Yes. It is April, and this should have been done a month ago. I've been swamped with new work responsibilities, which is good and will help us towards our financial goals. However, I don't want to be negligent in the other things I want to do. I also don't want to get into a habit of making excuses for poor time management. Without further ado, the update for February.
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:
February, although we were over budget, was still a great month. The reason why I say it was a good month is because my wife was able to start her own business. As an entrepreneurial family, I don't mind taking strategic business risks. The goal is to take risks that would help us along our financial journey. She's started an invitation and calligraphy business. I honestly couldn't be more proud of her.
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. The good thing is that we are aware of the problem and can work on solutions to fix it. In the future, we’re planning to do a better job of preparing for expenses instead of relying on one source of income. This month we were over our budget by $505 when we exclude money put towards our investment and savings accounts. We still need to adjust to the new budget with the move in order to get our finances in order again. 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.
We didn’t pay down as much debt as I thought we would. In the next couple of months we’ll be focusing on decreasing our debt in order to help us be more financially secure.
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 November, our investment income was(DRUMROLL PLEASE)…
Which isn’t much now, but since this portion of our portfolio is $4,390, our annualized return is 14.3%, which is not bad. This amount was slightly higher than last month’s 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! 85% 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. 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 decent this month at 17.4%, from last month’s rate of 14.1%. 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. We'd like to use our money to buy time rather than spend our time to make money.