I haven't updated my journal in a few months, but I just wanted to say that I am still very actively seeking early retirement! I haven't given up at all, and here's the latest update:
October was a great month for savings. Not only did I receive my signing bonus for the year, but I also tightened up on spending, and deployed more capital to purchase even more stocks. At times, the market was pretty beat up in October, so I tried to use this to my advantage by picking up shares of discounted companies. I am slowly, but surely building up the passive income portfolio!
One of my original goals for this year was to build a portfolio that would be valued at $60,000 by the end of the year. I hit that mark this month, and should the market cooperate, I will be able to check off this goal as successful at the end of the year. Going forward, I will set goals focusing on dividend income received as opposed to total portfolio value (which will always be volatile).
Further, I succeeded in reaching my fourth goal, which was to contribute up to the maximum ($17,000) in my 401k. Maxing out my 401k was a secondary goal for this year, as I had already been doing so since I first started working full-time. However, my current employer has a wonderful matching policy, which made it very difficult to pass up the free money. I told myself I would make an attempt to contribute up to the maximum, but would stop if I ever found myself needing the extra cash. Luckily things worked out ok (it helped that I switched jobs and received a higher salary/bonuses), and I was able to reach this goal.
I am striving so very hard to reach early financial independence, so I need to concentrate more on building up my taxable portfolio. I’ll need the taxable account to fund my freedom since my current plan is to not take an early withdrawal from any of my retirement plans. The Roth IRA and 401k are off limits until traditional retirement age. Since I’ve already contributed so much into the 401k, the foundation has already been put into place. I figure I will have at least 30 years or so to let this thing continue to compound and grow. Maybe next year, or the year after, I’ll stop making contributions to the 401k altogether.
Expenses were steady, and pretty much consistent with the previous month. I did spend a little bit more on food, but other costs were mostly minimized.
The rental property is doing well, although I did have a slight surprise this month. I found out that the trash and recycling are not included in the water bill, but are instead billed to the homeowner every four months. Since I wasn’t aware of this, I didn’t factor in this cost when the lease agreement was signed. Therefore, it would be difficult for me to try and force the tenant to pick up this tab now. I figure it probably isn’t worth the hassle, and as long as they pay their rent on time and take care of the property, I’ll let this slide and eat the cost myself. It’s about $30/month I will be losing on the bottom line. Oh well. I’ll just have to make sure future tenants are aware that they will have to account for the trash and recycling bill separately from their water bill. Lesson learned.
When adding in my yearly bonus, I was able to save over $8000 this month. But instead of going on a material shopping spree, I did the shrewd thing and invested the capital into stocks. I went on a different type of shopping spree and made a total of eight purchases this month, an all time high! I picked up shares of: Caterpillar (CAT), Cummins (CMI), (2) Kinder Morgan (KMI), Intel (INTC), Air Products and Chemicals (APD), Abbott Laboratories (ABT), and Norfolk Southern (NSC).
Here is the breakdown:
Other / Fun $368.25
Rental Insurance $30.00
Rental Expenses $0.00
Property Tax x
Trash-4 Months $115.74
Work Income $3,919.40
Rental Income $2,090.00
Dividend Income $18.09
Total Expenses $3,131.64
Net Income $12,946.71
Expense Ratio 24.19%
Savings Ratio 75.81%
Expense Ratio (Exclude Rental Expenses) 15.96%
Savings Ratio (Exclude Rental Expenses) 84.04%
Monthly Net $9,815.08
Money to Invest $8,027.77