Progress Report

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!

2015: Year-end Review

/ humblefi / 1 Comment

2014 is when I started my journey towards Financial Independence. I did not have a formal set of goals, but I did define what Financial Independence means to me (here).

2015 was the first year where I had a formal set of goals. For 2015, I the following goals to get me closer to my financial independence goals (here). End of 2015 has arrived and it is time for the year-end review.

One word before that. I got amazing support from the Financial blogger community during this year and my humble thanks to all who took the time to drop a comment and/or drop in an encouraging word and/or drop a suggestion. It is truly appreciated. Thank you.

Back to the goals, I managed to reach some goals, exceed some and not reach some.

  1. Max out 401K contributions ($36K) for both me and my wife.
    1. Done: 12/31/2015
    2. Reached this goal…same goal for next year.
  2. Contribute $16K (goal stretch $24K) to Passive Income Streams
    1. Done 09/30/2014
    2. Exceeded this goal big time….very happy about this.
    3. Same 16K goal for next year
  3. Contribute $4800 to 529 College Fund
    1. Done: 12/31/2015
    2. Exceeded this goal as well by about $1000….I am happy about this too…though the goal seems to be stuck at $30K…it is like two steps forward and three steps back.
    3. Same goal for next year though
  4. Deposit maturing CDs into passive income streams
    1. Done 01/17/2015
    2. This was a one-time cash inflow…I used some CDs I had set aside for home down payment…since I did not see that happening this year, I moved them to my passive income streams. I am very happy I did this as well.
  5. Keep scouting for a possible home
    1. Not Done: 12/26/2015
    2. This goal is not looking so good. The prices in 2015 were even more crazy than 2014. So, 2016 is not looking good either. There were some discussion about moving to a lower cost area that *forced* its way into the family’s conversation. But, no decision yet.
  6. Start and finish Estate Planning
    1. Not Done: 12/26/2015
    2. There were some changes within the family which delayed this goal a bit. I was thinking about appointing my brother’s family as a guardian for my kid, but some instability has crept into my brother’s family and I wanted to give him time to work things out…so, I need to rework my strategy and timing a bit more. Family is family…so, I am hoping this issue can be resolved. And of course, I spent way too much time on setting up the passive income streams.
    3. Will add this goal to next year’s goals
  7. Get a more stable job.
    1. Not Done: 12/26/2015
    2. I am struggling with this goal due to a serious lack of will power. I keep starting my preparations and then it gets bogged down after a few days. I think I am mentally tired of working and preparing for interviews and the rest of the things that has to happen in family life. But, doing this when out of a job is not a good idea.
    3. Will add this goal to next years goals but I will come up with some form of tracking to keep me honest.

Summary

Overall, 2015 has been a reasonably good year. I achieved 4/7 goals I set for myself.

  • Average monthly dividend has reached $702 per month…still way below my target of $4000, but much closer to my intermediate target of $1000 per month. I read somewhere that the pace of compounding will visibly increase once you hit $1000 pm in dividends. For next year, I would like to make a serious dent in the goal towards $1000 pm in dividends.
  • Goals 6 and 7 will be done next year for sure.
    • For 7, I need to build up my confidence and will power and beat the heck out of this goal.
    • For 6, I just need to make some difficult decisions along with my wife.
  • W.r.t Goal 5, I am going to keep accumulating small amounts of money towards the home down payment, but I do not anticipate meeting this goal in 2016.

More on this in 2016 yearly plan. Once again, thanks for all the amazing support. I really appreciate it.

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.

Financial Independence Progress Report for September 2015

/ humblefi / 2 Comments
09/30/2015
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 33.77% 33.94%
Passive Income Streams ($4000 pm) $178.58 pm (08/2014)% $439.96 pm (08/2015)
Retirement Fund ($900K) 54.66% 54.62%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

Markets are continuing the roller-coaster ride…the DOW Jones index lost more than 200 points more than once this month. I did take advantage of this down market (another post on this coming up on how).
I expected a downturn and planned for it (here)…but, that did not soften the blow much. At the end of August, my portfolio had taken a beating….so, how did September do?

  • September was a much better month for markets than August.
    • College fund stayed even
    • Retirement funds stayed even.
  • Passive income for September 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.
    • September Passive Income = (total passive income in this year) / 9 == $439.96 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 and VTMFX. Both these investments dipped to their 52 month lows when the DOW Jones index dropped more than 200 points. These new investments will contribute towards dollar cost averaging my holdings. Yeah for that!

