Hey everyone, 2020 is halfway done! I can’t wait until this year is over with. It’s been a difficult year for everybody and it is really dragging. At this point, I just want to survive 2020 with minimum damage. Many of my New Year goals are way behind. That’s alright. Some years, you just have to get through the best you can.
This summer is different than past summers too. All the fun (mostly free) things we used to enjoy are mostly canceled or closed down. Luckily, we can still enjoy the great outdoors. We’ve been visiting various parks and trails nearby. It’s fun to explore these out of the way places more. Usually, we’re too busy for that. So I guess slowing down a bit isn’t such a bad thing. The image to the left was taken at Kelley Point Park. This is the confluence of the Willamette River and Columbia River. It’s pretty crazy that we lived here for 25 years and didn’t visit before. There are nice places everywhere. I hope you enjoyed exploring locally too.
On the personal finance side, we did okay last month. My income decreased again. Fortunately, our spending was also low. We spent more than usual due to pent up demand, but it is still lower than normal. All our son’s clothes were too small so we went shopping for bigger stuff and spent almost $200. We also spent more on takeout from our friends’ restaurants. Small businesses are really struggling right now. We want to help as much as we could.
Okay, I’ll go over my goals first and then share the details of our net worth, cash flow, and savings.
Here is my goal scheduling 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’ll see which goals need extra attention.
Many of my goals are screwed up this year. I started out with reasonable goals and I won’t be able to accomplish many of them. That’s life, though. There will be setbacks and some years will be harder than others. We need to survive 2020 and hope for better days ahead. It’s okay to have lower expectations for 2020.
- Real Estate Crowdfunding $150,000.Earlier this year, I added $25,000 to our RE crowdfunding investment with CrowdStreet. This will be it for a while because we’re low on cash now. During this pandemic, it’s best to conserve cash. I plan to complete this goal by the end of 2021.
- FI Ratio > 110%. This is my main goal for 2020. The FI ratiois passive income divided by expense. Once we reach 100% consistently, then we’ll be set to retire in style. This goal is good so far. Our expenses were low so it isn’t too hard. We’re at 121% for 2020 so far. I think we’ll be okay with this one.
- Saving rate > 50%. This one is really tough because I use gross income. If you make a lot of money, your tax rate is higher. If you don’t, then your expenses overwhelm the income. I’m sure only a few people can reach 50% saving rate. We’re at 61% this year. That’s really good. Let’s hope it holds up for the rest of 2020.
- Side hustle income > $5,000. Side hustling income is way down this year. Scooter sharing companies are shuttered and I don’t want to do it anyway. A lot of people need the extra income more than we do. We’ll put off all side hustles until the COVID-19 pandemic is done. Last month, I got $200 refund from a conference. That counts, right?
Branding (by 40)
- Content creation > 178 blog posts and videos. This is a huge amount, but we’re ahead of the pace. In June, I posted 9 blog posts and 2 videos. We’re slowing down because it’s harder to create content in the summer.
- Refresh RB40. This one is on hold for now. I’ll get back to it when I’m up to it.
- 1,000 subscribers on Eat by 40! Currently, we have 90 subscribers. This is a slow process that will probably take way more than one year. We’ll keep working on it.
- Visit Thailand. It looks like we won’t be able to visit my parents this year. I’ll put this off until 2021.
- Travel hack 200,000 points. My Alaska Airlines points came in. I’ll probably apply for a new card in a few months. I don’t think we’ll accomplish this goal in 2020. There are too many other problems to deal with this year.
- Update our Will. I haven’t started this one yet. I’m still looking for an affordable option. The lawyers I talked to asked for over $2,500. That seems really high to me, but we really need to get this done soon.
- Happiness level > 9. My happiness level was good in June. Homeschooling is over so we’re a lot more relaxed at home. I gave June an 8.5. Life is good even with all these problems.
Net Worth (-2.5% YTD)
I’ve been tracking our net worth since 2006 and it is very motivating to see the progress we made. 2020 is a tough year for investors. 2020 is a strange year. The stock market crashed in March, but came back most of the way in April and May. I don’t understand how it can come back so quickly with 40 million workers unemployed and the economy in shamble. But I’m very glad I’m an investor. For 2020, our net worth is down 2.5%. That’s not bad at all. I just hope we get back to even by the end of 2020. I’m going with a modest goal this year.
Here is a chart of our investment 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.
2020 Passive Income ($16,513 YTD)
Here is a quick summary of our passive income. You can see all the details on my Passive Income page.
Fortunately, our passive income is holding up pretty well. The payout lags the economy a bit so we might have some bad news in the future, but for now, it isn’t too bad.
- Real Estate Crowdfunding– One of the apartment projects we invested in completed on 2/29. Whew! The sale went through and we got a nice payout from that one. RE crowdfunding is holding up surprisingly well. You can read more detail here on our RE crowdfunding income page.
- Rentals– We have two rental units and both our tenants have good jobs. For now, they are both paying rent on time.
