Financial Independence Progress Report for September 2018

September is done and so is the third quarter. End of year is coming closer and that means yearly evaluations also 🙂 But lets not jump ahead…lets see how September fared.

I am seeing a lot of red in many parts of my portfolio….bonds and stocks in both taxable and tax-advantages accounts. Feels like we have reached the turning point in the market and nowhere to go but down. I.e. buying opportunity! Need to build up cash reserves again to profit from it. I have a note on this later in this post.

How much closer did I get to my financial independence targets in September? Lets look at the numbers for August and find out.

10/06/2018
Emergency Fund 24.21% 24.56%
College Fund 56.98% 57.67%
Passive Income (2017 vs 2018) $15495.52(9/2017) $1451.35 (9/2018)
Retirement Fund 87.91% 88.97%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 10.18% 12.45%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for September 2018 is a bit less than August 2017. It is by design and not unexpected.
      • Earlier this year, I redistributed where my funds are invested. Cashed out some gains and converted quarterly dividends to monthly and more importantly more tax efficient monthly 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 September is 32% more than 2017….just distributed differently.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing new to report here as I am out of cash 😐
      • Continuing to rebuild my emergency fund.
    • Investments in tax-deferred account (IRA)
      • No cash here too 🙂
      • But, need to build a cash fund because I am seeing a lot of red here.
        • I.e. time to invest more and dollar cost average down the investments will be here soon!!
  • Miscellaneous
    • I was walking through all my investment categories and I am seeing red in many of them.
      • Investments in the  GREEN
        • US Equities :
          • VDIGX
      • Investments in the RED
        • International equities:
          • VIHAX, VTIAX, VEMAX
        • Municipal Bonds:
          • VCADX, VWIUX
        • REITs:
          • VGSLX, VGRLX
        • Investment Grade Bonds:
          • VFSTX and VFICX
        • Bonds:
          • VTABX
    • In my experience, when I see such broad declines across many investing categories and across many geographies, then it usually indicates that a storm is gathering. The entire world is connected in many ways and bad markets have a way of spreading fast.
    • It is time to shift focus on how to not only prepare for a downturn but also how to benefit from a downturn.
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