Financial Independence Progress Report for August 2016

August also has come and gone without much fanfare. Another very slow month…so slow that I felt like doing something just to make it less boring. But, I reminded myself that it is the lull before the storm that I anticipate may start in September (historically a rough month). But, lets look at numbers for August.

09/03/2016
Emergency Fund $60K 100.0%
College Fund (80K) 44.30% 44.92%
Passive Income (2015 vs 2016) $297.54 (08/2015) $391.93  (08/2016)
Retirement Fund ($900K) 64.66% 65.01%
Roof for our Family($750K) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways this month

  • Portfolio Increases (in green above)
    • Nothing great to talk about…I still think that the positive gains of this year will not stand the test of time…..insane valuations will always come crashing down.
  • Portfolio changes
    • No portfolio changes this month….still adding to the cash fund I set up last month. If there is a good market dip (saw DOW drops 200-300 pts), I will use the cash to buy the dip.
  • Passive Income Stream
    • Passive Income for August 2016 ($391.93) is higher that August 2015 (297.54). This restarts the streak of 2016 dividends being more than 2015 dividends for the corresponding months. The streak got broken last month because I was in the middle of some portfolio changes….happy to get it back this month 🙂
    • My goal is to reach $750 pm by end of this year…it is already August…and my monthly dividends are appx $433 pm.
      • Target Dividend
        • $9000 pa => $750 pm
      • Current Dividend
        • $5593 pa => $466 pm
      • Balance to make up in the next 5 months
        • $9000 – $5593  => $3407 over the next 4 months
        • I have kept some cash aside to invest in a dip….I could invest it right now and increase my chances of making my target of $750 pm dividend income. But, I have chosen to wait a bit for value by waiting for a market dip and then using the cash. September is another big month for dividends. Based on how September does, I will decide.
        • I think I might squeeze through….keeping fingers crossed.
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7 thoughts on “Financial Independence Progress Report for August 2016

  1. Nice update, all I see is green numbers 🙂 I can understand your reluctance to wanting to invest. You’ve made a target but it might not be the optimum that to do, to invest at these all time highs. I’m sure there will be a big opportunity at some point over the next few months.

    Tristan

    Like

    • Thanks for dropping by Tristan. Yes. Green is much better on the FI mind than red 🙂

      Dollar Cost Averaging is supposed to make you ignore market valuations….and I did that for almost two years….but has been hard for me to follow it this year. My goal is to create a dividend income stream that is big enough to fund itself. For example, if I reach my target of $750 pm by end of this year, then it is an average of $750 pm being invested in the market without me putting a single dollar towards investing. I can then start looking for a house to call my own and not worry about money for investing. Lets hope for the best.

      Liked by 1 person

    • Thanks for dropping by ambertreeleaves!

      For the past two years, I have seen the market reach higher and higher. At this stage, let us say that the market may go up 5-10% more. But the downside to me is that it may fall more than that. For example, take VDAIX (Vanguard Div Appreciation fund) currently priced at $34.26. In 2009, it was $17 in Sept, 2009 and $27 in Sept, 2013. So, if you take a rough guess and say that a market reset will take the fund price somewhere in between 2009 and 2016, I expect the price to drop to appx $27. Note that I am being nice here….just in January this year, the fund dropped to $28 appx and there was no real recession here. So, the downside to me is much more that a 10% upside.

      I remember some wise person saying….the market takes the stairs to the top and the elevator down 🙂 A bit of cash would be a much needed cushion!

      Liked by 1 person

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