Financial Independence Progress Report for Dec 2019

It is December 2019 now. Somebody recently asked the question: what were your accomplishments in 2019? At that moment, it struck me that 2019 has been a very very busy year….there were a lot of personal and professional issues our family had to deal with….relationship troubles, a job loss, new job and job-change induced relocation, sick parent, moving to a new house, etc. There were some good things as well….but lots and lots of stress. I realized that I need to slow down for a few days and slowly extricate myself from the grind. 

First step is this report 🙂 My last monthly progress report was May 2019. I was supposed to use a new method to track my finances and goals going forward from May. That did not happen for the above reasons. I have used this template since I started this blog…almost 6 years ago. So, lets use it for some more time until I stabilize my life!

That said, let us see how much closer I got to my financial independence targets in Dec 2019.

12/22/2019
Emergency Fund 100.0% 39.27%
College Fund 67.39% 76.20%
Passive Income (2018 vs 2019) $1387.59(12/2018) $732.68 (12/2019)
Retirement Fund 92.52% 95.46%
Roof for our Family Done!
Medical Fund (via HSA) 18.60% 22.30%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • This year’s target dividends was $500 pm or $6000 per year. The target is half of last years because I had to sell some investments for a home down payment.
    • The good news is that I have exceeded my target. The total dividends, as of today, is $10,426.89.
    • The bad news is that last year the total dividends were much higher….$16,589. But that was expected….home purchase and all.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing this month. Too many expenses related to Christmas 🙂
    • Investments in tax-deferred account (IRA)
      • Redirected the December REIT fund dividends into VEIPX: Vanguard Equity Income Fund
    • Investments in tax-deferred 401K
      • No change this month…continuing to build a cash position.
      • The way the market is going up, this plan seems stupid…..but I want to have cash when the chips are down much more that the incremental gains this year.
  • Miscellaneous
    • Nothing special.

 

Financial Independence Progress Report for May 2019

May 2019 is done….seems like time is moving faster and faster!! Since the beginning of 2019, I have been studying a bit on different planning strategies for a 40 year retirement. I picked one of the strategies and have been doing a dry run for the past few months. I am ready to make that the main execution vehicle from next month onwards. So, I will introduce the method I chose and also how I am going to track it going forward.

This means that this form of monthly progress update will be the last. I have used this template since I started this blog…almost 6 years ago. So, bit sad to let it go…but time to move on and look to the future.

That said, let us see how much closer I got to my financial independence targets in May 2019.

6/1/2019
Emergency Fund 100.0% Done
College Fund 67.39% 65.34%
Passive Income (2018 vs 2019) $1228.30(05/2018) $1213.09 (05/2019)
Retirement Fund 92.52% 87.8%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 18.60% 18.53%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

There is a lot of red in this month’s portfolio….mainly to the stock market tanking by a few points.

  • Passive Income Stream
    • This year’s target dividends was $500 pm or $6000 per year. The target is half of last years because I had to sell some investments for a home down payment….though home search itself has not been successful yet.
    • The good news is that I have met the yearly target of $6000 per year as of this month. The total dividends, as of end of May, is $6060.73.
    • Every dollar of passive income from now on is just a bonus.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing this month.
    • Investments in tax-deferred account (IRA)
      • Used the IRA cash fund to invest into VEIPX: Vanguard Equity Income Fund
      • I.e. Dollar cost average down my VEIPX holdings in light of market drops.
    • Investments in tax-deferred 401K
      • Nothing this month
      • For 401K cash fund, my investment plan is in the following order…have not used it yet….waiting for the market to go down more.
        • Dividend growth fund or
        • US large cap equity fund or
        • US total market fund
  • Miscellaneous
    • Nothing special.

Financial Independence Progress Report for April 2019

April 2019 is done….and spring is almost done and summer is close….yeh!! Imagine how it can be if you were already financially independent? Yummy! With that positive thought, lets see how much closer I got to my financial independence targets in April 2019.

4/02/2019
Emergency Fund 100.0% Done
College Fund 64.50% 67.39%
Passive Income (2018 vs 2019) $911.81(04/2018) $1211.94 (03/2019)
Retirement Fund 94.57% 92.52%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 14.12% 18.60%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • For 2018, my goal was $12K per year which I achieved.  My passive income goal for 2019 is $500 pm or $6K per year. The main reason for the lower target was a pending home purchase…but I have still not been lucky in finding a home that fits the needs and budget 😐
    • But good news is that my monthly passive income has been higher than my targets 🙂 In addition, I am rebuilding my passive income streams. So, all in the right direction.
  • Additional Investments
    • Investments in taxable accounts
      • Added to my tax efficient passive income stream via MUNI bonds.
        • VCAIX:
          • Vanguard California Muni
          • Federal and State tax free
    • Investments in tax-deferred account (IRA)
      • Added some more $$ to my rainy day investment fund…for use when the next recession comes and brings down asset prices
      • Money market is giving a decent 2.4%…so, am getting paid to wait.
      • My goals are to invest in the following order when the chips are down:
        • For IRA cash:
          • VEIPX: Vanguard Equity Income Fund
        • For 401K cash:
          • Dividend growth fund or
          • US large cap equity fund or
          • US total market fund
          • …..all based on what funds are available in my 401K
  • Miscellaneous
    • Got a super positive surprise for HSA this month.
    • Due to a mistake, my HSA contribution was not getting forwarded to my HSA investment account. It had accumulated to over $4K.
    • Was unhappy that it was not invested…but very happy for the additional $4K!!

Financial Independence Progress Report for March 2019

March 2019 is done….still fighting flu in the family…..flu shots do not seem to be working well this time 😐 But enough of that….lets get on with March.

How much closer did I get to my financial independence targets in March 2019? Lets look at the numbers and find out.

4/02/2019
Emergency Fund 100.0% Done
College Fund 62.54% 64.50%
Passive Income (2018 vs 2019) $1391.30(03/2018) $1211.21 (03/2019)
Retirement Fund 91.00% 94.57%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 13.66% 14.12%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • For part of 2018, I was on a quarterly dividend system that I later converted to a monthly dividend system. Since March is a major dividend paying month in quarterly system, March 2018 beats March 2019.
    • My passive income goal for 2019 is $500 pm or $6000 pa. For 2018, my goal was $12000 which I achieved. So, there will be lots of RED this year 😦
    • But good news is that I have started rebuilding my passive income streams…more on this below!!
  • Emergency Fund
    • My emergency fund rebuilding is done…I achieved 100% of my target.
    • This sets a floor for the next couple of years where recession and a down market can put pressure on finances, cash flow, etc.
    • No more updates on the Emergency Fund from now on…..will let it grow in the background.
  • Additional Investments
    • Investments in taxable accounts
      • Very happy to have re-started  a tax efficient passive income stream
        • VCAIX:
          • Vanguard California Muni
          • Federal and State tax free
          • Got 85 cents (first) dividend in March 🙂
    • Investments in tax-deferred account (IRA)
      • Added to my portfolio in cash…a rainy day investment fund when the next recession comes in and brings down prices
      • Money market is giving a decent 2.4%…so, am getting paid to wait.
      • My goals are to invest in the following order when the chips are down:
        • For IRA cash:
          • VEIPX: Vanguard Equity Income Fund
        • For 401K cash:
          • Dividend growth fund or
          • US large cap equity fund or
          • US total market fund
  • Miscellaneous
    • Nothing. this week.

Financial Independence Progress Report for May 2018

May is another slow month. But, since my portfolio rework over March and April this year, dividends for rest of the year are going to look totally different than prior years. May is the first month where the total effect of the changes will be seen. Let us see how the numbers look for May 2018.

