January 2020 Goals and Financial Update - Retire by 40 (2024)

Hey everyone, we’re off to the races for 2020! January was a good month for us. I made some progress on my New Year goals and our cash flow was good. However, our net worth took a small step back. The stock market dropped a bit at the end of the month due to the coronavirus outbreak. This outbreak is pretty scary because so many people are infected, over 17,000 cases now. Let’s hope it’ll be old news next month.

On the financial side, we have a mix of good and bad news. First, the good news.

• Our income streams were all solid.
• Expenses were much lower than usual.
• Passive income was good.
• Our FI ratio was over 100%.
• We saved more than 50% percent of our income.

The only bad news is our net worth dropped a bit. That’s okay. The year is still young. We have plenty of time to recover.

On the personal side, life was great in January. We didn’t do much and spent a lot of time at home. That’s normal for us in the winter. We’ll do more stuff when the weather improves. One positive side effect is that I can work a bit more on the weekend. I released 12 blog posts and 8 videos last month. That’s a lot! I’m trying to get ahead of the schedule because I’ll slow way down when Junior gets out of school this summer. All in all, January was a pretty good balance.

Okay, I’ll go over my goals first and then share the details of our net worth, cash flow, and savings.

2020 Goals

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 effort.

2020 is off to a very good start for the most part. There are 2 rows that need extra attention – the side hustle and refresh Retire by 40. It’s been very rainy and I didn’t do much side hustle so far. The other one is giving RB40 a facelift. I tried a bit, but it’s quite complicated. I’m afraid to break the site. I’ll keep working on these.

Financial Goals

• Real Estate Crowdfunding $150,000. I added $25,000 to our RE crowdfunding investment with CrowdStreet in January. This will be it for a while because we’re low on cash now. I plan to complete this goal by the end of 2021.
• FI Ratio > 110%. This is my main goal for 2019. The FI ratio is passive income divided by expense. Once we reach 100% consistently, then we’ll be set to retire in style. January was a great month for us. Our expenses were very low and the FI ratio looked great. We’re at 122% for the year. Let’s hope we can keep this up for the rest of the year
• Saving rate > 50%. This one is really tough because I use pretax income. If you make a lot of money, your tax rate is higher. If you don’t, then your expenses overwhelm the saving rate. I’m sure only a few people can reach 50% saving rate. We did very well in January. I made some 401k contributions for 2019 and saved a ton. We’re at 63% so far. That’s really high.
• Side hustle income > $5,000. I planned to start pet sitting on the side, but I need a good review before I can start. It might take a while to get this side hustle going. Also, we didn’t charge any scooters. It’s not worth it when it’s cold and raining outside. Last month, Mrs. RB40 got a gift from her mom. That’s a side hustle, right?

Brand by 40

• Content creation > 178 blog posts and videos. This is a huge amount, but we’re ahead of the pace. We released 12 blog posts and 8 videos in January. This one is going great so far.
• Refresh RB40. I had a very tough time on this one. I found a theme I like, but I’m afraid to make changes. In February, I need to do taxes so this task will be put off. This one is not going well, just like last year…
• 1,000 subscribers on Eat by 40! Currently, we have 62 subscribers. That’s not a lot, but the channel is still young. We’ll keep working on this one. I’m optimistic. Check out Eat by 40! and subscribe. 😉

Personal Goals

• Visit Thailand + 1. I plan to go see my parents this summer and then visit another country on the way home. It’s a bit too early to work on this one.
• Travel hack 200,000 points. I applied for an Alaska Airlines card in January. Mrs. RB40 has a business trip in Honolulu in the spring. We can use the companion pass and save some money on our flight.

• Update our Will. I haven’t started this one yet. Plenty of time left…
• Happiness level > 9. January was a great month and I was pretty happy. The only complaint I have is about the weather. It’s so rainy this year. I’m ready for nicer weather. It would have been a 10 if the weather was better.

Net Worth (-1.3%YTD)

I’ve beentracking our net worth since 2006 and it is very motivating to see the progress we made. 2019 was a great year and our net worth increased by 18%. That’s huge. I don’t think we’ll see that kind of gain in 2020, but you never know. I’d be very happy with a 5% net worth increase this year.

January wasn’t a good month for our net worth. The market dropped near the end of the month due to the coronavirus outbreak. VFINX (S&P 500 index fund) was flat for the month. However, our net worth dropped a bit. The year is still young so I’m not too worried.

Here is a chart of our net worth from Personal Capital. *Sign up for a free account at Personal Capitalto 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 ($3,729 YTD)

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

Our passive income looks good so far. Even our rental income is doing well this year. However, it won’t stay this good for long. I need to remove a huge tree from our property and it will cost over $1,200. Ugh! That’s the problem with being a landlord. There is always something going wrong.

