VEIEX

Financial Independence Progress Report for June 2017

/ humblefi / Leave a comment

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.
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Financial Independence Progress Report for May 2017

/ humblefi / 2 Comments

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 🙂 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.

Financial Independence Progress Report for March 2017

/ humblefi / 4 Comments

Three months already over in the new year….this year is definitely going faster than last year! Nothing interesting this month. My passive income streams boosted by appx 16% but somehow I feel unsatisfied…not sure why. Maybe the pace of reaching my goals is slow 🙂 Anyways, let us look at the numbers for March 2017.

04/01/2017
Emergency Fund $60K 83.00% 84.135%
College Fund (80K) 50.57% 51.35%
Passive Income (2016 vs 2017) $1052.01(03/2016) $1219.83 (03/2017)
Retirement Fund 68.61% 71.45%
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 Mar 2017 ($1219.83) is appx 16% higher than Mar 2016 ($1052.01).
    • I did not add more funds this month since all my investment vehicles are trading at peak values. Waiting for the next dip to invest more. One exception is listed next.
  • Additional Investments
    • International exposure
      • Just like prior months, I have continued to increase my exposure outside the US. Stocks in United States seem too overvalued to my simple mind. 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 have 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).

Financial Independence Progress Report for February 2017

/ humblefi / Leave a comment

Two months already over in the new year….somehow feels that this year is going faster than last year!

I am still not sure on what should be my yearly goals for 2017. I am carrying forward some goals from last year…college fund, retirement fund, etc. Thanks to valuable comments on a blog post from Vivienne, Baba Joga and AmberTreeLeaves, I am getting close to a decision. By next month, I will decide one way or the other…else quarterly update in in jeopardy 🙂

Lets look at the numbers for Feb 2017.

02/05/2017
Emergency Fund $60K 100% 83.00%
College Fund (80K) 49.58% 50.57%
Passive Income (2016 vs 2017) $269.65 (02/2016) $408.50 (02/2017)
Retirement Fund 65.07% 68.61%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 0.5% 2.6%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Emergency Fund changes
    • It is looking more likely that my next significant goal will be a real estate investment. Before that, I want to seed my passive income streams with as much money as possible to get it as close as possible to my intermediate goal of $1000 pm. My final goal is $4000 pm as documented here.
    • So, to get closer to $1000 pm, one change I made I reduced my emergency fund by appx $10K and pushed the money into a cash fund….to roll this into my passive income streams.
    • I have initiated a per-month contribution towards rebuilding my Emergency fund, but that can happen in the background.
  • Passive Income Stream
    • Passive Income for Feb 2017 ($408.50) is appx 51% higher than Feb 2016 ($269.65). This increase is an expected one.
    • In July of 2016, I welcomed some new members to my mutual fund family. One of the new arrivals was VWITX (Vanguard Intermediate Term National MUNI fund).
    • A good portion of the year-over-year increase in passive income for Feb comes from VWITX. This pattern will repeat the rest of the year as well.
  • Additional Investments
    • International exposure
      • Just like prior months, I have continued to increase my exposure outside the US. Stocks in United States seem too overvalued to my simple mind.
      • And 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 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).

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.

Financial Independence Progress Report for December 2016

/ humblefi / 8 Comments

Hope everyone had a wonderful holiday season! Here is wishing you a happy and prosperous 2017. May all your dreams and aspirations come true!!

December is a happy month for all dividend investors and so it was for me too! Passive income coming into my account is validation for the FI path and also motivation to continue the FI journey with even more vigor! Lets look at the numbers for Dec 2016.

12/30/2016
Emergency Fund $60K 100.0%
College Fund (80K) 47.95% 47.95%
Passive Income (2015 vs 2016) $1281.58 (12/2015) $1983.06 (12/2016)
Retirement Fund ($900K) 63.44% 64.27%
Roof for our Family($750K) 00.00%
Medical Fund 00.00%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • Passive Income for December 2016 ($1983) is appx 54% higher than December 2015 ($1281.58). This is a big increase and a totally unexpected one.
    • The positive surprise was due to more than expected capital gains distribution from VDIGX and VWELX. I will take it…however they come 🙂
  • Additional Investments
    • VEIEX(Vanguard Emerging Markets Stock Index Fund))
      • 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. So, I have continued to increase my exposure to countries outside the US. I want my passive income stream to come from many countries all over the world as a good means of diversification.
      •  This time, I invested in a new fund: an Emerging markets fund called VEIEX. This fund invests in many emerging market countries like Brazil, India, Russia, China, Taiwan and 20 more countries around the world.
      • If you want more details on VEIEX, please get it directly from the horse’s mouth: VEIEX.
  • Passive Income Goal
    • My 2016 goal was to reach $750 pm in passive income by year end. December is done…and my per-month dividend stands at $801.99. Hurrah!
    • 2016 had lots of ups and downs…including a phase of unemployment and no salary for a month at least, a nasty health issue and what not. So, achieving this goal and exceeding it by a small amount of $50 makes me very happy.
    • Sometime back, I wrote an article called How much freedom did I buy today? I read that article again today and decided to compute the number of hours of freedom I have bought with $801 of passive income per month.
      • My Passive Income goal is
        • $4000 per month (Why $4000 pm?)
        • $48000 per year
        • $131.5 per day ($48K/365)
      • It is the end of 2016 and my passive income is $801 per month.
        • How much freedom will $801 pm buy me?
          • $801/$131.5  =>  6.09 days per month => 146 hours per month => 4.7 hrs a day (31 day month)
        • To put this in perspective, here is the amount of freedom $801 of passive income will buy me:
          • 4.7 hours      of absolute freedom every day!
          • 6.09 days     of absolute freedom every month!
          • 73.08 days    of absolute freedom every year!
          • 2.35 months of absolute freedom every year!
    • For 2017, I will aim for a challenging monthly passive income target of $850 pm. Wish me luck!