2016 Quarter 3 Update

Quarter 3 overall is a slow quarter for us. During Quarter 3 I was off work for the first two months, so our total income and thus savings rate is down for the quarter.  During Quarter 4 I will be working every week, with a lot of overtime, and this will propel our yearly savings rate to 50%.

Financial Update: Income:

Our total income for the quarter came to $14,935, which has us on par for hitting our $80,000 year target.

Financial Update: Savings Rate:

To calculate our savings rate we took our gross income, subtracted out income taxes paid, and added in tax returns received and 1/2 Per Diem. Social security income for our nephews is included in our gross income total.

  • Gross Income: $14,935
  • Payroll + State Taxes: – $762
  • Net Income: $14,143

Here is a breakdown of our total savings for the quarter

  • Monthly extra on house:            $600
  • HSA Contributions:                     $1,560
  • IRA Contributions:                      $1,950
  • Increases in Savings Balance:    -$700
  • Taxable Account                          $300
  • TOTAL                                         +3710

This works out to a 26% savings rate.  When adding in the third quarter income and savings with the first and second quarter, we have a total income of $55,995 and savings of $10,830.  This is a savings rate of 25.8%, which is still pretty good. If we view the land purchase and the van purchase in Quarter 2 as transfers of savings instead of spending, then there is a vastly different picture of $55,995 in earnings and $23,830 in savings, putting us at 42.5%.

I started a taxable Betterment account to start taking advantage of historically low Long Term Capital Gains tax and the instant diversification Betterment offers.  So far I have put in only $100 per month, but once the house is paid off I will be diverting all the extra money I was putting on the house into my Betterment account.

House Payoff:

Primary Residence Mortgage Q2 So far this year I have only put $200 per month extra on the house.  At the end of the calendar year I will make a large payment on the mortgage like I did last year.  With the unexpected van purchase, it will be less than what I had hoped for, I’m shooting for at least a $10,000 – $12,000 reduction in principal. I love seeing that large drop on my Personal Capital Chart.  I’m planning on this years end of year extra house payment being at least twice the size of last years.

Action Economics:

Earnings: I will start to discuss this on a cash basis vs. accrual, so most of the dollars reported here were actually covered in my last financial update:

  • July: $225.26
  • August: $166.79
  • September: $245.48

The majority of the earnings are from Amazon Associates. I made $15 from spreadsheet sales this quarter.  On average, each month the site is earning more money than the yearly cost of it, which is great, and will ensure the long term viability of the site.  In August I paid for the domain name up through 2021 and for hosting through next year at a cost of around $200.

Traffic: This quarter I published 13 articles with a total of 22,339 words.  I typically build up my articles that are ready to publish during the summer to get me through my long work season of September – May.  A lot of the articles I am publishing now I wrote during the summer.  I currently have about 10 articles ready to publish. I’m working 75 hour weeks right now, so I really don’t have the time to produce any new content. This quarter we had 33,291 page views and visits from 138 countries. Traffic is down about 15% from last quarter. I didn’t have any media mentions or large shares of my articles this quarter. Organic traffic has steadily increased, which is a better metric for success in my opinion than total page views.  In Quarter 2 I had 19,430 organic page views, and in Quarter 3 this increased to 23,097. Our biggest article is still the one I wrote on Building A Monkey Bar Set This article accounts for just under 43% of our search traffic now. My post Living Large on $50,000 A Year: Why It’s not so hard for median earners to get ahead has risen sharply and now accounts for about 22% of search traffic. For the quarter 235 articles were found at least once in search engines.

Goals For The Rest Of 2016:

Increase Earnings by 11% to an even $80,000: I’m on track for this and MAY exceed it. As long as Mrs. C. and I keep doing what we are doing we should achieve this goal.

Increase Savings Rate to 50%: Excluding the van purchase and our land purchase our savings rate should end up just over 50%.  Since these are more closely related to transfers of savings than to consumption I think this is still a legitimate way to track our savings rate.

Look Ahead To Quarter 4: Quarter 4 will be a big quarter for us. I started out with 75 hour weeks and will continue that for some time.  Once I switch over to my facilities job that will drop to 40 – 50 hours per week, but it’s still WAY better than 0 hours per week. Quarter 4 should be our highest income quarter. With most of our major expenses behind us, we should be able to effectively save a lot more of our Quarter 4 income as well.

That’s it for my third quarter, how has the third quarter of this year been for you?

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. John uses the free tool Personal Capital to track his net worth and posts quarterly updates on his finances. Check out the Action Economics archives section for all past posts.

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