I think it takes a little bit of guts to share your income and expenses openly with the world. But that said, I think there is value for both of us in reading this post. I will do a similar post every month.
General Thoughts on this Month: This was a great month for income, thanks to a record in Passive Income, in which all dividends were reinvested, which really makes everything else look good as well (savings rate, % of expenses covered by passive income, etc). In reality, it was pretty normal month if dividends are removed.
As usual in December, it was pretty expensive due to the Holidays, but that happens every year and we are ok with it actually. In fact, if you remove housing, rental property mortgage costs, and gifts/donations, our total expenses actually came in under $2,000 this month. But when you add back in those three categories, expenses balloon to over $7,000!
All of that said, listed below is a detailed display of all income and expenses for the month of December 2016.
General Thoughts on INCOME:
1) Income appears to be very high numerically, but when you consider the fact that all dividends were reinvested and that everything else went towards paying down debt, it really didn't "feel" like we made a lot this month.
Once there is actual 'excess' and not everything is plowed back into investments and debt repayments, we then should see the difference between our income and expenses. Still, I strongly believe that your "system" is what is actually important (not your numbers), and I think our family's financial system is right.
2) Lending Club sales continue to offer around $100 or so income per month, which is nice. Here is a detailed description from June's report, explaining this number, as I unwind my Lending Club investment as quickly as I can. This number will eventually go to zero.
3) Dividends were a record, and I wrote about them in depth, here, and so I won't add anything additional in this report.
General Thoughts on EXPENSES:
1) Expenses were relatively high, but we expected that and prepared for it relatively well. As I mentioned in the introduction, when you remove our three largest categories, we really are doing well, in which this month we spent only about $2k for a family of four in the US. So I'm thankful for the situation we've created.
Post Takeaway - I always think December does a good job of showing how close we are to FI (financial independence). I would agree that in the aggregate we are probably around 35% of the way there, which is what our chart above reveals. You can do the same evaluation for whatever month or metric works for you. For us, with about 11 years to go until I turn 42, I think we are on pace.
In conclusion, I am very excited about 2017 as we transition away from debt repayment and more towards investing in the second half of the year. Stay tuned.
What do you think? I'd love to hear your thoughts below.
Thanks for reading!
Passive Income Dude