Monthly update – Dec 2017

Keeping it rolling, only 31 months from Financial Independence!

Much better month in November (+1.32% gain) than October (+0.47%), especially at the end, where the market really jumped up. I started the month with $952K of invested assets, put in $4,108 into my various accounts (401K, Roth IRA, brokerage), and ended with $969K (almost to $1M, yay!). For the year, all total, I am still up around 9.6%, and that is with a 70% stock/REIT and 30% bond mix.

Bonds continue to not perform very well (up only about 0.1% for the month) but they are providing the stability that I want (in case of a market downturn). Surprisingly, the REITs were up (about 3.0% for the month) – maybe they are just returning to where they should have been after a pretty bad year. The International was OK for the month (up 0.8% for month), and the S&P 500 and small cap indexes really did well (around 3.1% for the month).

My dividend portfolio (from my dad’s inherited IRA) is up about 3.0%, primarily due to REITS, though the Chevron and
Verizon stocks did great (Chevron was up 9.2% in November). That at the same time that they are due to pump out some end-of-year dividends to help out (this may be the reason they are up – folks are buying them to get the dividend).

In the value portfolio

  • CSS Industries stock was down almost 10% for the month, and went into negative territory for the year. I’ll go through my 6-month stock analysis in a later post, as I try and determine whether to keep a stock
  • Gilead was down 0.2% for the month, but still up 10% for the year
  • Taho continues to underperform, down another  8.1%, and over 20% for the year. Legal troubles in Central America continue to be a drag
  • For December, I plan on continuing to put my investment money into my bond mutual fund. I want to get my allocation more in line there with a 33% REITS/ 33% bonds/33% stocks plan. This will call on me to probably buy bonds each month for the rest of the year
  • The big lesson for the value portfolio continues to be that I’m not a very good stock picker, or that I need to be patient (i.e. 3-5 years patient) in order for it to pay off.

I continue to make progress towards my FIRE goal. While I expect a market correction at some point, I think we will be able to weather it, provided the Zombie Apocalypse doesn’t come.

How did your November go? How are your plans for the year going?

 

Mr. 39 Months.

 

Monthly update – Nov 2017

Keeping it rolling, only 32 months from Financial Independence!

While September was a good month (1.26% gain), my October was kind of “middle of the road”, with a 0.47% growth. I started the month with $946K of invested assets (not counting savings), put $4,108 into my various accounts (401K, Roth IRA, brokerage), and ended with $953K. For the year, all total, I am still up around 8.26% (September really helped push me up)

Bonds and REITs were down a little in October (-0.3%), while the equity markets were up (+2.3%). My dividend portfolio (from my dad’s inherited IRA) is down -1.4%, and my value portfolio is down -3.2%. So again, my ability to pick stocks individually does not come close to matching the index fund investing method.

In the value portfolio

  • CSS Industries stock was up 4.2% for the month, and about 7.7% since I bought them a couple of months ago
  • Gilead lost -7.5% in October, but is still up 10.3% for the year
  • Taho lost -8.9%, and is down 13.7% for the year
  • Overall result of value investing play ytd is 1.8% for the last 4 months, or 7.2% annualized. Still not competing with the index funds.

For November, I plan on continuing to put my investment money into my bond mutual fund. I want to get my allocation more in line there with a 33% REITS/ 33% bonds/33% stocks plan. This will call on me to probably buy bonds each month for the rest of the year

Hope your Halloween was scary and exciting!

 

Mr. 39 Months.

Financial Update – Disaster File

 

If you remember back in July, I realized that I had to update our personal files, or our “Disaster Files.” This was the files showing investments, wills, titles, etc. Often folks do this once every so often (many times after a family member passes away) and then let it lie fallow till the next “emergency.” Yep, I was one of those folks, having not touched it since 2013. In my previous post I attached a couple of helpful documents that I hope folks find useful.

It’s been a bit of a “slog” as I have worked my way through, but here is where I am at the beginning of the 4th qtr.

No Description
1 Update Master List from 2013
2 Send Master list to Mrs. 39 Months
3 Price out updating wills
4 Redo filing cabinet with Master List & Disaster file #1
5 Household budget folder (budget goals, income statement, balance sheet, income/expense forecasts)
6 Housing Information (Title, insurance, receipts for work, property taxes)
7 Online passwords
8 Location of keys to safe deposit box – Mrs. 39 Months drawer
9 Credit records: Resolution of past debts (auto, home)
10 Home Insurance Policy
11 Net Worth’s 2009 to present
12 Annual updates for Jan 1, 2017 into investments
13 Investments (list of accounts, goal planning, annual balance sheet)
14 Taxes: Tax records for previous year, current year documents
15 Personal background info (Education, personal history, resume)
16 Credit: Resolution papers of past debts, credit card names, numbers & 1-800 number
17 Health insurance (Booklet from work, health history, medications, etc.)
18 Life Insurance (Insurance policies, etc.)
19 Safe Deposit: Title to Mrs. 39 Month’s auto, DD214, NY and KY marriage certificate, letter of last instructions, copy of will, personal property inventory, negatives of personal property, passports, old passports, Mrs. 39 Months’s birth certificate, Mr. 39 Months’s birth certificate, Mr. 39 Months’s SS card)
20 Letter of Last Instructions
21 latest credit report
22 Auto Info: Insurance coverage, policies, auto registration, repair/maintenance records
23 Instruction letter (where to find everything, computer passwords, etc.)
24 Setup dates for regular updates to the files (so I never have to do this again) – Jan 1 of each year

The hardest one to date what the letter of last instructions. It is here that you really start feeling your age and realize that it could end. You need to determine funeral arrangements, where to be buried, etc. It really does make you think. Still, it’s done and I have it in a fairly obvious place in the house, and have let key folks know where to find it.

So what do I have left?

1 Updated list of personal property
2 Pictures of personal property
3 Guarantees & warranties (appliances, cars, etc.)

The pictures of personal property actually might end up being a video (room by room) and description. Often these are better than just pictures. Guarantees & warranties may be something that I just start assembling as we purchase items, and stick in place.

I will probably start working on these in the New Year, as part of my “Jan 1” plan. I hope you folks are also doing some of the “slog” work that you need to do for FI.

Good luck!

 

Mr. 39 months.

 

 

 

 

 

Investment update – October 4, 2017

Okay, 33 months left till Financial Independence!

Overall, my investments were up $11,752 for September, a gain of 1.26%, which isn’t too shabby. Big gainers appeared to be Small Cap funds and the S&P500 funds. Internationals did OK as well. The bond funds and REITs continued to underperform, though not significantly enough to drive my results down. I remain happy with my current allocation in my 401Ks/IRAs:

  • 30% Bond intermediate Index Fund
  • 17.5% S&P 500 Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% International Index Fund
  • 17.5% REIT Index Fund

My father’s Inherited IRA, which I set up with an eye towards income, has returned 3.3% in dividends on an annual basis, and has gone up 0.9% for the quarter. While not as big a move as the S&P, Small Cap and International, I believe this portfolio is a lot more “stable” so I will continue to experiment with it for income.

 

My “fun money” account, which I use to try to value invest, has pretty much stayed even. The values have dropped somewhat, but this has been offset by dividends. I’m still excited about the potential for growth here, as some of my picks are dramatically undervalued. I just have to be patient.

 

Hope your October trick or treating goes well!

 

Mr. 39 Months.

Quarterly Update – Oct 1, 2017 (end of 3rd qtr)

Well, its early October, three-quarters of the way through the year, and another opportunity to compare my goals for 2017 to what I’ve actually done, both financial and personal/other. A lot of folks don’t like to do this sort of thing, but as an engineer and amateur financial junky, I actually love taking a look at these sort of things. Even when I’ve had a bad quarter (or bad year) I like to look at the numbers and see what my situation is, and the future outlook.

Ok, I’m a numbers geek.

So how am I doing in comparison to my goals for 2017 (the ones that I listed on April 30th)?

My Goals for 2017 (some financial, some not):

 Put in $33,000 in tax-advantaged accounts throughout the year. Grade A. I have put in $28,150 so far this year (including some bonus money) and am on track to hit my goal by December.

  1. Put in all bonuses, gifts, and our previous house payments into regular accounts (estimate of $26,000 year): Grade A. I have put in $22,375 so far this year, and I am on track to hit my goal by December.
  2. Increase dividend income from our investments to $18,000/year (and reinvest them): Grade B. I have $13,680 in dividends so far this year. Going to be touch and go to see if I hit this, but it looks like I am on track to hit $18,240.
  3. Get Passive income up to 65% of living expenses: Grade B. I am currently at 67.3% for the first 9 months. . To hit the goal I have to hope for some major dividend payouts in December.  We do continue to keep our living expenses low, though we did have to spend some money on home repairs which bumped it up a bit.
  4. Beat at 6% growth rate on our net worth: Grade A. I am at 8.64% so far, with three quarters of the year gone by. Even if the markets come back with 0 growth for the rest of the year, I’m good. Remember that the majority of my investments are in an allocation of 30% bonds, 17.5% REITs, and 52.5% stocks (split evenly between S&P500, Small cap and International)
  5. Begin attending local real estate investment association meetings, to learn about and begin preparing for real estate investing in 2018: Grade D. Went to first meeting in July, but haven’t joined the group yet. The last two months work has interfered with my ability to attend. Not sure when I will start investing in it, because all you hear right now is that the market is too hot. We will see. My goal here is to start studying and learning.
  6. Start a blog (i.e. this one). Grade A. Done
  7. Fitness: Increase weight lifted by 10% over the year. Grade D. Currently appear to have hit a wall, as I haven’t gone up hardly any for the last 3 months. Hurt my shoulder about a month ago, and that has set me back, and business travel has hurt me in September. Need to work on this.
  8. Average 3 hours of cardio each week. Grade D. Currently only averaging a little over 1.
  9. Go on an international trip. Grade D. Wanted to do something bigger this year, but Mrs. 39 months job situation killed chances for larger trip. Plan to go to Quebec or Montreal in October or November.
  10. Visit one national park. Grade D. Again, job situation hurt this. Have never been to Ellis Island, so may try for this.

So in looking at this, I think I am tracking well for the first nine months, with a lot of non-financial items coming up short.  Still got some work to do (especially in terms of personal fitness).

How are you doing on your goals for 2017?

 

Mr. 39 months

Monthly update – Sep, 2017

Keeping it rolling, only 34 months from Financial Independence!

After a great month for July (+$14,373), my August wasn’t exceptional. I started the month with $926K of invested assets (not counting savings), put $4,108 into my various accounts (401K, Roth IRA, brokerage), but ended the month at $928.6K, a 0.2% drop. For the year, all total, I am still up around 7.1%.

Bonds and REITs are up, probably because folks don’t expect the US Fed to raise rates for the rest of the year. My stock Index funds are down a bit. One of my “value” stocks that I purchased, Gilead (Stock symbol GILD) is up 10% for the month. I bought it because it was selling at a low P/E, and matched 5 of Benjamin Graham’s seven value indicators. Its up over 24% for the year, so a big win for me.

At the same time, using the same logic, I bought a lot of Tahoe enterprises (miner stock) that hit 5 of Graham’s points, and was selling below book value (i.e. the stock was less than what you’d get if you liquidated the company). So far, it’s dropped 10.6% for the year, primarily due to legal troubles. Still, the concept of value still holds, and if I have patience, it should still bounce back up (it has been on an uptick the last 2 weeks).

For September, I plan on putting my investment money into my bond mutual fund. I want to get my allocation more in line there with a 33% REITS/ 33% bonds/33% stocks plan. This will call on me to probably buy bonds each month for the rest of the year

 

Hope your August was fun and fulfilling!

 

Mr. 39 Months.

Monthly update – Aug 1, 2017

Yeah, baby! Broke past the 3-year mark, and I am 35 months from Financial Independence!

In addition, my investments went up $14,372,77 for July, a gain of 1.58% over the previous month. Here I was moping in a previous email about my investment strategy not exactly working, and the market takes off in the last week. The big gainers appear to be the S&P500 Index funds and my International Index funds (Internationals have had a great year!). Bonds are up a little, and my REITs (Real Estate Investment Trusts) continue to do poorly – though remember that my REITs did very well in the previous 2 years.

