Each month, I’ll be posting our budget as well as the income we receive from our investments. Investment income includes dividends, interest, and rent payments(if any). This has to be one of the toughest aspects of being financially transparent. It shows whether we really practice what we preach about being faithful stewards, or if we are squandering the resources God has given us. It’s a little frightening to be honest, and can be a little disheartening. Being put under a microscope is never easy, especially if you think you’re the one holding the microscope. The truth is, God already knows whether we have been good stewards or haven’t, and His grace can even forgive our lack of stewardship. It also helps to keep us in check, as far as keeping our expenses low since we will be posting how much we spend each month, but it also helps us remember a couple of things:
1. Everything we have is the Lord’s, and he has graciously given us the abilities we have to earn and be good stewards.
2. Our identity isn’t found in our possessions or lack of possessions, so we shouldn’t be afraid of posting either.
3. Our motivation isn’t to boast, and yes, it is possible to boast about not having or shunning possessions. Since everything we posses is only “ours” for a time, the stewardship of what we have is what’s most important. Our faithful stewardship is still attributed to God, because He is the one molding us, strengthening us, and our faithfulness is a gift from him anyway! All the glory belongs to him from start to finish.
Ok let’s get started:
April was a great month. Looking at the details of the budget, most of the amount over budget was caused by 1.) allocating more money towards investments 2.) putting money towards both my wife's and my business 3.) increasing our giving. We set our budget under the amount we collect in income. We do this to ensure that we strive to live below our means, which would prevent us from living paycheck to paycheck. This month, we were only over our budget by $160 when you exclude the amounts we were able to save and invest. This is a huge improvement and worth celebrating. I'm also excited that we were able to increase our giving, and will adjust future budgets accordingly. We seem to be back on track to not only being under budget but also being generous, which is the whole point of this blog and out goals.
As I stated before, when we don’t shop for groceries, we end up spending a ridiculous amount in eating out. In addition, we had a few hiccups in transferring money between some checking and savings accounts, resulting in unnecessary bank fees. I was able to start working again, which is one of the reasons why these updates have't been as frequent. the extra income has really helped us increase our giving saving, and even our spending. We were able to be more generous this month, which is something I want us to continue. Now, I’m not proposing that we should be consistent givers in order to appease God and get in His good graces. And I’m also not saying that if we are more generous then God has to bless us. What I am saying is that, when we don’t praise God with our finances and demonstrate that He is greater than our financial needs and circumstance, we have treated our financial security and budget as an idol. If we don’t crush our idols and bring them to God, we are bound to be crushed by our idols. I don’t want us to get into the habit of spending simply because the money is there. We need to learn to be patient with our spending, but liberal in our generosity and investing.
Now that we’ve got the painful and hard part out of the way, let’s look at our investment income as well as our savings rate. Our long term goal is to have enough income from our investments so that we can both quit our jobs and use our time more wisely and with more purpose than simply collecting a paycheck. Not saying that work is wrong, or that being an employee is unfruitful, we would just rather use our time in other ways. In order to get to that point, we need to save. Increasing our savings rate will increase the amount we can use to invest which will increase our investment income.
For the month of April, our investment income was(DRUMROLL PLEASE)…
Which isn’t much now, but since this portion of our portfolio is $5,291, our annualized return is 15.2%, which is not bad. This amount was the most we have received so far in passive income, which means we’re gaining some traction towards our monthly goal of $125 in passive income per month. I’m excited to see how the rest of the year goes! 90% of the income came from interest in our lending club account, so we will definitely keep adding to that account as well as our dividend portfolio. The price of the stocks in our dividend portfolio decreased, resulting in a -.82% loss, but we don’t plan on selling these stocks so this isn’t too big of a deal as long as we can keep collecting the dividend checks.
In November 2014, we bought The Lion’s Fixed Income motif (purple in the portfolio analysis). We bought this motif to increase our monthly passive income, and will be adding money to this motif and to The Lion’s Share’s motif (in green). As you can see, the increase in our income came from the income we received from The Lion’s Fixed Income motif. If you take another look at the dividend income, every single one of our holdings in purple rewarded us with cash. As an investor, consistent monthly passive income is our biggest financial goal. You can invest in these motifs as well by opening a Motif account and investing in one of the portfolios to the right of the screen.
Our savings rate this month was great this month at 18.6%, from last month’s rate of 21.8%. We’re hoping to increase our savings rate after reading countless articles that demonstrate how individuals, regardless of their age or income level, can “retire” in 15 years if they invest consistently and save half of their income. By retire, we mean being able to do the things we are most passionate about, regardless of the income it produces. We’d like to use our money to buy time rather than spend our time to make money.