6/08/2018
Emergency Fund 20.83% 34.67%
College Fund ($80K 100K…$20K increase) 65.61% 53.79%
Passive Income (2017 vs 2018) $470.72(5/2017) $1228.30 (5/2018)
Retirement Fund 78.08% 83.01%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.77% 9.82%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for May 2018 is 160% higher than May 2017 🙂
      • In March an April, I redistributed where my funds are invested. Cashed out some gains and converted quarterly dividends to monthly and more importantly more stable and tax efficient dividends. Details in April monthly progress report.
      • The June, September and December dividends are going to be much less. But, the total dividends for the entire year will be higher though.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing new to report here as I am out of cash 😐
      • In April, I took money from my emergency and home down payment funds and deployed them to generate more passive income for me.
      • From this month on, I need to rebuild my emergency fund.
    • Investments in tax-deferred account (IRA)
      • In the last few months, I have taken some profits and set up a a cash fund to take advantage of the next investing opportunity. Unlike 2008, I want to have a cash fund ready to take advantage of lower asset prices in the next bear market!!
      • I bought some more of VEIPX (Vanguard Equity Income Fund) and VIHAX (International High Dividend). Both are down a few % points this year and I took advantage of this to dollar cost average down my investments.
  • Miscellaneous
    • I had to revise up the money allotted for the college fund. Looking at the projected cost of college, I will not have the capacity to fully fund college. But, my goal is to fund at least some of it.
    • I have started a new way of tracking numbers for the next phase of my financial independence journey…will talk about this over the next couple of weeks.

Financial Independence Progress Report for April 2018

April is usually a dull month, post March dividends. But, this time, I did a rework of my portfolio to cash out profits from my equity funds and move them to MUNI funds. Dividends for rest of the year and going to look totally different than prior years. So, excited to see how the changes work out rest of this year. Let us see how the numbers look for April 2018.

5/03/2018
Emergency Fund 83.33% 20.83%
College Fund ($80K) 64.54% 65.61%
Passive Income (2017 vs 2018) $450.13(4/2017) $911.81 (4/2018)..cheating!
Retirement Fund 82.79% 78.08%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.77% 9.77%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for April 2018 is 100% higher than April 2017 🙂
      • I know I know….this is cheating a bit.I sold funds which distribute dividends quarterly and bought funds which distribute dividends monthly. Details below.
      • The June, September and December dividends are going to be much less. The total dividends for the entire year should be the same OR slightly higher though.
  • Additional Investments
    • Investments in taxable accounts
      • I sold some more stocks…primarily international funds, captured the gains and moved the money into my MUNI funds. Why?
        • Tax equivalent yield for MUNI funds are close to 4%
        • VTMGX and VEMAX yield is roughly 2.5 to 2.75% and I get taxed on top of that. It is possible that VTMGX and VEMAX might add some capital gains….but I am okay with this risk.
        • When the prices drop later this year, I will invest back into these funds…lets cross that bridge when we get there.
      • In addition, I took a bunch of money from my house down payment fund and deployed them as well….a house purchase does not seem to be on cards this  year….so, why let the money sit idle?
      • I also took a bunch of money from my emergency fund and invested them as well. If I need money, I would have to sell some bond funds….hopefully the funds do not lose too much value in case such a case comes….touch wood to avoid taking such a loss.
    • Investments in tax-deferred account (IRA)
      • In the last few months, I have taken some profits and set up a a cash fund to take advantage of the next investing opportunity. Unlike 2008, I want to have a cash fund ready to take advantage of lower asset prices in the next bear market!!
      • I bought some VEIPX (Vanguard Equity Income Fund).
        • Every fund in my tax-advantage portion is earning money for me: stocks and bonds and REIT funds. The stocks are primarily International funds.
        • I am slowly going to dollar cost average into US equities using VEIPX with the cash fund I have developed over the last few months.
        • Basic strategy is that I can get access to entire vanguard funds inside my IRA. A generic total market fund is easy to get from any 401K provider….so, I will add more US equities via my 401k using a total market fund.