How is it August already?
Somehow, we’ve managed to blow past the first 7 months of the year and now, 2020 feels like it’s just around the corner. We would’ve posted this earlier but we took a much needed and long-awaited family vacation that threw off our normal, weekly posting schedule. No biggie! The halfway mark of the year provided us with time to reflect, assess progress and make some pretty big decisions.
But before we get into that, can we just say, the vacation we came back from was just…ahhmazing. We spent a week in Negril, Jamaica getting sun-kissed, binge eating delicious food, drinking a steady supply of Red Stripe and even scoring a few naps. Our family in NY and FL joined us which made it extra special since they got to spend time with our son.
If you’ve ever been to Jamaica, then you know that things happen sloooowly there. There’s a process for everything. Even the processes have processes! At first, it frustrated us until we finally gave in to the speed of the island and let time trickle away. It was a humbling reminder of how we’ve all normalized being hyper-connected through technology and how unrealistic our expectations of immediacy and perfection are.
Anyway, we’ll save that for another post and leave you with this. If you have vacation time…use it. IF you can help it, don’t be a part of the reported 52% of workers who didn’t use the time they earned. Alright, let’s get into our mid-year review.
For context, you can review our plan for 2019 here. In summary, we broke into two categories; personal financial goals and business goals. Looking back at this plan, we can already say that we could’ve tightened it up a bit, but rather than beat ourselves up about it, we’ve learned to own the lesson and keep things moving.
On a high level, the first half of this year has been dope. For a while there, we didn’t know what was going to happen next. We were featured on several podcasts, scored a couple live radio interviews and picked up some amazing press including Glamour magazine, Marketwatch, Essence magazine, CBS This Morning, 60 Second Docs [below], Forbes and the NY Times. You can find links to all that stuff here.
Anyway, for a while there, we would [kinda] jokingly ask eachother, “what do you think will happen next week?” because it was all happening so fast. All of this was wonderful, educational and gave us hope for the future of FIRE and this platform.
On the other hand, if we’re being honest, it was very distracting and made it more difficult to focus on our goals and wellness. Considering we want to grow our business, all of the activity above did wonders for us, but considering we couldn’t anticipate when any of it would hit or require a huge block of time, sticking to a schedule was very difficult.
Nevertheless, the week before our vacation, we managed to squeeze out a launch of our e-book Eat Better on a Budget: A Complete Guide to Cooking at Home. We’re really excited about it because we’ve long held the belief that there were HUGE opportunities to help people save more money by making cooking at home less frustrating.
Since Mr. r&R used to be a professional chef, he’s taken all of those skills and his experience of cooking at home and turned it into an easy to read guide to help people cook BETTER. If you’r eready to say no to struggle plates, wasting food and blowing your food/grocery budget every month, you can get the e-book here. Knowing that 1 in 4 food delivery drivers admit to eating your food might be another motivation to just cook at home more…yuk.
Aliright, let’s talk money! As of July 2019, here’s where we stand…
Soooo, as you can see, there’s quite a bit of red there. In short, the business required a significant amount of capital which came at the expense of our personal and investment goals. Thus is life and as a result, we had to re-allocate some funds that would’ve otherwise gone towards investments. We’d be lying if we said, we preferred to see more green on the board, but anyone who has ever started a business can tell you that it aint always easy. If it were, then everyone would be doing it.
So we’re feeling a lil less rich than the days we had two consistent paychecks coming in. On the other hand, we have way more flexibility than we did before and we can absorb some risk in the short run under the belief it will pay off handsomely in the future.
But even with the business debt [interest free BTW] and stalled expected contributions to our retirement accounts, our net worth has increased [approximately] 8% year-over-year driven by rental income, increases in our rental and primary home property values and investment portfolio performance.
The investment portfolio numbers are a little wonky since we rolled some of it over after Mr. r&R quit his job so it wasn’t as easy to get a clean YoY number. Regardless, in summary, like many people who have been invested in this bull market we’ve experienced growth. Today, we gladly take the lazy-man’s approach, investing in ndex funds through Vanguard with the majority of our shares in VTSAX, their institutional fund cousin VINIX and a smattering of other funds sprinkled in.
