Financial Independence Progress Report for July 2018

July has come and gone and August is almost half way done and I am late with my monthly report!! Jeez…time flies fast. I was out of town for work related matters and it was a tiring one. But, post coming back, counting dividends for the month of July was definitely helpful to break out of the funk! So, lets look at the numbers.

8/11/2018
Emergency Fund 38.78% 20.73%
College Fund 53.70% 55.80%
Passive Income (2017 vs 2018) $486.86(7/2017) $1233.78 (7/2018)
Retirement Fund 85.73% 87.38%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.82% 9.79%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for July 2018 is much higher than July 2017. It is expected to be so 🙂
      • In March an April, I redistributed where my funds are invested. Cashed out some gains and converted quarterly dividends to monthly and more importantly more stable and tax efficient dividends.
      • The June, September and December dividends are going to be much less. But, the total dividends for the entire year will be higher though.
      • Compared to this time last year, the total dividends this year through end of July is 33% more than 2017….just distributed differently.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing new to report here as I am out of cash 😐
      • Unplanned vehicle maintenance has taken a chunk of money out of emergency funds again.
      • So priority is to rebuild my emergency fund now.
    • Investments in tax-deferred account (IRA)
      • Bought some more of VIHAX (International High Dividend) to dollar cost average down.
  • Miscellaneous
    • Nothing.
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Financial Independence Progress Report for June 2018

June is traditionally the second biggest month of the year for dividends.  But, since my portfolio rework over March and April of this year, dividends are going to look different than prior years. Dividends will be more stable and divided evenly across all months of the year. June will still be the second biggest month, but will be less in absolute numbers compared to prior years. Let us see how the numbers look for June 2018.

6/08/2018
Emergency Fund 34.67% 28.78%
College Fund 53.79% 53.70%
Passive Income (2017 vs 2018) $2389.89(6/2017) $1721.47 (6/2018)
Retirement Fund 83.01% 85.73%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.82% 9.79%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for June 2018 is approximately 27% lower than June 2017. It is expected to be so 🙂
      • In March an April, I redistributed where my funds are invested. Cashed out some gains and converted quarterly dividends to monthly and more importantly more stable and tax efficient dividends.
      • The June, September and December dividends are going to be much less. But, the total dividends for the entire year will be higher though.
      • Compared to this time last year, the total dividends this year through end of June is 21% more than 2017….just distributed differently.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing new to report here as I am out of cash 😐
      • Loaned out some emergency fund money to a friend who had an emergency….so priority is to rebuild my emergency fund now.
    • Investments in tax-deferred account (IRA)
      • I bought some more of VIHAX (International High Dividend) and VTIAX (International index). Both are down a few % points this year and I took advantage of this to dollar cost average down my investments.
  • Miscellaneous
    • Last month I said this…..
      • I have started a new way of tracking numbers for the next phase of my financial independence journey…will talk about this over the next couple of weeks.
    • Found an error in my tracking spreadsheet and had to make some changes. So decided to push the date by a couple of weeks to test drive it a bit more. Will update the blog soon.

Financial Independence Progress Report for May 2018

May is another slow month. But, since my portfolio rework over March and April this year, dividends for rest of the year are going to look totally different than prior years. May is the first month where the total effect of the changes will be seen. Let us see how the numbers look for May 2018.

6/08/2018
Emergency Fund 20.83% 34.67%
College Fund ($80K 100K…$20K increase) 65.61% 53.79%
Passive Income (2017 vs 2018) $470.72(5/2017) $1228.30 (5/2018)
Retirement Fund 78.08% 83.01%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.77% 9.82%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for May 2018 is 160% higher than May 2017 🙂
      • In March an April, I redistributed where my funds are invested. Cashed out some gains and converted quarterly dividends to monthly and more importantly more stable and tax efficient dividends. Details in April monthly progress report.
      • The June, September and December dividends are going to be much less. But, the total dividends for the entire year will be higher though.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing new to report here as I am out of cash 😐
      • In April, I took money from my emergency and home down payment funds and deployed them to generate more passive income for me.
      • From this month on, I need to rebuild my emergency fund.
    • Investments in tax-deferred account (IRA)
      • In the last few months, I have taken some profits and set up a a cash fund to take advantage of the next investing opportunity. Unlike 2008, I want to have a cash fund ready to take advantage of lower asset prices in the next bear market!!
      • I bought some more of VEIPX (Vanguard Equity Income Fund) and VIHAX (International High Dividend). Both are down a few % points this year and I took advantage of this to dollar cost average down my investments.
  • Miscellaneous
    • I had to revise up the money allotted for the college fund. Looking at the projected cost of college, I will not have the capacity to fully fund college. But, my goal is to fund at least some of it.
    • I have started a new way of tracking numbers for the next phase of my financial independence journey…will talk about this over the next couple of weeks.