- Dividend– This one looks good so far, but I’m sure companies will cut dividends if this pandemic sticks around much longer.
The stock market is priced very optimistically. I really don’t think the economy will recover that quickly. The number of cases is surging in the US again. IMO, there is a lot more pain to come in 2020.
Our FI ratio looks great so far at 121%. We didn’t spend much and our passive income was good.
*FI ratio = passive income/expense
June 2020 Cash Flow
Our cash flow was good in June. Our income streams weren’t great, but our spending was low. We’re spending way less than usual.
This is the Sankey diagram for June. You can get a quick overview here and see the details below.
Gross Income (target > $13,000/month)
This year, our gross income target increased to $13,000/month. If we make this much every month, we’ll be able to save around 50%. May marked the first time our income dipped below $13,000 and this continued in June. Our passive income and blog income decreased. Our gross income was $12,146 last month. Let’s see what went wrong.
- Mrs. RB40’s job: $8,528. Mrs. RB40’s job continues to be the pillar of our household income. We could survive without her income, but life would be more stressful.
- Blog Income: $1,012. My blog income continued to drop. Hopefully, it will bottom out soon. You can read more details on my Blog Income page. Also, RB40Jr is on the payroll now as a model, YouTuber, and photographer. His income will go straight into his Roth IRA. He has about $5,000 in his Roth IRA now. That’s a great head start in life.
- Rental Income: $596. We had a good month with the rentals. I fixed a few things, but no big bills. Read more at the Rental Property Passive Income page.
- Dividend Income: $1,761. Our dividend income was slow in June. See more details at my Dividend Passive Income page.
- Real estate crowdfunding: $41. RE crowdfunding was slow last month as well. Three projects have suspended payout so far. We’re still doing pretty well this year because 2 projects completed on time. You can see how we’re doing at the RE Crowdfunding Passive Income page.
- Interest Income: $8.
- Side hustle: $200. No side hustling for a while due to COVID-19. However, I got $200 refund from a conference. I’ll take it.
Monthly Spending (target < $4,166/month)
This year, I plan to spend about $50,000 so our monthly spending budget is $4,166/month. For now, we are way under budget due to the lockdown. Like most families, we’re only spending money on basic goods and minimal luxury items. In June, we spent $3,045. That’s a bit higher than the previous months. It was due to pent up demand. We purchased new clothes for our son because everything was getting too small for him. Also, we spent some money on takeouts and travel.
- Housing: $1,169. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, and furnishing. Our housing cost decreased significantly from previous years. We moved into our duplex and we can share some expenses with our tenant. This helps a lot.
- Parents: $10. My parents didn’t need extra money in June. I changed the auto-transfer amount to $10 so I don’t have to set it up again.
- Groceries: $337. Normally, we spend about $550/month on groceries. Wow, we did pretty well in June. I think I got quite a few things on sale.
Here are some of the dishes I made last month. Check them out and subscribe to our channel on YouTube!
Salmon Garlic Butter Noodles
Tuna Kimchi Stew
- Travel: $899. We purchased a voucher for a week at a resort in the Maldives… We can use it any time before 2023 and it is fully refundable. Let’s hope travel is back on by then.
- Entertainment: $289. We relaxed a bit and ordered takeout from our friends’ restaurants. It’s really tough to be in the restaurant business right now.
- Health: $30. Our son went to his dentist.
- Bills: $23. My term life insurance payment.
- Transportation: $96. Car insurance and gas.
- Kid: $156. We got new clothes and shoes for RB40Jr.
- Pet: $35.
- Clothing: $0. We didn’t buy any adult clothes last month.
- Misc: $0.
I don’t count these as personal spending.
- Taxes and deductions: $2,480.
- 401k savings: $3,145. I contributed $1,625 to my 401k. Mrs. RB40 contributed $1,520 to her 401k.
- Roth IRAs: $1,000. We contributed $500 each to our Roth IRAs.
- 529 College Savings plan: $0. We contributed $4,000 earlier this year. I think we’re done for 2020.
- Extra Savings: $2,476. I had to borrow some money from our savings account this month.
2020 Savings ($53,147 YTD)
So far, we saved $53,147. This part is going very well for us. Our expense was lower than normal and we were able to save a huge percentage of our income, 61%. That’s really good.
- Joe’s 401k: $20,125.
- Mrs. RB40’s 401k: $9,100
- Roth IRAs: $6,000
- 529 College Savings: $4,000
- Extra savings: $13,922
YTD 2020 saving rate = 61%
June 2020 Wrap Up
Overall, June 2020 was a good month financially. Our net worth increased due to our investment. We might be able to get back to even New Year. I’m hopeful. Our cash flow was good even with reduced income. I feel very fortunate to be in this position. I keep thinking our family would have been in big trouble 30 years ago when my parents had a small Thai restaurant. Luckily, we’re in a good position in life and we are handling this crazy year pretty well. I hope you’re doing well too. 2020 is a tough year.
How about you? Did you have a good month? Take care and be safe!
Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.