According to my Integrity Policy, I want to let you know that this post contains Personal Capital referral links.  Personal Capital is a free service.  They are looking for high-net worth individuals as possible customers for their financial advisory services, but the expense tracking and retirement planning tools that I recommend are free of charge.

It’s all about the Benjamins. And Jacksons. And Lincolns. And Washingtons.

Whew!  Like most people invested in the market, January brought us a bit of a rough start to 2016.  For the first time (but surely not the last), I’m writing a net worth update that includes a reduction in our current safe retirement income.

For the January 2016 financial statement, our net worth decreased 3.2%.  Womp womp.

Let’s run down what led to this sad state.  First, I had to pay my Q4 taxes for 2015.  That was about $7K out the door.  This went on credit cards this month as I was working to meet some minimum spend on new credit cards to earn mileage signup bonuses.  This is part of the travel hacking game, which you can learn a little bit about on this site.

Next, I wasn’t able to put the cash I earned to work in the market, because I am in contract on my newest rental property, a duplex in the midwest!  That new property closes in exactly one week (February 8th).  I expect to report a tiny trickle of income from that property for February, but I’ll mostly be spending the month making necessary repairs, hiring my new property manager, attempting to remove a problematic existing tenant, and getting the vacant unit occupied.  Bottom line:  It will probably be April or May before the property is completely rehabbed, running, and fully occupied.  Every penny I took in this month (and next) is going towards that acquisition and those repairs.  I won’t be able to invest further in my index funds until March or so.  This bums me out a little because now would be an excellent time to be buying the market!

Finally, I saw a seasonal drop in the resale value of my rentals, combined with a slower-than-normal rise in value on my primary residence.  I expect these values to come bouncing back as the summer approaches, but I really don’t care all that much about the value of the rentals– I’m not planning on selling any of them soon, and most importantly they’re producing cashflow, so their value is kind of immaterial.

I had to juggle money around from my checking and savings accounts to show enough liquid funds to the lender to close on my new duplex, so that explains the drop in my Real Estate Operating account.  That money will be restored after the closing.

Blog Income

As I mentioned in my Integrity Policy, I want to make sure I share any and all professional relationships and compensation I make as a part of this blog.  In January, I did a little better on affiliate and ad revenue (I get a few hundredths of a penny when ads are seen, and between .20 and a couple of dollars when ads are clicked), thanks in large part to being featured on Rockstar Finance, LifeHacker and Debt Discipline!

I earned the following:

• $2.40 in referral clicks to VPI Pet Insurance
• $8.87 in commissions from Dorco Razors
• $13.89 in Google Ad Income

Thus, my total income for the month from the blog was $25.16! It might not seem like much, but that’s a nice improvement from the past few months!  I’m really thankful!  The blog is still operating at a deficit of a few hundred dollars, but at this rate it may reach break-even before I have to renew hosting and domains.

If you’re looking to start your own blog or web site, please consider using my referral link for BlueHost.  I’ll get a little cash to help pay hosting expenses, and you’ll get a great hosting provider (the same one I use) starting at about $3.95 per month.

Retirement Update

Our net worth is down $6,708.52 this month. Still, with the new rental property coming on board and everything still going according to plan, we continue to be on track for a retirement in approximately 44 months.

With equity and bond accounts totaling $119,592.37 at the end of January, a 4% Safe Withdrawal Rate would allow us to take out $398.64 per month.  Our rental properties, after all expenses, vacancies, and short and long term maintenance are considered, produce $503.00 of safe cash flow every month.  I managed to find a few new places to save on insurance and landscaping for my properties and tweak cashflow up this month– it saved our monthly income from dropping off too badly!

Safe Monthly Income: $901.64 (-$5.79 to Last Month)

% to Goal: 18.03% (-0.12% to Last Month)

Want to Know How to Track Your Expenses This Closely?

It’s really easy.  Sign up for a Personal Capital account, which is completely free.  It’s how I track my balances across time, and allows me to project all my retirement progress without doing any work at all.  As a disclaimer, if you sign up with Personal Capital, this site may get a referral fee depending on the size of your portfolio.