Another month in the bag.

music selection:  “Rasputin” — Turisas

weigh-in:  205.0 (0.2)

Each month, I review my financial results for the period and year to date.  This includes a summary of my spending, budget, and some ratios to benchmark portfolio performance.  I hope it serves as inspiration to those who are afraid they will never accumulate more than a few hundred thousand and thus will never retire.  It doesn’t take as much money to retire as the mainstream FIRE community insists!

ASSETS:
Wells Fargo (taxable): This finished the month down 966 dollars at 28,640.  That is a 3.26% monthly decline and good for 8.57% annual gain.

Interactive Brokers (taxable): Here I finished the month at 214,875 down from 227,772 last month.  That is a monthly loss of 5.66% and year to date gain of 34.95%.

Interactive Brokers (tIRA): This account is down 3,360 to 172,447 versus last month.  The monthly decline is 1.91%.  Feel pretty good about the long term performance of this mostly property and casualty insurance portfolio that has a year to date gain of 17.53%.  A sleepy industry should normally return 9-12% a year not twice that in half the time.

HSA: This account is down 491 on the period to 6,985.  That is a 6.57% move in the wrong direction or 172.16% gain year to date, driven largely by my annual contribution.  This account is still “small” and will see wild swings until it has more ballast.

Checking: Cash is up to 20,083 from 19,301.  That is a 4.05% gain from last month and 133.84% gain year to date.  I will make quarterly estimated payments of 2,350 to the Revenue Service throughout the year, including one in September.

Total investable assets come to 443,030 down 3.68% from 458,578 last month and up 28.98% from 343,483 year to date.

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 4,700 income tax prepayment asset and expect to make two more such payments during the year.  I hope to get my estimate “about right” this year.  I have been carrying too much prepayment so far in early retirement.  Next payment of 2,350 needs to be made before the 15th.

 

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 443,030 that is a withdrawal rate of 5.64%.  I earned 1,311 in options premium income during the month of July.  I’m trending to earn 75% of budget from options trades this year.  Additionally, my income centric approach to investing includes 24,715 in expected distributions, dividends, and interest for the year or an additional 103.87% of budget.  Total budget is estimated to be covered 178.86%.  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 1,138 for the month, which is under the 2,000 target.   I will be spending much less on Stansberry products now that I have a Choice account allowing access to 10 services with my PWA subscription combined.  This should allow me to come in under budget for the year and for the foreseeable future.  There will be two more cash transfers to the IRS this year.

 

OTHER INCOME:

I picked up 131 dollars from my efforts on the local Water Board.

Devour your prey raptors!
Financial Transparency as of 31AUG2019

Never miss another opportunity to devour prey!

9 thoughts on “Financial Transparency as of 31AUG2019

  • September 3, 2019 at 12:28 am
    Permalink

    Thanks for doing the transparency posts, very motivating!

    1. What’s your rationale for diverging from the index investing crowd?

    Any resources you recommend/use to get started on analyzing securities? I’ve had a large enough portfolio mostly idling in cash

    Reply
    • September 3, 2019 at 7:59 pm
      Permalink

      Justin,

      I was trained in grad school to be an indexer. In fact, I “proved” (and I mean ad nauseum) with the One High And Holy Mathematics, that the markets are efficient. I discovered some stuff later that led me to challenge the orthodoxy. I now believe the retail investor can beat the indexes.

      Reply
  • September 3, 2019 at 6:37 pm
    Permalink

    Looks like you have almost a year’s spending in your checking account.

    1) Are you using a bank that pays interest and has no fees? Mine pays 3% if I have 1 direct deposit and 15 debit transactions. I earn a couple hundred a year in interest this way.

    2) Is this cash a cushion against a bad turn in the market or something like a health emergency, or both? Or is it more a consequence of too few investment ideas?

    Reply
    • September 3, 2019 at 8:01 pm
      Permalink

      1) No fee checking with trivial interest.

      2) cushion is mostly for peace of mind. I sleep better this way.

      Reply
  • September 3, 2019 at 8:13 pm
    Permalink

    I nerded out and analyzed your annual returns, adding back your spending but assuming no reinvestment of those funds.

    2016
    FV: 34.1%
    S&P 500 TR: 11.96%

    2017
    FV: 22.4%
    S&P 500 TR: 21.83%

    2018
    FV: -27.6%
    S&P 500 TR: -4.38%

    2019 YTD
    FV: 26.8% (40.18% annualized)
    S&P 500 TR: 16.7% (25.1% annualized)

    Averages (YTD is weighted)
    FV: 17.27%
    S&P 500 TR: 13.6%

    Your 3.67% outperformance over 3.7 years should qualify you for a hedge fund job! Yet the volatility and correction of 2018 looms as a warning of what can happen when specific assumptions are violated with a leveraged bullish portfolio.

    Reply
    • September 3, 2019 at 10:20 pm
      Permalink

      Thanks!

      I’m well aware that I stepped in bronto sp. poo in late 2018. I’m taking measures to make sure it doesn’t happen again!

      Reply
  • September 7, 2019 at 5:34 pm
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    Thank you Chris, much appreciated.

    Reply
  • September 7, 2019 at 5:36 pm
    Permalink

    Any thoughts on the inverted yield curve and possible upcoming recession?

    Thanks for your posts, very informative.

    Reply
    • September 8, 2019 at 2:08 am
      Permalink

      Joe, the 2mo/10yr inversion historically leads the coming recession by about 18 months. It can be shorter and it can be long. But the biggest gains come just before the crash. I think the best course is to stay long but stay hedged.

      Reply

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