Saturday, June 26, 2021

401K in my 401K

I just hit a new major financial milestone: 401K in my 401K!  This new milestone comes from 10 years worth of contributions and investment returns.  When I first started to invest in my 401K, I started with a 3% contribution per paycheck.  Then I slowly increased my contributions by 1% every few months.  I was finally able to start maxing out my contributions about 7 years ago. 

The low rate of return is due to a conservative asset allocation.  About 50% of the portfolio is currently sitting in a stable value fund earning a guaranteed 2%.  As I’ve shared before, back in late February 2020 and then in early March 2020 I sold a majority portion of my 401K into a stable value fund with a guaranteed rate of return of 2.5% (the rate has dropped down to 2% now).  I watched as the stock market continued to tank and I thought that I was so smart for correctly timing the market. 

Then when the stock market started roaring back in late March 2020, I didn’t have the guts to put my entire balance back into my stock market funds.  I sat on the sidelines with this huge stable value fund balance.  Market timing is extremely difficult because you need to perfectly time 2 different transactions: when to sell and when to buy.  I’ve been dollar cost averaging the stable value fund back into a total market fund over the last year.  Thankfully, we didn’t fiddle with our other accounts too much during this time. 

If I had simply just held on to my funds without selling in 2020, my account value would have been MUCH higher by now (probably over $180,000 higher!) due to a ~60% increase in the US stock market since late March 2020.  I wasn’t able to time the market properly and missed out on some huge gains.  Oops - an expensive lesson learned.  The stock market crash last year taught me that my risk tolerance wasn’t as high as I thought it was (previously 90/10).  Our overall portfolio (IRA, taxable, HSA) is now 70% stocks and 30% bonds - and will probably stay that way moving forward. 

My current new 401K contributions consist of:

71% Fidelity S&P 500 Index Fund (FXAIX) 

6% Fidelity Mid Cap Index (FSMDX) 

13% Vanguard Small Cap Growth Index (VSGAX) 

10% Vanguard Health Care Index (VHCIX)

My wife is also maxing out her 401K with international stock market funds to further diversify our investments.  We are Coast FI now but will continue to invest towards our financial freedom.  Here is the Fioneers’ definition of Coast FI:

“Coast FI is when someone already has enough invested in their retirement accounts that would grow to provide them with a comfortable traditional retirement. They wouldn’t need to add another dollar. If someone has achieved Coast FI, it means that they only need to cover their actual costs of living with active income.”  

You can find a great Coast FI calculator here.  How is your financial progress?  Keep investing my friends.

Tuesday, June 1, 2021

Side hustles May 2021

The great thing about doing side hustles to generate extra income is that you can hustle on your own terms.  The more hard work, time, and creative effort you put in, the more extra money you can make.  You can hustle as little or as much as you want, whenever you want.  It’s your extra money, and you can choose how you want to spend it.  Instead of focusing on what ideas don’t apply to you, try focusing on different side hustle ideas that you can implement to work for your situation. 

Once a month (usually on the 1st), I like to post a short summary of our personal and financial situation for the previous month.  While I don’t often post articles, I am committed to documenting all of my side hustle income.  Here I’ll share some of what’s been going on with our lives and our side hustles.  

Just a random picture of our dog

Welcome to June!  Did you have a good May?  We are about half way through 2021 already.  Time sure does fly doesn’t it?  We continue to work hard, make money, and try to have fun along the way.  Here’s our monthly summary of side income that we have generated in the previous month of May. 

Cash Back 

On 5.11 my wife received a $10 statement credit on her AMEX Gold credit card.  This card offers a $10 dining credit every month on select restaurants such as Cheesecake Factory or Shake Shack.

On 5.11, my wife received a $20 statement credit on her AMEX Gold credit card from AMEX Offers. This was for $20 back on $100+ purchases made at Wayfair. We bought some furniture. 

On 5.14, my wife received a $30 statement credit on her AMEX Platinum card. This was for $30 off $30 on purchases made with PayPal checkout. 

On 5.22, I received a $4.20 cash back statement credit on my Citibank ThankYou Preferred credit card.

On 5.23, I received a $0.18 cash back statement credit on my AMEX SimplyCash Business credit card. 

On 5.24, I received a $0.41 cash back statement credit on my AMEX SimplyCash Business credit card.

On 5.29, my wife received a $22.63 statement credit on her AMEX Platinum card. This was for their Saks Fifth Avenue credit, which offers up to $100 ($50 per 6 months) credit on purchases made at Saks. 

On 5.31, I received a $25 statement credit on my AMEX SimplyCash business credit card from AMEX Offers. This was for $25 cash back on purchases over $500. 

Rental Income

We did not receive any rental income this month because our tenants are currently having financial difficulty.  We are giving them some time to get back on better financial footing.  The pandemic has been hard on their income streams.  This is one of the risks of rental property investing - consistent income is not guaranteed.

Survey Income

On 5.7, I received a $5 Amazon gift card from The Vision Council for completing a survey.

On 5.17, I received a $30 check from My Impact Network for completing a survey.

On 5.18, I received a $40 virtual Visa credit card from E-Rewards Medical for completing a survey.

On 5.19, I received a $35 virtual Visa credit card from E-Rewards Medical for completing a survey.

On 5.24, my wife received a $25 Gap gift card for completing a survey through Gap.  

On 5.26, I received a $50 direct deposit from GLG Survey for completing a survey. 

Miscellaneous Income

On 5.6, I received a $1 Amazon gift card from MyPoints. 

On 5.14, I received a cash payment of $1.01 for recycling a small bag of plastic water bottles and aluminum beer cans.  

Monthly Totals:

We earned $112.42 from cash back income

We earned $185 for completing online surveys

We earned $2.01 of miscellaneous income

We earned $20 of sales income

All of this totals $319.43 from our side hustles for the month of May!  We took a hit to our side hustle this month due to missed rental income payment.  With a large emergency fund, we are not stressing about this missing income yet.  That may change in the future.  For now we continue to enjoy our journey towards financial freedom.  Our finances and investments are automated.  And we keep growing our points and miles stash in anticipation of future international travel.  Keep hustling!  

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