This month I was a little late posting our budget and investment income. Hopefully, I’ll post this update a lot sooner than the 12th of the month.
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:
January was another roller coaster ride for our finances. February might be a little more in line with our regular monthly budget/expenses, but I'm confident that March will be a better gauge of how our finances should look like for the rest of the year. As we transitioned to move closer to our church community, and to cut my wife’s commute in half, we realized a couple of things. The first thing we realized is that we’ve been poor planners. We were relying on my wife’s bonus in order to finance our move, rather than saving towards it in a separate account. We received the bonus in January, which shows the huge improvement in our income. In the future, we're planning to do a better job of preparing for expenses instead of relying on one source of income. I’ve also seen that when we don’t buy groceries on a consistent basis, we spend an exorbitant amount on food by dining out. This is a habit that needs to be curbed, otherwise we’ll be eating the money we need to pay down debt, invest, and give. This month we were over budget by $346 when we exclude money put into savings and investments. I'm glad we were able to put some money back into our investment accounts considering the roller coaster of moving into a new apartment. 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. We didn't have to pay rent this month, since we prepaid it last month. However, we spent a lot in eating out, in an accident we had while moving and overall spent more money because we had more money in out account. 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 $4,274, our annualized return is 14.1%, which is not bad. This amount was slightly lower than last month's passive income because we wanted to ensure that we'd have a comfortable move. I'm excited to see how the rest of the year goes! 92% 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 increased, resulting in a .31% gain, 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, 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 14.1%, an improvement from last month’s rate of 0%. The move was a major strain on our finances, but the months to follow should be better as we transition into our new home. Hopefully next month we continue to be better stewards of what God has given us. I hope that you’ll be challenged to do the same!