The combination of low cost, reinvested gains, dividends and compounding interest contributed to the double digit percentage point growth we’ve seen in our balance. Before the year is over, we’ll definitely take a good hard look at our portfolio and tweak some things in an effort to simplify our investment strategy. Simplicity is becoming ever more important to us these days.
On another note, while it wasn’t listed above, a lingering item on our to-do list from 2018 was to start chipping away at legacy planning. We want to make sure that if something happens to us, our son and our affairs are in order.
As of today, we’ve secured ourselves with an awesome supplemental life insurance policy through Ethos. We shared that experience here so there’s no need to go into details. In short, they’re affordable, lightning fast, reputable and got the job done in less than ten minutes which was exactly what we were looking for.
We took things a step further and like our life insurance preferences, went with a lightning fast, tech company to get our wills done. The company is called Tomorrow and they provide state-by-state will templates you can customize through their app for free. We could’ve gone through legalzoom [$$] or through a lawyer [$$$] but opted to have this done since it was free, quick and could be updated as often as we like.
We’ll likely end up in a lawyer’s office soon though to get the rest of our affairs handled but if you just need something quick, fast and in an hurry, we highly recommend checking out Tomorrow.
OK, here’s where we stand with our business goals.
So let’s tackle real estate first. Hands down, 2019 has been a great year to be a landlord. We had one minor issue that cost us a little under a $1K to fix due to a clogged dishwasher that lead to a leak in the unit below ours, but besides that, it’s been a good year of steady occupancy and collected rent. Considering we rolled the dice on building a capital reserve fund [money set aside for anticipated repairs], we’ve been allocating some of the rent collected to build that fund and are right on target to hit our cap.
We also committed to tightening up our liability exposure this year so we planned on rolling both properties under an LLC [limited liability company] but we discovered that it would create some hiccups with our insurance company since they don’t cover business property. Bummer!
So, while we were consolidating all of our other policies, we opted to purchase a $1m umbrella policy instead. This allows us to sleep a little better at night knowing that if something unforeseen were to happen, it wouldn’t bankrupt our family.
Just as we were ready to celebrate with a nice dinner, we realized that we had to re-calibrate our son who was waaay off his routine after Jamaica and had just begun potty training. In summary, we flaked on our big celebration dinner and need to reschedule it. This may sound like it’s not a big deal, but as a working family, managing rentals, building another business and trying to keep it all together, celebrations are a HUGE deal to us. Not being able to commit or find a new date is a clear sign to us that our capacity is at an unsustainable level. More on that later.
On a more positive note, the Playing with FIRE film has been officially released and has been selling out private screenings across the country. We had a great time hanging out with Scott and Taylor while they were here in Atlanta and were so proud to see that ATL sold out our show. It’s a testament to the growth of the FIRE movement and the passion of it’s disciples.
Though we weren’t there long, seeing our big a$$ faces on a silver screen was a pretty amazing feeling and we’re looking forward to joining the team again for the NYC screening which is slated for some time in August. It’s also a wonderful example of what can happen when people of all backgrounds are unified under a common belief and cause…freedom.
Lastly, we’re all booked to attend FinCon in Washington DC, the premier money nerd event. This year, will be so much fun because we’ve built such wonderful relationships with others in the space. We’re guessing this year will feel more like a college reunion than a work conference. Since we won’t have Baby r&R, the chances of us reliving some college days are pretty high.
But we also have our eyes set on a few other conferences in the latter part of this year, namely AfroTech. These days we’re thinking long term and being purpose driven, so the allure of building relationships with people who are aligned with our beliefs and making strides in growing industries is appealing. We’ll share details as that story unfolds.
In conclusion, the first half of the year has been amazing, exhausting and unpredictable. We’re richer than we were last year and though we’re off track in a few areas, rest assured we have a handful of big jokers in our back pocket. We can’t quite share them yet but when we do, we hope you’ll join us in our excitement. If we had to give ourselves a grade, it would be another B-, very similar to this time last year.
As usual, our next big update will be a year-end update and we’ll continue to post regularly on Thursday mornings with a few planned breaks in between. Thank you all for your support and encouragement over the last few months. It means more to us than you will ever know.
Mr. and Mrs r&R