Money

June 2022 FIRE Update

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Happy Independence Day! Did you have a good month? June was a fun month for us. RB40Jr finished school and we went on a road trip to see friends and families. This road trip was put off twice due to Covid so we were all looking forward to it. We had a great time, but it was an expensive trip. The price of gasoline peaked and hotels were expensive as well. But it was worth it. We’re back home for a few days, then we’ll go visit my parents in Thailand. Mrs. RB40 took a sabbatical so we can travel the whole summer. It’s been great so far.

On the personal finance side, June was rough. Our income was much lower than usual because Mrs. RB40 didn’t work. I also didn’t work much. Our monthly expense was also high due to travel. We had to draw down some savings to fund this summer vacation. That’s okay, though. We saved a lot earlier this year. I’m sure we’ll get back on track in the fall. We’re comfortable enough to splurge a bit.

Oh, the stock market dropped a significant amount in June. Our net worth also dropped, but I wasn’t worried. I was on vacation and didn’t pay attention to the market at all. I’ll keep adding to our investment and ride out the bear market.

First, I’ll share how I’m doing on my New Year goals. Then, I’ll show you our monthly cash flow. Here are the details.

2022 Goals

Here is my 2022 goal spreadsheet. It works really well. Try it out if you can’t keep up with your New Year goals. The key is to go over the spreadsheet at least once a month to track your progress. That way, you can see which goals need extra attention.

I’m not doing so well on my goals this year. I already failed 3 of them. See the reason below.

Financial Goals

  • Real Estate Crowdfunding $200,000. I’m not doing well on this goal. In May, one project was completed and we got our investment + profit back. That’s great, but now I need to reinvest the money. Also, we have an unexpected expense. We are building a beach cabin in Thailand. So, I’m not sure how much we can increase our investment in RE crowdfunding this year. Anyway, the projects on CrowdStreet finish their funding phase very quickly. Investors are taking money off the stock market to diversify. It’s a great way to passively invest in real estate.
  • FI Ratio > 110%. This is my main goal for 2022. The FI ratio is passive income divided by expense. So far, our FI ratio is 142%! Our big payout from the real estate crowdfunding project pushed the FI ratio to a new high.  
  • Sell rental condo. Our tenant decided to stay for another year. He’s a great tenant so I’m okay with it. The price isn’t great in that area anyway. Portland is still struggling with a lot of issues. Hopefully, the city will improve soon. Anyway, I failed this goal.
  • Speculate crypto $10,000. This isn’t going too well. Crypto is going through a shakeout in 2022. My crypto account lost a large percentage this year, but it might be a good time to buy…

Health Goals

  • Unfortunately, I lost my fitness tracker in Bangkok. I have no idea how it happened. It probably just popped off my wrist. Oh well, I’ll see if I can pick up another tracker when I get home. Unfortunately, I lost all motivation for now. Maybe I can try again next year.

Fun Goals

  • Travel 180 days – I was away from home for 97 days since the beginning of 2022. We are traveling more this summer while Mrs. RB40 is on a sabbatical. She could retire if she wants, but she chooses to work this year.
  • 1,000 subscribers on my YouTube channel. Currently, we have 1,183 subscribers on our YouTube channel. I was publishing several clips per week earlier this year, but I ran out of steam. Woohoo! I posted a clip from our road trip.
  • Hot air balloon ride, zipline, and Disneyland. I’ll work on this when I get back to Portland. Hot air balloon ride near Portland. Zipline in Thailand in the summer. Disneyland in the fall. Doesn’t look good here…
  • Happiness level > 8. Everything is awesome on vacation. I give it a 9.5.

Net Worth (-15% YTD)

I’ve been tracking our net worth since 2006. It is very motivating to see the progress. The power of compounding is unbelievable. Our net worth increases more than we earn almost every year. However, 2022 is turning out to be an exception to the rule. The stock market dropped over 20% and we are in a bear market. Our net worth followed the market down and dropped 15% so far. We diversified with real estate and other holdings so our portfolio is a bit more stable than the stock market. It still hurt, though. But!

***Important*** Don’t stop investing. You need to keep investing when the stock market is down. Eventually, the stock market will recover and you will do very well as long as you keep investing through the downturn.

Here is a chart of our net worth from Personal Capital. Sign up for a free account at Personal Capital to help manage your net worth and investment accounts. I log in almost every day to check on our accounts. It’s a great site for DIY investors.

