Financial Independence Progress Report for December 2017

December is here and time to party ­čÖé 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 ­čÖé

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┬áDecember 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┬áthan 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)
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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┬áNovember 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┬áthan 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:┬áVanguard Total International Stock Fund
        • VIHAX:┬áVanguard 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.