Time continues to race by at Mach speed. Because time is racing by so fast, I’m writing this two days before the end of the month because I don’t know when I will have the next opportunity to carve out the time to get this out on a timely basis. Sometimes you just have to seize the moment of opportunity. As I type, Mrs. GYFG is at her hot yoga class, my dogs are laying at my feet, and my son is taking his morning nap. I woke up at 3:30 am and couldn’t sleep, so I got up to work on my new business until around 7:00 am when my wife and son woke up. After my wife left for her yoga class, I buckled my son into his stroller and we took the dogs for an hour long walk. Now I’m writing this post (right before I start cooking breakfast to enjoy when Mrs. GYFG is back from yoga).
The business is taking off like a rocket and it has renewed me with new energy. I also find myself filled with more energy since I began treatment to remove the H. pylori bacteria that I recently found out was the reason for my chronic stomach pain over the last 18 months.
By now you have probably noticed that I spend much more time talking about the things that are going well than what might not be going as well. I do expect life to have its challenges and obstacles – I’m a true believer that you can’t have the sweet without the bitter. But the goal is to learn how to extend the sweetness and quickly get past the bitterness. I’ve previously recommended spending 99% on the good and 1% on the bad.
With that, let’s dive into the nuts and bolts.
If you’re a regular reader and only want to read the new content, feel free to just skip the intro below, and head to Net Worth. If you are new or haven’t read many of these reports, I encourage you to take two minutes to read the intro below, which does change periodically.
Why I Share These Monthly Reports
Mission Statement: To Humanize Finance, Build Wealth, and Reach Financial Freedom.
For those of you new around this corner of the internet, these monthly reports are about full transparency. And, they are just as much for me as they are for you. It was a hard decision to make all of my financial details public, but it has proved to be a very motivating one. The process I go through every month to produce these reports has been enlightening and life-changing. I published my first “income and net worth report” for January of 2015 when our net worth was only $195,141, and our gross income was on pace to hit $178,000 that year.
A little over four years later, our net worth currently clocks in at $1,220,368 with a gross income over the trailing twelve months of $514,321 (new all-time-high).
- That’s a 6.3X increase in net worth due to a compound annual growth rate of roughly 50% for the past four years.
- At the same time, income has increased 2.6X, which translates to a compound annual growth rate of roughly 24%.
Honestly, I don’t think the GYFG household would have experienced these kinds of results without the existence of this blog and the accountability it brings. Knowing that I will share our results with you readers every month keeps me very focused and intentional with all things related to our financial well being. For that, I THANK YOU for taking the time to read and interact with me on this blog.
Above and beyond this benefit to my own household, my sincere hope is that my policy of full transparency will inspire you to take the helm of your own financial ship and be intentional with its direction. I truly believe that anyone can reach financial freedom if he or she is willing to do things differently than the pack. If you’re after average results, then you’ve landed on the wrong site. There’s nothing wrong with average, but the kind of results I preach are EXTRAORDINARY. Sure, the “get rich slow” method is proven, but there is an alternative, which is to “get rich fast.” Look, I have no interest in living like a starving college student until I am old and brittle to only then have the means to check off bucket-list items when my body might no longer be physically capable of doing them. And I don’t want that for you either!
Here at GYFG, we approach the pursuit of FINANCIAL FREEDOM with an abundance mindset, so you won’t hear me telling you to cut out those $5 lattes. Choose to spend on what is meaningful to you. I spend a lot, but I also strategically earn a lot, save a lot and invest a lot.
I hope these reports inspire and move you to action. Don’t take a passive role in your finances and hope for the best. Keep this famous Jim Rohn quote in mind:
“If you don’t plan your future, somebody else will. And you know what they have planned for you? NOT MUCH!”
You must be intentional with your finances if you ever want a fighting chance to make it to financial freedom. But it does not have to take 40-50 years of slaving away for “The Man” before you have the option to retire. I think 10-20 years is all you need, with the most aggressive folks probably able to reach financial freedom in 10 years or less. A high income paired with a high savings rate are two of the vital components of a good recipe for the 10-year track.
I know I don’t have to publish my juicy details every month, but it’s important to me that you know that I put my money where my mouth is (not so many people giving financial advice actually do this). I publish all of my financial details not to brag, but instead to show you what is working as well as what’s not working. Sometimes finance can get pretty dense, and I think real life examples and numbers can help slice through the complexities (and the BS). Personally, I have always enjoyed the financial reports put out by other bloggers around the blogosphere, so I always intended to share my own.
You can find all my previous reports on the Financial Stats page.
Financial Stats Dashboard
At the end of every month, I download a .csv file from my Personal Capital account and drop it into my custom built excel workbook in order to update the dashboard you see below. I’m blown away every month by the progress we have made in a relatively short period of time. Now that the mortgage is paid off and that section is no longer included in these monthly updates, this will become a new monthly staple. The only number below that is not an actual number and instead is a forecast is the current year projected income of $538,574 in the gross income chart below.
Now that we have seen the overall, let’s take a closer look at a few of the items below.
Our net worth was up $48,939 in June vs. May. The increases came from regular monthly savings, a strong equities market, and income generated from the new business.
