Financial Independence Progress Report for March 2018

/ humblefi / Leave a comment

March 2018 is done and with that, the first quarter of 2018 is done. March is one of my favorite months because almost all my funds send me dividends on a quarterly basis. Lets see how the numbers look for March 2018.

Caveat: Though then March numbers look green all over, note that the numbers got murdered in February….perhaps I need a year-to-date number….will think about it.

3/31/2018
Emergency Fund 83.33% 83.33%
College Fund ($80K) 63.66% 64.54%
Passive Income (2017 vs 2018) $1254.31(3/2017) $1396.05 (3/2018)
Retirement Fund 81.63% 82.79%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 6.17% 9.77%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for March 2018 is 11% higher than March 2017. Not much of a gain, but it is greater than average inflation percentage of 3%.
    • I was considering the Rule of 72…the rule that predicts when your money will double. If I continue at 11% (caveat in next point), my money will double in 7 years….wouldn’t that be nice for FI 🙂
    • Anyways, 11% increase was achieved more by new investments than dividend returns and additional investments are drying up this year. But, nice to think about it hey…more on this coming later!!
  • Additional Investments
    • Investments in taxable accounts
      • I sold VHDYX, captured the gains and moved the money into my MUNI funds. Why?
        • Tax equivalent yield for VCADX is 4.5%.
        • VHDYX yield is 2.75% and I get taxed on top of that. It is possible that VHDYX will add some capital gains but it looks like we are almost done with the bull market…so, we can discount this.
        • When the prices drop later this year, I will invest back into VHDYX…lets cross that bridge when we get there.
    • Investments in tax-deferred account (IRA)
      • In Dec 2018, I took some profits and set up a a cash fund set up to take advantage of the next investing opportunity. This month, I cashed out profits from a couple more funds and added to the cash fund.
      • Unlike 2008, I want to have a cash fund ready to take advantage of lower asset prices in the next bear market!!
      • I also bought some more of VGSLX…a REIT fund….REITs have dropped almost 10% this year….so, seemed like a good time to buy into this and dollar cost average down my REIT investments.
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Financial Independence Progress Report for February 2018

/ humblefi / 2 Comments

February 2018 is done and gone and I am late by 11 days in publishing this….bad bad bad. Was a bit lazy at the end of last month and life caught up to me. Better late than never!

That said, lets look at the numbers for February, 2018. Nothing big to report…

  • The dividend stream is settling down to an even pace since I have no extra money to add to the dividend funds.
  • The stock market swoon in February 2018 had its effect on my portfolio also…look at the nos in red below.

Looking forward to March’s quarterly dividends!

3/11/2018
Emergency Fund 83.33% 83.33%
College Fund ($80K) 64.47% 63.66%
Passive Income (2017 vs 2018) $408.50(2/2017) $657.17 (2/2018)
Retirement Fund 82.17% 81.63%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 6.17% 6.17% ….lost login again 😦
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for February 2018 is a couple hundred dollars higher than February 2017. This is mostly the result of a push towards adding to my MUNI funds through 2017.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing to report
      • Got really attracted to the idea of selling my investments in VHDYX (up 10-12%) and moving them to MUNIs…divided yields are about the same and the MUNIs are federal tax free….had to pull myself back.
      • Holding off until I capture the quarterly dividends in March, 2018.
    • Investments in tax-deferred account (IRA)
      • In Dec 2018, I took some profits and set up a a cash fund set up to take advantage of the next investing opportunity.
      • This month, I moved some of the cash fund into a REIT fund….REITs have dropped almost 10% this year….added to my investment in VGSLX to dollar cost average down some of my investments.

Financial Independence Progress Report for January 2018

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It is already end of January 2018 and a new year is well underway and I just realized once again how time flies. I started writing this blog in July of 2014. My first page was this (About) and my second was this (What is Financial Independence to Me). I had just then started thinking about Financial Independence and freedom from the rat race!

Surprisingly, even after 4 years, the initial goals have not changed at all….which means I was thinking some things correctly 🙂 Every month of new dividends flowing in gets me closer to my goals and motivates me to get every dollar working hard for my freedom. Best of luck for my fellow travelers in the journey of financial freedom…..make every dollar work for you!

That said, lets look at the numbers for January, 2018.

2/4/2018
Emergency Fund 100.00% 83.33%
College Fund ($80K) 62.50% 64.47%
Passive Income (2017 vs 2018) $441.42 (1/2017) $755.14 (1/2018)
Retirement Fund 81.03% 82.17%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 6.17% 6.17%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Emergency Fund
    • I saw an opportunity to reach my funding target in one of my MUNI funds (VCADX) and just could not resist it. So, I took some of my emergency funds and bought into the fund. It was a momentary weakness to dip into my emergency fund…but hopefully the new dollars will bail me out later in time.
    • More on this later.
  • Passive Income Stream
    • My passive Income for January 2018 is a couple hundred dollars higher than January 2017. This is mostly the result of a push towards adding to my MUNI funds through 2017 and a bit in Jan 2018.
  • Additional Investments
    • Investments in taxable accounts
      • As mention earlier, I invested some emergency fund cash into purchasing MUNIs (VCADX). This fund is both federal and state tax free.
    • Investments in tax-deferred account (IRA)
      • In Dec 2018, I took some profits and set up a a cash fund set up to take advantage of the next investing opportunity. Still in a holding pattern….

Financial Independence Progress Report for December 2017

/ humblefi / 2 Comments

December is here and time to party 🙂 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 🙂

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 December 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 than 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)

Financial Independence Progress Report for November 2017

/ humblefi / 1 Comment

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 November 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 than 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: Vanguard Total International Stock Fund
        • VIHAX: Vanguard 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.

Financial Independence Progress Report for October 2017

/ humblefi / 1 Comment

It is one of those slow dividend months again….not much action (which is good) but not much money coming in either 😐 So, lets directly jump into the numbers for October 2017. This time, I will post a bit early as I will be heading out for a work related assignment and will not have the time until well into next month.

10/29/2017
Emergency Fund $60K Done
College Fund (80K) 58.61% 59.62%
Passive Income (2016 vs 2017) $551.80 (10/2016) $528.04 (10/2017)
Retirement Fund 78.74% 79.39%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 5.86% 5.70%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for October 2017 is approximately 4% lower than October 2016. The only reason for this decrease is that I re-positioned my investments to provide more dividends in the months of Mar, June, Sep and December instead of my older investments that used to have a dividend stream in Jan, April,  July and October.
    • My total dividends at this point in time are actually up compared to last year
      • At this time in 2016, average dividends per month was $603.4.
      • As of now in 2017, average dividends per month is $709.60.
      • So, appx a 17% increase in average dividends per month.
    • I also captured some capital gains from one of my US mutual funds. The stock markets are reaching new levels every day and the only thought that comes to mind is: greater the rise, the greater fall. So, I am staying invested in the US market, but capturing some gains as well.
  • Additional Investments
    • Investments in tax-deferred account (IRA)
      • In July, I sold portions of some funds to capture accumulated capital gains and created a cash fund inside my IRA.
      • In August and September, I deployed some of the cash in the cash fund into two international mutual funds to avoid the super expensive valuations of US stocks. In October, I continued more of the same and invested in the same funds again.
        • VTIAX: Vanguard Total International Stock Fund
          • Lower expense ratio
          • Covers the entire international market (large, medium and small caps)
        • VIHAX: Vanguard International High Dividend Fund
          • Higher expense ration
          • Covers a portion of the international market only (mainly large caps)
      • The curious reader may ask: why not just invest everything in the cheaper VTIAX? I am following my old rule of risk diversification….in the same class of mutual funds (international market), I always have two funds compete for your money. So, both VTIAX and VIHAX will now compete with each other to make more money for me 🙂
    • In addition, I noticed now that in my IRA, the percentages of US and International stocks are almost even. 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 invest some of the leftover cash fund into mainly US stocks and pick them up at cheaper valuations.

Financial Independence Progress Report for September 2017

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I was eagerly waiting for September dividends to come….it is the third highest grossing quarter after Dec and June. So, what is not to like? But, September has come and gone and there is not much excitement in reporting the numbers. The numbers are not that bad year-over-year, but I guess it is the slow progress towards the goals’ end that has made me a bit less excited. But, I told myself…One step at a time….build the dividend streams and the dividend snowballing will start for sure!

That said, lets look at the numbers for September 2017.

10/06/2017
Emergency Fund $60K Done
College Fund (80K) 57.59% 58.61%
Passive Income (2016 vs 2017) $1176.20(09/2016) $1547.52 (09/2017)
Retirement Fund 77.79% 78.74%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 4.18% 4.20%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for September 2017 is approximately 31.5% higher than September 2016. The main reason for this increase is Investments in a couple of International funds…..VTMGX (International Developed Markets Index) and VEMAX (Emerging Markets Index).
    • I have tried to diversify away from investing only in US market funds and I am just seeing the fruits of that this year on. Roughly 17% of my total dividends this year have come from International funds. I want to bring this up a bit more to reduce the risk of all dividends coming from the US markets.
  • Additional Investments
    • Investments in tax-deferred account (IRA)
      • In July, I sold portions of some funds to capture accumulated capital gains and created a cash fund inside my IRA.
      • In August, I deployed some of the cash in the cash fund to buy two international mutual funds…the US funds have not come down from their super expensive valuations.
      • In September, I continued more of the same and invested in the same funds again.
        • VTIAX: Vanguard Total International Stock Fund
          • Lower expense ratio
          • Covers the entire international market (large, medium and small caps)
        • VIHAX: Vanguard International High Dividend Fund
          • Higher expense ration
          • Covers a portion of the international market only (mainly large caps)
      • The curious reader may ask: why not just invest everything in the cheaper VTIAX?
        • I am following my old rule of risk diversification….in the same class of mutual funds (international market), I always have two funds compete for your money.
      • So, both VTIAX and VIHAX will now compete with each other to make more money for me 🙂

Financial Independence Progress Report for August 2017

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August has come and gone and it is time to look at the numbers for August 2017.

09/08/2017
Emergency Fund $60K 85.34% 87.32%
College Fund (80K) 56.83% 57.59%
Passive Income (2016 vs 2017) $391.93(08/2016) $535.78(08/2017)
Retirement Fund 76.87% 77.79%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 4.14% 4.18%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for August 2017 is approximately 36% higher than August of 2016. Past investments in VCADX (CA MUNIs) and VWUIX (National MUNIs are the main reasons for the increase.
    • But, since I re-distributed the sale proceeds to other funds that follow the regular quarterly payout cycle, my total dividends for 2017 year-to-date is higher than that for 2016 at the same time. So. nothing to worry!
  • Additional Investments
    • Captured gains in taxable account and paid off car loan
      • Sold rest of Tax managed Balanced fund (VTMFX) to capture capital gains and add to my cash fund.
    • Paid off our car-loan
      • I did not find any deals worthy of investing among the mutual funds I own….out here in the US and outside. So, instead of keeping it in the bank and/or a money market fund, I repaid the remaining portion of our car loan! Now, every month, I will have some extra savings to be applied for home down payment and/or to replenish the emergency bucket.
    • Investments in tax-deferred account
      • Last month, I sold portions of some funds to capture accumulated capital gains and created a cash fund inside my IRA.
      • I deployed some of the cash in the cash fund to buy two international mutual funds…the US funds have not come down from their super expensive valuations.
        • VTIAX: Vanguard Total International Stock Fund
          • Lower expense ratio
          • Covers the entire international market (large, medium and small caps)
        • VIHAX: Vanguard International High Dividend Fund
          • Higher expense ration
          • Covers a portion of the international market only (mainly large caps)
      • The curious reader may ask: why not just invest everything in the cheaper VTIAX?
        • I am following my old rule of risk diversification….in the same class of mutual funds (international market), I always have two funds compete for your money.
      • So, both VTIAX and VIHAX will now compete with each other to make more money for me 🙂
  • Add to the cash fund..details 
    • I started a small cash fund accumulated a couple months back to take advantage of any market dip(s) in the US market. This month, I again captured some gains in a couple of my investments to add to this cash fund. 
    • Now, the waiting game begins for a significant stock dip. What is a big dip? I will wait to employ my cash fund at least until the NAV drops 10% on any of my passive income streams.

Financial Independence Progress Report for July 2017

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Belated July progress report. I was out of town on work related matters.

July is here and has the super tough goal of going against June…one of the best dividend months of the year! As expected, July got beat hands down 🙂 Lets look at the numbers for June 2017.

