Here we are, heading into the final month of 2019. It’s amazing how time flies by when you are busy and focused.

Business continues to pick up and there were only a few days in the beginning of November where we didn’t have any appointments booked. Since that time we have received a steady flow of business and increased billing for services. On paper we already have enough revenue in billed services to cover all of the start up costs and expenses up to this point. So after a little more than two months we are at break even which is a nice accomplishment.

Another positive was actually receiving our first payment for services. And just in time too, because the business account we opened was getting very low on funds and I didn’t want to dip into our personal account again. We wanted to do the old frame and hang your first dollar tradition, but how do you do that with a check? I just made a copy and quickly deposited it so we had some funds in the account.

Now that we have some money coming in and consistent business I need to focus more on increasing revenue. In this business there are only two ways to do that. More bookings, aka volume, or higher prices.

The problem with the first option is that there are only so many hours in a day. While I have not necessarily worked a “full day” in the conventional sense of the term, the number of bookings I can take is dependent on other companies having assignments that fit my open time slots. And in this business 85% of people want services after they get off work, which only leaves about a four hour window for bookings each day. So to get more revenue I need to find ways to generate bookings during the day and normal business hours. I have recently received a few AM bookings and I hope that trend continues as that is where most of my downtime currently is. And that’s a sure way to increase daily revenue.

The second option is getting more quality priced work. The difficulty I have at this time is my inexperience in this business. Because of that inexperience I don’t get any direct business yet. The bookings I accept are currently all from third party services. In return for their referral we split the revenue. As I gain experience and trust in the industry the goal is to start taking less of these type of bookings as we grow the direct services part of the business. That would be the equivalent of a 100% increase in price to do the same amount of work.

I’m not one to normally set goals, but if I did these would be the goals for the business heading into the new year.

In our October update I had started the process to rollover my company 401k to a previously established Vanguard Rollover IRA. That excruciatingly long process finally ended the week before Thanksgiving. I decided to go ahead at put all of that cash into VTSAX to give us a broader market exposure.

Additionally, once this transaction was made I decided to make a couple of additional changes to rest of this account. I previously had two bond funds, short and intermediate, which I decided to consolidate into the Vanguard Total Bond Index Fund (VBTLX). I also decided to try and increase my dividends and take on a little more risk so I moved some money from an income fund to the Vanguard High Dividend Yield Index Fund (VHYAX). This is the first time in years I have touched this account so we will see how it goes.

Speaking of dividends and passive income. I have never been able to get a good grasp on how much we receive in dividends and passive income. We have several accounts in several financial institutions and the system we use for our finances was never very good for tracking this detail in an easy way. So now that I have had my mornings free I set out to find a way to get this information consolidated and easily tracked in our system.

It took me a couple of days tinkering in our system but I figured out how to make this happen. Once I figured it out I had to go all the way back to January 2018 and make changes to every transaction that was dividend related to get the data fixed. Once that was done I ran the report and was shocked by the number.

In 2018 we made over $40k in dividends and reinvested gains from our funds. That was such an unexpected number to see that I had to go back through an recheck everything again. It’s correct!! Most of this money came in December of 2018 where we received a whopping $30k in dividends and reinvested gains. Of this amount one fund in my wife’s 401k paid us $18k. Not a bad return if you ask me.

So far in 2019 we have received almost $15k in dividends and reinvested gains. I’m not sure if this December will be as kind to us as last year was, but if it is we should surpass last year’s amount. We won’t know for a couple of weeks but this was a very nice surprise nonetheless.

Looking at it from a F.I. standpoint, our passive income currently covers about 67% of our anticipated retirement budget. This is much better than I could have imagined and doesn’t even account for market increases. I might have to take some time and go back and fix 2017 just to see if there is a trend or if 2018 was just an anomaly. I might even have to create a fun little tracking spreadsheet for passive income, which of course really means I will probably to back to the beginning of our investment lives just to look at the trend.

On that lovely note,

Here is where we finished the month of November:

Portfolio- $1,021,692 (Cash and Investments)

Portfolio Goal – $1,500,000

Amount needed to reach goal – $478,308

Our portfolio increased by $17,598 or 1.75% from the end of October.

Year-to-date we are up 22.88%.

Net Worth – $1,226,415

This is an increase of 1.76% from the end of October.

Year-to-date we are up 21.05%

The markets continued to work their way higher. The beginning of December saw a little stumble when the trade war talk picked up. But in usual fashion excellent economic and job news paved the way for a quick rebound in prices.

Normally the news of a President being on the verge of impeachment would probably send the markets reeling. However, this isn’t happening and for understandable reasons. Whatever happens in the House is not going to happen in the Senate. This is everyone’s foregone conclusion to this process and therefore there is no uncertainty which is what the markets really dislike. No matter people’s opinions on the subject the real question is what happens next November, not in congress.

As long as the economy continues to gain and jobs continue to get generated the market will follow suit. The trade war rhetoric and posturing will continue to go back and forth and impact short term swings. Once something gets signed expect another bounce as more uncertainty gets removed from the market.

As of now I don’t really see anything slowing this market down except unexpected news, a sudden downturn in economic data or a complete collapse in trade talks. Of course the market could also get overheated and another case of “irrational exuberance” could set in.

But in the end, who cares! We are not in this game for today, tomorrow or even next year. We are in this game for decades and we just enjoy watching the days, months and years pass.

As good as these economic and market times are right now, it will not always be this way. We always want to enjoy it while it lasts, and we certainly are right now. However, don’t be the one that gets caught up in the irrational exuberance and expectations that this great run will last forever.

When I played baseball my dad would always tell me “it’s takes highs and lows to make an average.” That was his way of keeping me focused on the long run instead of dwelling or obsessing in the moment. It’s good to celebrate and recognize the highs and it’s also good reflect on and learn from the lows, but we should never dwell on them and set unreasonable expectations.

Remember history and temper your expectations so you can make sound financial decisions that benefit you in the long run. There is a reason the markets have returned an average of 7% annually and not 20%. It takes highs an lows to make an average.

Thank you as always for taking time out of your day to read our blog. If you haven’t yet, please follow us to receive future posts.

Until next time……………….

Joe