Financial Update – Q2 2021

This has been a BUSY quarter for me. I put up a fence, installed french doors, changed a bunch of windows, painted the fence, my garage and entire house, built a car port and a bunch of other little things.

All of this was done at my owner occupied rental property. When I bought this house and moved in four and a half years go, I figured I would move out in a year or two. As it turns out, it’s not only really convenient to live here for a few different reasons but the current state of the market makes it difficult to buy anything else. My new plan is to make this place as comfortable as possible until I do move. On top of that, I want to be sure that when I am ready to move I don’t have any remaining projects to finish here and I can seamlessly transition into the new place.

If you caught last quarters update you’ll remember that I was talking about possibly purchasing a single family house from my friends father. As you can probably expect from all the work I’ve done here, that fell through.

2021 Passive Income – $16,860.41 YTD

Owner Occupied Rental – $4,350.00

Rental Properties – $10,529.68

Dividends – $881.25

Interest – $29.58

Other – $1,069.90

I like to calculate my FI (Financial Independence) ratio in two parts. The first part being passive income vs. necessary expenses. The second part being passive income vs. total expenses. The first calculation makes sense because I know that I could cut all, or most, of my unnecessary expenses if I had to, this is often referred to as “Lean FI.” The second calculation makes sense because this level of FI would require no changes to my every day life and I could continue living exactly as I am now. The purpose of these calculations is to determine how close to financial independence I am.

Passive Income vs. Necessary Expenses

$16,860.41 / $20,712.87 = .814 x 100 = 81.40%

This 81.40% means that my passive income for the first half of 2021 was ~19% short to cover my necessary expenses.

I anticipated being well over 100% by this time this year. I’ve spent a ton of money on my owner occupied rental property this year. None of the things that I’ve done were immediately necessary and some were completely unnecessary but I funnel any house related costs into my necessary category within my budget. On top of that, I sold my truck and bought a different one. This swap wasn’t entirely necessary either but transportation as a whole is. Regardless, I still have time to exceed 100% this year.

In terms of dollars, this 19% amounts to about $642 per month that I was lacking in order to afford all my necessary expenses without working.

Passive Income vs. Total Expenses

$16,860.41 / $26,212.02 = .6432 x 100 = 64.32%

This 64.32% means that I was about 36% away from being able to afford ALL of my expenses for the first half of 2021 without needing to work.

This ~36% amounts to about $1,558 per month that I was lacking in order to afford all my expenses without working.

Net Worth +12.87% YTD

I’ve been tracking my net worth since 2016 and it’s both motivating and inspiring to see the progress I’ve made. I saw a 12.87% gain during the fist half of 2021. That puts me way ahead of schedule for my yearly goal of 18% and I certainly can’t complain.

I use Personal Capital to track my net worth. It’s phenomenal, honestly. I login almost daily to keep an eye on things. If you’re interested, use my link to sign-up here. (It’s free)

Total Amount Invested and Annual Savings Rate – $18,103.47 / 41.21% YTD

I have managed to invest $18,103.47 into the market so far this year. My goal for the year is $35,000. I’m currently on track to invest about $30,000. I’ll need to step it up to hit my goal for this year.

I’ve found that it’s extremely easy to invest money when it’s an automatic process. Trying to decide whether to invest more or save for another rental property is much more difficult, to me.

I have managed to save 41.21% of my net income so far this year. Calculating your savings rate is a great metric to track as it really opens your eyes to what an expensive month or two can do to an entire year of savings. That’s basically what’s happened to me this quarter. I’ve spent a ton of money and my savings rate is suffering because of it. I’m pretty much maxed out on the amount that I can comfortably save so any differences in savings rate mainly come from increases or decreases in spending. I still have some projects to complete but hopefully by the end of the year I can get back into the mid 50% range.

Goals For 2021

Financial

• Invest $35,000 – Current: $18,103.47 / $35,000
• Increase Net Worth by 18% – Current: 12.87% / 18%
• Achieve a 60% Savings Rate – Current: 41.21% / 60%
• 100% FI Ratio (Total Expenses) – Current: 64.32% / 100%

It looks like the only financial goal that I’m solidly on track to achieve is an 18% net worth increase. Though, the market could tank and send this goal spiraling down with it, of course. I’ll mark my $35,000 invested and 100% FI ratio as possible for now. My 60% savings rate goal is still possible but I would have to dramatically change my plans for the year to achieve it. I’d still like to see 50%+ by the end of the year.

Fitness

• Run 100 miles this year – Current: 28 / 100
• Bench press 325lbs (@ ~175lbs bodyweight) – Best this year 315lbs @ 178lbs
• Squat 365lbs (@ ~175lbs bodyweight) – Best this year 370lbs @ 178lbs
• Deadlift 455lbs (@ ~175lbs bodyweight) – Best this year 365lbs @ 178lbs

I underwent surgery in April and that screwed up my fitness goals pretty badly. I’m way behind on all of these goals for the year (besides squats) and I’m way too busy right now to realistically expect to achieve any of these this year. I’ll get back after it soon.

Other

• Read 30 books – Current: 23 / 30 (Check out my book recommendations!)
• Total of 2,000 blog subscribers – Current: about 2,151 / 2,000 (Subscribe here!)
• Travel outside of New York – No progress

I’m way ahead of my reading goal and I don’t see any reason why I won’t be able to read 20 more books this year. I got a Disclosure: We may receive a referral fee if you sign up with a service through a link on this page.

Check out Personal Capital to track your net worth. It’s phenomenal, honestly. I login almost daily to keep an eye on things. If you want to check it out, use my link to sign-up here. (It’s free)

What I’m currently reading: