Purging your Blogroll

One of the things which has always brought me a lot of pleasure is reading other FIRE blogs and seeing the different facets of the subject. It seems each blogger has a topic which motivates them, and they concentrate a great deal of energy on that topic. The result is some excellent reading and the opportunity to learn in-depth of a wide variety of topics.

However, as many folks know, blogging tends to be an exhausting process, and the ground is littered with bloggers who have not lasted more than a year. It seems folks start blogs to tell their tale or write-up their passion. Once that is done, they trail off, and the enjoyment that folks take in reading their work is lost.

As you look to the right on this page, you will see my “blogroll” of sites that I have found and believe worthy of further reading. Yet one of the tasks that has to be done, if the blogroll is not to grow too large, is the weed or “cull” the list occasionally. This can be done due to a fall off in productivity (not that many posts) or quality (no interesting posts). Some sites just stop publishing entirely.

It is often a sad affair, as the reason they were put on is because they have excellent topics and interesting writing. I try to do this at least twice a year, and recently culled a few sites (while adding several others). It is a personal decision, and not one that I take lightly. I hope that my blogroll continues to provide you, the reader, with a good list for you to check out on your own.

I hope you enjoy my writing and the writing of those I point out. Enjoy the rest of summer!

 

Mr. 39 Months

Status Update – Aug 1, 2018

Yeah, I am back “in the black” for the year!

After six months of struggle (the floor fell out in February 2018) I have finally moved back into the black for the year. Overall, I am up 0.7%. A far cry from the 19% of 2017, but at least I am profitable. All we have to do is keep this level up and I might be close to 8% for the year. Fingers crossed!

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

I ended up being about 1.5% up here for July, so they have continued steady increases for a while now. I re-balanced at the beginning of the month, so I sold some winners and bought some losers. S&P500, US small cap and International did well. Bonds and REITS stayed even/lost a little.  Note that these returns include reinvesting dividends.

My 401K/Deferred account at work was up 3.1% for July, after re-balancing. Remember that this account doesn’t have REITs, so it benefits more than above when REITs drop (but doesn’t do as well when REITs surge).

Dividend Income Account: Allocation:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

This account dropped -1.6% for the month, primarily due to drops in bond index funds (though Cisco and the REITs were also down a bit). This account was better earlier in the year. Overall, its sending me dividends, but not growing much.

Value Investing Account: Allocation (remember I refocused this at the beginning of February):

  • 40% in individual value stocks I picked myself (2 each, 20% for each) – SBS and GILD
  • 20% USAA Market Index (my brokerage is USAA)
  • 40% in Vanguard Value Index fund

This was the surprise. For those who have been following, my “fun money” account has been getting savaged this year. I have bemoaned my inability to pick stocks. Well, we had a minor turnaround in July (Cia Saneamento up 11.5%, Gilead up 9.9%) so the overall value was up 6.8% for July. Still way down for the year, so I still think my stock picking ability has not shown out.

Overall, an up month. Let’s hope we can keep this momentum going for the rest of the year, so we can rescue this one.

How did you do in July?

 

Mr. 39 Months

Well, I suck……

…..at picking stocks.

Seriously, I appear to be pretty bad at this. For the month of May, I made back a lot on some of the losses for the year, but my few value stock picks really tanked, dragging me down. I mean -$4,387 (or -17.3% down)! I ended up 1.26% for the month of June, primarily due to the good performance of my index funds. Still down 1.9% for the year, not counting what I have put into the accounts for the last 5 months. Still, I guess I’m buying stuff on sale, so I have that going for me.

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

I ended up being about 1.7% up here, after my monthly inputs into the various accounts. S&P500, Small Cap and REITS were up, Bonds were OK, and International was down. Remember that International did well earlier in the year, so it balances out. Another reason for asset allocation. Note that these returns include reinvesting dividends.

My 401K/Deferred account at work was up only 1.1% for May (same as April). Again, I’m gaining back some of what was lost at the beginning of the year, and buying stuff on sale.

Dividend Income Account: Allocation:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

Another bright spot, up 1.9% for the month (including dividends). My stocks in this account didn’t do as well in May, but the REITs did, and the bonds were OK. I think part of this was the major jump up of my stocks in April.

Value Investing Account: Allocation (remember I refocused this at the beginning of February):

  • 40% in individual value stocks I picked myself (2 each, 20% for each) – SBS and GILD
  • 20% USAA Market Index (my brokerage is USAA)
  • 40% in Vanguard Value Index fund

Again, major disappointment in the stocks. Overall, the account was down -6.8%. The two index funds did OK, but the stocks just drove it down. I continue to see evidence that I am not a good stock picker (as most folks in the FIRE community can attest to). If I don’t see a major turnaround in fortunes by the end of the year, I’ll just sell my stock picks and go to index mutual fund investing (like so many other folks). Again, this is more of a “fun money” account where I experiment.

