July 2022 FIRE Update

Hey everyone! We are back in Portland after 8 weeks of traveling. Whew, I am worn out. I think we are done with backpacking. Packing up and moving every few days isn’t as fun as it used to be. We had fun, but this trip just took a lot out of us. Next time, we’ll go to one location and stay there for the whole trip. But we’ll probably stay home for the next few years. RB40Jr especially had a hard time being away for so long. He is ecstatic to be home.

On the personal finance side, July was okay. Our income was much lower than usual because Mrs. RB40 didn’t work. I also didn’t work much because I couldn’t focus while on vacation. Additionally, our monthly expense was also high due to travel. So we had to draw down some savings to fund this summer vacation. That’s okay, though. I’m sure we’ll get back on track in the fall. We’re comfortable enough to splurge a bit.

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.

2022 Goals

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.

Financial Goals

• 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 very quickly. Investors are taking money off the stock market to diversify. It’s a great way to 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 128%. Our big payout from the real estate crowdfunding project helped a lot.
• 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. Occasionally procrastination is a good thing. 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…

Health Goals

• 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.

Fun Goals

• Travel 180 days – I was away from home for 123 days since the beginning of 2022. We are traveling more this summer while Mrs. RB40 is on 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 1,333 subscribers on our YouTube channel. I don’t think I’m cut out to be a YouTuber. I just don’t have the personality for it. But we gained some subscribers this year so I met my goal.
• Hot air balloon ride, zipline, and Disneyland. This isn’t looking good. I haven’t been able to schedule these fun things into the schedule. We’ll probably put it off until next year.
• Happiness level > 8. Everything is awesome on vacation. I give it a 9.

Net Worth (-13% 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. The stock market dropped over 20% and we are in a bear market. Our net worth followed the market down and dropped 13% so far. We diversified with real estate and other holdings so our portfolio is a bit more stable than the stock market. It still hurt, though. But!

***Important*** Don’t stop investing. You need to keep investing when the stock market is down. Eventually, the stock market will recover and you will 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 ($46,668 YTD)

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

July was a slow month for passive income

*FI ratio = passive income/expense

July 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 cash flow. You can get a quick overview from the diagram and see the details below.

Gross Income: $3,683

Our gross income is way lower than usual because Mrs. RB40 is taking a sabbatical. Also, we are traveling and I’m not working much. Like many families, we are drawing from our savings to travel. We saved quite a bit earlier this year so I’m okay with it. After this summer, we’ll be home for a long time.

• Mrs. RB40’s job: Mrs. RB40 is on a sabbatical.    
• Blog income: $1,488. My blog income was down last month. Blogging is 50% passive, at best. If I post less, I make less money.
• Real estate crowdfunding: $638. A small payment from real estate crowdfunding last month. You can read more on the RE Crowdfunding Passive Income page.
• Rental income: $770. 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: $788. See more details on my Dividend Passive Income page.
• Interest Income: $9
• Side hustle & Misc: $0

Monthly Spending: $4,413

This year, I plan to spend about $50,000. So our monthly spending budget is $4,166. In July, we went over that budget due to travel. We were in Thailand to visit families and see the sights.

Here are the details.

• Housing: $1,160. 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: $250. 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.  
• Groceries: $19. Usually, we spend about $500/month on groceries. This month, we didn’t buy much grocery because we weren’t home.

• Bills: $23. (This is just life insurance. Water, gas, and electric bills are included in the housing category.)
• Transportation: $87. This category includes gasoline, insurance, public transportation, and car maintenance.
• Entertainment: $0.

• Kid: $0.
• Travel: $2,873. Thailand is cheaper than the US, but it is still expensive to travel around.    
• Health: $0.     
• Clothing: $0
• Misc: $0.

Others

I don’t count these as personal spending.

• Taxes and deductions: $450 

July 2022 wrap up

July was another month that we needed to draw from our savings. We have enough savings so I’m not too worried. We’ll get back on track in September.

All right, that’s it today. It’s time to go back to school shopping for us. Did you have a good summer?

Disclosure: We may receive a referral fee if you purchase or signup for a service through the links on this page.

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 United States. Go check them out!

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

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.

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