May 2022 FIRE Update
Hey, everyone. Did you have a good month? May was uneventful for us. Life just went on as usual. Now, we are just waiting for RB40Jr to finish school. Once he’s done, we’ll go on a long summer vacation.
On the personal finance side, May was an anomaly. We spent a lot more than usual, but we also made a lot of money. One of our real estate crowdfunding projects was completed and we got a nice fat payout. Also, Mrs. RB40 got 3 paychecks last month. The extra income helped us overcome a big expense month.
On the expense side, we got hit from all directions.
- Travel – I booked hotel rooms and flights for our summer vacation in California, Thailand, and the Maldives.
- Parents – I sent about $6,500 to pay for my mom’s nursing home in Thailand. My brothers sent a similar amount. This is for 30 months so it is very affordable compares to what we pay in the US.
- Transportation – As everyone knows, gasoline is expensive these days. I also took our car in for an oil change and got a speeding ticket.
- Health – Mrs. RB40 got some dental work done.
These all added up to a very expensive month. Fortunately, our income was higher than normal too and we were able to save 45%. This saving rate was lower than usual, but it could have been a lot worse. You can see the details in the cash flow section below.
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.
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.
- 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 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 150%! 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.
- 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.
- Travel 180 days – I was away from home for 85 days since the beginning of 2022. We’ll travel more this summer when Mrs. RB40 takes 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 995 subscribers on our YouTube channel. I was publishing several clips per week earlier this year, but I ran out of steam. I need to make some new clips soon.
- 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.
- Happiness level > 8. Life is good. No big problems in May. I give it a 9.
Net Worth (-9.2% 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 S&P 500 index decreased by ~14% already. Our net worth followed the market down and dropped 9.2% so far this year. We diversified with real estate and other holdings so our portfolio is a bit more stable than the stock market. Down is down, though.
***Important*** Don’t stop investing. You need to keep investing when the stock market is down. Eventually, the stock market will recover and you’ll 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 ($38,501 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
May 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 March cash flow. You can get a quick overview from the diagram and see the details below.
Gross Income: $34,372
Our gross income will be lower than usual this year. We plan to work less and travel more. Also, no side hustle for me this year. May was really nice, though. Mrs. RB40 had 3 paychecks and we got a big payout from our real estate crowdfunding project.
- Mrs. RB40’s job: $13,046. Mrs. RB40’s income was higher than usual due to her 3rd paycheck.
- Blog income: $1,121. My blog income was lower than usual due to taxes.
- Real estate crowdfunding: $18,627. May was an awesome month for Real estate crowdfunding. You can read more on the RE Crowdfunding Passive Income page.
- Rental income: $720. 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: $849. See more details on my Dividend Passive Income page.
- Interest Income: $8
- Side hustle & Misc: $0
Monthly Spending: $11,373
This year, I plan to spend about $50,000. So our monthly spending budget is $4,166/month. In April, we went way over that budget due to travel and parent expense. For travel, I booked hotels and got some tickets for local flights around Thailand. Also, I sent some money to help pay for my mom’s nursing home expenses. My dad signed a 30-month contract and got a discount. Oh, our transportation expense was higher than usual as well. I got a camera speeding ticket. Ugh! Here are the details.
- Housing: $1,270. 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: $6,650. 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. Last month, we each sent them around $6,500 to pay for mom’s nursing home. The contract is 30 months so we’re good for a while.
- Groceries: $606. Usually, we spend about $500/month on groceries. Everything got more expensive so $600/month is probably the norm in the future. Here are some of the dishes I cooked in May.
- Bills: $23. (This is just life insurance. Water, gas, and electric bills are included in the housing category.)
- Transportation: $430. This category includes gasoline, insurance, public transportation, and car maintenance. We spent more than usual here too. Normally, we spend less than $100/month on transportation. In May, I took the car in for an oil change and filled up 3 times. I also got a camera speed ticket. Ugh! As a result, I had to take a driving course to get the ticket dismissed. Now, I just need to drive very carefully for a few years.
- Entertainment: $241. We ate out several times. Yikes, this category is really spiking. The restaurants are packed too. People are spending like there is no tomorrow.
- Kid: $50. RB40Jr’s school had a small fundraiser.
- Travel: $1,449. I got tickets for local flights around Thailand and booked some rooms for this summer. I’m not done yet, so we’ll have a big bill here again next month.
- Health: $528. Mrs. RB40 had some dental work done.
- Clothing: $124. Mrs. RB40 purchased some stuff.
- Misc: $0. Donation.
I don’t count these as personal spending.
- Taxes and deductions: $7,366
2022 Savings ($46,144 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: $15,694
YTD 2022 saving rate = 50%
May 2022 wrap up
May was a strange month for us. We didn’t do much, but a lot of money disappeared. Fortunately, our income was higher than usual so we had some extra money to invest. Our net worth didn’t change much last month. Anyway, it’s the calm before summer vacation for us. Once summer starts, we’ll be on the road a lot.
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. I’m looking forward to nicer weather and summer vacation. It’ll be a busy summer. Everyone has been cooped up too long and we are all itching to travel. Reserve your flights and hotel rooms now if you haven’t done it yet. They are disappearing quickly.
How was May for you? Did you have a good month?
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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.