Our FI ratio looks great this year. We didn’t spend much in January and our passive income surpassed our expenses. Hopefully, we can continue this trend for the rest of 2020.

*FI ratio = passive income/expense

January 2020 Cash Flow

Our cash flow was excellent last month. All our income streams were solid and we didn’t spend much money. I caught up on my 401k contributions for 2019 and saved an extra $5,500.

Here is the Sankey diagram for January. 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 should be fine. I’m optimistic because our blog and rental income are good so far. If these two continue to perform well, it shouldn’t be too difficult to meet our income target.

• Mrs. RB40’s job: $8,909. 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:$4,955. My blog income was good last month. You can read more details on myBlog Income page. Also, RB40Jr is on the payroll now as a YouTuber, model, and photographer. His income will go straight into his Roth IRA. He has over $3,500 in his Roth IRA now. That’s a great head start in life.
• Rental Income:$716. Last month was good with our rental income because we didn’t have to fix anything. I think we should be able to generate about $500/month this year. Read more at theRental Property Passive Income page.
• Dividend Income:$844. Our dividend income started off slow in 2020. I think it will pick up by March. See more details at myDividend Passive Income page.
• Real estate crowdfunding:$493. RE crowdfunding was good and we got a big payment from CrowdStreet. I think this will be a nice year in this category. You can see how we’re doing at the RE Crowdfunding Passive Income page.
• Interest Income:$21.
• Side hustle:$300. Winter is tough for side hustling. Last month, we didn’t charge any scooter and my pet sitting business didn’t get off the ground. Mrs. RB40 got $300 from her mom and that was our only extra income for the month. February is going to be tough too. My $5,000/year target for side hustling might be too ambitious.

Monthly Spending (target < $4,166/month)

This year, I plan to spend about $50,000 so our monthly spending budgetis $4,166/month. January was a good month for us. We spent $3,069. That’s quite low. We don’t do much in the winter so that’s expected. It will increase quite a bit when the weather improves.

• Housing: $1,202. 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: $680. I sent some money to my parents to help out with healthcare and living expenses. This year, my brothers are helping out so it should be better than last year.
• Groceries: $370. Our grocery expense was lower than usual in January. Maybe we had extra food leftover from the holidays. Usually, we spend about $500/month on groceries. This category is going to increase soon because our son is starting to eat more now.

Check out some of what I made last month.

SAHD Recipe – Thai Cashew Nut Chicken

SAHD recipe – Thai Ginger Chicken stir fry

• Travel: $158. Mrs. RB40 and Junior went to visit her parents in CA. They didn’t spend much on this trip.
• Entertainment: $300. We went to eat out, purchased a ticket for TEDx, a pizza steel, and an XBOX gamepad.
• Health: $40.
• Bills: $23. My term life insurance payment.
• Transportation: $158. Our car is paid off so this is just gas, maintenance, and insurance.
• Kid: $98. I signed up Junior for soccer in spring and got some clothes for him.
• Pet: $40. Our cat got fleas. Oh man, it’s been a tough few months. In January, I got a flea collar and a serious spray. The fleas are all gone now and I hope they don’t come back.
• Clothing: $0. This category doesn’t include our son’s clothes.
• Misc: $0.

Others

I don’t count these as personal spending.

• Taxes and deductions: $2,884.
• 401k savings: $8,625. I contributed $5,500 to my 401k for 2019. I also added $1,625 for 2020. Mrs. RB40 contributed $1,500 to her 401k.
• Roth IRAs: $1,000. We contributed $500 each to our Roth IRAs.
• 529 College Savings plan: $0. I just contributed $2,000 to our son’s 529 plan. This will show up in February.
• Extra Savings: $660. Whew! We saved a lot in January.

2020 Savings ($10,285 YTD)

So far, we saved $10,285. This is a great way to start off the year. Our expense was lower than usual and we were able to save a huge percentage last month, 63%. That’s really good.

• Joe’s 401k: $7,125.
• Mrs. RB40’s401k: $1,500
• Roth IRAs: $1,000
• 529 College Savings: $0
• Extra savings: $660

YTD 2020 saving rate = 63%

January Wrap Up

All in all, January was a great start to 2020. I was productive and our finance was solid. Our net worth decreased a bit, but I’m not going to worry about it. As long as we keep investing, we’ll come out ahead in the long haul. February should be a good month too. The only hiccup on the horizon is the cost of removing a huge tree from our property. That bill will probably come in March. That’s it for now. Check back at the end of February to see how things are going at the RB40 household.

How about you? Did you have a good month? Are you working on your New Year goals?