Progress Report

Financial Independence Progress Report for August 2016

/ humblefi / 7 Comments

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.

Financial Independence Progress Report for July 2016

/ humblefi / 6 Comments

July has come and gone without much fanfare. After June, one of the two biggest months of the year for dividends, July feels disappointing actually. But, let the numbers speak rather than my emotions 🙂

08/01/2016
Emergency Fund ($72K)$60K 100.0%
College Fund (80K) 42.53% 44.30%
Passive Income (2015 vs 2016) $604.87 (07/2015) $579.61  (07/2016)
Retirement Fund ($900K) 61.64% 64.66%
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)
    • I cannot believe that any of the positive gains will ever stand the test of time. It is the markets going crazy on us with insane valuations. So, I will not waste my time talking about it.
  • Portfolio changes
    • I did some more portfolio changes….hopefully for the last time this year. The main idea was to capture some gains and move them into a couple of new fund options. And also set aside some money for the cash fund.
    • I wrote about this here. My new mutual fund investments are VWELX and VDAIX.
  • Cash Fund
    • I started a cash fund in May since I anticipated a few days of down market towards the end of June…with the interest rate drama, Britain’s exit from Euro decision, etc. I used the fund completely to buy the Brexit dip.
    • I have started a new cash fund in July again…nothing big..two hundred dollars a month max. And some cash to seed the fund came from capturing some of the gains from some of my mutual funds.
  • Passive Income Stream
    • Passive Income for July 2016 ($579.61) was surprisingly lower than that of July 2015 (604.87). I was wondering why this happened…..and then I remembered on seeing the numbers. When I was jobless early this year, I sold some ESPP stock I had and used the money to buy VWITX (National MUNIs). I got to sell some ESPP without any additional taxes….the espp sale replaced some portion of my salary loss. The ESPP stock dividends are slightly more than the National MUNIs but at tax time, the MUNIs will score because the gains are tax free. I got the diversification I wanted but it came as a surprise.
    • My goal is to reach $750 pm by end of this year…it is already July…and my monthly dividends are appx $433 pm.
      • Target Dividend
        • $750 pm => $9000 pa
      • Current Dividend
        • $433 pm => $5196 pa
      • Balance to make up in the next 5 months
        • $9000 – $5196  => $3804 over the next 5 months
        • I think I might squeeze through….inspite of July’s weak dividends.
      • Lets hope for the best!!

Financial Independence Progress Report for June 2016

/ humblefi / 6 Comments

June is finally done! It is one of the two biggest months of the year for dividends. And it did not disappoint me 🙂 Lets look at June’s numbers. In a later post, I will do my quarterly review for the 2nd quarter and see how I am doing for the yearly goals.

07/02/2016
Emergency Fund ($72K)$60K 100.0%
College Fund (80K) 42% 42.53%
Passive Income (2015 vs 2016) $1038.14 (06/2015) $1741.69 (06/2016)
Retirement Fund ($900K) 61.31% 61.64%
Roof for our Family($750K) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways this month

  • Dollar Cost Averaging
    • In May, I reduced my Emergency fund and moved some of it into a new Dividend mutual fund (VDAIX). I was keeping the remaining money as a Cash Fund to invest on the next market downturn….and boy…did Brexit provide that for me.
    • Brexit turned out to be a boon for me. The market dropped on two consecutive days in a big way….DOW dropped by 600 points and 300 points on consecutive days. Thanks to the people of United Kingdom for this!
    • I had a couple thousand dollars left over from the emergency fund makeover and pushed all the money (and some) into my passive income streams. Yeah for dollar cost averaging….this cash infusion will make its presence felt over the years via dividend compounding.
  • Cash Fund
    • I started a cash fund in May since I anticipated a few days of down market towards the end of June…with the interest rate drama, Britain’s exit from Euro decision, etc.
    • I used the fund completely and now I am officially out of cash…I mean I am so out of cash that I had to borrow money from my wife to pay the bills for this month. I am never going to hear the end of this for sure 🙂
    • So, for the next 3-4 months at least, I will have to run a very very tight ship 😦 Hey, the sacrifices will pay off in the long run right? And the dividends coming in will hopefully keep me motivated and help me ride out the low-cash situations.
  • Passive Income Stream
    • Passive Income for June 2016 recaptured the increase in dividends over the same period last year. June 2015 had a dividend income of $278.52 and June 2016 has a dividend income of $378.08 …a decent year-over-year increase.
    • My goal is to reach $750 pm by end of this year…considering we are at the half way mark for the year and my monthly dividends are close to $400 pm, I can see now that I am going to reach it….eagerly waiting for the day when this event happens!

Financial Independence Progress Report for May 2016

/ humblefi / 7 Comments

If April was the slowest month year-to-date, May was not that far behind 🙂 But, on the positive front, May 2016 is better than May 2015!  And, I can’t wait for June’s dividends…it is the second biggest month in terms of dividends for me. So, if we are done with May 2016, it is an exciting time for me. Lets look at May’s numbers.

06/05/2016
Emergency Fund ($72K)$60K 100.0%
College Fund (80K) 41.25% 42%
Passive Income Streams ($4000 pm) $235.30 (05/2015) $371.51 (05/2016)
Retirement Fund ($900K) 61.08% 61.31%
Roof for our Family($750K) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways this month

  • Portfolio changes continues this month….
    • In April, I made changes to my Capital Appreciation bucket. I wrote about it here. In May, I have strengthened my dividend portfolio with a new mutual fund investment.
    • In May, I reduced my Emergency fund by $12K and moved a quarter of it into another Dividend mutual fund. I am sure Vivienne is smiling on this reduction in cash holding. You can check her out at WellRoundedInvestor.com, ….she is a FI blogger way ahead of the curve!  She has always encouraged me to invest some of the idle cash 🙂 Lo and behold, I did it.
    • The period of unemployment I went through this year has motivated me to generate more dividends and accelerate my journey towards FI. So, I decided to invest some money from the emergency fund and accelerate my financial independence.
  • VDAIX (Vanguard Dividend Appreciation Index)
    • I have initiated a new position in VDAIX…this completes my multi-pronged approach to build a solid dividend platform. More details in another post.
    • This fund invests in many companies that have a history of increasing dividends. If there is a discussion of quality companies, the companies in VDAIX has to be part of that discussion. The fund’s portfolio is listed here.
    • I am going to Dollar Cost Average into this over the next few years and build another solid portfolio investment.
  • Cash Fund
    • I have started a small cash fund to keep handy…I anticipate a few days of down market towards the end of June…with the interest rate drama, Britain’s exit from Euro decision, etc.
  • Passive Income Stream
    • Passive Income for May 2016 recaptured the increase in dividends over the same period last year. May 2015 had a dividend income of $235.30 and May 2016 has a dividend income of $371.51 …a decent year-over-year increase.

Financial Independence Progress Report for April 2016

/ humblefi / 3 Comments

April is a slow month for dividends in my portfolio. But, after a couple months of no paychecks, seeing regular paychecks in April was such a joy! In celebration of that, I pumped a couple hundred dollars into making sure that future paychecks via dividends are a certainty 🙂

Lets look at the numbers now.

04/30/2016
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 39.33% 41.25%
Passive Income Streams ($4000 pm) $544.13 pm (04/2015) $509.15 pm (4/2016)
Retirement Fund ($900K) 57.96% 61.08%
Roof for our Family($750K) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways this month

  • Portfolio changes continues this month….
    • I wrote about my Capital Gains gut check here. As part of that exercise, I divested all my holdings in VTCLX (Vanguard Tax Managed Capital Appreciation) and VTMSX (Vanguard Tax Managed Small Cap).
  • Additions to my new investment vehicle…
    • Last month, I initiated a position in Vanguard Intermediate-Term Tax-Exempt Fund Investor Shares (VWITX). I wrote about it in my March Progress Report.
    • I took all the money from the sale of VTCLX and VTMSX and moved them into VWITX.
    • The gains are Federal Tax free and AMT (Alternative Minimum Tax) free as well. I would still have to pay CA state tax for VWITX though.
  • Dollar Cost Averaging
    • Did not have cash to dollar cost average (DCA) my funds this month…but I did boost my investments to dollar cost average VTMGX (Vanguard Developed Markets Index Fund….my non-US exposure mutual fund). I want to have some of my passive income streams to not come from US companies. VTMGX diversifies my passive income streams to include companies from Greater Europe, Greater Asia and Canada.
  • Passive Income Stream
    • Passive income for April 2016 ($1016.87) broke the positive trend of current year month winning over previous year’s month as April 2015 ($544.13). Hmm….
      • ….this was expected as my portfolio changes led to a some days where my money was not working for me…a gap of a couple days between closing of accounts and moving them into new accounts.
    • I compute Passive Income per month as (total passive income in this year) / number of months completed this year.
      • Total passive income is a sum of dividends + capital gains distributions.
      • April Passive Income = (total passive income in this year) / 12 == $201.98 which beat the 2015 April number ($172.40 per month)
      • Doing it this way keeps the monthly passive income more realistic because I can instantly know which of my monthly expenses are covered by this amount. I keep a separate tracker for this which I will write about at a later date.
    • My intermediate goal is to get $1000 pm in passive income first. My estimation for 2016 is that I will reach $750 pm. Lets see if I can push it some more 🙂

