Financial Independence Progress Report for October 2018

October is done….one more month closer to the end of year. Like last month, I am seeing a lot of red in many parts of my portfolio….bonds and stocks in both taxable and tax-advantages accounts. We have definitely reached the inflection point in the market and choppiness is back with a bang.

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

11/02/2018
Emergency Fund 24.56% 28.41%
College Fund 57.67% 55.37%
Passive Income (2017 vs 2018) $711.44(10/2017) $1320.40 (10/2018)
Retirement Fund 88.97% 85.72%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 12.45% 12.36%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for October 2018 seems a lot more than October 2017. But it is fake 🙂
      • 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 October is 38% 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
        • Bonds:
          • VTABX
      • Investments in the RED
        • International equities:
          • VIHAX, VTIAX, VEMAX
        • Municipal Bonds:
          • VCADX, VWIUX
        • REITs:
          • VGSLX, VGRLX
        • Investment Grade Bonds:
          • VFSTX and VFICX
    • 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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