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May 2013 Monthly Expenses

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My goal this year is to save 80% of my net income. This includes income from all sources: W-2, bonuses, 401k contributions, ESPP, stock options, RSU’s, rental properties, dividends, etc.

This is my first update in a few months as I had been pre-occupied with work and trying to close Rental Property #2. My expenses were also erratic since I had so many one time expenses to account for (mostly due to the $20k rehab). As such, I never got around to running the numbers from February-April timeframe. Eventually, I’ll try to get around to calculating these numbers.

The reality, though, is after one year on this early financial independence journey, I’ve kind of just gone on auto-pilot with my monthly expenses. That is, I don’t really even feel the need to keep tabs anymore, since my spending habits are so ingrained now. I trust myself not to over-indulge, and if I do from time-to-time, I’ll know what steps I need to take to auto-correct to get things back to steady state.

May marked the first month where Rental Property #2 was ready to go and starting to collect rent. This helped provide a big boost in the savings department as I was able to clear 80% (81.45%) for the first time this year. Also, I received a nice $1000 bonus from work for doing a good job on a past project from last year. After taxes, I was left with just under $600, but hey, I’ll take it. Free money never hurts!

Other than that, most of my other expenses were inline with what I’d usually expect. One plus is that I didn’t have to fill up on gas this month! I started biking in May, and am already grateful I’m doing this. Not only b/c I’m saving a hundred bucks a month or so, but mostly for the health benefits. All that exercise is even making work a little less painful these days. We are near the half-way mark for the year, and I’m excited to be that much closer to financial freedom!

Here are the numbers for May:


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{ 13 comments… add one }
  • MichelleNo Gravatar June 9, 2013, 9:15 pm

    Wow 80% is definitely awesome!

    • FI FighterNo Gravatar June 11, 2013, 9:59 pm


      Yeah, I’m doing my best to save so that I can buy more houses šŸ˜‰


  • LeighNo Gravatar June 10, 2013, 6:25 pm

    80%, hmmm. If you include my RSUs, my projection for the year is currently off by about $3,000 to hit an 80% savings rate. That could happen!

    Congrats on hitting $0 on gas in May! I might have to fill up twice this month, which is a little annoying, but ah well. I don’t drive to work at least. I can’t believe you only spent $482.11 last month beyond your rent… You’re way better at being frugal than I am.

    • FI FighterNo Gravatar June 11, 2013, 10:02 pm


      That’s awesome! RSU’s are definitely sweet and I can’t wait until mine vest later this year! I hope the stock stays afloat for awhile longer since I also have options and ESPP coming down the pipeline.

      Haha, yeah not having to fill up on gas helped me save a bit this month. Biking is also great in the sense that it allows me to get in good exercise and not really need a gym membership. The frugal stuff is made easier since work provides lot of amenities (free breakfast, snacks, drinks, etc.)

      You’re doing great!

  • Dividend MantraNo Gravatar June 11, 2013, 6:41 pm

    FI Fighter,

    Congratulations on the success so far with the rental properties! You’re going to be free before you know it. It’s great that you have both rented out and everything is stable.

    However, I don’t think I’d calculate that as a 80%+ savings rate. Certainly mortgage costs are an expense to a degree, even though part of it is paying off the principle (equity) in the asset. If I owned a home I would certainly count my mortgage as an expense, and I would count it as an expense to offset any rental income if I was renting it out…otherwise it would look like I’m clearing 100% of rental income.

    The 58.25% savings rate you have in your table is your true savings rate, no?

    Either way, you’re doing fantastic!

    Best wishes.

    • FI FighterNo Gravatar June 11, 2013, 10:09 pm


      Thanks! It’s a great feeling having both units rented and not have to pay the mortgage for another month.

      In regards to numbers, yeah, I’ve thought about how to calculate them before and decided to use the current method I’m using to determine savings rate.

      My total expenses/total income says 58.25% savings rate, but that number alone is misleading. For instance, if I just leave out the rental properties, my personal expenses/income would be $1282.11/$5427.33 = 24% expense rate, or 76% savings rate.

      So, to me, adding the rental income is a lot like adding dividends to the income category. The rental income becomes my passive income. Of course, I do have HOA + mortgage + property tax + insurance, etc. to account for, but these shouldn’t be added to my expenses since they will easily contribute to a large percentage of total expenses. My savings rate shouldn’t be decreasing by adding passive income, that wouldn’t make any sense. These rentals need to be making me money or I’m in trouble šŸ˜‰

      What I do is simply take the difference between rental income – rental expenses and use the net profit as my “dividend”. By doing this, my “real expenses” are kept the same, and I’m now adding work income + net rental profit to the denominator.

      Hope this makes sense!


  • OscarNo Gravatar June 11, 2013, 6:49 pm

    You are doing a great job! Man do you rent a closet the Bay Area is expensive 800 dollars that’s great. I glad you will be free soon

    • FI FighterNo Gravatar June 11, 2013, 10:17 pm


      Lol! Yeah, Bay Area prices aren’t cheap by any means. I only manage to get by with minimal pain by living with other people. I was able to do that in Newport Beach as well, paying “only” $750/month and living 10 minutes from the beach.

      I’m single, so my living arrangements can be kept simple for now. I just need to live close enough to get to work!


      • OscarNo Gravatar June 12, 2013, 7:33 pm

        That’s great keep it up you help me stay motivated thanks for your blog!

  • Curtis@PayOffMyRentalsNo Gravatar June 13, 2013, 7:05 pm


    Great job. Positive cash flowing rental properties in the bay area is an amazing accomplishment.

    Actually, as far as including the numbers in your monthly savings/expense ratios, I might recommend that you exclude all rental income/expenses from any monthly personal budget. An annual accounting should be sufficient especially since repairs and vacancies really tend to scew the numbers in any given month. Just run take the net profit/(loss) annually and then prorate it accross 12 months. Cleaner and simpler. At least that’s what I do.

    Either way, great job!

    • FI FighterNo Gravatar July 6, 2013, 8:16 am


      Gotta love positive cash flow!

      Hey, great idea on excluding the rental stuff until the end of the year. I agree, that makes it easier to calculate and less confusing on a month-to-month basis. Going forward, I’ll just track my personal expenses to calculate my savings rate.

      Thanks for stopping by!

  • MartinNo Gravatar June 18, 2013, 7:17 pm

    Impressive, man and congrats on your results. the 80% goal is really something. You will be free really soon if you manage saving such amount of money and invest into more income making investments. The only thing I can think about the difference between real estate and stocks (besides dealing with tenants) is that real estate can bring you large cash basically right away (or as soon as you rent it) while with stocks you have to wait a lot longer before the dividends kick in in large amounts. I think.

    • FI FighterNo Gravatar July 6, 2013, 8:24 am


      Yeah, I’ve sort of noticed that as well. I think dividend investing will definitely pay off in the long run, after many years of compounding + dividend raises.

      For a person on a shorter time frame, rental properties may help you get there faster. The power of leveraging will allow you to “flip” properties for capital gains, irrespective of any taxes, and the other tax benefits are too great to ignore. Yep, the flipside is that rental properties aren’t really passive, and you have to deal with tenants šŸ™‚


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