The allocations are not too much “out of whack” so I don’t intend to rebalance until July (unless something major happens).

How did you do in May?

 

Mr. 39 Months

Taking time to smell the roses (or get some of your non-financial goals accomplished)

One thing every FIRE person needs to guard against is getting so tied up in the financial side of FI, that they neglect other aspects of their life that are equally or even more important (can anyone say “family” here?).  One should never neglect their other goals in life just for financial gains – or you might end up at the end regretting a life of emptiness.

That is why your goal setting for the year should include a healthy set of non-financial goals, and you should strive mightily in order to meet them. For me, my non-financial goals are:

Personal:

  • Increase weight lifted by 10% from 2018 (increased by 12.7% in 2017). I want to continue to improve my strength as I get older, instead of just wasting away
  • Average 3 hours of cardio per week (currently averaging about an hour). Again, want to improve my fitness
  • Take part in at least one long bike ride, like MS bike-a-thon (80 miles)
  • Backpack over 100 miles on AT (did over 100 in 2017)
  • Begin volunteering at Pennsbury Manor at their joiner’s shop (woodworking)
  • Reduce weight by 20 lbs. from Jan 2018 (lost 9 lbs. in 2017). Again, I want to get in better shape as I get closer to financial independence
  • Read at least one book a month. Trying to learn new things and keep my mind shop. Started this in August 2017, and I’ve been doing fairly well with it.

Travel:

  • Visit a national park (visited Shenandoah NP in 2017)
  • Visit family in Tennessee, Vermont and New York. Family is very important to me. One of the things I am looking forward to with financial independence is the opportunity to visit family more often
  • Visit Portland, OR and northern California. Mrs. 39 Months has a craft class she wants to take in Portland, so I’ll go as well, and run around in Portland, when it’s over, we want to visit the Park in Northern California with the Redwoods.
  • Visit Ellis Island. Wanted to do this in 2017, but didn’t make it. As 50% Czech from immigrant great grandparents from the turn of the century, I believe they went through there, and I want to see it
  • Go on an international trip. Not sure which one (Canada, Caribbean, etc.) but I’d like to get out this year.
  • Visit the Asheville NC area. It’s one of the areas that we are considering retiring to (close to my old home in Tennessee, interesting crafts, shops & outdoor sports, etc.). Trying to learn more about the area (we’ve been there a couple of times).

For the year, I have worked as diligently on these as on my financial goals (well…. Maybe not the weight loss as much). Still, I have knocked a lot of them off/made progress.

This week, I had the opportunity to visit two National Parks, which helped me check off a travel goal for 2018 – and gave Mrs. 39 Months and me a lot of pleasure.

We visited the Redwoods National Park in Northern California. Mrs. 39 Months has always wanted to see these big trees, and they didn’t disappoint. It was great hiking around and just taking in the grandeur of it all.

We also visited Glacier Lake National Park, in Southeast Oregon. It was formed when a volcano exploded about 7700 years ago, and then collapsed in on itself and the caldera. The result is a beautiful lake at 8800 ft. altitude, which is just fed by rainwater. Nothing drains out, nothing drains in, and so it has some of the most pure water in the world. You typically can see 140 – 180 ft. down into it, and it is also about 1900 ft. deep.

When we visited, there was still snow on the ground and blocking the road which goes around. We took pictures in freezing rain, and then headed out. Still a lot of fun.

What non-financial goals do you have this year, and what have you gotten done so far?

 

Mr. 39 Months

Status Update, May 2018

Well, another month, another period of not much progress. Again, I didn’t lose but didn’t gain much either. Looks like last years big “bump” is going to be offset by a flat year in 2018? We will see, still got 2/3 of the year to go. Thanks to putting all my bonus money into my investments, I’m back to being over $1M in assets, so that is a plus.

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

I ended up being about 0.3% up here, after my monthly inputs into the various accounts. My bond index funds dropped a bit, but my international and REITs were up, bringing me to a +0.3% for the month. For the year, I’m a little up, while the market in total is a little below Jan 1. Another reason for asset allocation. Note that these returns include reinvesting dividends.

My 401K/Deferred account at work was up only 1.1% for April – but this one doesn’t have a REIT option in its choices, so I didn’t get the benefit of the REITs for April (but didn’t suffer from this in this account for 2017).