Financial Independence Progress Report for March 2016

/ humblefi / 4 Comments

March is the first quarterly dividends month i.e. month of good news. And some more good news on the job front….I got one 🙂 After a month of hard fought interviews, I have started on a new job. Learnt a lot of lessons in the period of unemployment…will put these lessons to work this year. But, March has been a super positive month for me!!

Lets look at the numbers now.

03/31/2016
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 37.11% 39.33%
Passive Income Streams ($4000 pm) $744.05 pm (03/2015)% $1016.87 pm (3/2016)
Retirement Fund ($900K) 57.76% 57.96%
Roof for our Family($750K) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways this month

  • Unemployment Induced portfolio changes
    • Unemployment lead to almost two months of no income 😦 But, some good came from this. I had almost $40K invested in one company stock…part of an Employee Stock Purchase Plan from one of the companies I had worked in the past.
    • I wanted to de-risk this  investment by selling it and moving it to a fund of many different stocks but could not for fear of capital gains and resulting tax inefficiency.
    • In the two months of no income, I sold half of the $40K bundle. This keeps the total income the same. I distributed the money into a couple different mutual funds and hence reduced the risk of $40K riding on one company’s stock.
  • New investment vehicle
    • I took part of the de-risking money from my ESPP sale and put some unused money in my checking account into Vanguard Intermediate-Term Tax-Exempt Fund Investor Shares (VWITX).
    • My design of passive income streams is based on 6 key design principles. The second of the five is: For each risk bucket, have a minimum of two investment vehicles….get some competition going you know 😉
    • For the MUNI bucket, I already have an investment in VCADX, the California only muni fund. I wanted to add some competition and also diversify the MUNI bucket by adding a National MUNI fund (no federal tax). I would still have to pay CA state tax for VWITX, but the CA munis  have gotten so expensive that it is crazy to invest in it now. So, I am diversifying with a National MUNI fund.
  • Dollar Cost Averaging
    • Did not have cash to dollar cost average (DCA) my funds this month…but I did boost my investments to dollar cost average VTMGX (anguard Developed Markets Index Fund….my non-US exposure mutual fund). I want to have some of my passive income streams to not come from US companies. VTMGX diversifies my passive income streams to include companies from Greater Europe, Greater Asia and Canada.
  • Passive Income Stream
    • Passive income for March 2016 ($1016.87) continued the winning trend vs March 2015 ($744.05).
    • I compute Passive Income per month as (total passive income in this year) / number of months completed this year.
      • Total passive income is a sum of dividends + capital gains distributions.
      • March Passive Income = (total passive income in this year) / 12 == $156.62
      • Doing it this way keeps the monthly passive income more realistic because I can instantly know which of my monthly expenses are covered by this amount. I keep a separate tracker for this which I will write about at a later date.
    • My intermediate goal is to get $1000 pm in passive income first. My estimation for 2016 is that I will reach $750 pm. Lets see if I can push it some more 🙂

Financial Independence Progress Report for January 2016

/ humblefi / 2 Comments

Happy new year everyone! May 2016 bring you closer to all your goals, with a good helping of peace and prosperity.

01/31/2016
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 38.08% 37.11%
Passive Income Streams ($4000 pm) $557.78 pm (01/2015)% $592.90 pm (1/2016)
Retirement Fund ($900K) 57.76% 56.02%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

2016 started off with a bang huh…;-) Yes…just like the whole world, my entire stock portfolio took a beating in January…college fund, retirement fund, and passive income mutual funds…all of them got beat.