Overall, the balanced portfolio that I’m following with my 401K/IRAs (30% Bonds, 17.5% S&P500, 17.5% International, 17.5% Small Cap, 17.5% REITs) appears to be doing OK. For the year, I appear to be around 7.3% up. I know everyone is expecting a “correction” sometime soon, but until then, I will keep with my allocation and rebalancing. In fact, in July I rebalanced about $15K from stocks into Bond index fund to get back to 30%. Its not doing well now, but it puts me in better shape if there is a correction. How is that for discipline?

My stock pick portfolio (that I’ve written about before) didn’t do as well as my 401K/IRAs. This just goes to show me that the standard of having most of your money in Index funds, with a small portion for “funny money,” seems to work for me.

I’ve got an interesting book for my next post on timing the market (long term) that I will get out soon. I think you guys might find it interesting

Hope your July was fun and fulfilling!

 

Mr. 39 Months.

Six Month review of my investment strategy

I typically look at my investments every 3 months to see how they are doing. I also take the opportunity at the six-month point to rebalance if things have gotten way out of whack. This lets me get a good idea of how I am progressing and make adjustments. I don’t like to rebalance more than that – I think it would drive you nuts to do it more frequently.

If you remember my investment strategy, Mrs. 39 months and I each have an IRA (money we transferred from our company 401Ks when we left them) and a Roth IRA (which we’ve been investing in fairly regularly since 2001). For each of these, we have it split like this:

  • Bonds: 30% (was 20%, but we bumped it up at the start of 2017, as we are closing in on retirement)
  • S&P500 Index: 17.5%
  •  REIT Index: 17.5%
  • International Index : 17.5%
  • US small cap: 17.5%

For these, we are up about 6.6% total (capital gains + dividends), with International, Small Cap and S&P500 leading the way. REITs and bonds didn’t do very well (rising interest rates, anyone?). I will need to do a little rebalancing, but not much.

For my 401K and deferred account, I don’t have a REIT option, so it’s split up as

  • Bonds: 30%
  • S&P500 Index: 23.3%
  • International Index : 23.3%
  • US small cap: 23.3%

For these, we are up about 9.2% total (capital gains + dividends), with International, Small Cap and S&P500 leading the way. With only bonds not doing well, the 401K did better. However, I will also have to do some rebalancing.

Finally, I have two brokerage accounts that I have setup with Bond index funds and my own stock and REIT picks. I tried to set them up to maximize dividends, as an attempt to research how I might invest to get the most passive income out (see earlier post on this).

  • Pop’s Inherited IRA (50% bonds/25% stocks/25% REITs): 3.6% gain, mostly from dividends
  • Personal investments (41% REITs/29% bonds/30% stocks): 2.6% gain, again mostly from dividends

I put in $1,376 into personal investments each month, and I try to use that to get it to the 50/25/25 level of the inherited IRA. Still working to get there.

For rebalancing purposes, the mutual fund and 401K companies (Vanguard, TRowePrice) make it fairly easy to sell off funds and reinvest in others. I will just sell enough and buy enough to get somewhat close to the split that I want.

Overall, I am fairly happy with what I’ve got so far. I’m coming in around 5.6% gain at the mid-year point, so baring any major disasters, it should be a good year!

I hope your midway points are equally good!

 

Mr. 39 Months

 

Mid Year Update

July 2017

Well, its early July, halfway through the year, and a perfect time to compare my goals for 2017 to what I’ve actually done, both financial and personal/other. A lot of folks don’t like to do this sort of thing, but as an engineer and amateur financial junky, I actually love taking a look at these sort of things. Even when I’ve had a bad quarter (or bad year) I like to look at the numbers and see what my situation is, and the future outlook.

Ok, I’m a numbers geek.

So how am I doing in comparison to my goals for 2017 (the ones that I listed on April 30th)?

