September 2022 FIRE Update

Hey everyone! It’s October and the leaves are turning beautiful yellow and red. Autumn is a really nice time in the Pacific Northwest. The temperature is just about perfect and the rain hasn’t started yet. That’s about it for the positive news, though. We had a pretty bad month at the RB40 household in September. Mrs. RB40 and I had some health issues. Life isn’t fun when you aren’t healthy. You can read more about the problems in the Happiness section below.

Unfortunately, things weren’t much better on the personal finance side. The stock market is crashing and it probably will get worse. Our portfolio dropped like a rock and our net worth is back to where it was in December 2020. Yikes, that’s 19 months. It’s a big step backward. We need to keep investing, though. That’s the only way to win this game.

Today, 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. The progress is very uneven. I will have to set better goals next year.

Financial Goals

• Real Estate Crowdfunding $200,000. I invested in an apartment renovation in North Carolina so we’re slowly getting there. The projects on CrowdStreet finish their funding phase very quickly. Investors are taking money off the stock market to diversify. Real estate is a great way to generate passive income.
• 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 133%. The 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. Anyway, this goal got a fail.
• Speculate crypto $10,000. Occasionally, procrastination is a good thing. I didn’t add much money to my crypto account this year, because it is going through a shakeout. I’m too afraid to add more money. Crypto is probably too volatile for me.

Health Goals

• Unfortunately, I lost my fitness tracker in Bangkok. I have no idea how it happened. It probably just popped off my wrist. I’ll see if I can get a new one when it’s on sale.

Fun Goals

• Travel 180 days – I spent 142 days traveling this year and I am exhausted. We spent the whole summer on the road while Mrs. RB40 was on a sabbatical. She could retire if she wants, but she plans to go back to work soon.

• 1,000 subscribers on my YouTube channel. Currently, we have 1,381 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 bake these fun things into the schedule. We’ll probably put it off for now.

• Happiness > 8. Oh man, my happiness tanked in September. The plunge was due to the myriad of health issues we faced. I went in for my annual physical and got some bad news. My cholesterol was high and the doctor prescribed a new pill. I also had back pain and was diagnosed with arteritis (x-ray imaging). What?! So now I’m taking a new pill and going to physical therapy. Ugh! Mrs. RB40 also had some health issues. She is going in for a minor surgery soon. Her dad also had a healthcare incident. Lastly, my mom’s health continues to deteriorate. Man, when it rains, it pours. September was a stressful month for us.  

Net Worth (-17.8% YTD)

Ouch! The stock market took a big tumble in 2022. Our net worth is down 17.8% for the year. (It hit a new high in Jan. 2022.) I’ve seen our net worth drop more percentage-wise, but we never lost this much in dollars before. It’s painful. In 2009, our net worth decreased by 25%, but our portfolio was much smaller back then. Brace yourself because the pain isn’t over yet. Things will probably get worse until next year.

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 a terrible year. The stock market crashed and dragged our net worth down significantly. We diversified with real estate and other holdings so our portfolio is a bit more stable than the stock market. The decrease in our net worth is extremely painful, but we will keep investing.  

***Important*** My best advice is to stay the course. Do not 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: $58,048 YTD

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

Our passive income is strong this year. In particular, real estate crowdfunding paid out nicely. Also, our rentals are performing much better than the last few years. It’s nice to be diversified.

*FI ratio = passive income/expense

Sept 2022 Cash Flow

Our cash flow was negative last month. Mrs. RB40 was on sabbatical and our other income streams were low. Our spending was also pretty high. We had to pull $728 from our savings. That’s not a lot, but negative cash flow is never good.

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: $3,994

Our gross income was actually pretty good last month.

• Mrs. RB40’s job: Mrs. RB40 was on a sabbatical.    
• Blog income: $2,169. My blog income was good. Blogging income is 50% passive, at best. If I work less, my income drops too.
• Real estate crowdfunding: $286. A light month from real estate crowdfunding. You can read more on the RE Crowdfunding Passive Income page.
• Rental income: $767. 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 years.
• Dividend Income: $771. Good month with dividends.
• Interest Income: $1
• Side hustle & Misc: $0. I’ll find a new side hustle next year.

Monthly Spending: $4,272

This year, I plan to spend about $50,000. So our monthly spending budget is $4,166. In September, we went just a little over budget. I got a ticket to Thailand and booked a room. I used my miles so I got a good discount.

Here are the details. Actually, I’ll only focus on a few categories that were higher than usual.  

• Housing: $1,228. 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.
• Travel: $543. I got a ticket to visit my parents in Thailand and also booked a room. I used my reward so it was pretty cheap.
• Health: $737. We visited our dentist and doctors. Also, I purchased a pretty expensive mattress pad to help reduce my back pain. Our bed was just a little too hard.  
• Groceries: $569. In previous years, we spend about $500/month on groceries. It looks like inflation is around 10% for us. We didn’t eat out much last month. I’m just not enthusiastic about it anymore after eating out every day for 2 months during our summer trip. Here are some of the food I cooked last month.

Taxes and deductions

I don’t count these as personal spending.

• Taxes and deductions: $450 

September 2022 wrap up

Whew! September was a bad month, but it’s over. October should be a bit better. My back is starting to feel better so I’m hopeful. We are eating healthier too. Hopefully, my cholesterol numbers will improve soon. I’m not as hopeful financially. We have some healthcare expenses coming up. We also need to travel to California to help out Mrs. RB40’s family. Our passive income is the only bright spot in 2022. It should be enough to cover our cost of living so we don’t have to sell any stocks while the market is down.

All right, that’s it today. Are you braced for more pain? I have a feeling this recession will be a tough one.

Passive income is the key to early retirement. These days, I’m investing in commercial properties with CrowdStreet. They have many projects across the United States. Go check them out!

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

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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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