My portfolio – July Update

Q2 earnings season is upon us and the first few reports have been decent but it is way too early to know whether the expected growth rate of 6.5% is realistic. Q1 results were strong and if that continues through the end of the year then we could be in for more solid performance in the stock market.

My portfolio has been the beneficiary of that performance as I’ve seen 9 straight months of growth. The S&P has been positive in 7 of those 9 months as well so that certainly helped. It wasn’t just tiny increments either as 5 of the last 7 months have seen bumps greater than 10k. I’d be financially independent in no time with growth like that!

The market took a small break this month as the S&P 500 return was back to a negative, coming in with a -0.27% return since the last update.

The market will have its pauses and falls but I’m overjoyed with the growth I’ve seen recently. It’s impressive how quickly capital can growth once you hit a certain dollar threshold as the market barely has to move and my portfolio can spike $10k.

It also makes you realize how much I could lose if the market moves in the other direction, something that’s always important to keep in mind. It’s easy to forget that in a  market that has been so favorable for the past years but doing these monthly updates and seeing the big jumps always makes me remember that dollar swings can be large in either direction.

It’s also great to see that my asset allocation has gotten to a point where everything is close to target and I can direct new purchases towards classes that fall below target. That means that I’m buying that things that are more likely to be undervalued in relation to other assets from a long term viewpoint and that’s good for my long term returns.

Let’s take a look at my portfolio today and where I’ll be directing money next month.  Continue reading “My portfolio – July Update”

June dividend update

June was a very busy month for me. Not only did I get engaged but we also spent a considerable amount of time looking for houses. In fact, we just made an offer on our potential first home today which is both exciting and stressful.

I’ll write about that process another day and what it might mean for my portfolio but today I’m looking at my June dividends and am excited by what I see.

My portfolio is very ETF/mutual fund focused so a lot of the payouts are centered on these quarter ending months and these months drive my performance for the quarter and the year. Even though I’m not a dividend focused investor, I do feel like consistent and growing dividend payouts are a helpful tool in long term investing and as such, I set a goal of $8,000 for the year.

I’m not quite sure if I’m on pace to beat that goal and a lot of it will depend on what happens in December but June certainly helped my totals move along. Steve, my trusty dividend employee who has been lazying about the past two months found a lot of seasonal work in June and earned himself a solid wage!

As a reminder, my March dividend totals were $1250.80 and last June’s dividend total was $1161.49 so both serve as a starting point for what was expected this June. With that in mind, let’s take a look at how June 2017 looks. Continue reading “June dividend update”

My savings rate and expenses – May update

Health expenses are really easy to underestimate and I think that’s one of the biggest worries I’ll have whenever I actually make the decision to quit the work force.

It’s not just the insurance premiums that will be a bother but also the deductibles you have to meet before coverage kicks in. Both are sure to rise quite a bit by the time I’m ready to retire and losing those employer contributions towards my premiums will certainly send my healthcare related expenses soaring.

The problem with healthcare expenses is that they’re so difficult to predict. I can tell what my premiums will be for this year and I can tell what my maximum out of pocket expenses will be for the year but predicting actual costs which will likely fall between that premium only and premium + out of pocket max level is a total crap shoot.

I can’t even began to think about where to start figuring out what sort of premiums I’ll be looking at by the time I’m 40+ and whether or not I’ll even be able to get insurance at that point.

The timing of the payments is another question mark as well making it difficult to accurately budget for them on a month to month basis. I had some health care bills in May for doctor visits that happened months ago and my fiancee has some bills still coming in for an accident that happened ages ago.

I’m not sure exactly what I’m trying to say here besides healthcare kinda sucks and is the biggest question mark in early retirement for me.

My main annoyance with healthcare when you have a high deductible plan is that it’s really hard to gauge the actual costs of something when you visit a doctor or have some tests done especially since you often get billed multiple times for one visit. I’ve had situations where I’ve had a test done and gotten three bills for it, the test, the doctor who administered the test and then the reading of the test. I work in insurance and I’m still confused or annoyed by half the stuff that I see on my insurance bill.

I’m lucky enough to have the extra cash to cover my deductibles whenever I need to have something done or when I want to visit a doctor but I feel for those who are struggling to get by and can’t even afford to use their benefits because they have a massive deductible they have to hit.

I guess one positive thing from my perspective about having SOME expenses any given year is that it gives a more realistic picture of what my budget will actually be when I retire. I can easily see a 10k bump in yearly expenses after retirement for a single person if one doesn’t properly account for the premium and deductibles and has some new medical problems. Even now with my medical premiums being partially covered by my employer, I can still be dealing with a 5k bill for premiums and deductibles once the year is done.

