Half of 2015 is in the books. Most of us would say, “OMG, where did the time go?!”
Not me. This past New Year’s Eve in NYC, huddled in a cold cafe and slowly dancing with the wife and baby, seems like a distant memory because I live every day outside of any semblance of a routine.
Also much improved from that moment in the cafe is my financial situation, which I’ll update you all on in the paragraphs that follow. June wasn’t our best month, but it was certainly a good month. Forward passive income (which is the average passive income I’ll earn each month going forward), trekked higher at a solid rate, increasing 3.4% above last month. Dividends paid were just over $700 and the third-highest month ever. Net worth climbed by 0.8% despite a down market. Expenses came back to reality and we’re but one month away from being entirely free and clear of the apartment from our NYC Year-long Experiment.
The Path to Financial Independence
The ultimate graph of financial independence (above) shows that my forward passive income plus side hustles covered 14.7% of our expenses in June.
I re-entered the uptrend, and will hopefully not falter like I did in May. If you look at my updated Retirement Roadmap, I’ll be on track if I can cross 20% expense coverage by the end of this year.
See Investment Portfolio for Full List of Holdings and Details
Paid In June: $708.76
Previous Forward Dividend Income: $724.48
New Forward Dividend Income: $750.36 (+3.3%)
June was a solid month, although I was surprised to see that my dividends are heavier in the 2nd month of each quarter. I was a relatively active trader this month, taking advantage of some strong pricing in some of my growth stocks. I sold a handful of Netflix (NFLX), and my entire positions in drone-maker Aerovironment (AVAV) and organic-LED maker Universal Display (OLED). I also sold my spun-off shares of South32 (SOUHY), as the reported dividend will only be about 2% (whenever it’s announced) and I have plenty of mining giant BHP Billiton (BBL) as it is. With those proceeds, I doubled my positions in toy maker Hasbro (HAS) and pipeline toll-taker Kinder Morgan (KMI). I also upped my stake in the regional-to-national Texas Roadhouse (TXRH) story, and initiated a long-overdue position in Johnson & Johnson (JNJ). I also did my normal 401(k) deferral.
In June we saw increases from Realty Income (O) and Walt Disney (DIS)–the Disney increase was a nice surprise, as their dividend increased by 15% and they began semi-annual payments (from their normal December annual payout schedule). Forward dividend income increased 3.3% this month–which is great. If I can average 2% per month for the rest of the year, then I’ll hit my goal of $850 in forward dividends.
Sometimes we in the financial community get swallowed up in numbers, and forget what power they really have. For many Americans, $750 in income for doing nothing is significant. At the current minimum wage, you’d have to work over 100 hours to bring in that much income–my money made that for me while I slept, and I’m really very grateful to live in a society advanced enough where I can so easily invest bits and pieces every month, allowing this passive income to grow so quickly.
Paid In May: $0.00
Previous Forward Interest: $41.74
New Forward Interest: $41.99
My annual interest payment for my annuity occurs in April. I’ll continue contributing a little bit each month to this account.
No change from last month. Our consumer debt situation from our vehicles needs to get squared away first. The pending tax refund and a withdrawal from our annuity will pay off one vehicle, which we’ll be able to sell once we receive the title. Those dollars will be used to purchase a family-friendly vehicle, and the excess will go to paying off our other vehicle (and subsequently selling) and paying down our no-interest CC debt. After that, we’ll look into the rental game. I hope to have this all done by Thanksgiving.
“All quiet on the western front,” says the side hustle section of Retire29. Nothing went up on SeekingAlpha in June, although my Stock Analysis Framework post was syndicated on July 1st, which got a good reading and increased my SA followers to over 150. At four articles in six months, I’m behind my goal of getting 10 done this year.
Retire29 had about 110 views per day–a 10% increase from May. A week into July, I’m averaging over 250 per day, so that’s exciting. My 2015 goal for the blog was to hit 5,000 views a month. I’m going to set out to make that happen this month. I’ve come to the conclusion that views don’t just happen on their own, so I’m really making an effort to connect and comment with other blogs–it pays huge dividends. There are always those blogs where dropping a comment or two will pull a lot of readers over simply because they’re monsters in the industry: Budgets Are Sexy, Rockstar Finance, Financial Samurai, Retire By 40, or Dividend Mantra. However, it pays to frequent a lot of (relatively) smaller blogs, too, since their readership is probably a bit more dedicated and connected. This is why I love to check out No More Waffles, The Wealth Brick Road, Income Surfer, or Cashville Skyline.
Retire29 had its second-straight profitable month! With $6 per month in operational costs, any month over $6 in ad revenue (which is all I get right now) is a profitable month. My hourly labor rate is probably around 2-3 cents per hour, but hey, nobody said this was big money. It’s a labor of love to you…my fine readers.
June saw a return of rational expenses. Baby29 got a lot of great toys, a tablet, and diapers this month; the house is bursting at the seams with fresh diapers (just in time for potty training)–we seriously have another 1,000 diapers sitting in boxes and drawers. I bought some discounted gift cards from Lowe’s for some landscape work (Thanks, Dad!), which is where the home/other costs come in.
The easiest place for expense optimization is the food and dining categories. I’m a habitual money waster when it comes to food. I tend to justify it because the costs are so small–a McChicken here, a wasted dish there, a Monster Energy Drink here and there. These costs add up, though, and I bet I could easily cut $100 off of our food and dining budget by just not mindlessly spending a few dollars each day. I’m going to implement that in July and see if the results are noticeable.
Other than the auto costs, which will end the year closer to $150 or so, this is about what you can expect from my expenses. There will be constant reductions in some areas (food, utilities), as life gets more efficient, but right around $5k is about what I’m expecting.
If you look at my expenses compared to my passive income, my passive income would have paid for all the expenses between Home/Other and Gifts/Charity, and would have partly paid for Travel. That’s kind of a fun way to look at it. I could retire once that passive income can work all the way up to the top.
As always, Net Worth is a rather poor indicator of one’s financial independence, however, people like using it for comparative purposes, so I oblige. My net worth rose 0.8% this month to $342,381. That is a ~$2.5k increase. The market had a tough month with the S&P down 2.5%. But, my contributions and dividends offset all of that and I increased investments by about $1k; the rest came from debt and mortgage paydown.
I have no specific net worth goals. I reckon my Net Worth will be somewhere around $700k by the time I retire, however, that is just an approximation. Far more important is that little line chart at the very top, showing by passive income as a percentage of my expenses.
Thanks for reading and following along, as always!
Previous Financial Reports: