2022 FIRE Wrap-Up!

Happy New Year everyone! Whew, I am so glad 2022 is over. Let’s wrap it up and send it on its way. 2022 was a tough year for the RB40 household. Actually, it was a mixed bag. We had some wins and some losses. Our net worth decreased substantially, but our cash flow was pretty strong. Mrs. RB40 took a sabbatical and we had a lot of fun in the summer. My mom had some serious health issues and that made me feel bad. Mrs. RB40 also had some minor health issues. See, we had ups and downs in 2022. I’d like 2023 to be a year with all wins. I’ve had enough of the bad news.

Today, I’ll share how I did with my 2022 New Year goals. Then, I’ll share how we did with cash flow and net worth. Let’s go.

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 and work on them.

I didn’t do very well on my goals in 2022 since I failed half of them. The other half was okay, though. For 2023, I’ll try to simplify the goals and do better.

Financial Goals

• Real Estate Crowdfunding $200,000. This one is too difficult. We just don’t have enough extra income to increase our investment this much. In 2022, I invested in an apartment renovation in North Carolina so we’re slowly getting there. These days, the projects on CrowdStreet finish their funding phase very quickly. Many investors are taking money off the stock market to diversify. Real estate is doing much better than the stock market. It’s a great way to generate passive income.
• FI Ratio > 110%. This was my main goal for 2022. The FI ratio is passive income divided by expense. In 2022, our FI ratio was 146%! It was our best year yet. Let’s see if we can repeat it in 2023.
• 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, I failed this goal.
• Speculate crypto $10,000. I sold off my Crypto holding in November. The craziness is too scary for me. All in all, I lost about $1,000. I might get back in next year.

Health Goals

• I got a new fitness tracker! Next year, I’ll set an achievable monthly step goal.

Fun Goals

• Travel 180 days – I spent 193 days traveling this year. This whole travel thing is exhausting. We spent the whole summer on the road while Mrs. RB40 was on a sabbatical. She could retire if she wants, but she is back at work. Also, I spent a lot of time with my parents this year. That part isn’t much fun because my mom is sick. The biggest lesson is travel isn’t much fun without my wife and kid.

• 1,000 subscribers on my YouTube channel. Currently, we have 1,445 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. Terrible. We didn’t do any of these activities in 2022. I’ll try to get hit one of these in 2023.

• Happiness > 8. 2022 was up and down for me. The first part of 2022 was great because we traveled a lot and life was smooth. The second part was rough because my mom was hospitalized. It was stressful. Mrs. RB40 and her dad also had some health issues. All in all, 2022 was good. My average happiness score was 8.3. I guess that isn’t too bad. Let’s hope 2023 will be uneventful.

Net Worth (-12.5%)

Oof! Financially, 2022 was a terrible year for our net worth. It decreased by 12.5%. Almost everything in our net worth took a dive this year – stocks, bonds, house, rental condo, Thailand condos, and blog. All these decreased in value in 2022. (I value Retire by 40 at 3x annual earnings. The blog income decreased so the book value also dropped.) These are the only exceptions.

• Real estate crowdfunding – We did pretty well with real estate crowdfunding in 2022. However, I don’t know how the higher interest rates will affect future earnings.
• I bonds – This is a great place to stash some cash. The interest rate is much better than our bank accounts.

I’ve been tracking our net worth since 2006. Usually, it is very motivating to see the progress. The power of compounding is unbelievable. However, 2022 was demoralizing. I’m just glad it’s over. Seeing our net worth decrease isn’t much, but we will continue to invest for the future.  

***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: $82,086 YTD

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

Our net worth performed horribly in 2022, but our passive income was very strong. It kept me optimistic about FIRE. This is the first time we’ve really been tested since I retired in 2012 and we survived. I’d be a lot more worried if our passive income took a dive too. In particular, real estate crowdfunding did quite well. Also, our rentals generated more income than the last few years. It’s nice to be diversified. Actually, everything did quite well.

*FI ratio = passive income/expense

2022 Cash Flow

I removed Mrs. RB40’s income from this Sankey chart. This will make it easier to see if we’d be okay when she retires. Overall, 2022 was a good year. The cash flow shows that we can live comfortably without Mrs. RB40’s income.

Here is the Sankey diagram of our cash flow. You can get a quick overview from the diagram and see the details below.

FIRE Income: $71,246

Our FIRE income was good enough in 2022. The only problem was my blog income. It’s decreasing every year. I’ll try to supplement it with some side hustles in 2023. Fortunately, our passive income was pretty good in 2022.

• Real estate crowdfunding: $22,980. Our real estate crowdfunding income hit an all time high in 2022. It was great. You can read more on the RE Crowdfunding Passive Income page.
• Dividend Income: $14,271. Our dividend income stayed at about the same level as the previous year. That will do for now. We’ll focus more on dividends after Mrs. RB40 retires.
• Rental income: $8,632. 2022 was a great year with our rental properties as well. We didn’t have a lot of repairs and that made life much easier.  
• Blog income: $19,373. My blog income is decreasing. I’m not sure if it’ll ever recover.
• Interest Income: $2,434. We have about $55,000 in I-bonds.
• Side hustle & Misc: $3,555. This was from various sources including tax refund, gifts, credit card bonuses, and side hustles.

Annual Spending: $54,608

In 2022, I plan to spend about $50,000. We went over budget a bit, but $50,000 was just a guess. I think it’s okay to go over budget a bit. So what did we spend money on? We traveled a lot so that category was way higher than usual. The parent category was also much higher than usual. My mom has dementia and we’re helping with the hospital expenses. Mrs. RB40’s dad also was hospitalized for a bit. We flew down to help him transition back home. Mrs. RB40 also had some health issues. The other categories were pretty reasonable.  

Here are the details. Actually, I’ll only focus on a few categories to keep it simpler.  

• Housing: $15,173. 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.
• Parent: $11,007. We helped out more than usual in 2022. This year should be easier.
• Travel: $15,699. We spent a lot of money on travel in 2022. This category should be way lower this year.
• Groceries: $4,283. Not bad for a family of three. This was lower than usual because we were on the road a lot.
• Bills: $297
• Kid: $1,096  
• Health: $2,510.
• Transportation: $2,147. This category probably will increase in 2023. I need to take our car (2010 Mazda) to do some maintenance.  
• Entertainment: $1,389. Not too bad. Most of this was restaurant spending.
• Clothing: $619.
• Misc: $388.
• Taxes and Investing: $16,638.

2022 wrap up

Bye bye 2022! We survived and we’ll do better this year. Life is uncertain, but we’ll keep fighting. I’m optimistic for 2023. The stock market probably will go down for a bit, but I think it’ll be on the mend by the end of the year. Let’s get this recession over with so we can all have a nice winning year.

All right, that’s it today. Did you have a good year in 2022? Are you optimistic about the coming year?

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 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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