It’s the end of the first quarter of 2017, so I figured I would write a performance update of my financial goals for 2017. The first part of the year is starting out well with all investment goals meeting or exceeding my plans.
I made the decision to max out my pre-tax 401(k) by the end of May. At the end of March, I reached $12,868 in contributions which are all being invested in Vanguard’s Total Stock Market Index Fund which has made $714 in profits to date. I have a second 401(k) account from a previous employer that I use for day trading and swing trading. As of March 31st, I had accumulated $5,680 in profits from my holdings in Amazon, Facebook, and Twitter. Once I reach $18,000 in contributions for 2017, I will continue to contribute to the after-tax portion of my 401k with the intent of performing a Mega Backdoor Rollover to a ROTH IRA in December.
Unfortunately, I am no longer eligible to contribute to a traditional IRA, but that didn’t stop me from maxing out my wife’s IRA to $5,500 to take advantage of reducing my taxes by $1,375 and increasing our 2016 tax return. All funds were invested in VTI, Vanguard’s Total Stock Market Index Fund.
I was still eligible to able to contribute to my ROTH IRA but only up to $4,170. Half of the funds were invested in VTI, Vanguard’s Total Stock Market Index Fund, and the other half was invested into SNH the Senior Housing Properties Trust REIT. I bought into SNH on price dips which have set me up to receive an 8% annual dividend. By placing this order in a ROTH IRA tax-advantaged account I will not have to worry about paying taxes on the dividend payments. I intend to increase my positioning in SNH over the coming year using this ROTH account.
Before completing this post today, I doubled down on my position in Twitter as the stock bottomed out to it’s all time low and held at support. As you may remember from my previous investment holdings post, I believe Twitter is a great social platform but mismanaged as a company. I believe a buyout is inevitable and am happy to buy up a few more shares as close to or below the support line as possible. My risk mitigation plan is to limit my risk tolerance to $400 loss on this position.
Robo Advisor Investing
I started an account with Betterment and Wealthfront to test out their services. I placed $500 in each account and soon after learned about the Backdoor ROTH IRA strategy. Since then I decided not to contribute any more to these accounts. I intend to make my after-tax investments through my 401(k) during the second half of this year. All funds will be invested into Vanguard’s Total Stock Market Index Fund. Thanks to Jim Collins and his book the Simple Path to Wealth, I see no reason to further use robo advisors to diversify my portfolio, VTSAX / VTI is all I need.
I invested $20,000 at the beginning of the year into brand new storage units, in Saint Louis, Missouri. The deal closed at the end of January and I should receive my first quarterly payment in May.
I picked up about $400 through affiliate programs related to this blog and an extra $300 by providing personal finance consulting services to some acquaintances. This is something that I am going to explore further in the future as a primary side hustle to make beer/toy/vacation money.
In December I analyzed our family food expenses for 2016 and realized we had doubled our spending over any previous year by relying on weekly meal subscription services and restaurants. We made a conscious decision to drive this cost down by utilizing the recipes from the meal subscription service but sourcing the food ourselves from the grocery. As you can see from the chart below our food expenses have dropped by 40% to 50%. Overall I have done pretty well as sticking to my $2.67 per person per meal goal, but I started to slip at the end of March where I became lazy about cooking dinner and went out to restaurants a little more than planned. Overall the spending was still below previous averages so I am not too disappointed.
I used to average between $200 and $300 a month on online orders. A portion of these were impulsive purchases. Since making an effort to delay purchases in my shopping cart I have been able to our monthly online spending between $100 and $150. There have only been three impulsive orders since December. What did I buy? A power circular saw to build a flower box and destroy stuff, a walker for my grandma, and a WeMo Mini Smart Plug to connect my living room lights to the Amazon Echo. I can’t kick myself in the butt over the first two purchases, the WeMo was an unnecessary purchase, but something I have wanted for over a year. I do feel a little guilty about this purchase, but it will be used daily to control the lights in my new living room so at least it’s not a wasted purchase.
Overall I feel like I am on track with all of my goals for 2017.