Happy November!
Wow October was a painful month for our portfolio! This is the first market correction since I started investing as a hobby and I’ll say it’s pretty lame when you earn 4 paychecks and your net worth actually goes down. The market basically ate our income. But that’s life. Thankfully we resisted selling anything so as of this point they are just unrealized losses.
October was a great month otherwise! I am working with multiple clients and am getting all the spreadsheet time my heart desires. I also got to present at the monthly meetup for one of the women entreprenuership groups I am a member of. The topic was “Ways to save: Tips and Strategies we used to save $240,000 in five years” about our time living on the farm and how we lived on one income and saved the other. The speech went great; I got good engagement from the audience and even got a few laughs (I’m sure I tried way too hard to be funny).
Without further ado, let’s get into the goal update!
2018 Financial Goals:
Goal #1 Make an extra $15,001 to remain the primary wage earner. Made $1388.20 of extra income this month. The bulk of this actually came from my employer in the form of an annual bonus and Cost of Living increase in wage. Since the market dipped I didn’t sell any stocks.
Goal #2 Save 50% of our gross household income from March through December. In October we saved 46.79% of our pre-tax income. This is the first month that we spent more than 50% but we are still at 61.26% in total. I expect that November will be less than 50% as well since we have money to spend from being over 50% for all of the other months this year.
I have read that a lot of people calculate their savings rate based on their take home pay. This is alright since taxes are likely a small portion of their expenses but since taxes are our biggest expense I include them in our spending total.
Here are our savings rates by month:
March 58.97%
April 64.94%
May 53.90%
June 74.28%
July 58.64%
August 68.01%
September 64.61%
October 46.79%
Goal #3 Max out everything. We set our percentages at the beginning of the year so we are on track to max out our 401Ks, 1 HSA and our Traditional IRAs.
Goal #4 Improve our asset allocation. Traditionally, this term “asset allocation” is used to define the mix of investments in a portfolio (example: 90% stocks, 10% bonds) but I’m using it here to describe the percent of assets that are generating income (401Ks, CDs, taxable brokerage accounts, etc) compared to assets that do not produce income (vehicles, cash and our house).
Starting asset allocation:
17% Income producing assets
83% Non-Income producing assets
Current asset allocation:
29.46% Income producing assets
70.54% Non-Income producing assets
Goal asset allocation by 12/31/18:
30% Income producing assets
70% Non-Income producing assets
So close! We should hit this goal in November. The purpose behind this goal is to make sure that we are using assets to build wealth instead of buying assets that do little or nothing for our portfolio. For example, I want to make sure we don’t have too much money “invested” in our cars since cars go down in value rapidly (deprecation) and don’t produce any income (well ours don’t anyway). I am still learning and getting comfortable with investing so it takes a while to get money invested and tends to build up our cash reserve which is just sitting in a savings account, not earning much interest.
Goal #5 Spend 100 hours providing financial coaching. I did 11 hours in October and have 29 hours left to go. If you have ever considered volunteering to help people with their finances I highly recommend it. After setting this goal in January I wasn’t really sure what I was getting into and I didn’t really know what it would look like. It can be whatever you want it to be! I stick to the areas that I am comfortable in and as long as I don’t try to answer questions that I don’t know the answers too, it is really fun for me and helps them get more confidence in their finances.
Goal #6 Set financial boundaries and communicate them to family members. I didn’t make any progress on this goal in August or September OR OCTOBER. I need to have a more in depth talk with one of my brothers that I have been dreading and procrastinating on all year. Perhaps NOVEMBER will be the month to slog through this quagmire.
Goal #7 Monthly net worth updates. Still crushing this goal by updating our net worth tracker on almost a daily basis.
Cheers to November!