May 2024 FIRE Update – Retire by 40

Hey everyone! Wow, it’s almost summer. The months are flying by quickly. That’s what happens when life is good. May was a busy month for me. I went to the gym, delivered some lunches, worked on the blog, took RB40Jr to all his activities, and enjoyed making ceramic bowls. Whew! That’s the key to a fulfilling retirement. You should be a little busy and get out of the house regularly.

On the personal finance side, we had a good month. Our net worth is near all-time high. The stock market had a good run in May. Also, our cash flow was pretty good. Oregon had a revenue surplus last year and returned some money to the taxpayers. The “kicker” gave our passive income a nice boost. We spent more than usual because I had a large car repair bill. That was about it, though. Other expenses were okay.

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. Time is running out!

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 to retire. For 2024, I reduced this goal to 100%. We are getting older and I feel we can spend a bit more. After 5 months, our FI ratio is 123%. That’s pretty good.

*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’s looking 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 8% since the beginning of the year. I’m optimistic, but you never know what’s going to happen next.

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. May was not a good month. I cut back on exercise because my elbows and knees were in pain. 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!
• Glaucoma screening. I have a family history.
• Immunization. Tdap booster Done! Flu and Covid vaccine later.

Fun goals

International trip

Mrs. RB40 turns 50 this year and she wants to go on a fun memorable trip. We plan to visit Japan for 3 weeks in the summer. I purchased flight tickets and reserved the hotel already. I can’t wait for this trip.

Happiness level > 8

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

May was a great month. I had a lot of fun with my ceramics class. The weather got better. Life was good. It wasn’t perfect, though. We had a couple of problems at home. One night, a random guy came to our door and ripped out our doorbell camera. What a jerk! Also, someone messed up a small section of our new fence. Mrs. RB40 thinks a vehicle bumped it. I’m getting tired of living in the city. There are too many jackasses in our area.

Help RB40Jr start a YouTube channel

RB40Jr wants to start a YouTube channel. I’ll help him get it going in the summer. This one doesn’t look good. RB40Jr lost interest in starting a channel. Maybe we can rekindle his interest this summer. He’ll have more free time then.

Net Worth (+8%)

I’ve been tracking our net worth since 2006. It is very motivating to see the progress we’ve made. The power of compounding is unbelievable. The stock market did well in May. Our net worth is up 8% since the beginning of the year. The economy is slowing down, but it is still pretty strong. I think the rest of 2024 should be good.

***Important*** My best advice is to stay the course. Do not stop investing. You have to keep investing whether the stock market is going up or down. You might think stocks are too expensive, but they’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. The little blip is due to rolling over my individual 401k to an IRA. Vanguard stopped supporting the i401k and the easiest option was to roll it over to an IRA.

(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 to check our net worth and use their free tools. It’s a great site for DIY investors.

May 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’ll retire soon.

May was a good cash flow month. Our passive income got a boost from the Oregon tax refund. That was helpful because I spent more than usual on car repair. Other than that, our spending was reasonable.

May 2024 FIRE Income: $7,519

Our FIRE income was good in May. The tax refund was nice.

• Real estate crowdfunding: $0. We didn’t have a payment from real estate crowdfunding last month. You can read more on the RE Crowdfunding Passive Income page.
• Dividend Income: $1,384. Good month.
• Rental Income: $666. We had an uneventful month at the rentals.
• Blog income: $1,501. A good month at the blog.
• Odd jobs: $545. I spent about 4-5 hours per week doing deliveries. These days, I focus on lunch catering orders.    
• Interest: $32.
• Tax refund: $3,391. Yay for the Oregon “Kicker!” Oregon returns money to tax payers when there is a revenue surplus. This is a good policy.

Spending: $5,454

This year, I plan to spend about $65,000. That was the amount we spent last year. However, we also plan to update the kitchen this year. I probably should increase our budget to accommodate that. We’ll see how it goes.  

Here are some details.  

• Housing: $1,324. This includes mortgage, utilities, furniture, repair, and maintenance. Our housing expense is pretty low because we live in a duplex. We split many expenses with our tenant.
• Transportation: $1,563. Gas and insurance. We had a big car repair bill. Hopefully, our car will be good for a while.
• Entertainment: $224. We ate out a few times last month. Also, I purchased a few items for my ceramics class.     
• Groceries: $630. Not bad.
• Health: $501. Health-related expenses are increasing as we age.    
• Kid: $307. Unfortunately, kid expenses are also increasing as RB40Jr gets older. We are making payments for his orthodontist and an international school trip. He also purchased a suit for the mock trial at school. The kid suit from Target was $75, pretty cheap.     
• Parent: $250. My brothers and I send $250/month to my dad to help with expenses. He lives in Thailand so their cost of living is much lower than in the U.S.
• Personal: $194. Mrs. RB40 purchased a few personal items and got a haircut.
• Misc: $395. I signed up for a new credit card. This annual fee is more than I like, but we’ll get $300 back as travel credit.

Savings: +$2,065

May 2024 wrap-up

Alright, let’s wrap it up. May was a great month for us. Our net worth came back to all-time high. Cash flow was positive. I kept busy, enjoyed my new hobby, made a little income with side hustles, and spent a lot of time with my wife and kid. It doesn’t get better than this.  I’m optimistic for the rest of 2024.

That’s it for May. 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.