The best I can do at this point is max out my HSA, take care of myself and get as prepared as I can be for whatever comes around when I’m ready to quit work. Hopefully my fiancee(wife at that point) will still want to work and I can jump on her insurance plan! It’s always better to get some form of subsidization than pay full boat.

If anything this year made me realize that I probably need to up my expected costs for healthcare quite a bit in my retirement plan.

If you read my last update, you know that April for me was a mediocre savings month as I had some travel costs for my awesome trip to Nasvhille and May is no different but it’s healthcare costs that are the culprit this month! It’s not a surprise as I knew they were coming having visited some doctors in the past few months but the surprise was the actual cost of the trips.

I hadn’t planned on all these medical expenses when I set my goals for the year so I’ll probably be lagging a bit in those areas but it is a good wake up call to have early in the retirement planning years versus realizing it much later when it’s harder to adjust for it.

Let’s take a look at the gross income breakdown for May. Continue reading “My savings rate and expenses – May update”

Amazon’s taking over the world and the much talked about death of retail

Amazon’s purchase of Whole Foods Market was the headline this Friday and it sent a whole sector of retail into a tailspin as the thought of competing with Amazon had investors worried about the future of the grocery space.

It’s true that Amazon and online shopping in general has had quite an effect on retail as can be seen by the many store closures in the past two years. Companies like Sears, Macy’s, J.C. Penney and many others are closing hundreds of stores this year and will likely continue to do so in the next few years.

There are two reasons for this destruction in retail. The main reason is that more and more shopping has moved online. The e-commerce share of the overall pie has more than doubled in the past decade.

Do note that the number represented in the graph below includes certain things normally not bought online like gas, cars and the number excluding those items is nearer to 15% and continuing to grow.

ecommerce, online sales,e-commerce

Amazon has been the main beneficiary of this movement as evidenced by their stock performance and brick & mortar retailers have struggled to keep up. They’ve only recently started to invest heavily in the online sector but the moat that Amazon has built in that area may be hard to beat this late in the game. In fact Amazon makes up nearly half of the overall e-commerce which is impressive considering the # of online retailers that are out there.  Continue reading “Amazon’s taking over the world and the much talked about death of retail”

Relationships, personal growth and marriage

Relationships, personal growth and marriage

One of my recent posts talked about my engagement and I’ve been thinking about what that means for the past couple of days. Those thoughts have centered around the impact a good relationship can have on your life.

It was only a few years ago that I was in my late 20s, discouraged from the dating rut I was in and expecting to be stuck in that loop of mediocre relationships for a while. There’s something to be said about feeling trapped and the stickiness it brings into the other aspects of your life. Often times when one thing isn’t going well, other things follow suit. In short, one thing failing can make your outlook on other parts of your life change as well. I wasn’t happy in my social/personal life, wasn’t happy with my career and wasn’t even happy with my living situation. I felt like I was failing in my relationships and by default I felt the same way in all other aspects of my life.

Then I met her and everything changed. People often say that their significant other makes them a better person and I never understood what they meant by that until I met and spent time with my now fiancee. She has a lot of great qualities and I immediately knew that there was something different about her when compared to other girls I’ve dated. Most of my prior relationships barely lasted a few months and I honestly expected this one to be the same but things progressed, they moved along and I realized that this was working; it was working pretty damn well.

That internal belief of being stuck in all aspects of my life made no sense to me anymore. I was in my late 20s and living a life I didn’t want to live because I told myself that was the norm. I was depressed, anxious, bored and unhappy.

It took one great person, one good relationship to make me realize that didn’t have to be the case and get my life moving again. If I could succeed in a relationship, I could succeed in other areas of my life as well. That was a pretty key realization in my life that drove me forward in search of bigger and better things. I was no longer stuck in my default loop of mediocre relationships so why should I be stuck in other parts of my life?

I moved to a nicer place; closer to work and amenities which led to a higher quality of life. I never hated my job but found it rather unfulfilling so I took a closer look at my career and pushed myself forward into a different career path; one that I enjoy and one that offers more potential for earnings, personal growth and impact. I began this blog as a way to track my financial progress and push myself forward on my personal projects and through all that I became a better boyfriend to my girlfriend as well. She was the one that brought forth this whole cathartic realization me. Meeting her was the start of a whole new part of my life and now here we are ready to start yet another journey.

Marriage! That’s our dog and bunny up there announcing our upcoming nuptials. I’m excited to continue growing as a person and seeing where the journey takes me from here.  Continue reading “Relationships, personal growth and marriage”