Quarter 1 2017 Financial Update

I’m making a few changes to the format and data in these quarterly wrap ups.  On the income side of the equation I am removing the total of our income and only publishing the savings rate.  Our household income is between $60,000 and $90,000, but it seems like the more details I share about our income, the more likely it is that someone can extract my actual hourly rates, which I would like to avoid.  I will still post blog income in detail.  Additionally on the balance sheet side of the equation I will be removing our emergency fund from the equation.  This amount should generally be static, so continuing to publish the same number serves no purpose.  The main items I am going to be tracking are our portfolio balances and our debt repayment on our home, which should both show some decent movement every month.

Quarter 1 has been quite a busy quarter for us.  The big news is that Mrs. C. finally got into a thyroid specialist and was diagnosed almost instantly with Graves disease.  This sounds like bad news, but it was actually very welcome.  Mrs. C. has struggled with a variety of health issues that had been dismissed as anxiety, fatigue, getting older, etc, and now she finally has an answer.  Last summer her heart rate started jumping really high for no reason and it was identified that she had a thyroid problem.  After around 6 months of taking medication, she got into the Thyroid specialist in January and was able to have radioactive iodine treatment in February.  Our medical bills are still rolling in from this, but it looks like our out of pocket will be around $1,500.  Mrs. C’s doctor believes that she has had Graves since 2013, and possibly earlier due to her current symptoms and her medical history for the past few years.

Florida BeachI finished my snow removal job in mid February and traveled to Florida to work a job at the St. Lucie Nuclear Power Plant.  Holy crap was that a big difference!  It’s always summer in Florida! Not only is it warm, it is also not an oven like when we visited in June last year.  I took a walk along the beach and found some cool shells for the kids while I was down there.  I also went for a jog with some friends from work and saw Dolphins jumping in the water, crazy!  It looks like I have a fairly busy work season lined up through mid May which is good news.  I will also be returning to work earlier than normal this fall, starting in early August instead of late August.

I will note that in southwest MI we had the mildest winter I can remember we had no snow accumulation in February and January was pretty sparce as well.  For my job doing snow removal at the local nuclear plant we ended up doing a lot of odds and ends tasks on the many nights we had no snow.  We painted rooms, repaired plumbing, replaced ceiling tiles and light bulbs, and even built a new briefing room for our department in our warehouse.  I am fairly confident this will be the last year I work this job.  For the next two years my main plant is starting its spring refueling outages earlier, which means I would have to leave towards the end of January.  It was already a hard sell for me to take off in mid February.  With leaving 3 weeks earlier, it just doesn’t make sense to bring me in for 6 weeks of work, essentially only half the winter.

I’ve used the nice weather to my advantage and did some trail clearing on our railroad bed trail.  I also build a nice walking bridge over one of the railroad bridges with scrap wood I had laying around.  It was possible to cross before, but this makes it much safer.  There is a railing on both sides and a fully covered walkway, so you can’t accidentally roll an ankle by stepping between the railroad ties.  I will build a nice looking bridge here at some point in the future.  This will do for now.  I had 1 day and spent less than 50 bucks to make it happen.  Kid #2 who is 8 is in cub scouts and his troop will be doing an overnight camp in our woods in April, which should be a fun adventure!

 

Spending:

For Quarter 1 we hit a 36.4% savings rate. This quarter we have had a couple challenges affecting our savings rate.  I already mentioned Mrs. C.’s healthcare expenses above, but we have also started our oldest son’s teeth straightening expenses.  We put down $800 and are paying $200 per month for the next year on his appliance that expands his bite, then we will have another $3,500 expense for Braces in a couple years.

We have not started our youngest nephew in preschool yet, it looks like we will start in September, which will be an expense of around $500 per month.  This will be largely offset by Mrs. C’s earnings, but will still drag down our savings percentage.

All of the kids are super interested in Space stuff, heck my nephew has stated very seriously that he is going to live on Mars, he claims he already has his ticket.  I wanted to get a better telescope for the kids because the Walmart special one we bought a decade ago just isn’t user friendly enough for the kids.  I found an amazing deal on Amazon and purchased an Orion 90mm telescope for $142 under Amazon Warehouse deals.  The scope normally retails for $240, but by getting a returned item I saved 40%!  We haven’t used it much, but I did play around with it for a bit and was able to get the moon super focused and can see craters in extreme detail with it.  The tracking knobs are amazing for moving the telescope just a touch to keep the moon or a planet in view. More updates on our exploration of the sky as time goes on.

 

Net Worth:

Net Worth Q1 2017

Our net worth is currently $216,660, excluding our cash savings accounts. Since we changed our health care plan for this year we could not contribute any money to our HSA.  We also have not been contributing to Roth accounts, in favor of our traditional IRAs, which we have been making on a weekly basis.  I lowered the value of our mower to be more in line with prices I have seen on craigslist for similar mowers.  So far in 2017 we have not made any new extra payments to our mortgage balances.  In June after the spring outage season is complete we will make a large payment on our primary residence.