My Goals for 2017 (some financial, some not):

  1. Put in $33,000 in tax-advantaged accounts throughout the year. Grade A. I have put in $20,200 so far this year (including some bonus money) and am on track to hit my goal by December.
  2. Put in all bonuses, gifts, and our previous house payments into regular accounts (estimate of $26,000 year): Grade A. I have put in $18,250 so far this year, and I am on track to hit my goal by December.
  3. Increase dividend income from our investments to $18,000/year (and reinvest them): Grade C. I have $8,877 in dividends so far this year. Going to be touch and go to see if I hit this.
  4. Get Passive income up to 65% of living expenses: Grade D. I am currently at 61.9%. To hit the goal I have to hope for some major dividend payouts in December.  We do continue to keep our living expenses low, though we did have to spend some money on home repairs which bumped it up a bit.
  5. Beat at 6% growth rate on our net worth: Grade A. I am at 6.2% so far, with only half the year gone by. Even if the markets come back with 0 growth for the rest of the year, I’m good.
  6. Begin attending local real estate investment association meetings, to learn about and begin preparing for real estate investing in 2018: Grade n/a. Plan was to start in July, and I have the date marked in my calendar. Not sure when I will start investing in it, because all you hear right now is that the market is too hot. We will see. My goal here is to start studying and learning.
  7. Start a blog (i.e. this one). Grade A. Done
  8. Fitness: Increase weight lifted by 10% over the year. Grade D. Currently appear to have hit a wall, as I haven’t gone up hardly any for the last 3 months. Need to work on this.
  9. Average 3 hours of cardio each week. Grade D. Currently only averaging a little over 1.
  10. Go on an international trip. Grade n/a. Wanted to do something bigger this year, but Mrs. 39 months job situation killed chances for larger trip. Plan to go to Quebec or Montreal in October.
  11. Visit one national park. Grade n/a. Again, job situation hurt this. Have never been to Ellis Island, so may try for this.

So in looking at this, I think I am tracking well for the first half of the year. Still got some work to do (especially in terms of personal fitness).

How were your first six months of 2017?

 

Mr. 39 months

Monthly Update for May 2017 (Month 38)

 

So how am I doing vs. my goals for 2017?

 

  1. Invest $33,000 in tax-advantaged accounts in 2017: Put in $4,660.87 into my 401K and Roth IRAs. Currently have put in $18,084 for year (including a 5.7K bump from part of my bonus). On track to hit it
  2. Invest $26,000 in regular accounts in 2017: Put in another $1,376.29 (my old mortgage payment). Currently have put in $16,881 (rollover money from Pop’s IRA and bonus money)
  3. Increased dividend income to $18,000: Won’t figure dividends till end of quarter, when a lot of them pay out
  4. Passive income covers 65% of base living expenses: Again, will wait till end of quarter to figure out
  5. New worth beats 6% growth figure: Assuming house worth stays equal (hard to figure out in this market), my net worth is up 5%, primarily due to investments. Looks like I should be able to hit my goal here.
  6. Begin attending REIA (Real Estate Investor’s Association)  Meetings: Will start in July
  7. Start a blog: Done in April
  8. Publish Student Finance Book: Done in April
  9. Increase weight lifted by 10%: I’m up 6% for year, but have plateaued for last 2 months. Part of it is just sticking to regular exercise
  10. Average 3 hours of Cardio every week: Currently doing a little over 1 hour. Not good
  11. Go on an international trip: Wife’s job status doesn’t allow for vacations till Oct. Will try to squeeze something in
  12. Visit a national park: Again, wife’s job status. Will probably try and hit Ellis Island this summer
  13. See the 2017 Solar Eclipse: August 21st! Unfortunately, we won’t be in the direct path, but I have family in Knoxville TN that will.

 

Investment Returns for May:

  • IRAs (30% bonds, rest split between S&P500, REITs, Small Cap & Int’l): +0.87%
  • Roth IRAs (30% bonds, rest split between S&P500, REITs, Small Cap & Int’l): +0.75%
  • 401K (30% bonds, rest split between S&P500, Small Cap & Int’l): +0.80%
  • Deferred compensation from work (30% bonds, rest split between S&P500, Small Cap & Int’l): +0.87%
  • Inherited IRA (set up for income; 25% REITs, 25% dividend stocks, 50% bonds): +0.78%
  • Personal investments (26% stock, 44% REIT, 30% bond ): -0.92%

 

Apparently, I continue to do poorly at picking stocks, REITs and bonds for my personal investments. I doesn’t help that I’m trying to get my personal investment allocation to match my inherited IRA. That means I’ve been buying a lot of bond index funds – and with rates going up, I’m getting hammered.

 

Overall, I’m pretty happy with May, and with the year so far. Month 38 is “in the can” and retired.

 

On to month 37!

 

Mr. 39 Months