October Wrap-up

Considerably late but better than never, here is The Smart Fi October wrap-up.

If you missed my September Wrap-up you can read it here.

The Smart Fi monthly wrap-up is my chance, to share with you, the progress of a humble personal finance blog and our family’s journey, as we save half* and march towards financial independence.

*While we have come close, we have not actually reached the 50% savings rate, yet.


October is the month of pumpkins, fall and…… CANDY, especially in my high traffic, trick-or-treat neighborhood. Incidentally, October was marked by a pretty nasty market downturn. The S&P 500 fell nearly 10% in the month of October.

Reading through a  couple of net worth blog posts (Young Fire Night, and Frugal Money Man) it was easy to see that a stock market downturn can have a profound effect on both net worth and the psychology of investing.

No one likes seeing paper losses in their investment accounts but they are just that, paper losses. In other words, you do not realize a stock market loss until you sell that asset. So for most prodigious savers, market downturns are not bad or harmful, but rather a perfect opportunity to purchase investments at a discount. As you will read in the investments section, taking advantage of a market downturn is exactly what I did.

If you liked an investment in September, you should love that investment in October after a 10% correction.

The Smart FI Motivation

I love a good challenge because, in my eyes, making life a game makes it more fun. In October I wrapped up our family’s grocery budget challenge and made poor progress on my 5 million step goal challenge.

5 Million Step Challenge

After 3 months of exceeding my step goal (June, July, and August) of 500,000 plus steps per month, I have stacked 2 back to back suboptimal months together. For October I walked and ran my way to 393,731 steps. Spoiler Alert, November is looking slightly better.

Why keep track of my steps? Honestly, I enjoy turning life into a series of small games. Setting goals are part of the game. I try to set one fitness goal and one financial goal each month. Sometimes my goals are ridiculous, (2018 Spend Nothing Challenge) and sometimes they are more reasonable(February Plank Challenge and June Weight Loss Challenge). Most often, my goals just keep me motivated to make my future self a better version of me.

Cumulatively for 2018, I have 4,423,690 steps. This is on pace and within striking distance of reaching my goal of 5 million steps for 2018.

2-month Grocery Budget Challenge

My wife and I wrapped up our grocery budget challenge in October. Our goal was to limit our grocery spending to $600 per month, broken down into $150 per week allowances. At the end of September, I negotiated a one-month extension that expired at the end of October.

While my wife didn’t care for the feeling of being limited to a weekly dollar amount, the challenge clearly worked. She would forego purchasing items or just avoid the grocery store altogether if we were running low on money towards the end of each week. After two months of tracking grocery spending the old fashion way, (paper ledger) we agreed to end the challenge.

We learned that we spend far more when we are not mindful of our food spending. Also, frequent trips to the store cause us to spend more than we should.

You can read both of my grocery budget articles here:

Financial Goals Review

One 2018 financial milestones completed. 

January first, I laid out my lofty financial goals for  2018. Here they are:

  1. Max out two 401 k’s = $37,000*
  2. Max out both Mrs. Smartfi’s and my Roth IRA = $11,000
  3. Max out family HSA = $6900**
  4. Contribute $10,000 to taxable brokerage account at Vanguard for my hybrid mortgage payoff plan. Goal Completed
  5. Add $300 dollars per month to the mortgage payment. This gets me to $20,000 of mortgage principle pay down per year. Current mortgage balance $222,543

* 401k and 403b contribution limit increased $500 for 2018 to $18,500 in 2018.

** HSA limit increased $150 for 2018 to $6900 for a family for 2018.

Let’s add this up

37,000 (401k) + 11,000(IRA) + $6,900(HSA) + 10,000(taxable savings) + 3,600(mortgage principal payments) = $68,500 savings/investments in 2018

In October this is where I allocated our family’s capital:

  • $1,337.54 to wife’s 403(b)
  • My 403(b) = MAXED OUT*
  • $846.12 to Roth IRA’s
  • $440 to HSA
  • $1925 to taxable brokerage accounts
  • $1,669.25 paid towards mortgage principal

*My personal 403(b) is maxed out for 2018. You can read How I maxed Out My 403(b) In 6 Months to see the details.

 September ContributionRunning 2018 Total Contribution2018 Goal
Roth IRA's
Vanguard Taxable account
Mortgage principal$1,669.25$19,878.25$20,000
monthly savings rate (%)49.6%

 October Investment Purchases

In the month of October I purchased:

  • 5 shares of Apple
  • 21 shares of Vanguard Total Stock Market Index (VTI).

In the September Wrap-up, I outlined why I have been purchasing Apple and VTI, you can read the full version here. I will give you a brief summary.

Apple– Although Apple leans heavily on revenue from the iPhone, it has been diversifying into hardware that is very sticky, iWatch, earbuds, and Home Pod Speaker to name a few. When Apple reported earnings last quarter, they had quarterly growth of 30% in this area of hardware. Additionally, as more and more iPhones are sold the App store and iTunes store show continued growth. Apple is a long-term investment for me and a dividend growth play.

VTI– What can I say, I’m a sucker for a low-cost index fund. With an expense ratio of 0.04%, Vanguard Total Stock Market Index is a cheap way to get total stock market diversification. When I buy VTI, I remind myself I am not smarter than the market and I just want to match market returns.

Wrapping it up

Thanks for joining me to review my October accomplishments.  I am already looking forward to writing the November update. We should be knocking down a few more 2018 financial dominos.

The stock market continues to correct into November, briefly dipping into negative territory for the year, eek! Also, we will cover Black Friday shopping and see if that sent us off the rails.

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