In addition, the company I worked in got bought over and the buyer decided to conduct a massive layoff. I was impacted as well. Losing to job to start the new year, with no severance to boot, is definitely not the way I wanted to start the new year….but, hey, life has to move on right? Onto the next job. Thankfully, I had two weeks of vacation left over and I got paid for that. This event has reinforced my decision to reach for Financial Independence and I am now more motivated to reach FI now.

Now, for some good news.

  • Surprise winner for January
    • The only surprise winner that stayed positive in all of this, inspite of the Fed raising interest rates, was VCADX…my California MUNI bond fund that is part of my tax efficient passive income streams. Looks like the fear of stock market tanking is driving the bond fund up. Anyways, I am not selling this fund now but if I did, I would get decent capital gains 😉
  • Dollar Cost Averaging
    • Since the market had huge dips of multi-hundred points on many days, I took full advantage of this and boosted my investments to dollar cost average VDIGX, VHDYX and VTMGX. I contributed all of my vacation payout from my job loss towards this. Infact,   I contributed more towards VTMGX (Vanguard Developed Markets Index Fund….my non-US exposure mutual fund). I want to have some of my passive income streams to not come from US companies. VTMGX diversifies my passive income streams to include companies from Greater Europe, Greater Asia and a bit from Canada.
  • Passive Income Streams
    • Passive income for January 2016 ($592.90) continued the winning trend vs January of last year ($557.78).
    • I compute Passive Income per month as (total passive income in this year) / number of months completed this year.
      • Total passive income is a sum of dividends + capital gains distributions.
      • January Passive Income = (total passive income in this year) / 12 == $49.41
      • Doing it this way keeps the monthly passive income more realistic because I can instantly know which of my monthly expenses are covered by this amount. I keep a separate tracker for this which I will write about at a later date.
    • My final FI goal for passive income is $4000 per month (pm). This is going to take a while. So, my intermediate goal is to get $1000 pm in passive income first. How close am I to $1000 pm?
      • I ended last year with a monthly passive income of $621 (averaged out).
      • Assuming a 3% dividend return and a conservative 0% dividend growth, it will probably take me at least 3 more years to reach $1000 pm with a chunky sized investment each year. After reaching that, I plan to pretty much leave the investments on auto pilot. Wish me good luck 🙂
      • Imagine taking the $1000 passive income per month and investing it back into the passive income streams….income compounding will kick start in a hurry….eagerly waiting for that day!

Financial Independence Progress Report for December 2015

/ humblefi / Leave a comment
12/25/2015
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 38.05% 38.08%
Passive Income Streams ($4000 pm) $297.68 pm (12/2014)% $621.24 pm (12/2015)
Retirement Fund ($900K) 58.31% 57.76%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

I am going to wrap up a little early in this last month of 2015. I want to gain some time to plan for 2016. There is both good news and bad news in this last month of 2015. Lets tackle the bad news first.

  • Retirement Fund
    • Lost almost 0.5% of my portfolio this month.
    • In the same interval,
      • S&P 500 lost 0.16%
      • DOW Jones lost 0.29%
    • Nevertheless, looks like there is no Santa Claus boost for my retirement fund this month. The astute reader may notice that there are  still 3-4 market days left in December…miracles can happen you know 😉
  • 529 plan
    • Last month, through my kid’s graciousness, money set aside for the birthday party went unused and that went into the college fund. Inspite of that, the 529 barely eked out a positive gain. So, overall, no Santa Claus rally for this investment too.

Now for the good news.

  • Dollar Cost Averaging
    • Around Dec 21st, DOW had a nice dip of 300+ points. I took advantage of this and boosted my investments to dollar cost average VDIGX, VHDYX and VTMGX.
  • Passive Income Streams
    • Passive income for December 2015 continued the winning trend vs December of last year.
    • I compute Passive Income per month as (total passive income in this year) / number of months completed this year.
      • Total passive income is a sum of dividends + capital gains distributions.
      • December Passive Income = (total passive income in this year) / 12 == $621.24
      • Doing it this way keeps the monthly passive income more realistic because I can instantly know which of my monthly expenses are covered by this amount. I keep a separate tracker for this which I will write about at a later date.
    • My final goal for passive income is $4000 pm. This is going to take a while. So, my intermediate goal is to get $1000 pm in passive income first.
      • At the end of November, passive income was at $515 pm.
      • A nice amount of dividends from Dec 2015 has led me to $621 pm.
      • Assuming a 3% dividend return and 0% dividend growth, it will probably take me at least 3 more years to reach $1000 pm with a chunky sized investment each year. After reaching that, I plan to pretty much leave the investments on auto pilot. Wish me good luck 🙂

Financial Independence Progress Report for November 2015

/ humblefi / 4 Comments
11/30/2015
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 36.52% 38.05%
Passive Income Streams ($4000 pm) $226.42 pm (11/2014)% $515.17 pm (11/2015)
Retirement Fund ($900K) 58.03% 58.31%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

Markets made a small move on the positive side and the following portions of my portfolio definitely saw some benefit from it.

  • Retirement Fund
    • Moved some more of my gains from my Vanguard IRA into VGSLX (Vanguard REIT Index). This moves my VGSLX % to 6% of my IRA holdings….final goal is to have it be 10% of my IRA and add a solid dividend stream in my IRA account.
  • 529 plan
    • Money set aside for a birthday party for my kid went unused and that went into the college fund. So, positive markets and the small funding boost, courtesy my kid’s generosity, helped propel the 529 fund.

I did take advantage of some down days in VTMGX (Developed Markets International fund) and boosted my investments to dollar cost average my investment in VTMGX. I am hoping for some decent dividends from the International fund…mainly to diversify my dividend income stream across many countries.

The passive income portion of my portfolio is chugging along nicely. Passive income for November 2015 continued the winning trend vs November of last year.

  • I compute Passive Income per month as (total passive income in this year) / number of months completed this year.
    • Total passive income is a sum of dividends + capital gains distributions.
    • November Passive Income = (total passive income in this year) / 11 == $515.17 pm.
    • Doing it this way keeps the monthly passive income more realistic because I can instantly know which of my monthly expenses are covered by this amount. I keep a separate tracker for this which I will write about at a later date.
  • My final goal for passive income is $4000 pm. This is going to take a while. So, my intermediate goal is to get $1000 pm in passive income first. Right now, I am at $515 pm. But, next month is December….the biggest month for dividends for me and possibly for most people. I am expecting monthly passive income to reach $600 pm. Can’t wait to get to the end of this month.

Financial Independence Progress Report for October 2015

/ humblefi / Leave a comment
10/31/2015
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 33.94% 36.52%
Passive Income Streams ($4000 pm) $214.08 pm (10/2014)% $492.51 pm (10/2015)
Retirement Fund ($900K) 54.62% 58.03%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

Markets made a reasonably noticeable turn towards the positive side and the following portions of my portfolio definitely saw some benefit from it.

  • Retirement Fund
  • 529 plan

I did take advantage of some down days in the market and boosted my investments to dollar cost average some of my mutual fund investments (another post on this coming up on how). But, October has been a super busy month for me, including a couple days spent in the hospital for a freakish accident of cause unknown. So, I am happy to see a positive gain without putting in any serious effort…..the precise definition of passive income 😉

The passive income portion of my portfolio is chugging along nicely. I am aggressively funding my passive income portfolio and (try to) make use of every down day in the markets. My funding sometimes is as low as $100 and as high as $500. Most of the days, I have gotten lucky and dollar cost averaged down my mutual funds….a tiny bit, but hey, each bit matters right 🙂

Passive income for October 2015 continued the winning trend vs last year.

  • I compute Passive Income per month as (total passive income in this year) / number of months completed this year.
    • Total passive income is a sum of dividends + capital gains distributions.
    • October Passive Income = (total passive income in this year) / 10 == $492.51  pm.
  • Doing it this way keeps the monthly passive income more realistic because I can instantly know which of my monthly expenses are covered by this amount. I keep a separate tracker for this which I will write about at a later date.
  • I did take advantage of the down markets and added to my investment in VDIGX , VTMFX and VTMGX (developed markets ex-north america). All these investments have hovered around their respective 52 month lows These new investments will contribute towards dollar cost averaging my holdings.
  • November will be a slow month for me as usual…but looking forward to December for the next big dividend income month.