Happy New Year everyone! I hope you had a nice winter break. We went to visit families near Palm Springs and had a great time. It was so nice and sunny there. I don’t know how many more gloomy Pacific Northwest winters I can take. We’ll probably move down to California after RB40Jr finishes high school. Mrs. RB40’s parents are getting older and they need more help. Also, I think the cost of living in the CA deserts is actually cheaper than in Portland. Our property tax is 6 times my father-in-law’s! He has half an acre and we can build something in the back when we move to CA. However, that would probably increase the property tax significantly. We’ll figure something out. Maybe I’ll just get an Airstream. He already has a big concrete pad back there.
Okay, let’s wrap up 2024. The RB40 household had a great year financially. Our net worth reached a new high, thanks to the stock market. Our spending was also pretty low. The only snag was the income side. Sadly, my active income continued to decrease. However, I’m not too worried. This is part of the transition to full retirement. In 5 years, I probably won’t have any active income at all. We’ll withdraw from our retirement accounts as needed. Our investment should be able to support a comfortable retirement.
Alright, I’ll share how I did with my 2024 goals. Then, I’ll go over our net worth and cash flow. Let’s go!
2024 Goals
Here is my 2024 goal spreadsheet. It works well. Try it out if you can’t keep up with your New Year goals. The key is to review the spreadsheet monthly to track your progress. That way, you can see which goals need extra attention and work on them.
I accomplished most of my goals in 2024. Check it out.
Financial Goals
FI ratio > 100%
The FI ratio is passive income divided by expense. If you can generate enough passive income to cover your expenses, then you’re set. For 2024, I reduced this goal to 100%. We are getting older and we can spend a bit more.
The result was 121%. That’s really good, but there will be big changes in the coming years. I’ll write a detailed post about it soon.
*FI Ratio = passive income / expense
3% Rule
Everyone is familiar with the 4% retirement withdrawal rule, right? Basically, you should have a successful retirement if you withdraw less than 4% of your investable assets annually. Let’s see if we can spend less than 3% in 2024. This is a good way to test your retirement readiness.
In 2024, we spent way below 3%. This will be more important in the coming years as our passive and active income decreases.
Track net worth and hope for +10%
I’ve been tracking our net worth since 2006. It’s great to see the progress. For 2024, I hoped for 10% gains. At this point, the gain is completely dependent on the stock market and there isn’t much I can do to influence this goal. I’ll just track it and keep my fingers crossed.
Our net worth gained 20.1% this year! That’s much better than expected. Last year, I thought the market was too hot and it wouldn’t perform that well. This is why you need to keep investing. Once again, it was good to be an investor.
Health Goals
Exercise 3x per week
Now that I’m 50, health is job 1. I need to exercise consistently so I can stay healthy longer. I joined a gym and plan to exercise at least 3 times per week. Unfortunately, my elbows developed joint pain several months into working out. I can’t exercise like my younger self anymore. Getting older sucks.
I modified my exercises, but the pain never disappeared completely. Finally, I took the whole month off in December. The extended time off helped tremendously. Now, I’m ready to go back to the gym. This time, I’ll try to avoid stressing my elbows. Getting fit after 50 is tough!
Health checks
Equally important is checking in with the doctors. At this age, we have more maintenance and preventative care to deal with. I got everything on the list done.
- Colonoscopy. Done!
- Annual physical. Done!
- Dental exam. Done!
- Vision screening. Done!
- Immunization. Tdap booster, Flu, and Covid vaccine. Done!
Fun goals
International trip
Mrs. RB40 turned 50 and she wanted to go on a fun memorable trip. We visited Japan for 3 weeks. It was awesome. I’d love to live there for a year or so.
Happiness level > 8
2024 was a great year. The only bout of unhappiness was when I had shingles. That sucked. If you’re over 50, get the shingles vaccine.
Other than that, life was great. The secret to happiness is to stay busy with activities you enjoy and be healthy.
Help RB40Jr start a YouTube channel
We gave up on this one. RB40Jr. lost interest.
Net Worth (+20.1%)
I’ve been tracking our net worth since 2006. It is very motivating to see our progress. The power of compounding is incredible. In 2024, our net worth increased 20.1% and far outpaced our earnings. This is why you have to invest.
***Important*** My best advice is to stay the course. Do not stop investing. You should keep investing whether the stock market is up or down. You might think stocks are too expensive, but it’ll look cheap in 10 years. Keep investing and you’ll achieve financial independence someday. Don’t try to time the market.
This is a chart of our net worth from Empower. (Personal Capital is now Empower.) Sign up for a free account at Empower to help manage your net worth and investment accounts. I log in often to check our net worth and use their free tools. It’s a good site for DIY investors.
I’m not sure why the chart looks like this. The update interval probably got messed up in August and September.
2024 FIRE Cash Flow
This FIRE cash flow chart includes my online income, side gigs, and taxable passive income. Mrs. RB40’s income and our retirement accounts aren’t included here.
Overall, 2024 was a good year. Our spending was on target, below $65,000. That’s very reasonable for a family of 3 on the west coast. The FIRE income streams also performed relatively well.
2024 FIRE Income: $62,001
- Real estate crowdfunding: $15,278. Real estate crowdfunding was great in 2024. One project exited successfully and returned a nice profit. You can read more on the RE Crowdfunding Passive Income page.
- Dividend Income: $15,286. Dividend income was good as well.
- Rental Income: $7,260. I had a good year with the rentals. We didn’t have any big repairs and the tenants paid on time. This will change next year. One of our tenants is leaving and I’m planning to sell our rental condo.
- Blog income: $12,028. My blog income decreased again. In a few years, it’ll probably be zero. Oh well, I had a good run.
- Odd jobs: $4,803. I deliver catering orders a few times per week. It kept me busy. This income stream will decrease over the next few years as well.
- Other: $4,632. Tax refund and other random stuff.
- Interest: $2,714.
Spending: $63,087
In 2024, I plan to spend about $65,000. That was the amount we spent in the previous year. We made it! However, I didn’t start any remodeling this year. Next year, we’ll have plenty of repair and maintenance to do.
- Travel: $16,631. Travel was our biggest expense in 2024. We visited Japan, Thailand, and California. It was great. I think travel will be a big category while we are healthy.
- Housing: $15,480. This includes mortgage, utilities, furniture, repair, and maintenance. Our housing expenses are lower than most families because we live in a duplex. We split many expenses with our tenant.
- Transportation: $4,632. Gas, insurance, and maintenance. Our old Mazda5 still runs well and should last 4-5 more years. I don’t want to buy a nicer vehicle now because we park in the street. The cars here are all banged up.
- Groceries: $5,711. We spent about $500/month on groceries. That is very reasonable for a family of 3.
- Health: $3,513.
- Kid: $8,680. Wow, it’s true. Kids are more expensive as they get older. RB40Jr needed braces and he participated in various activities.
- Entertainment: $3,497.
- Personal: $1,983.
Savings: –$1,086
2024 Wrap-Up
Alright, let’s wrap it up. Overall, 2024 was a great year. We did very well financially. Our net worth reached a new high and we spent less than 3% of it. My active income decreased, but that’s just part of my gradual retirement. Mrs. RB40 continues to work, but she is contemplating retirement more often. She probably will retire when our son graduates high school. The one-more-year syndrome is strong with her, though. I don’t know when she’ll retire.
I’m grateful for 2024. We had a great year. I hope 2024 was great for you as well.
2024 is all wrapped up. Did you have a good year?
Passive income is the key to early retirement. These days, I’m investing in commercial properties with CrowdStreet. They have many projects across the United States. Go check them out!
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Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!
Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.
