HSA

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.
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Financial Independence Progress Report for July 2017

/ humblefi / Leave a comment

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 January 2017

/ humblefi / 7 Comments

The first month in the new year is done and it is time for the monthly update!

For the first time in the last couple of years, I am struggling with what should be my yearly goals for 2017. There are some basic goals that I will carry over from last year…like college fund, retirement fund, etc. But my struggle is mainly with the housing goal and that in-decision is affecting a couple other goals. But, I think I am getting closure on this issue and will update on the decision soon.

But for now, lets look at the numbers for Jan 2017.

02/05/2017
Emergency Fund $60K 100.0%
College Fund (80K) 47.95% 49.58%
Passive Income (2016 vs 2017) $592.90 (01/2016) $441.42 (01/2017)
Retirement Fund 64.27% 65.07%
Roof for our Family($750K) 00.00%
Medical Fund 00.5%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • Passive Income for Jan 2017 (441.42) is appx 30% lower than Jan 2016 ($592.90). This is a big decrease but an expected one 🙂
      • I sold all my ESPP shares from a previous employer and moved them into a couple different mutual funds. Basically cashed out for better risk diversification….shares in only one dividend company vs shares in many dividend paying companies.
      • The ESPP shares had an odd dividend payout frequency: Jan, April, July and October. Post the sale, dividends for these months will take a hit this year, but they will be more than compensated by investments with normal cycle of dividends in Mar, June, Sept and December.
  • Additional Investments
    • International exposure
      • Just like prior months, I continued to increase my exposure outside the US. Stocks in United States are way to overvalued and frothy in my opinion. I want my passive income stream to come from many countries all over the world as a good means of diversification.
      • So, I added to my existing investments in an Emerging markets fund (VEIEX) and Developed Markets International fund (VTMGX).
    • Build a tiny cash fund again
      • Since I have stopped investing in US stocks, I am accumulating that money in a money market fund. When the market tanks later this year, I want to have a small cash fund accumulated to take advantage of the dip.
  • Medical Fund
    • I signed up the family for a High Deductible Health Insurance Plan and got access to a Health Savings Account (HSA). $6750 of pre-tax money can be saved in it. HSA money is eligible for all valid medical expenses…free of federal and state taxes.
    • This will begin the accumulation of the Medical Fund. I have accumulated a couple of nasty health issues through all the ups and downs in life…this makes a medical fund an absolute necessity for my later years.
    • My hope is that the family medical expenses are small enough to be able to pay out of pocket now and let the HSA funds compound over the years. Lets see how it goes.