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Financial Transparency as of 31JUL2018

Each month, I break down my finances and financial progress.  This serves primarily to keep me accountable.  I hope it also helps others see the power of an income centric approach to early retirement investing.  Today’s report covers the month of July 2018 with year to date updates.

music selection:  “Love Walks In” — Van Halen

ASSETS:

Wells Fargo (taxable): This finished the month at 30,333, down from 29,851 at last month end.  That is a 1.61% monthly gain.  Year to date, this account is down 348 or 1.13%.

Interactive Brokers (taxable): Here I finished the month at 303,464 up from 290,093 last month.  That is a monthly gain of 4.61% and a year to date result of minus 6.29%.  The annualized loss is my first one in several years and is driven by the unexpected change in leverage at UVXY from 2x to 1.5x.  I was unprepared for the announcement.

Interactive Brokers (tIRA): This account is also up to 171,648, from 165,79 last month.  The monthly gain is 3.53% and my year to date result is a 5.28% gain.

Checking: Cash is a bright spot up to 11,880 from 11,535.  That is an even 3% growth from last month.  Year to date cash has changed by minus 1.11%

Total investable assets come to 521,122 up 4.06% from 500,772 last month.  That is a 4.06% monthly gain.  The year to date mark is minus 1.60%

Don’t forget to see the long term trend at Lizard King’s Transparency Page.

LIABILITIES:

Home: paid

Car: paid

Income tax: I have a 12,945 tax asset on deposit with the service.  Because of the mishap with UVXY, I expect to have a trivial tax liability this year and should even qualify for the maximum ACA subsidy.  Net tax rate could be negative for 2018.

WITHDRAWAL RATE:

I have automatic withdrawals from my taxable investing accounts set to provide a cash income of 25,000 a year.  Against a liquid net worth of 521,122, that is a withdrawal rate of 4.80%.  I earned 2,257 in options premium income during the month of July and am on pace to earn 40,326 in options for the year or 1.61 times budget.  Additionally, my income centric approach to investing includes 26,435 in expected distributions, dividends, and interest for the year or an additional 105.74% of budget.  In the event of a downtown, I should be immune to the need to “sell at the bottom”.  At the same time, I can expect steady and robust growth to keep ahead of inflation.

SPENDING:

Spending was 2,1551 for the month, which is a little rich for me.  We are in the thick of summer here in Houston and daily highs have been over 100F.  This has resulted in a higher than normal electric bill to keep the air conditioner running.  Year to date, I have spent 13,010 and am pacing 22,303 for the year.  That is 2,697 under budget.  I have an extraordinary item of 3,500 coming through next month as I have purchased a premium advisory product from Stansberry Research.

OTHER INCOME:

I earned 150 this month or 138.52 after payroll taxes for my efforts at the Memorial Hills UD municipal water board.  It is a small amount but over a year’s time it adds up to another full social security credit.  This should improve my eventual payout when I reach qualifying age.

Devour your prey raptors!


{ 5 comments… add one }
  • Chris B August 1, 2018, 6:08 pm

    Any more details about the Stansberry subscription?

    • The Lizard King August 2, 2018, 1:09 am

      Four years prepaid of Stansberry Credit Opportunities. Bonds and equity opportunities that arise from bond research.

  • chomper August 3, 2018, 4:43 pm

    Velociraptor,

    So, the product you are buying is how you have found good high yield bonds to purchase before?

    I have never heard of the company before, but knowing that you use their service is a very high endorsement for me. You wouldn’t pay that kind of money for it if you didn’t think it would more than pay for itself over time.

    Are you thinking about transitioning away from the CEFs and more towards individual bonds?

    • The Lizard King August 3, 2018, 7:10 pm

      Chomper,

      I’ve found bonds on my own before. But it was a “cigar butt” approach. I targeted bonds trading under 40 cents reasoning that average recovery in liquidation is about 40 cents on the dollar. The Stansberry service starts with a team of analysts that are analyzing over 4000 bonds. They zero in on the ones they feel are “money good” and will not default. These bonds tend to trade for a lower discount (for now, I think there will be deeply discounted opportunities when the credit cycle inevitably turns). They further have an equities specialist lawyer on staff to review the prospectus to ensure the bonds are “senior” in the capital structure, something I was never able to do for myself and ended up with zero recovery in some liquidations as a result. This is going to be an approach that is nominally lower yield but should have better effective yields, less volatility, and more safety. Stansberry is the only newsletter writing company I’d recommend. Once upon a time Motley Fool passed my test but they have clearly lost sight of their mission and are now in it purely for the money. I do believe this service will more than pay for itself over the four year period. I wanted the 5,500 lifetime membership but it would have wrecked my short term liquidity position. Four years from now, I will have banked enough profit from the service to pay for the lifetime renewal and then some.

      I have already sold some CEFs. I unloaded the ones that were trading below the market price I acquired them. I am letting the winners ride. I will trim some options exposure by writing fewer contracts if more good bond opportunities open up than I have cash to secure.

  • joe August 5, 2018, 6:28 am

    Thanks for the info. I go get some of their cheap newsletters such as True Wealth at $99 a year. It seems like a decent newsletter. I would have to agree there are a lot of bad newsletters out there though.

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