junior. This was for his school field trips.
  • Pet: $34.
  • Bills: $24. Life insurance.
  • Health: $56. Dentist visits.
  • Travel: $37. Mrs. RB40 went on a business trip.
  • Clothing: $0.
  • Entertainment: $158. We ate out a few times in September. Mrs. RB40 was out of town and I was too lazy to cook for 2. Junior rarely appreciates my cooking anyway.
  • Misc: $67. I purchased legs for my bench project, a wok spatula, a book, and a silicone muffin pan.

Others

I don’t count these as personal spending.

  • Taxes and deductions: $2,774.
  • 401k savings: $2,480. I contributed $1,000 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: $0.
  • Extra Savings: $2,299. This went into our saving account. It’s nice to have a little extra cushion.

2019 Savings

We saved $63,454 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: $17,000.
  • Mrs. RB40’s401k: $14,010
  • Roth IRAs: $9,000
  • 529 College Savings: $2,865
  • Extra savings: $20,579

YTD 2019 saving rate = 51%

September 2019 Wrap Up

All in all, we had a nice month. 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, everything worked out even with a few hiccups. Our rental income was a disaster, but we’re still positive for the year. (Whew!) It should look a lot better once I rent out our 1 bedroom condo. Our expense squeaked in under budget. Maybe I should send my parent money a smaller amount regularly instead of $1,000 at a time. Our expense will look smoother if it’s spread out more. I’ll automate it next year. Anyway, September was okay. There are just a few months left in 2019 and I’m looking forward to wrapping up the year. This year has been too busy for us. Hopefully, next year will be smoother.

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.

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

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