Dividend Income Account: Allocation:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

Up about 0.2% including dividend payments.  Bonds (50% of allocation) got hit, but my 25% REITs helped to lift me into the positive. Most of the dividend stocks (Chevron, Verizon) were up significantly, which helped.

Value Investing Account: Allocation (remember I refocused this at the beginning of February):

  • 40% in individual value stocks I picked myself (2 each, 20% for each) – SBS and GILD
  • 20% USAA Market Index (my brokerage is USAA)
  • 40% in Vanguard Value Index fund

Another bad performance for the stocks that I picked myself. Down 2.5% for the month of April. The big losers were my two stock picks. It is becoming very clear that I am not a good stock picker (as most folks in the FIRE community can attest to). If I don’t see a major turn around in fortunes by the end of the year, I’ll just sell my stock picks and go to index mutual fund investing (like so many other folks). Again, this is more of a “fun money” account where I experiment.

The allocations are not too much “out of whack” so I don’t intend to rebalance until July (unless something major happens).

 

How did you do in April?

 

Mr. 39 Months

Quarterly Update – Apr 2018

Well, it’s early April, a quarter of the way through the year, and hopefully a good start for the year’s goals. Again, a lot of folks don’t like to do this sort of thing, but as an engineer and amateur financial junkie, 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 – and financially the first quarter had both good and bad.

So how am I doing in comparison to my goals for 2018?

My Goals for 2018 (some financial, some not):

Finance:

  • Save $81K in tax-advantaged accounts (saved almost $37K in 2017): Grade B. Saved almost $14K in 1st qtr, and looking to dump $21K from my bonus into it in early April.
  • Save $9K in regular: Grade A. Got this done right out of the gate. The $5K I had to take from my inherited IRA went right into this, and I took $4K from savings and put it in as well. The $333/month I was going to dollar-cost average into it will just go to plus back up my savings.
  • Increase dividend income from all accounts to $24K/year: Grade B. Was at $4,456 for 1st qtr vs. $4,089 in 1st qtr 2017. I usually get a big boost in 4th qtr, so we will see if I hit it.
  • Passive income covers 33% of base living expenses in retirement, i.e. $24K of my $72K expected expenses: Grade B. See above – need to hit $24K of dividends, since I don’t have other forms of passive income right now.
  • Beat net worth growth rate of 7%: Grade D. Market is down, thus hurting my net worth. It hasn’t grown hardly at all, despite the $23K that I dumped into it. If market recovers, I should still be able to hit this.

Business:

  • Begin attending regular meetings of my local real estate investors association. Grade C. Attended four (4) meetings over 3 months. Good info, but nowhere near as much as I should be investing time for. There was a great one last night on estimating repair costs, but it was full and I couldn’t attend.
  • Double the number of blog visitors in 2018. Grade A. I’ve already exceeded last years numbers by 15%. I’m sure part of it is that I have more content. Still, I need to do a better job of providing stuff folks want to read.
  • Write/publish a book on finance.  Grade: Incomplete. Did some initial work on it, but really haven’t put as much work into this as it needs.

Personal:

  • Increase weight lifted by 10% from 2018 (increased by 12.7% in 2017 Grade B: Up 3% from the beginning of the year
  • Average 3 hours of cardio per week (currently averaging about an hour).Grade C: Averaging about 1.7 Hours a week as of March.
  • Take part in at least one long bike ride, like MS bike-a-thon (80 miles) Grade: Incomplete. Bike scheduled for September
  • Backpack over 100 miles on AT (did over 100 in 2017) Grade: Incomplete. Hike’s scheduled for June and October
  • Begin volunteering at Pennsbury Manor at their joiner’s shop (woodworking) Grade C: Volunteer training set for April 15th, and then I will start
  • Reduce weight by 20 lbs. from Jan 2018 (lost 9 lbs. in 2017). Grade D: Only lost 4 lbs. in 1st Qtr. Need to get better at fitness and diet.
  • Read at least one book a month. Grade A. Read five (5) books in 1st qtr, one work of fiction, two self help, and two histories. Really enjoying this personal goal

Travel:

  • Visit a national park (visited Shenandoah NP in 2017). Grade: Incomplete. Scheduled to visit two parks in May (Redwoods NP in California and Crater Lake in Oregon)
  • Visit family in Tennessee, Vermont and New York. Family is very important to me. One of the things I am looking forward to with financial independence is the opportunity to visit family more often. Grade B. Visited family in TN in March, but only for a short time. Looking forward to more visits throughout the year.
  • Visit Portland, OR and northern California. Grade: Incomplete. Scheduled to visit in May 2018.
  • Visit Ellis Island. Wanted to do this in 2017, but didn’t make it. As 50% Czech from immigrant great grandparents from the turn of the century, I believe they went through there, and I want to see it Grade: F. Still haven’t been there and I have had the opportunities.
  • Go on an international trip. Not sure which one (Canada, Caribbean, etc.) but I’d like to get out this year. Grade: Incomplete. Nothing scheduled at this time.
  • Visit the Asheville NC area. It’s one of the areas that we are considering retiring to (close to my old home in Tennessee, interesting crafts, shops & outdoor sports, etc.). Trying to learn more about the area (we’ve been there a couple of times). Grade: Incomplete. Nothing scheduled at this time.

Overall, I’d give myself a B. Got a lot done, but still have more to go.

 

How are you going on your goals for 2018?

 

Mr. 39 Months

Status Update, Apr 1 2018

Well, not much progress was made during the month of March, but I also didn’t lose, which (when you think of February) could be considered a plus. I did get one month closer to FI (27 months to go!). While I am not “going gangbusters” right now, I’m not unhappy. As I said in my previous post, I believe I am going to be able to get some investments on sale in early April. Still haven’t gotten back to $1M in invest-able assets (thank you February) – but I will soon.

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

I ended up being about 0.4% up here, after all the craziness. While the S&P 500 Index and International Equity lost significantly, the bonds and small cap did alright. The surprise was the REITs! After getting pummeled in 2017 and the beginning of 2018, they hopped up over 4% in March, and enabled me to stay in the black. Another reason for asset allocation. Note that these returns include reinvesting dividends.

My 401K/Deferred account at work was down 1.1% for March – but this one doesn’t have a REIT option in its choices, so I didn’t get the benefit of the REITs for March (but didn’t suffer from this in this account for 2017).

Dividend Income Account: Allocation:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

Did well, considering – 1.7% up for March. Again, don’t forget that it is ¼ REITs, and they really helped it out. The bonds didn’t really go up much, but I did get the advantage of all the dividends. Overall, dividends were about 3% annual yield – and I will reinvest those in the assets that went down in 1st quarter.

Value Investing Account: Allocation (remember I refocused this at the beginning of February):

  • 60% in individual value stocks I picked myself (3 each, 20% for each)
  • 40% in Vanguard Value Index fund

Another bad performance for the stocks that I picked myself. Down 4.7% for the month of March. Everything in this account is down. I believe I am going to give it to the end of the year, and if it’s no better, then its going to Low-cost index funds!. Again, this is more of a “fun money” account where I experiment. It keeps showing me that I’m not a good stock picker.

The allocations are not too much “out of whack” so I don’t intend to re-balance until July (unless something major happens).

How did you do in March?

 

Mr. 39 Months

Status Update, Mar 1 2018 – OUCH!

Well, that hurt a little! As with most of us in the US, the markets were not kind to us in February. I thought we’d have a dip and then push back up a little before the end of the month, but it went down a lot at the end as well.  I lost about $38.3K (3.8% of invested assets) and dropped back below the $1M mark for assets, right as I hit it in January. Sad face!

The S&P 500 benchmark dropped 3.9% in February, so I guess I should consider myself lucky that I didn’t do as bad. I had hoped that with my larger % of bonds (30%) and REITS (17.5%) in my retirement accounts, it would buffer it a bit, but that didn’t work out. Let’s break it down.

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

They all ended up losing money, but the big losers were REITs and International. Bonds actually didn’t lose too much, so they helped offset some of the losses. For REITs, there was a broad market selloff in February, and Mall REITs really tanked (down 23%). Though many earnings reports beat analyst estimates, the potential for a pending rate hike really hurt them.

Dividend Income Account: Allocation:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

Some of my stocks went up her (Cisco, iShares) and the bonds only dropped a little. Still the REITs hurt it. What’s interesting is that, while I’m down 3.8% overall, this account is only down 3.4% – and the dividends for the holders actually were raised for 2 of them.

Value Investing Account: Allocation (remember I refocused this at the beginning of February):

  • 60% in individual value stocks I picked myself (3 each, 20% for each)
  • 40% in Vanguard Value Index fund

This was my worst performing group, dropping 5.3% for February. One of my picks (SBS) was up about 1.6%, but the others drove it down. Again, this is more of a “fun money” account where I experiment. It keeps showing me that I’m not a good stock picker.

So after losing a$38K in one month, what am I going to do about it? Not much.

I have an allocation strategy and a set amount I invest on a monthly basis. I’m going to stick with my plan, and revisit every 6 months.

 

How did February treat you?