Financial Independence Progress Report for April 2018

April is usually a dull month, post March dividends. But, this time, I did a rework of my portfolio to cash out profits from my equity funds and move them to MUNI funds. Dividends for rest of the year and going to look totally different than prior years. So, excited to see how the changes work out rest of this year. Let us see how the numbers look for April 2018.

5/03/2018
Emergency Fund 83.33% 20.83%
College Fund ($80K) 64.54% 65.61%
Passive Income (2017 vs 2018) $450.13(4/2017) $911.81 (4/2018)..cheating!
Retirement Fund 82.79% 78.08%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.77% 9.77%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for April 2018 is 100% higher than April 2017 🙂
      • I know I know….this is cheating a bit.I sold funds which distribute dividends quarterly and bought funds which distribute dividends monthly. Details below.
      • The June, September and December dividends are going to be much less. The total dividends for the entire year should be the same OR slightly higher though.
  • Additional Investments
    • Investments in taxable accounts
      • I sold some more stocks…primarily international funds, captured the gains and moved the money into my MUNI funds. Why?
        • Tax equivalent yield for MUNI funds are close to 4%
        • VTMGX and VEMAX yield is roughly 2.5 to 2.75% and I get taxed on top of that. It is possible that VTMGX and VEMAX might add some capital gains….but I am okay with this risk.
        • When the prices drop later this year, I will invest back into these funds…lets cross that bridge when we get there.
      • In addition, I took a bunch of money from my house down payment fund and deployed them as well….a house purchase does not seem to be on cards this  year….so, why let the money sit idle?
      • I also took a bunch of money from my emergency fund and invested them as well. If I need money, I would have to sell some bond funds….hopefully the funds do not lose too much value in case such a case comes….touch wood to avoid taking such a loss.
    • Investments in tax-deferred account (IRA)
      • In the last few months, I have taken some profits and set up a a cash fund to take advantage of the next investing opportunity. Unlike 2008, I want to have a cash fund ready to take advantage of lower asset prices in the next bear market!!
      • I bought some VEIPX (Vanguard Equity Income Fund).
        • Every fund in my tax-advantage portion is earning money for me: stocks and bonds and REIT funds. The stocks are primarily International funds.
        • I am slowly going to dollar cost average into US equities using VEIPX with the cash fund I have developed over the last few months.
        • Basic strategy is that I can get access to entire vanguard funds inside my IRA. A generic total market fund is easy to get from any 401K provider….so, I will add more US equities via my 401k using a total market fund.

2018 Goals and Quarterly Updates

Last Update on: 07/21/2018

My FIRE journey started in 2014…07/21/2014 to be exact is when I write the About section of this blog. It has been almost 4 years now on the FIRE journey and it does feel good to reach almost $1000 per month in passive income in 2017.

But, the bigger feeling is that FI is still a long way to go. The days of big capital infusions are over…there is only so many times I can steal from the home down payment fund 🙂 Waiting for the dividend snowball to get bigger is it for now. I read often Dividend Mantra’s snowball post because it motivates me to stay patient and wait for the snowball to build up. Hope it is useful for readers of this blog also.

For those readers who think that FI takes a long time, I do agree….but here is my timeline which should give some hope! I went from accidentally learning about FI to earning the following Passive Income per month from 2014 to 2011. So, FI is possible….keep plodding…I will be with ya!!

