April 2014 Financial Update
April left us slightly wealthier due to a small amount of stock market gains and very moderate spending. Our year to date spending is back within our budgeted levels four months into the year.
With over $6,000 in total income during April, we more than covered our monthly expenses of $1,712.
Mrs. RoG’s paycheck keeps flowing in, and that represents roughly half of our monthly income. Even without the paycheck from her job, our other income covered all of our expenses for the month (= financial independence!).
Income received from rootofgood.com totaled $876 in April. This was a pretty ordinary month of blog income with revenue from various advertising networks in addition to Google Adsense revenue.
“Deposits” totaling $737 was mostly a repayment of a business loan made to family in 2013. I also received some rebates submitted in January.
Ebay revenue was minimal in April with only $45 in sales. I’m working on flipping some electronics on Craigslist in May, so hopefully I’ll make a couple hundred dollars. Like most people, we have plenty of excess “stuff”, I just need to get it listed on ebay or craigslist to convert it from junk to cash.
In April we received just over $1,500 in dividends and interest from our investment portfolio. That is in addition to over $3,000 in dividends received in March. Year to date, we have earned $4,777 from our investment portfolio:
A quick note on the expense tracking and income tracking tools I use. If you like these pretty graphics, that’s exactly what you get from Personal Capital. But they really go beyond pretty pictures. All of our savings and spending accounts (including checking, money market, and five credit cards) are all linked and updated in real time through Personal Capital. It’s my first stop when I have a quick finance question like “how much cash do we have?” or “what do we owe on credit cards right now?”.
Personal Capital is also a solid tool for investment management. Keeping track of our investment portfolio takes two clicks and is incredibly easy with Personal Capital. If you haven’t signed up for the free Personal Capital service, check it out today (review here).
Now let’s look at April expenses:
At $1,712 for the month of April, we did an awesome job keeping living expenses very low in spite of having three kids. Even more surprising is that our April expenses included over $700 in travel expenses for our five week trip to Canada. Travel expenses include an apartment rental for a week in Montreal through airbnb (save $25 on your next reservation through this link), two nights in a hotel in New York City, and passport fees for one of the kids. For our family, the apartment rental will work out to be way cheaper than a hotel, and we’re getting a two bedroom apartment with a kitchen which will allow us to cook breakfast and dinner at home and avoid dining out all the time.
As an aside, we’ll end up getting the Montreal apartment rental for almost free after the $400 sign up bonus from our Barclay Arrival credit card. If you haven’t signed up for your own Barclay Arrival card yet, don’t miss out on $400 in free travel (or check out one of the other great bonus offers available here).
Gas, grocery, and restaurant spending was pretty ordinary for the month. These expenses tend to stay the same month to month (which is a good sign!). In the next few weeks I’ll have a post showing every single grocery item we purchased in April and you can see how our family of five gets by on $500-600 per month.
The “general merchandise” expense of $20 reflects a replacement of another kitchen appliance. It’s been a rough year for our kitchen appliances with our oven, microwave, and rice cooker all dying in recent months.
Upon reaching the age of 18, our old toaster oven decided to celebrate it’s legal status as an adult by taking up smoking. The broil element went bad, and it’s cheaper to replace the whole toaster oven than it is to replace a single element. I’ll be getting a $10 rebate back on the $20 oven, so I can’t complain about $10 for a brand new toaster oven. It’s even a lot fancier with an LCD panel, loud beeps, and a countdown timer.
We also had $62 of automotive expenses in April. I’m working on the air conditioning on our 2000 Accord, and that expense includes a pressure manifold gauge set from Harbor Freight and a 3 pack of refrigerant cans from ebay.
We know repairs and replacements will be required from time to time so they are included in our budget. This month it’s kitchen and automotive expenses, next month it will be something else. One thing is certain, there’s always some “unexpected” expense so we might as well plan for it explicitly.
Year to date, we have managed to keep spending very closely in line with our budget. At the end of March, we were a few hundred dollars over budget for the year. After a low expense month in April, we are now back within our budget.
We budgeted $32,000 per year for retirement, so four months of spending is $10,667. At $10,006 year to date actual spending through April 30, 2014, we are more than $600 under budget for the year. Given that actual year to date spending includes big expenses like summer travel and prepaying utility bills, we are probably doing even better than it appears on the surface.
Net Worth: $1,365,000 (+$15,000)
Another generally positive month of investment returns led to an increase in our net worth. With the generous stock market returns over the last few months and years, it’s easy to get complacent and forget that the stock market can also go down (on it’s way back up).
That’s okay if our net worth goes down. Our dividends and other income sources (excluding Mrs. RoG’s paycheck) are roughly enough to cover our recurring living expenses we budget for retirement. Long term I’m betting equities will pay off well.
Real Estate Update
In last month’s financial update, I mentioned I was thinking about investing in rental real estate. I decided not to pursue the opportunity. After looking at the numbers, it would have generated around $4,000 each year in net cash flow after expenses for a cash investment of $50,000. That cash flow plus potential appreciation would probably end up being slightly higher than the 8-10% I figure I might get from equities over the very long term.
But I’m lazy and didn’t want the hassle of managing rental real estate. Maybe when our kids are older and I get “bored” I’ll jump back into the rental real estate game. For now I’m happy with the real estate I already own.
As I mentioned in last month’s update, I checked my investment portfolio at Personal Capital and realized I already have around $150,000 invested in real estate through my mutual fund holdings. Those investments plus another $150,000 for my primary residence means I have 22% of my net worth tied up in real estate already. That’s enough for me right now!
Was the market kind to your net worth in April?