 

Mr. 39 Months

Monthly update – Feb 2018

Keeping it rolling, only 29 months from Financial Independence!

A pretty good month to celebrate!

  • For the first time, our investment assets (not counting savings, checking, home, etc.) hit over $1M
  • Good month for gains – got a 1.36% monthly gain, in addition to what I put in
  • Was able to roll my Dad’s IRA required distribution and some additional savings (total of $9K) directly into investments, and I bumped up my deferred pay allotment as well. All total, I put in about $13K into my investments in January alone. Getting into FIRE really motivates you to save.
  • Did my first travel hack! Mrs. 39 Months and I attended a dulcimer conference in mid-January, and got to stay at a nice hotel for free. Sweet!
  • Traffic on the site exploded, up over 200% from my 2017 monthly average. Thanks for tuning in!

A great way to start the year. I want to keep the momentum going.

My “fun money” value portfolio was interesting. I have three stocks in them (Gilead, Beasley Broadcast and SBS). I’ve already gone over why I chose them.  Gilead is up 12% for the month, and SBS is up 10%, However, Beasley is down about 1.5%. Overall, they’ve been great picks, and I’m up 2.5% for January (even counting my bond fund losses). About that – when I was originally planning it, I thought I’d set it up as a dividend account as well – so I have Bond Funds in it. Since I want to evaluate value with this money, I’ve decided to sell the bond funds, and invest the money in a Vanguard Value fund. I’ll do that at the beginning of February, so I will have a “baseline” to compare my stock picks to.

My inherited IRA that I set up for Dividends didn’t do well in January. Since its 25% REITs and 50% bond funds, you would expect with the raging economy and work on raising the prime interest rate, they’d suffer – and they did. Overall, they are down -1.8% for January. Not unexpected.

My company 401K and deferred accounts are up about 6% for January, because they are more heavily invested in stocks (25% S&P, 25% Small Cap, 25% Int’l, 25% bonds). Small cap really knocked it out of the park.

Our IRAs and Roth IRAs came back in around 1.2% for the month – pretty good. These are the ones that are 30% bonds, and then evenly split over REITs, Small Cap, Int’l and S&P 500. Again, good returns, and not unexpected.

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. My plan is to re-balance in July, unless the market really goes crazy.

Hope your new year is starting well!

 

Mr. 39 Months.

 

 

 

Investment update – End of 2017

Well, with 30 months left till FI, and the beginning of the new year, I wanted to go back and see how my investments did, to give you an idea of how my allocations seem to be working out.

For the year, my investments (not savings or real assets) went from $823K to $983K.

  • I added about $63K throughout the year
  • Got about $22K in dividends (2.7%)
  • Got about $75K in capital gains (9.1%)
  • Total returns on investments for the year, round 11.8%

The return is about average for the FIRE community. There are certainly some who really “smacked it out of the ballpark”, but I think that is because they are more invested in the assets that really took off this year.

Since I’m older and closer to FI, my allocation is a little more conservative:

  • 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

As one would expect, my bonds and REITs didn’t do as well this year (1.5% and 1.2% counting dividends) and they make up almost half of my assets. The stock portion (S&P, small cap and International) really kicked butt, getting around 20.1% on average. In the end I am very happy, as historically, this allocation would net me around 5.24% after inflation (which I expect to be around 2% for the US this year). Thus, my expectation was 7.24%, and I ended up around 11.8%.

As you might expect, my “set it and forget it” investment portfolio in my 401Ks and IRAs (both regular and Roth), where I just invest in index funds with the above allocation, did the best. I just regularly put in money, and surprisingly, the index funds do OK.

My father’s Inherited IRA, which I set up with an eye towards income, has returned 3.6% in dividends in 2017, which is a little more than I expected. Perhaps the rise in interest rates in the US (up 0.75% in 2017) had something to do with it. The capital gains for the stocks have been substantial, but that is only 25% of the portfolio. The REITs (25%) and bonds (50%) had a poor year for capital gains, so overall, it ended up just generating the 3.6%.

My “fun money” account, was somewhat of a disappointment as well. While one of my stock picks (Gilead Sciences) really shot up, the other two value picks (TAHO and CSS) did not perform well. I will revisit them in another email and I try and decide my ongoing value strategy. This portfolio also has 33% REITs and 33% bonds, which didn’t do well. Again, this is a small portion (5%) of my overall investment portfolio, so its more for me to try new things than to really make lots of money. I keep the majority of my investments in index funds and let them grow.

In a future posting, I’ll go into my value strategy, so folks can get some additional ideas and see if they work for them.

Hope your New Year has gotten off well!

 

Mr. 39 Months.