08/12/2017
Emergency Fund $60K 84.97% 85.34%
College Fund (80K) 54.72% 56.83%
Passive Income (2016 vs 2017) $579.61(07/2016) $486.86 (07/2017)
Retirement Fund 75.19% 76.87%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 2.6% 4.14%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for June 2017 is approximately 20% lower than July 2016. This is an expected decrease. I sold off an investment which used to produce dividends off cycle in Jan, April, July and October. So, passive incomes for those months will be less.
    • But, since I re-distributed the sale proceeds to other funds that follow the regular quarterly payout cycle, my total dividends for 2017 year-to-date is higher than that for 2016 at the same time. So. nothing to worry!
  • Additional Investments
    • Captured gains in taxable account
      • Sold some of Euro-Pacific Developed Markets (via VTMGX) and Tax managed Balanced fund (VTMFX) to capture some capital gains and pad my cash fund. Details below.
    • Captured gains in tax-deferred account
      • Some funds in my IRA had developed some nice gains over the past 6-8 years since the last major downturn in 2008. Sold some portion of a few funds to capture capital gains and created a cash fund inside my IRA to fund a future dip.
  • Add to the cash fund..details 
    • I started a small cash fund accumulated a couple months back to take advantage of any market dip(s) in the US market. This month, I captured some gains in a couple of my investments to add to this cash fund. 
      • Captured some gains (10%) from VTMGX (Developed Markets in Europe and Asia
      • Captured some gains (12%) from VTMFX (Tax Managed Balanced fund)
    • Now, the waiting game begins for a significant stock dip. What is a big dip? I will wait to employ my cash fund at least until the NAV drops 10% on any of my passive income streams.
      • Was disciplined enough in July…and was rewarded with a 1.5% drop in August…lets see how much more disciplined I can be on this one….waiting for a 10% drop!

Financial Independence Progress Report for June 2017

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June is here and welcome to one of the best dividend months of the year! I had both good news and bad news. Good news was all the dividends coming in…bad news was that I could not resist raiding the home down payment fund and putting that money to work for me 😦

Since I have to travel for work next week, I am publishing the report ahead of time….most of the dividends are deposited anyways…so, I am not going to miss anything. So, lets look at the numbers for June 2017.

06/23/2017
Emergency Fund $60K 84.73% 84.97%
College Fund (80K) 53.24% 54.72%
Passive Income (2016 vs 2017) $1741.69(06/2016) $2392.05 (06/2017)
Retirement Fund 74.27% 75.19%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 2.6% 2.6% (site down)
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • June is one of the best months of the year for me (and all dividend investors I am sure!). My passive Income for June 2017 is approximately 37% higher than June 2016.
    • I was weak this month also in that I stole some money from the house down payment fund to fund my passive income streams. The longer I delay the home purchase, the higher seems the risk of me stealing from it. In some ways, it is good…the money is employed in the market and working hard for me….but my flexibility w.r.t. home prices is lost. Lets see….
  • Additional Investments
    • International exposure
      • Just like prior months, I have continued to increase my exposure outside the US market. US stocks seem so overvalued that I just can’t bring myself to add to it.
      • I added some more funds to my existing investments in Emerging markets (via VEIEX) and Euro-Pacific Developed Markets (via VTMGX).
    • Vanguard Intermediate Term Tax Exempt MUNIs (VWITX)
      • Dollar cost averaged my existing investment in VWITX.
        • Last June at this time,  the price was $14.61….now it is $14.21. So, lowered my cost basis.
      • This will add to my monthly federal tax free income stream.
    • With this, I am done with monthly automated investments for this year….ran out of money 🙂 Except for the cash fund in case of a dip.
  • Build a tiny cash fund again
    • I want to have a small cash fund accumulated to take advantage of any market dip(s) in the US market. I am done accumulating….no money left to steal anymore 😐
    • Now, the waiting game begins for a significant stock dip. What is a big dip?
      • Take a broad based index like the S&P 500. A well known fund that tracks this is SPDR S&P 500 ETF Trust (NYSEARCA: SPY).
      • Compared to October of 2016, this fund is almost 20% more….for no good reason. The market seems to have gone crazy. To get a nice view that summarizes what I feel, take a listen to this wonderful podcast: http://www.financialsense.com/when-things-get-crazy-dont-get-lazy Valuations have truly gone crazy.
    • So, I will wait to employ my cash fund at least until the cost drops down to 10% on any of my passive income streams. Lets see how disciplined I can be on this one.