Financial Independence Progress Report for May 2017

May is a one of the super-special months in the year. Why? Because it comes before June….one of the two biggest dividend months in the year ūüôā Other than that, May was a dull month. And I have missed my update for April 2017….I do remember writing it…but I guess I forgot to publish it…I found it in my Drafts folder. So, it is going to be a 2-month update for some categories!

Let us look at the numbers for May 2017.

06/02/2017
Emergency Fund $60K 84.135% 84.73%
College Fund (80K) 51.35% 53.24%
Passive Income (2016 vs 2017) $371.51(05/2017) $470.72 (05/2017)
Retirement Fund 71.45% 74.27%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 2.6% 2.6%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • Passive Income for May 2017 ($470.72) is appx 26% higher¬†than May 2016¬†($371.51).
    • I have stolen as much money I can from all my other goals to fund my passive income streams…especially from our home down payment fund. This has resulted in¬†double digit year-over-year gains. But, next year, I will not see this kind of gains…I will enjoy them while they last hey!
  • Additional Investments
    • International exposure
      • Just like prior¬†months, I have continued to increase my exposure outside the US market. Dividend investors are not supposed to look at the stock price…but US stocks seem so¬†overvalued that I just can’t bring myself to add to it.
      • On the other hand, I want my passive income streams to come from many countries all over the world to spread¬†the risk of a single part of the world going through a bad phase.¬†So, I added some more funds to¬†my existing investments in Emerging markets (via VEIEX) and Euro-Pacific Developed Markets (via VTMGX).
  • Build a tiny cash fund again
    • I am accumulating some money in a money market fund. I want to have a small cash fund accumulated to take advantage of any market¬†dip(s) in the US market.
  • Capture gains in my IRA/401K
    • Seeing the insane manner in which the US market stocks are going up, I¬†can’t shake the feeling that we are at the top. I see all the signs of a big drop except the market is going up and up. It is tapering now and I feel that a major dip is quite near.
    • My IRA lost a lot of its value (total return) in the 2008 downturn and I had to wait almost 6 years for it to come back up. I was a financial fool at that time and did not even attempt¬†any corrective actions….I could have moved to preserve some of my gains…but did not know any better.
    • For the upcoming¬†downturn, I do not want to lose the gains in my IRA. So, I cashed out¬†most of the gains¬†accumulated in¬†my IRA over the last few years and have parked them in cash inside my IRA. When the next dip happens, I will put them back to work. Until then, I am okay with losing 2-3% in¬†dividends versus losing 10-20% of the stock price.