Wrapping Up 2016 Goals and Financial Updates - Retire by 40 (2024)

Woohoo! It’s time to wrap up 2016 and usher in 2017. Happy New Year! Are you excited about 2017? Personally, I’m a bit nervous because the economy is doing too well. How long can this euphoria last? I really think the stock market will be quite volatile over the next few years. We’re staying invested for the long run so I just need to not pay attention to the stock market so much. Anyway, we might as well enjoy it while the good times roll.

2016 was a great year for us. The S&P 500 index gained about 10% and a rising tide lift all boats. The real estate market in Portland also did very well in 2016. Our finances look great as a result and I hope you had a good year as well. Okay, let’s see how I’m doing with my 2016 goals and then I’ll go over our cash flow for the year.

2016 Goals

Non Financial Goals

Improve Fitness (Pass!)

I got aGarmin Vivofit 2for Christmas last year and I’m using it to track my activity level. It’s been a year and I liked keeping track of my general activity level. The device reminds me to keep moving and try to get out more. I had a terrible December, though. We had a few snow days and it’s just been really cold this month. Our activity level is way below normal.

Anyway, I did pretty well over the previous 11 months so I still accomplished my goal of exceeding 6,000 steps per day. Over the last 12 months, I walked almost 2,500,000 steps and that averages to 6,654 steps per day. Yes!

For 2017, I’ll set more fitness goals and try to be more active on a day to day basis. Maybe 7,000 steps per day would be an achievable goal next year.

Control my triglyceride level (Pass!)

I had my annual physical exam a few weeks ago and I was pretty nervous. My triglyceride level has been higher than normal this year. My doctor increased the dosage of my medication earlier this year, but my triglyceride level was still elevated (around 250). We also went to Thailand for 3 weeks in November and ate a ton of delicious food. I thought my test would come back with bad results for sure. However, I was wrong and got a good surprise for once. My triglyceride level is now about 100 and that’s acceptable. I think the big difference is that I began going to the gym regularly again when RB40Jr started kindergarten. We’ve also tried to eat healthier at home, but that was put on hold when we went to Thailand. Anyway, I’m very happy that my lab results are looking good. Whew!

Try 6 great restaurants (Pass!)

We completed this goal in October and we ate at a bunch of really great restaurants in Thailand. It’s been a fantastic gastronomic year for us. It was fun to try new restaurants too. If I didn’t have this goal, we’d probably stick with our old favorites. Next year, I need to set a few fun goals, too.

Take an extended trip to Thailand (Pass!)

We had a great vacation and you can read about our 3 week Thailand trip here.

Saving for this trip was made easy by Digit. Digit deducted a small amount from my account every few days and I didn’t notice the “stealth” saving at all. Check outmy Digit reviewif you don’t know about them. We saved $7,608 in 2016 and I think Digit is an awesome way to save for a trip. The balance was more than enough to pay for our trip and we’ll have a bit left over to send to our Roth IRAs. Nice!

Attend a conference – (Pass!)

I went to FinCon in September! It was a great trip and I met many awesome bloggers. Next time, I will make an effort to talk to the brands more. All in all, it was a great trip. If you are a personal finance blogger, you must go at least once. FinCon will be in Dallas in 2017. I don’t think I’ll make it next year, though.

Visit a national park – (Pass!)

We went camping at Crater Lake in July. Crater Lake is a caldera lake which resulted from a volcanic eruption and subsequent collapse of the empty magma chamber. It is the deepest lake in the US and the deep blue color is breathtaking.

For 2017, I’d like to visit another national park so we’ll probably set the same goal.

Start a non-finance website – (Fail)

This one is getting punted to 2017… but I did have some practice writing about travel during our Thailand trip!

Financial Goals

Invest $50,000 in our tax advantaged accounts(Pass!)

In 2016, we invested $56,100 in our tax advantaged accounts! Whoa, that’s a lot of money saved.

• Mrs. RB40’s 401k: $18,000
• Joe’s i401k: $22,500
• Our Roth IRA: $11,000
• RB40Jr’s 529 plan: $4,600

Maxing out your 401k and Roth IRA every year is the easiest way for an average Joe to become a millionaire. If you’re not contributing $18,000 to your 401k, then you should try to increase your contribution as much as you can in 2017.

Increase Dividends to $11,500 (Fail…)

This year, we received $10,789 in dividend income. That’s just a $200 increase from 2015 and it was quite a bit short of my goal. The main problem is that I sold off some stocks and haven’t invested the cash yet. I thought the stock market was too high and due for a big correction. In 2017, my main priority would be to invest the excess cash in good dividend growth stocks and increase our dividend income.

Surpass $50,000 in RB40 Junior’s 529 account (Pass!)

RB40Jr’s 529 did very well in 2016. It’s worth $54,225 at the end of the year. I’m planning to transfer this account to Vanguard in 2017 to take advantage of their low fees.

Increase Net worth by 3x risk free rate (Pass!)

The 10-year US government bond yields about 2% in 2016. So mytarget net worth increase for 2016 is 6%. The stock market started off slow in the first half, but really picked up steam after the election. The S&P 500 index gained about 10% in 2016 and our net worth benefited from that. Our net worth increased from about $2 million to $2.29 million this year. That’s almost 15% and it was way above expectations. It has been a really good year for investors.

The end of the year is a good time to check your target asset allocation as well. The US stock market has done very well this year and it might have thrown your asset allocation off track. We’re a bit heavy on the US stocks as you can see from this chart from Personal Capital. It’s probably a good idea to rebalance some money to international stocks at this point.

If you need help keeping track of your finances,try usingPersonal Capitalto manage your investment accounts. We have many accounts and Personal Capital helps us see the big picture quickly. Also check out their awesome retirement calculator. You can read my review here –The Best Free Retirement Calculator.

2016 Cash Flow

Normally, I go over our monthly cash flow here, but this time I will just give a summary for December and go over the whole 2016 instead.

December summary

December worked out well for us. Our income was very good because Mrs. RB40 got a little bonus from work and my online income was good as well. The total income for December was $8,816 which is much higher than our average of about $5,500/month.

However, our expense was also higher than usual due to home maintenance. Also, Mrs. RB40 got a new pair of new glasses and nice glasses are not cheap. Lastly, Christmas was a bit more expensive than usual this year because we took the chance to replace some of our worn out household items and I splurged a bit on gifts. All in all, we spent $5,538 in December. This is also higher than our average of about $4,500/month.

Now, let’s go over the 2016 cash flow.

Take Home Income (target > $5,000)

Our monthly take home income target was $5,000 per month and we came in just above that at $5,058 per month. There are areas that need improvement and I will work on it in 2017.

• RB40’s paycheck: $70,626. She got a nice raise in 2016 and her steady income was very good for our household.
• Rental income: $1,974. The rental income was not that great, but at least it wasn’t negative. I’m not sure if we will see much improvement in 2017. I raised the rent a bit, but we also have to repaint the exterior next year. There are just a lot of repair and maintenance on the duplex.
• Online Income: $29,210. My online income decreased about 20% from the previous year. I’ll need to hustle harder next year and bring it back up. This will be one of my goals for 2017.
• Dividend income: $10,789. Dividend income was pretty good, but we need to ramp it up more.
• P2P lending: $456. This one was lower than I hoped. That’s why I’m slowly taking the money out of our P2P lending account. I’m planning to invest with RealtyShares next year because I think real estate lending is more secure than uncollateralized lending.
• Misc income: $3,720. Miscellaneous income was pretty good in 2016. Most of this was from our tax refund.

Expense (target < $4,500)

Our monthly expense target was $4,500 per month and we were right on target. The challenge in 2017 is to keep it at this level. We live a very comfortable lifestyle and I don’t think we need to spend much more than this unless there is an emergency. I’ll just go over the average in this section.

• Housing: $2,268/month. This includes the mortgage, HOA, and property tax. Housing is 50% of our expenses and that’s too much. We won’t be able to decrease this unless we move to a cheaper area, though.
• Cash Allowance:$150/month. I’m using the credit cards much more now because we’re building travel reward points. The cash is mostly used by Mrs. RB40.
• Groceries:$472/month. This is up about 20% from 2015. The grocery bill will probably continue to increase as our kid grows.
• Transportation: $103/month. This is gasoline and car maintenance. I’m happy with this level of transportation expense. Our car should last many more years so I’m not budgeting for a replacement vehicle yet.
• Pet: $24/month. The pet food is part of the grocery so this is mostly pet sitting when we’re out of town.
• Child/Dependent:$307/month. Our kid expense is down a bit from 2015 and it should continue to decrease for a couple of years. This was mostly pre-school and clothes. Now that Junior goes to public school, we can use the money for lessons and extracurricular activities.
• Bills: $247/month. Electricity and insurance (auto, home, term life, and umbrella).
• Healthcare/Medical:$189/month.
• Entertainment:$224/month. Gym membership fee, eating out, etc… We probably could improve in this category.
• Misc: $523/month. Hmm.. There are just too many things in this category. I probably should break it out more.

Savings

Extra Savings:$6,623 in 2016 (in addition to the $56,100 in our tax-advantaged accounts.)

I had a higher number here in previous months, but I moved most of this to our tax-advantaged accounts. The $6,623 left will sit in our bank account for now to beef up our liquidity.

Can Mrs. RB40 retire?

This is a new section I’m adding for 2017. I want to see what happens if Mrs. RB40 stop working full-time. Basically, I will remove Mrs. RB40’s income from our spreadsheet and stop contributing to our tax-advantaged accounts.

Drum roll please … for 2016, Mrs. RB40 still would have to work. Wah Wah Wah… 🙁

If I remove her income, then we’d had to come up with $7,904 from somewhere to cover our expenses. We could withdraw this from our savings or she could work part time to bring in about $650/month. I’d be fine with taking this from our retirement account because it’s just 0.4% of our net worth, way below the 4% safe withdrawal rate. If I can bring up my online income next year, it should look a lot better.

2016 Wrap Up

Overall, we had a great 2016. Our cash flow was pretty good and our net worth increased much more than expected. I also accomplished most of the New Year goals so that feel awesome. Life is good and I can’t wait for Mrs. RB40 to join me in early retirement. I’m pumped up and ready for 2017! There is a lot of work to be done and it will be an exciting year on all fronts.

Did you have a good 2016 and accomplished your goals? Are you ready for 2017?

Happy New Year!!!