I’m super excited that our investment accounts have passed $64,000 in value.  If we do nothing else, in 30 years with 7.2% returns we should have over $500,000 in investments without adding another cent.  $500K at a 6% withdrawal rate would provide a $30,000 withdrawal.  Mrs. C. would be turning 65 and I would be turning 61. It’s great to know that we have a secure retirement at a normal retirement age, however we are going to continue investing aggressively to move that date up a couple decades :).

 

Investment Breakdown:

  • Total Stock Market Index:       $6,473
  • Small Cap Index:                   $12,240
  • Mid Cap Index:                      $14,621
  • Emerging Markets:                  $6,597
  • Betterment 100% Stock:        $1,663
  • Tesla Stock:                            $16,736
  • Cash:                                       $1,132

The cash in our investments is in our HSA.  I try to get $1,000 in there to cover medical expenses if needed.  Currently we are paying cash for our medical expenses and saving the receipts in order to use those expenses for tax free withdrawals in early retirement.

We have 60 shares of Tesla stock, which has performed extremely well since we purchased them.  I am a strong bull on Tesla over the next 10 – 20 years. I am not planning on adding any more shares to Tesla as time goes on. All of our future contributions to our accounts are to be spread across the above mentioned index funds.

 

House Payoff:

Currently we are paying an extra $200 per month automatically on our house.   We are planning on making a large payment in June and another large payment in December on our house.  The goal is to between these two payments hit between $15,000 and $20,000.  If we keep up this pace for 2017, 2018, and 2019, then we will be on track to pay off the house between May of 2020 and December of 2020. I keep track of where we are at with paying off our mortgage using my Mortgage Payoff Spreadsheet.

 

Skymiles:

I earn skymiles through flights on Delta for my employer and through use of my Delta Skymiles AMEX card.  Currently I have 153,000 skymiles.  Although this isn’t counted as an asset in my net worth, these have considerable value.  I personally plan on using these miles to rent a nice house or apartment on our 2018 trip to Disney World, which is on the lower end of value for skymiles redemption. On average skymiles are worth 1 cent a piece, which would value my Skymiles at $1,530.  For Hotel stay they are worth more along the lines of 75 cents a piece, so for my purposes my Skymiles are worth around $1,147.

Action Economics:

Earnings:  Originally I didn’t start this blog to make money, so I am thrilled to have some additional income streaming in.  I highly recommend starting your own blog for around $50 a year at GoDaddy. I love having a platform to express my thoughts and running a website can be extremely inexpensive, especially compared to the possible rewards. I have friends who run other blogs that earn 10 – 20X what my blog is earning right now.

January: Total: $327.47

  • Flexoffers: $0
  • Amazon: $317.47
  • Adsense: $0
  • Spreadsheets: $10

February: Total: $411.93

  • Flexoffers: $0
  • Amazon: $276.05
  • Adsense: $114.88
  • Spreadsheets: $21

March: Total: $209.34

  • Flexoffers: $0
  • Amazon: $149.34
  • Adsense: $0
  • Spreadsheets:
  • Sponsored Posts: $60

There certainly is a downward trend here and that can be attributed to two factors.  The first is seasonality.  We see a decent spike around Christmas time from Amazon, and with the delay in receiving payments,  the revenue for January and February are from this Christmas spike.

The second factor is a recent change in how the Amazon Associates program pays its members.  Starting this month there is a massive change.  Historically earnings were based on total items sold in a graduated tier.  Since I typically sold around 100 items per month our percentage was 6.5%.  Now the percentages are based on categories, and most categories are lower than 6.5%.  Some are higher, but several are around 4%. So I am expecting an approximate 30% cut in Amazon revenue. My goal is to be averaging around $300 per month for 2017.

I hosted my first sponsored post in March.  I gave a decent discount to what I think a sponsored post here is worth.  In the future the rate will be quite a bit higher.  Having a sponsored post on here from time to time will help with the income side of the blog and as long as I do it sparingly I think my audience won’t mind.  (Let me know if you do!).  The absolute most I can see doing is 1 post per month, but it will probably be even less frequent than that.

Traffic:

Over the past 6 months traffic to Action Economics has been fairly steady.  Growth has slowed substantially.  I need to work more on link building and media mentions, but in all honestly, I don’t really enjoy doing that part of blogging and with time constraints through my work schedule I just haven’t been getting around to it.

January:

In January we got a decent bump from Rockstar Finance for sharing the article My Detailed Financial Independence Plan.  We received 20,209 page views in January. 9,248 were from organic search.

February:

In February we had 12,871 page views, with 7,940 from organic search. Keep in mind February has 3 fewer days than January.

March:

In March we had 22,816 page views. In March Action Economics also has another article, Double Your Money Again and Again shared by Rockstar Finance.  We had 10,466 page views from organic search in March.

 How was your first quarter in 2017?  Any big moves in Net Worth?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. Check out the Action Economics archives section for all past posts.

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