Financial Independence Progress Report for July 2018

July has come and gone and August is almost half way done and I am late with my monthly report!! Jeez…time flies fast. I was out of town for work related matters and it was a tiring one. But, post coming back, counting dividends for the month of July was definitely helpful to break out of the funk! So, lets look at the numbers.

8/11/2018
Emergency Fund 38.78% 20.73%
College Fund 53.70% 55.80%
Passive Income (2017 vs 2018) $486.86(7/2017) $1233.78 (7/2018)
Retirement Fund 85.73% 87.38%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.82% 9.79%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for July 2018 is much higher than July 2017. It is expected to be so 🙂
      • 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.
      • The June, September and December dividends are going to be much less. But, the total dividends for the entire year will be higher though.
      • Compared to this time last year, the total dividends this year through end of July is 33% more than 2017….just distributed differently.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing new to report here as I am out of cash 😐
      • Unplanned vehicle maintenance has taken a chunk of money out of emergency funds again.
      • So priority is to rebuild my emergency fund now.
    • Investments in tax-deferred account (IRA)
      • Bought some more of VIHAX (International High Dividend) to dollar cost average down.
  • Miscellaneous
    • Nothing.

Financial Independence Progress Report for June 2018

June is traditionally the second biggest month of the year for dividends.  But, since my portfolio rework over March and April of this year, dividends are going to look different than prior years. Dividends will be more stable and divided evenly across all months of the year. June will still be the second biggest month, but will be less in absolute numbers compared to prior years. Let us see how the numbers look for June 2018.

6/08/2018
Emergency Fund 34.67% 28.78%
College Fund 53.79% 53.70%
Passive Income (2017 vs 2018) $2389.89(6/2017) $1721.47 (6/2018)
Retirement Fund 83.01% 85.73%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 9.82% 9.79%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for June 2018 is approximately 27% lower than June 2017. It is expected to be so 🙂
      • 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.
      • The June, September and December dividends are going to be much less. But, the total dividends for the entire year will be higher though.
      • Compared to this time last year, the total dividends this year through end of June is 21% more than 2017….just distributed differently.
  • Additional Investments
    • Investments in taxable accounts
      • Nothing new to report here as I am out of cash 😐
      • Loaned out some emergency fund money to a friend who had an emergency….so priority is to rebuild my emergency fund now.
    • Investments in tax-deferred account (IRA)
      • I bought some more of VIHAX (International High Dividend) and VTIAX (International index). Both are down a few % points this year and I took advantage of this to dollar cost average down my investments.
  • Miscellaneous
    • Last month I said this…..
      • 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.
    • Found an error in my tracking spreadsheet and had to make some changes. So decided to push the date by a couple of weeks to test drive it a bit more. Will update the blog soon.

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 November 2017

November is a special month….it is the month before December which is a big dividend month!! Other than that, November is a small dividend month. How do the numbers look for November 2017? Lets dive in.

10/29/2017
Emergency Fund $60K Done
College Fund (80K) 59.62% 61.36%
Passive Income (2016 vs 2017) $404.40 (11/2016) $601.87 (11/2017)
Retirement Fund 79.39% 80.86%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 5.70% 6.17%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for November 2017 is approximately $200 higher than November 2016. This increase surprised me. In comparing my 2017 and 2016 dividends, I found one main reason that accounts for a good chunk of the increase….increased investment in VWIUX (Vanguard Intermediate Term MUNI fund). Of course, some capital increase also has a minor hand in this increase.
  • Additional Investments
    • Investments in tax-deferred account (IRA)
      • From August to October, I have been steadily increasing my investments in International stocks. The cash for these purchases have come from a sale of some funds to capture accumulated capital gains.
      • In November, I continued more of the same and invested in the same funds again and I am done with my international investments
        • VTIAX: Vanguard Total International Stock Fund
        • VIHAX: Vanguard International High Dividend Fund
      • In my IRA, the percentage of International stocks is more than that of US stocks….by a slight margin. The reason for this strategy is that US stocks have extremely high valuations. And the international ones have room to grow still. 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 target more cash into mainly US stocks and pick them up at cheaper valuations.

Financial Independence Progress Report for October 2017

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.

Financial Independence Progress Report for September 2017

I was eagerly waiting for September dividends to come….it is the third highest grossing quarter after Dec and June. So, what is not to like? But, September has come and gone and there is not much excitement in reporting the numbers. The numbers are not that bad year-over-year, but I guess it is the slow progress towards the goals’ end that has made me a bit less excited. But, I told myself…One step at a time….build the dividend streams and the dividend snowballing will start for sure!

That said, lets look at the numbers for September 2017.

10/06/2017
Emergency Fund $60K Done
College Fund (80K) 57.59% 58.61%
Passive Income (2016 vs 2017) $1176.20(09/2016) $1547.52 (09/2017)
Retirement Fund 77.79% 78.74%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 4.18% 4.20%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for September 2017 is approximately 31.5% higher than September 2016. The main reason for this increase is Investments in a couple of International funds…..VTMGX (International Developed Markets Index) and VEMAX (Emerging Markets Index).
    • I have tried to diversify away from investing only in US market funds and I am just seeing the fruits of that this year on. Roughly 17% of my total dividends this year have come from International funds. I want to bring this up a bit more to reduce the risk of all dividends coming from the US markets.
  • 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, I deployed some of the cash in the cash fund to buy two international mutual funds…the US funds have not come down from their super expensive valuations.
      • In September, 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 🙂

Financial Independence Progress Report for August 2017

August has come and gone and it is time to look at the numbers for August 2017.

09/08/2017
Emergency Fund $60K 85.34% 87.32%
College Fund (80K) 56.83% 57.59%
Passive Income (2016 vs 2017) $391.93(08/2016) $535.78(08/2017)
Retirement Fund 76.87% 77.79%
Roof for our Family($750K) 00.00%
Medical Fund (via HSA) 4.14% 4.18%
Life Insurance Done (term life insurance policy)

Main Takeaways this month

  • Passive Income Stream
    • My passive Income for August 2017 is approximately 36% higher than August of 2016. Past investments in VCADX (CA MUNIs) and VWUIX (National MUNIs are the main reasons for the increase.
    • 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 and paid off car loan
      • Sold rest of Tax managed Balanced fund (VTMFX) to capture capital gains and add to my cash fund.
    • Paid off our car-loan
      • I did not find any deals worthy of investing among the mutual funds I own….out here in the US and outside. So, instead of keeping it in the bank and/or a money market fund, I repaid the remaining portion of our car loan! Now, every month, I will have some extra savings to be applied for home down payment and/or to replenish the emergency bucket.
    • Investments in tax-deferred account
      • Last month, I sold portions of some funds to capture accumulated capital gains and created a cash fund inside my IRA.
      • I deployed some of the cash in the cash fund to buy two international mutual funds…the US funds have not come down from their super expensive valuations.
        • 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 🙂
  • 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 again captured some gains in a couple of my investments to add to this cash 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.