2022 Passive Income ($45,573 YTD)

Here is a quick summary of our passive income. You can see all the details on my Passive Income page.

May was a great month for passive income. Our passive income from real estate crowdfunding gave our FI ratio a huge boost. I think we’re good for 2022.

*FI ratio = passive income/expense

June 2022 Cash Flow

Our cash flow was great last month. Our income was much higher than usual due to Mrs. RB40’s income and real estate crowdfunding income. That’s fortunate because our expenses hit an all-time high. We spent over $11,000 in May. That’s way higher than normal.   

Here is the Sankey diagram of our cash flow. You can get a quick overview from the diagram and see the details below.

Gross Income: $4,372

Our gross income is way lower than usual because Mrs. RB40 is taking a sabbatical. Also, we are traveling and I’m not working much. Like many families, we are drawing from our savings last month to travel. We saved quite a bit earlier this year so I’m okay with it. After this summer, we’ll be home for a long time.

  • Mrs. RB40’s job: Mrs. RB40 is on a sabbatical.    
  • Blog income: $2,046. My blog income was okay last month.
  • Real estate crowdfunding: $0. No payment from real estate crowdfunding last month. You can read more on the RE Crowdfunding Passive Income page.
  • Rental income: $725. We had a nice month at the rental. I think we’ll have a good year with rental income. Things are much smoother than the previous year.
  • Dividend Income: $1,966. See more details on my Dividend Passive Income page.
  • Interest Income: $9
  • Side hustle & Misc: $0

Monthly Spending: $6,420

This year, I plan to spend about $50,000. So our monthly spending budget is $4,166. In June, we went over that budget due to travel. We went on a road trip to visit friends and families in California. It was awesome and we had a great time. I’ll share our adventure later. I also paid for some hotels and flights for our upcoming trip to Thailand.

Here are the details.

  • Housing: $1,232. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, repair, and furnishing. The price of utilities increased a little this year.
  • Parents: $250. My brothers and I each sent $250/month to my parents. They don’t have much retirement savings. Fortunately, they live in Thailand so their cost of living is pretty low.  
  • Groceries: $210. Usually, we spend about $500/month on groceries. This month, we didn’t buy much groceries.
  • Bills: $23. (This is just life insurance. Water, gas, and electric bills are included in the housing category.)
  • Transportation: $87. This category includes gasoline, insurance, public transportation, and car maintenance. I didn’t count the road trip expense here.  
  • Entertainment: $19. I got some Vietnamese sandwiches for lunch.
  • Kid: $43. RB40Jr’s school had a small fundraiser.
  • Travel: $4,384. Wowza, travel is expensive. We had an awesome time so it was worth it. How many more family trips will we have? Our son is growing up quickly.   
  • Health: $122.     
  • Clothing: $0
  • Misc: $50. Mrs. RB40 got a haircut.

Others

I don’t count these as personal spending.

  • Taxes and deductions: $450 

2022 Savings ($44,020 YTD)

I don’t think we’ll save as much as usual this year. We plan to travel more and relax a bit. We’ve been saving for so long. I think we deserve a break. That’s probably how a lot of people are feeling. It seems like everyone is spending like mad. That’s understandable after 2 years of Covid, right?

  • Joe’s 401k: $14,300.
  • Mrs. RB40’s 401k: $8,150.
  • Roth IRAs: $5,000.
  • 529 College Savings: $3,000.
  • Extra savings: $13,570

YTD 2022 saving rate = 48%

June 2022 wrap up

June was different… Our income was low, our expense was high, and our net worth dropped a significant amount. However, I’m still pretty happy. We had a great road trip and didn’t stress about our finance at all. We know we are in a comfortable position. Even if the market drops more, we’ll stay invested. I’ve been through several bear markets and I know it’ll recover.

Anyway, the stock market probably will continue to be volatile for the rest of 2022. However, don’t be discouraged. You need to keep investing. When the market is down, you can buy more shares with the same amount of money. Eventually, the stock market will come back, and you’ll be on the winning side. If you’re near retirement and can’t deal with the volatility, real estate is a great option. Check out CrowdStreet. You can invest in apartments, hotels, and many other commercial projects. It’s a great way to generate passive income and add some stability in your portfolio.

That’s it for this month. We’ll be traveling for the rest of summer and I’ll post just once per week. Have a great summer!

How was June for you? Did you have a good month?

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.

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