Not my best month but budget is still covered.

music selection:  “Maps” — Yeah Yeah Yeahs

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 up 251 dollars at 28,977.  That is a 0.87% monthly increase and good for 9.85% annual gain.  This account also produces 9.80% in annual distributions, which sweep to my checking.

Interactive Brokers (taxable): Here I finished the month at 199,918 up from 194,791 last month.  That is a monthly gain of 2.63% and year to date gain of 25.56%.

Interactive Brokers (tIRA): This account is down 16,942 to 160,717 versus last month.  The sharp decline is driven by converting about 13,000 to Roth.  What remains in the tIRA is almost exclusively P&C insurers with a long history of profitable underwriting.  The account is up 9.53% on the year despite the large withdrawal.

Interactive Brokers (Roth): I am initiating this in the current month at 13,022.  The account is composed of Dow DuPont and its spinoffs as well as a position in MORL.

HSA: This account is up 597 on the period to 7,863.  That is a 8.22% move in the right direction or 206.35% 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 down to 15,088 from 20,624.  That is a 26.84% decrease from last month and 75.68% gain year to date.  I have suspended my monthly withdrawals from Interactive Brokers through the end of the year as I am flush with cash.  This will allow me to raise some brokerage cash for the downturn.  I also paid another tax estimate during the month.  Most of that cash will come back to me in April.

Total investable assets come to 425,585 down 0.81% from 429,066 last month and up 20.11% 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 7,050 income tax prepayment asset  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 after the first of the year.  I have converted some of my tIRA to Roth to increase my MAGI for ACA subsidy purposes.  The net result will be almost free healthcare and a tax refund in April/May.

 

WITHDRAWAL RATE:

I have suspended withdrawals from my taxable investing accounts set to provide a cash income of 25,000 a year.  I am instead drawing down cash but I continue to use the 25,000 number to calculate withdrawal rate.  Against a liquid net worth of 425,585 that is a withdrawal rate of 5.87%.  I earned 372 in options premium income during the month of October.  I’m trending to earn 59% of budget from options trades this year.  Additionally, my income centric approach to investing includes 25,656 in expected distributions, dividends, and interest for the year or an additional 102.62% of budget.  Total budget is estimated to be covered 161.41%.  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.  I’ll update at year year to reflect withdrawal rate versus actual spending.

 

SPENDING:

Spending was 3,742 for the month, which is well above the 2,000 target.   I’m well under budget for the year but my expensive months with home insurance and taxes are coming up.  I paid home insurance and have real estate taxes coming up.  There is about 400 dollars in extra automobile expenses this month due to replacing rear shocks/struts/brakes and two new tires.

 

OTHER INCOME:

I picked up 131 dollars from my efforts on the local Water Board.  I also picked up a payment from Google AdSense of 103 dollars.  Ad income for the blog is about 250 dollars a year so it isn’t making me rich and makes my “hourly rate” sort of laughable.  This is currently a labor of love.

Devour your prey raptors!

Sharing is caring!

Financial Transparency as of 31OCT2019

Never miss another opportunity to devour prey!

2 thoughts on “Financial Transparency as of 31OCT2019

  • November 4, 2019 at 2:51 pm
    Permalink

    1) Can you explain more about how the Roth conversion and a higher MAGI improved your ACA subsidy? I would have thought it would reduce it.

    2) Do you have loss carryovers from 2018 that can offset the Roth conversion?

    3) Do I understand correctly your Wells Fargo taxable account is holding investments with a yield above 9% (CEFs perhaps?)? Might it be better to put the high yielders in an IRA and the insurance companies in the taxable?

    Reply
    • November 4, 2019 at 3:20 pm
      Permalink

      Chris, I have loss carry overs from the blowup in late 2018. I am on pace to use those up this year and will likely not get a gift in the form of free Roth conversion again next year. I need some additional MAGI to get out of the no man’s land where I qualify for Medicare expansion (but TX didn’t expand so I would get nothing) and into the income range where I get ACA subsidy. I didn’t maximize the subsidy but rather took advantage of getting paid to do a Roth conversion.

      The Wells Fargo taxable has lots of CEFs and two REITs. Yield after yesterday’s close was 9.80%. It would be better tax wise to do as you suggest but my strategy calls for having enough passive cash spun off from taxable to meet my budget so I am never compelled to make bad options trades to “make rent”. I try to take advantage of the tax code but I never let the tax tail wag the investing dog!

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.