Financial Independence Progress Report for February 2019

February 2019 is done….and I realized that I forgot to write the January update! It was a busy life was in the first two months of the year. Mainly fighting the flu and some kid issues. But lets get on with February.

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

3/02/2019
Emergency Fund 80.07% 97.11%
College Fund 55.46% 62.54%
Passive Income (2017 vs 2018) $657.17(02/2018) $1037.33 (02/2019)
Retirement Fund 86.30% 91.00%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 12.56% 13.66%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for Feb 2019 was $1037.33…looks nice compared to last Feb right?  Not so fast…for part of 2018, I was on a quarterly dividend system…later converted to a monthly dividend system….so, 2018 will catch up to his year in a hurry…
    • My passive income goal for the year is $500 pm or $6000 pa. But I do not have the same higher dividend paying investments this year. So, getting ahead earlier in the year is good!
  • Emergency Fund
    • Rebuilt my emergency fund to almost 100% of my target.
    • Time to take some risks now 🙂
  • Additional Investments
    • Investments in taxable accounts
      • None.
    • Investments in tax-deferred account (IRA)
      • Started two cash fund streams:
        • IRA: Took a 12% gain from selling a portion of a REIT fund
        • 401K: Took a 11% gain from selling some international funds
      • My goal is to set aside 10% of my portfolio in cash…a rainy day investment fund to better dollar-cost-average good investments.
      • Money market is giving a decent 2.4%…so, am getting paid some…
  • Miscellaneous
    • Nothing.
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2019 Goals and Quarterly Updates

Last Update on: 2/8/2019….2019 goals update

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) 5 years now on the FIRE journey and it definitely felt good to reach almost $1400 per month in passive income in 2018.

Here is my FI timeline…..I went from accidentally learning about FI to earning the following Passive Income per month from 2014 to 2018.

  • 2014:      $171.02
  • 2015:      $705.80 …..dumped most of my home down payment here 🙂
  • 2016:      $840.80
  • 2017:     $1040.13
  • 2018:     $1380.78
  • 2019:     ????

But, as with many things in life, change is the only thing that is constant. The search for a home for our family has got complicated. What we like we cannot afford and what we can afford we do not like. I cashed out some of the investments in the hope of putting a bigger down payment and creating a better offer to the sellers….a guaranteed 4.5% return on investments! But that did not work out…we failed on 6 offers already….but the good news was that I took much less of a loss in the latter part of 2018 since I cashed out the gains earlier 🙂

So, I am really not sure how to fashion my Passive Income goals for 2019. Will I reach 2018 levels? If we purchase the house, surely not. If we don’t, we *have* to exceed 2018 levels. For now, I will assume that we do buy a house and set a lower target of $500 pm and fight my way back up like a newbie!!

FIRE Target: The end-goal Financial Independence criterion for me are listed in the table below. From this, I will derive the 2019 financial goals listed below the table.

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

2019: For 2019, I have thought about the following goals to get me closer to the financial independence targets listed in the previous table.

Financial Goals for 2019

  1. Payoff car loan
    1. 03/31/2019       
    2. 06/30/2019      
    3. 09/30/2019      
    4. 12/31/2019      
  2. Keep scouting for our family home
    1. 03/31/2019       
    2. 06/30/2019      
    3. 09/30/2019      
    4. 12/31/2019      
  3. Contribute $7000 to 529 College Fund 1
    1. 03/31/2019        
    2. 06/30/2019        
    3. 09/30/2019        
    4. 09/30/2019 
  4. Contribute $2000 to 529 College Fund 2
    1. 03/31/2019        
    2. 06/30/2019        
    3. 09/30/2019        
    4. 12/31/2019 
  5. Contribute $12k to Passive Income Streams(stretch goal of $24k
    1. 03/31/2019        
    2. 06/30/2019        
    3. 09/30/2019 
    4. 12/31/2019 
  6. Max out 401k contributions ($38K total for me and wife)
    1. 03/31/2019        
    2. 06/30/2019        
    3. 09/30/2019        
    4. 12/31/2019        
  7. Max out HSA contributions ($7000)
    1. 03/31/2019        
    2. 06/30/2019        
    3. 09/30/2019        
    4. 12/31/2019        
  8. Keep eating out expenses under $250 pm
    1. 03/31/2019        
    2. 06/30/2019        
    3. 09/30/2019        
    4. 12/22/2019        
  9. Estate Planning (Will, POD beneficiaries, Caretaker for children)
    1. 03/31/2019        
    2. 06/30/2019        
    3. 09/30/2019        
    4. 12/31/2019        

 

Financial Independence Progress Report for December 2018

December is done….and I realized that November was done before that and I did not update my monthly report! Too late now. I was extremely busy with unsuccessful house hunting. But lets get on with December.

This is the last month I will have passive income for a while….I have sold all my investments and plan to prioritize buying a home for the family. Based on how that purchase goes through, I will re-enter the market with whatever money is left. This was a tough call but in the face of lots of uncertainties, this is the only reasonable path I see. I think I will again become a beginner in dividend investing….lets see how things go the second time around!!

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

1/06/2019
Emergency Fund 28.41% 80.07%
College Fund 55.37% 55.46%
Passive Income (2017 vs 2018) $939.90(12/2017) $1387.59 (12/2018)
Retirement Fund 85.72% 86.30%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 12.36% 12.56%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for Dec 2018 was $1387.59.
    • Compared to this time last year, the total dividends this year through end of December is 32.69% more than 2017.
    • My first year of developing passive income streams was 2014. December dividends in Dec 2017 was $297.68. It has been a good ride with lots of lessons learnt along the way.
  • Additional Investments
    • Investments in taxable accounts
      • Sold some more investments to tax-loss-harvest some gains.
      • Using the proceeds, I continued to rebuild my emergency fund.
    • Investments in tax-deferred account (IRA)
      • Was forced to liquidate some holdings because the 401K plan offerings changed.
      • Invested back into three buckets
        • US Intermediate bond funds
        • International Equity funds
        • US Equity funds
        • Money market fund
          • Building a cash fund because I am seeing a lot of red here.
          • 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
        • 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 non-performing markets (like emerging 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.
      • If you have time, you can read this post I wrote a while back.
      • How to prepare for the next recession?
      • Since I have have been house hunting, it is amazing how similar the scenarios I wrote in 2015 are in comparison to today!!

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.

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.

Financial Independence Progress Report for August 2018

Delayed update this month as I was out of town on work matters. But, August is done and so is 66% of the year 2018….somehow the year seems to have slipped by stealthily!! How much closer did I get to my financial independence targets? Lets look at the numbers for August and find out.

9/01/2018
Emergency Fund 20.73% 24.21%
College Fund 55.80% 56.98%
Passive Income (2017 vs 2018) $535.78(8/2017) $1244.20 (8/2018)
Retirement Fund 87.38% 87.91%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.79% 10.18%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for August 2018 is much higher than August 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 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 August is 29% 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.
    • Investments in tax-deferred account (IRA)
      • No cash here too 🙂
  • Miscellaneous
    • Nothing.

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.

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.