Financial Independence Progress Report for August 2015

/ humblefi / Leave a comment
09/05/2015
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 35.00% 33.77%
Passive Income Streams ($4000 pm) $148.74 pm (07/2014)% $353.74 pm (07/2015)
Retirement Fund ($900K) 58.51% 54.66%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

I came back after a two week travel on work related matters and every day of that trip was a emotional roller coaster. Markets up and markets down…sometimes, within the same day. I expected a downturn and planned for it (here)…but, that did not soften the blow much. At the end of August, my portfolio has taken a beating….but so did a lot of people. So, what were my main takeaways this month?

  • August is a soft month for dividends…so, not much cushion to soften the blow from the down markets. September is a much better month for dividends…so, looking forward to next month.
    • College fund took a hit
    • Retirement funds took a bigger hit.
    • Last month’s zero gain is looking good now 🙂
  • Passive income for August 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.
    • August Passive Income = (total passive income in this year) / 8 == $53.74 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. My cost basis was close to $23 per stock before the market hit a downturn…but I invested about $1500 at an average of $21.50 per stock. This new investment will contribute towards dollar cost averaging my holdings. Yeah for that!

Financial Independence Progress Report for July 2015

/ humblefi / 4 Comments
07/31/2015
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 35.00% 35.00%
Passive Income Streams ($4000 pm) $139.55 pm (07/2014)% $319.11 pm (07/2015)
Retirement Fund ($900K) 58.51% 59.10%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

  • July is a big letdown w.r.t. dividends compared to June….but, there were no rough spots in July on the personal side. Yeah for that!
    • College fund stayed even again…zero progress for the second straight month is not so good…especially since I pump money into it every month.
    • 401K took a hit in June…so, getting a positive gain in July was good news…not by much, but it is greater than zero 🙂
  • Passive income for July 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.
    • July Passive Income = (total passive income in this year) / 7== $319.11 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 made a portfolio change in my IRA…moved some of the profits off to Vanguard REIT Index fund (VGSLX). This is my attempt at investing passively in real estate. I am happy I took this decision….somewhere in September/October time frame, I will think of adding to this REIT pile…I am expecting REITs to go down in  price some more around that time. Lets wait and see!

Financial Independence Progress Report for June 2015

/ humblefi / 2 Comments
06/30/2015
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 35.00% 35.00%
Passive Income Streams ($4000 pm) $104.34 pm (06/2014)% $277.37 pm (06/2015)
Retirement Fund ($900K) 59.29% 58.51%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

  • For me, June is the second biggest month for passive income. So, when I wrote the progress report for May 2015, I was eagerly waiting the end of June. But, June has its own ideas…it was a rough month on the personal and professional side for me and looking at the FI progress report, it looks like FI progress also has some rough spots.
    • College fund stayed even…which is great news actually considering the performance of the stock market this month. But, still, zero progress was depressing.
    • 401K took a hit in June….especially after a great month of May. A 1% drop is a chunky drop and that stings.
  • Passive income for June 2015 increased quite well in comparison to June 2014, even though the mutual funds did take a hit to the principal. This was the only bright spot this month.
    • 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.
    • June Passive Income = (total passive income in this year) / 6 == $277.37 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 investments went a bit down this month. So, I am going to look at my mutual fund investments this month and see if there are any investment opportunities to dollar cost average down the cost. More on this later.

Financial Independence Progress Report for May 2015

/ humblefi / 3 Comments
05/31/2015
Emergency Fund ($72K) 100.0% 100.0%
College Fund (80K) 34.54% 35.00%
Passive Income Streams ($4000 pm) $75.95 pm (05/2014)% $191.60 pm (05/2015)
Retirement Fund ($900K) 56.55% 59.29%
Roof for our Family($1 mil) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance payments initiated)

Main Takeaways

  1. February, May, August and November are months with lowest passive incomes. So, nothing great to write about this month of May. Next month is June, the second biggest month for passive income. So, eagerly waiting the end of next month 🙂
  2. 401K paycheck contribution increases lead to increases in the Retirement Fund and not market performance.
  3. Passive income for May 2015 increased in comparison to May 2014.
    • 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.
    • May Passive Income = (total passive income in this year) / 5 == $191.60pm.
    • 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.