June Net Worth $1,220,368 (up $207,503 or +20.5% for 2019)
- Previous month: $1,171,429
- Difference: +$48,939
Net Worth Break Down (MoM):
The Real Estate ($638,817) category decreased from 55% down to 52%. This category includes the equity in our primary residence ($463,896), our investment in the Rich Uncles commercial REIT ($72,413), and our hard money loans through the PeerStreet ($102,508) platform. I have been taking capital as it’s freed up from our after-tax PeerStreet account and using it to fund Rich Uncles as we work the RU account value up to $100,000 (which is why the PeerStreet value hasn’t been changing much MoM).
Net Cash ($101,235) increased from 5% to 8%. We actually have $107,562 in cash but net cash is only $101,235 after you adjust for our current credit card balance of $6,327, which we pay in full every month based on the statement due date. I started traveling again in January, so this will fluctuate a lot more going forward (and is compounded by new travel related to the consulting business I started back in March).
The Business ($234,962) category decreased from 20% to 19%. This represents the ownership I have in the private company that I work for. This is an illiquid investment that only gets an update to its value one time per year. I net the company stock asset value of $446,962 against the company stock loan of -$212,000 to arrive at the $234,962.
Life Settlements ($89,655) remained flat at 8%. We currently have investments in seven policies at $10,000 each. They are accreting in value by about $1,000 per month. For anyone familiar with options, I liken the fixed return of life settlements to the theta of a short option. In this case, the accreted value is like the theta decay of an option you’ve sold. In more simple terms, with this fixed return you are amortizing (realizing) that value with the passing of time.
The Stocks ($155,699) category increased from 12% to 13% and represents the cumulative value of our brokerage accounts (retirement accounts) that are invested in stocks. However, this is not all of our retirement money, as the majority of our PeerStreet investments are made through a self-directed IRA (worth about $81,000 and counted in the Real Estate category of the pie chart).
Total Capital Deployed in 2019:
I anticipate deploying about $182,000 in new capital this year (of which 63.9% has already been deployed). Although a healthy sum, this is down significantly from the $414,692 that we were able to deploy in 2018. Going forward I expect there to be a lot more month-to-month variability in the capital deployed. About 65% of the 2019 total deployed will go towards putting the mortgage to bed (which officially happened this month).
We didn’t deploy much capital in June beyond the automated investments into Rich Uncles and Mrs. GYFG’s 401K (which I just increased from 20% contribution to 50% to max out by the end of Q3). We are currently just letting cash build up but I do plan to deploy an additional $28,000 to Rich Uncles in order to get the account up to $100K before the end of the year. That is all I currently have on my radar for future deployments. I am paying back the 401K loan at about $450 per month but it’s not reflected in the above table as I plan to just update it at the end of the year (I currently owe $48,362 of the original $50,000 loan). Our projected income for the second half of the year is $256,000 and is more than enough to put the loan to bed at any time. The other item not captured in the table above is the $30,000 that I sent to my high yield savings account at CIT bank currently yielding 2.3%.
Income for the month of June was $50,855 vs. $91,688 in May. On a cumulative basis, we have earned $282,574 through June of 2019. Next month is when my mid-year bonus will get paid out and I’m expecting ~$21,000 on top of my normal salary. I’m currently projecting income in July to be in the $50,000 to $60,000 range.
In the second chart above, I also track our income on a trailing twelve months, and as expected the TTM rose to a new all-time high to over $514K.
Below is how we actually did vs. our goal of saving 50% of our after-tax income. In the chart below, the green bars represent our actual savings rate for the month, the orange bars are what we anticipate based on our 2019 budget, and the blue bar is the projected savings rate for all of 2019.
Our savings rate came in right at where it was forecasted last month at 61%. My personal expenses are currently comingled with my business expenses for the new business, which is distorting/diluting the savings rate these past few months. The reason is that I’ve been spending a lot more on business travel, which is completely reimbursed by the client, but on my personal P&L it shows up in the revenue line for the reimbursement and the expense line for the actual expenses (a 0% savings rate, bringing the actual number down). I should have a corporate credit card by August, if not sooner, that will get paid directly from my business account and will no longer roll into my personal P&L – only the business income will.
Do you want to calculate your own savings rate? I’ve made it super easy for you with the savings rate calculator included in the free GYFG FI Toolkit that you can download instantly by clicking the link below. Here’s a peek below. Did I mention it’s free? You have nothing to lose and everything to gain, Freedom Fighter!
Speaking of savings rate, go check out my post where I mathematically prove the importance of your savings rate as a higher priority in achieving financial independence than your compound return. If you’re trying to build wealth quickly, then you have to read this post.
There has been so much change and growth these past six months. My son is a little over eight months old now and he is such a joy and so much fun. I’m walking away from my C-Suite role and the business I started four months ago is booming. Although the next six months are going to be challenging as I run my business full time and continue transitioning out of my current role by the end of the year, I’m excited to see what those next six months bring, and the six months after that. I have so much I want to share with you about the business but I don’t have the time just yet to share everything. Rest assured, I will eventually get to it.
I hope you had a Jubilant June!
– Gen Y Finance Guy
p.s. Personal Capital now offers a 2.3% high yield savings account that is FDIC insured.
Personal Capital allows you to aggregate your entire financial life into one account. All you need to do to see all your accounts in one place is log in to Personal Capital and voila! But it doesn’t stop there. They even automatically classify all your income and expenses for you. You get a FREE and fully AUTOMATED tracking system!