  • 2014:      $171.02
  • 2015:      $705.80 …..dumped most of my home down payment here 🙂
  • 2016:      $840.80
  • 2017:     $1040.13
  • 2018:     Expected is slightly better than 2017….touch wood!

FIRE Target: The end-goal Financial Independence criterion for me are:

Financial Independence Criterion
Emergency Fund $60k
College Fund $80K $100K
Passive Income Streams $4000 per month ($1040 pm for 2017)
Retirement Fund $900k
Roof for our Family $750k…HCOL area
Medical Fund $100k….via HSA
Life Insurance To protect my earning years…..done

2018: For 2018, I have thought about the following goals to get me closer to the financial independence targets listed in the previous table.

Financial Goals for 2018

  1. Keep scouting for a possible home/multi-family residence/rental real estate
    1. 03/31/2018      Visited 7 open houses…not worth the years of slavery …
    2. 06/30/2018      Visited 3 open houses…how can people afford the money 😦
    3. 09/30/2018       
    4. 12/31/2018       
  2. Contribute $30000 towards Home Down payment Fund
    1. 03/31/2018        -$1281….took some money out for investments 😉
    2. 06/30/2018        -$48K….got disgusted with high prices and invested instead •`_´•
    3. 09/30/2018 
    4. 12/31/2018 
  3. Contribute $4800 to 529 College Fund 1
    1. 03/31/2018        $1,811.00……amount remaining is $2989
    2. 06/30/2018        $1000.00……amount remaining is $1989
    3. 09/30/2018
    4. 09/30/2018 
  4. Contribute $2400 to 529 College Fund 2
    1. 03/31/2018        $850.00…….amount remaining is $1550
    2. 06/30/2018        $500.00…….amount remaining is $1050
    3. 09/30/2018 
    4. 12/31/2018 
  5. Contribute $12k to Passive Income Streams(stretch goal of $24k
    1. 03/31/2018        $8,722.07…..amount remaining is $3277.93 (stretch $15277.93)    
    2. 06/30/2018        Done
    3. 09/30/2018 
    4. 12/31/2018 
  6. Max out 401k contributions ($37K total for me and wife)
    1. 03/31/2018        $12,399….amount remaining is $24,601  
    2. 06/30/2018        $21,876….amount remaining is $15,124 
    3. 09/30/2018 
    4. 12/31/2018 
  7. Max out HSA contributions ($6900)
    1. 03/31/2018        $3549……amount remaining is $3351  
    2. 06/30/2018        $4245……amount remaining is $2655    
    3. 09/30/2018 
    4. 12/31/2018 
  8. Keep eating out expenses under $200 pm
    1. 03/31/2018        Not yet….
    2. 06/30/2018        Not yet….  
    3. 09/30/2018 
    4. 12/22/2018 
  9. Estate Planning (Will, POD beneficiaries, Caretaker for children)
    1. 03/31/2018        Not yet  
    2. 06/30/2018        Not yet  
    3. 09/30/2018 
    4. 12/31/2018

Financial Independence Progress Report for March 2018

March 2018 is done and with that, the first quarter of 2018 is done. March is one of my favorite months because almost all my funds send me dividends on a quarterly basis. Lets see how the numbers look for March 2018.

Caveat: Though then March numbers look green all over, note that the numbers got murdered in February….perhaps I need a year-to-date number….will think about it.

