2021 seems to be looking up, in general. Vaccinations rates are up and things are beginning to open back up. I think we’re on the right track for things to be back to normal before too long. On my side of things, I had a great quarter financially.
I finally closed on my fifth multi-family rental property at the end of February. My original “on or about” date was scheduled for October and we faced delay after delay. I’m very happy that deal is finally closed. Everything went well and I managed to fill the vacant back unit pretty quickly. I’ll have more information on this property (and my other four) in my Q1 2020 rental property update within the next week or two. Subscribe so you don’t miss it!
I’m still waiting for a phone call on a single family property that I may be purchasing. I know the owner’s son pretty well and this would be an off-market deal. I’m currently owner-occupying the first two unit property that I purchased so if this deal works out I’ll likely move into the single family and rent my unit. I’m pretty excited for the possibility.
2021 Passive Income – $6,990.08 YTD
Owner Occupied Rental – $2,175.00
Rental Properties – $3,599.68
Dividends – $318.56
Interest – $17.26
Other – $879.58
I like to calculate my FI (Financial Independence) ratio in two parts. The first part being passive income vs. necessary expenses. The second part being passive income vs. total expenses. The first calculation makes sense because I know that I could cut all of my unnecessary expenses if I had to, this is often referred to as “Lean FI.” The second calculation makes sense because this level of FI would require no changes to my every day life and I could continue living exactly as I am now. The purpose of these calculations is to determine how close to financial independence I am.
Passive Income vs. Necessary Expenses
$6,990.08 / $7,592.42 = .9207 x 100 = 92.07%
This 92.07% means that my passive income for the first quarter of 2021 was ~8% short to cover my necessary expenses. I owed NY state and the Federal Government a bunch of taxes this year (one of the joys of owning rental properties), and this amounted for a large percentage of my necessary expenses this quarter. I should be well over 100% after next quarter. This 8% amounts to just $200.78 per month that I was lacking in order to afford all my necessary expenses without working.
Passive Income vs. Total Expenses
$6,990.08 / $9,652.89 = .7241 x 100 = 72.41%
This 72.41% means that I was about 37.6% away from being able to afford ALL of my expenses for the quarter without needing to work. This 37.6% amounts to $887.60 per month that I was lacking in order to afford all my expenses without working.
I didn’t receive any passive income from my fifth rental property until March. Going forward, I should see a nice jump in passive income. I think my goal of $30,000 in passive income this year is very achievable.
Net Worth +6.56% YTD
I’ve been tracking my net worth since 2016 and it’s both motivating and inspiring to see the progress I’ve made. I saw a 6.56% gain during the fist quarter of 2021. That puts me way ahead of schedule for my yearly goal of 18% and I certainly can’t complain.
I use Personal Capital to track my net worth. It’s phenomenal, honestly. I login almost daily to keep an eye on things. If you’re interested, use my link to sign-up here. (It’s free)
Total Amount Invested and Annual Savings Rate – $11,438.47 / 55.29%
I have managed to invest $11,438.47 into the market so far this year. More than half of this came from maxing out my Roth, I don’t expect to continue at this trajectory all year. I do think my goal of $35,000 for the year is possible though.
I’ve found that it’s extremely easy to invest money when it’s an automatic process. Trying to decide whether to invest more or save for another rental property is much more difficult, to me.
I have managed to save 55.29% of my net income so far this year. This is a great metric to track as it really opens your eyes to what an expensive month or two can do to an entire year of savings. I’m pretty much maxed out on the amount that I can comfortably save. The annual increases in my savings rate are largely due to an annual raise at my job as well as saving money from side jobs. As long as I can control my spending, I should see a nice bump this year from my new rental property.
Goals For 2021
Financial
- Invest $35,000 – Current: $11,438.47 / $35,000
- Increase Net Worth by 18% – Current: 6.56% / 18%
- Achieve a 60% Savings Rate – Current: 55.29% / 60%
- 100% FI Ratio (Total Expenses) – Current: 72.41% / 100%
My financial goals are looking great so far. Honestly, the one I’m least optimistic about achieving is investing $35,000. Unless the market tanks, bringing my net worth down with it, I should be able to make the rest of these goals happen.
Fitness
- Run 100 miles this year – Current: 24 / 100
- Bench press 325lbs (@ ~175lbs bodyweight) – Best this year 315lbs @ 178lbs
- Squat 365lbs (@ ~175lbs bodyweight) – Best this year 370lbs @ 178lbs
- Deadlift 455lbs (@ ~175lbs bodyweight) – Best this year 365lbs @ 178lbs
I’ll start by saying this, running sucks. I run a mile before each of my workouts and should hit my goal of 100 miles so long as I keep that up. As far as my lifts go, I’m a touch heavier than I originally set for these goals, but I don’t care much. These goals were derived from my best lifts ever, back in 2016. These goals will get me back to as strong as I’ve ever been. My plan is to attempt a one rep max at the end of each quarter.
I did better than I thought I would on bench. I pressed 315lbs and then failed at 325lbs. I squatted more than I ever have at 370lbs and didn’t attempt anything heavier, maybe I’ll hit 405lbs this year. My deadlifts didn’t go so well. I worked up to 365lbs and then failed at 385lbs. I was about half way up with 385 and felt a little tweak in my back so I immediately dropped the weight. 455lbs feels like it’s a lifetime away so we’ll see how it goes.
Other
- Read 30 books – Current: 10 / 30 (Check out my book recommendations)
- Total of 2,000 blog subscribers – Current: about 1,855 / 2,000 (Subscribe here!)
- Travel outside of New York – No progress
I’m way ahead of my reading goal and I don’t see any reason why I won’t be able to read 20 more books this year. 2,000 blog subscribers might actually happen before next quarter is over, which would be amazing. I would love to go on a vacation this year but, I just don’t see it happening. There is a chance I do a weekend trip outside of NY, so maybe!
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Check out Personal Capital to track your net worth. It’s phenomenal, honestly. I login almost daily to keep an eye on things. If you want to check it out, use my link to sign-up here. (It’s free)
What I’m currently reading:
