August 2024 FIRE Update – Retire by 40

Hey everyone! Summer is over. Our son is back in school and the weather is turning cooler. It’s nice and quiet at home again. Ahhh…

August was a tough month for me. I got shingles and spent most of the month in pain. After 5 weeks, the rashes on my forehead are mostly healed. I don’t have nerve pain anymore, but my face is still itchy. I highly recommend getting the shingles vaccine when you’re eligible at 50 years old. It’s miserable. Hopefully, the itchiness will be gone soon.

On the personal finance side, August was a good month. We spent more money than usual due to travel, but our net worth increased quite a bit. The stock market did very well and made up for the negative cash flow. We’re in a good shape overall for 2024.

Alright, I’ll share how I’m doing with my New Year goals. Then, I’ll go over our net worth and cash flow. Let’s go!

2024 Goals

Here is my 2024 goal spreadsheet. It works well. Try it out if you can’t keep up with your New Year goals. The key is to review the spreadsheet monthly to track your progress. That way, you can see which goals need extra attention and work on them. We don’t have much time left in 2024.

Financial Goals

FI ratio > 100%

The FI ratio is passive income divided by expense. If you can generate enough passive income to cover your expenses, then you’re set. For 2024, I reduced this goal to 100%. We are getting older and feel we can spend a bit more. After 8 months, our FI ratio is 109%. That’s good enough for now.

*FI Ratio = passive income / expense

3% Rule

Everyone is familiar with the 4% retirement withdrawal rule, right? Basically, you should have a successful retirement if you withdraw less than 4% of your investable assets annually. Let’s see if we can spend less than 3% in 2024. This is a good way to test your retirement readiness. We’ll add everything up at the end of the year. It looks good so far.

Track net worth and hope for +10%

I’ve been tracking our net worth since 2006. It’s great to see the progress. This year, I’d like to see 10% gains. At this point, the gain is completely dependent on the stock market and there isn’t much I can do to influence this goal. I’ll just track it and keep my fingers crossed.

Our net worth gained 14.6% since the beginning of the year. Oh wow, that’s huge. I don’t think the stock market can maintain this pace, though. It’ll probably pull back a bit over the next few months.  

Health Goals

Exercise 3x per week

Now that I’m 50, health is job 1. I need to exercise consistently so I can stay healthy longer. I joined a gym and plan to exercise at least 3 times per week. However, I was sick in August and only went to exercise 5 times. It was a big setback. I’ll try to exercise more this month. Getting fit after 50 is tough!

Health checks

Equally important is going to see the doctors. At this age, we have more maintenance and preventative care to deal with. Here is my list for 2024.

• Colonoscopy. Done!
• Annual physical.
• Dental exam. Done!
• Vision screening. Done!
• Immunization. Tdap booster Done! Flu vaccine later.

Fun goals

International trip

Mrs. RB40 turns 50 this year and she wanted to go on a fun memorable trip. We visited Japan for 3 weeks. It was awesome. We’ll visit again soon.   

Happiness level > 8

I’m a naturally happy guy so this should be easy. Life has been great over the last few years.

August was not a good month. We missed our flight back from Thailand and had to purchase new tickets. I got shingles and was miserable the whole month. Being sick really put a damper on my happiness level.

Help RB40Jr start a YouTube channel

We gave up on this one. RB40Jr. is busy with other activities.

Net Worth (+14.6%)

I’ve been tracking our net worth since 2006. It is very motivating to see our progress. The power of compounding is incredible. Our investment gains far outpace my peak earning year. This year, our net worth is up 14.6% so far. It’s pretty crazy. The stock market is pulling back a bit, though. That’s expected and we will continue to invest whenever we can. The key to keep investing.

***Important*** My best advice is to stay the course. Do not stop investing. You should keep investing whether the stock market is up or down. You might think stocks are too expensive, but it’ll look cheap in 10 years. Keep investing and you’ll achieve financial independence someday. Don’t try to time the market. 

This is a chart of our net worth from Empower. (Personal Capital is now Empower.) Sign up for a free account at Empower to help manage your net worth and investment accounts. I log in often to check our net worth and use their free tools. It’s a great site for DIY investors.

August 2024 FIRE Cash Flow

This FIRE cash flow chart includes my online income, side gigs, and taxable passive income. Mrs. RB40’s income isn’t here because she plans to retire soon…

August was a tough month. We dipped into savings to cover the extra expenses.

August 2024 FIRE Income: $3,900

Our FIRE income was good in August.  

• Real estate crowdfunding: $188. You can read more on the RE Crowdfunding Passive Income page.
• Dividend Income: $1,793. Good month.
• Rental Income: $721. We had an uneventful month at the rentals.
• Blog income: $840. Slow month at the blog.
• Odd jobs: $295.     
• Other: $63.

Spending: $7,292

This year, I plan to spend about $65,000. That was the amount we spent last year. That’s probably too optimistic. We’ll see how it goes.    

Here are some details.  

• Housing: $1,246. This includes mortgage, utilities, furniture, repair, and maintenance. Our housing expense is low because we live in a duplex. We split many expenses with our tenant.
• Transportation: $690. Gas and insurance. I also had to renew my registration and annual parking permit.  
• Entertainment: $506. We ate out a few times and went to see Cirque Du Soleil.       
• Groceries: $485. The grocery bill was lower than usual.
• Health: $417. I had a few extra health related expenses due to shingles. Terrible.  
• Kid: $527. Unfortunately, kid related expenses are also increasing as RB40Jr gets older. We are making payments for his orthodontist and an international school trip.     
• Personal: $361. Mrs. RB40 purchased a few personal items.
• Travel: $3,037. Ouch!

Savings: –$3,392

August 2024 wrap-up

Alright, let’s wrap it up. August was a miserable month for me, but I got through it. I just hope I stay healthy for the rest of 2024. It’s time to hunker down and relax at home.

That’s it for August. Did you have a good month? 

Passive income is the key to early retirement. These days, I’m investing in commercial properties with CrowdStreet. They have many projects across the United States. Go check them out!

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.