3/31/2018
Emergency Fund 83.33% 83.33%
College Fund ($80K) 63.66% 64.54%
Passive Income (2017 vs 2018) $1254.31(3/2017) $1396.05 (3/2018)
Retirement Fund 81.63% 82.79%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 6.17% 9.77%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for March 2018 is 11% higher than March 2017. Not much of a gain, but it is greater than average inflation percentage of 3%.
    • I was considering the Rule of 72…the rule that predicts when your money will double. If I continue at 11% (caveat in next point), my money will double in 7 years….wouldn’t that be nice for FI 🙂
    • Anyways, 11% increase was achieved more by new investments than dividend returns and additional investments are drying up this year. But, nice to think about it hey…more on this coming later!!
  • Additional Investments
    • Investments in taxable accounts
      • I sold VHDYX, captured the gains and moved the money into my MUNI funds. Why?
        • Tax equivalent yield for VCADX is 4.5%.
        • VHDYX yield is 2.75% and I get taxed on top of that. It is possible that VHDYX will add some capital gains but it looks like we are almost done with the bull market…so, we can discount this.
        • When the prices drop later this year, I will invest back into VHDYX…lets cross that bridge when we get there.
    • Investments in tax-deferred account (IRA)
      • In Dec 2018, I took some profits and set up a a cash fund set up to take advantage of the next investing opportunity. This month, I cashed out profits from a couple more funds and added to the cash fund.
      • Unlike 2008, I want to have a cash fund ready to take advantage of lower asset prices in the next bear market!!
      • I also bought some more of VGSLX…a REIT fund….REITs have dropped almost 10% this year….so, seemed like a good time to buy into this and dollar cost average down my REIT investments.

Financial Independence Progress Report for February 2018

February 2018 is done and gone and I am late by 11 days in publishing this….bad bad bad. Was a bit lazy at the end of last month and life caught up to me. Better late than never!

That said, lets look at the numbers for February, 2018. Nothing big to report…

  • The dividend stream is settling down to an even pace since I have no extra money to add to the dividend funds.
  • The stock market swoon in February 2018 had its effect on my portfolio also…look at the nos in red below.

Looking forward to March’s quarterly dividends!

3/11/2018
Emergency Fund 83.33% 83.33%
College Fund ($80K) 64.47% 63.66%
Passive Income (2017 vs 2018) $408.50(2/2017) $657.17 (2/2018)
Retirement Fund 82.17% 81.63%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 6.17% 6.17% ….lost login again 😦
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for February 2018 is a couple hundred dollars higher than February 2017. This is mostly the result of a push towards adding to my MUNI funds through 2017.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing to report
      • Got really attracted to the idea of selling my investments in VHDYX (up 10-12%) and moving them to MUNIs…divided yields are about the same and the MUNIs are federal tax free….had to pull myself back.
      • Holding off until I capture the quarterly dividends in March, 2018.
    • Investments in tax-deferred account (IRA)
      • In Dec 2018, I took some profits and set up a a cash fund set up to take advantage of the next investing opportunity.
      • This month, I moved some of the cash fund into a REIT fund….REITs have dropped almost 10% this year….added to my investment in VGSLX to dollar cost average down some of my investments.

Financial Independence Progress Report for January 2018

It is already end of January 2018 and a new year is well underway and I just realized once again how time flies. I started writing this blog in July of 2014. My first page was this (About) and my second was this (What is Financial Independence to Me). I had just then started thinking about Financial Independence and freedom from the rat race!

Surprisingly, even after 4 years, the initial goals have not changed at all….which means I was thinking some things correctly 🙂 Every month of new dividends flowing in gets me closer to my goals and motivates me to get every dollar working hard for my freedom. Best of luck for my fellow travelers in the journey of financial freedom…..make every dollar work for you!

That said, lets look at the numbers for January, 2018.

2/4/2018
Emergency Fund 100.00% 83.33%
College Fund ($80K) 62.50% 64.47%
Passive Income (2017 vs 2018) $441.42 (1/2017) $755.14 (1/2018)
Retirement Fund 81.03% 82.17%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 6.17% 6.17%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Emergency Fund
    • I saw an opportunity to reach my funding target in one of my MUNI funds (VCADX) and just could not resist it. So, I took some of my emergency funds and bought into the fund. It was a momentary weakness to dip into my emergency fund…but hopefully the new dollars will bail me out later in time.
    • More on this later.
  • Passive Income Stream
    • My passive Income for January 2018 is a couple hundred dollars higher than January 2017. This is mostly the result of a push towards adding to my MUNI funds through 2017 and a bit in Jan 2018.
  • Additional Investments
    • Investments in taxable accounts
      • As mention earlier, I invested some emergency fund cash into purchasing MUNIs (VCADX). This fund is both federal and state tax free.
    • Investments in tax-deferred account (IRA)
      • In Dec 2018, I took some profits and set up a a cash fund set up to take advantage of the next investing opportunity. Still in a holding pattern….

Financial Independence Progress Report for December 2017

December is here and time to party 🙂 My best wishes for a wonderful holiday season! Hope everyone is geared up for a relaxing holiday break. My break starts this weekend and I am looking forward to a couple days off from the rat race.

December is the second highest dividend producing month of the year for me…..June takes the crown for the most dividend producing month. But, add the dividends to the good feelings of Christmas holidays and it sweetens the pot a bit in favor of December. So, I like December more than June 🙂

It is also a time of introspection regarding the goals set at the beginning of the year. But, yearly review is for another post. For now, lets look at how the numbers look for December 2017. Bit early in the month, but most of the dividends are in….

12/22/2017
Emergency Fund $60K Done
College Fund (80K) 61.36% 62.50%
Passive Income (2016 vs 2017) $2007.76 (12/2016) $2098.37 (12/2017)
Retirement Fund 80.86% 81.03%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 6.17% 6.17% (login fails to new provider)
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for December 2017 is approximately $100 higher than December 2016. Not much of an increase, but my total dividends for the year are almost $2000 higher in 2017 compared to 2016. I.e. the dividends are distributed to me differently on 2017 due to some investment changes.
  • Additional Investments
    • Investments int taxable accounts
      • I invested the last of my cash fund into purchasing MUNIs (VCADX and VWIUX). Basically, I emptied my money market funds in a final push for 2017. This will pay dividends in 2018….especially VCADX since it is both federal and state tax free.
    • Investments in tax-deferred account (IRA)
      • I captured some gains in two target date funds in my IRA and moved the money into a money market fund for now. I want to have a cash fund set up to take advantage of the next investing opportunity. But where? See next point.
      • In my IRA, the percentage of International stocks is more than that of US stocks….by a slight margin. The reason for this strategy is that US stocks have extremely high valuations. So, my theme for 2018 is to add to US stocks when their valuations become more reasonable. How will I achieve this?
      • I will pile up on US stocks over time in the following ways:
        • Tax deferred accounts
          • Periodic 401K investments are always dollar cost averaging into US stocks (70% of money goes into US funds)
          • I will use my cash fund that I have accumulated in the last few months (via capturing gains) into mainly US stocks and pick them up at cheaper valuations.
        • Taxable accounts:
          • Dollar Cost average into dividend funds that mainly buy US securities….
            • VHDYX (current dividends),
            • VDADX (dividend growth),
            • VDIGX (bit of both)

Financial Independence Progress Report for November 2017

November is a special month….it is the month before December which is a big dividend month!! Other than that, November is a small dividend month. How do the numbers look for November 2017? Lets dive in.

10/29/2017
Emergency Fund $60K Done
College Fund (80K) 59.62% 61.36%
Passive Income (2016 vs 2017) $404.40 (11/2016) $601.87 (11/2017)
Retirement Fund 79.39% 80.86%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 5.70% 6.17%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for November 2017 is approximately $200 higher than November 2016. This increase surprised me. In comparing my 2017 and 2016 dividends, I found one main reason that accounts for a good chunk of the increase….increased investment in VWIUX (Vanguard Intermediate Term MUNI fund). Of course, some capital increase also has a minor hand in this increase.
  • Additional Investments
    • Investments in tax-deferred account (IRA)
      • From August to October, I have been steadily increasing my investments in International stocks. The cash for these purchases have come from a sale of some funds to capture accumulated capital gains.
      • In November, I continued more of the same and invested in the same funds again and I am done with my international investments
        • VTIAX: Vanguard Total International Stock Fund
        • VIHAX: Vanguard International High Dividend Fund
      • In my IRA, the percentage of International stocks is more than that of US stocks….by a slight margin. The reason for this strategy is that US stocks have extremely high valuations. And the international ones have room to grow still. I will pile up on US stocks over time in the following ways:
        • Periodic 401K investments are always dollar cost averaging into US stocks (70% of money goes into US funds)
        • In the next recession, I will target more cash into mainly US stocks and pick them up at cheaper valuations.