Category Archives: Networth

Still Shopping For a Home—Will We Ever Buy One?

Nine weeks pregnant with number two. Wide awake at 4am due to some pretty bad nightmares and a moderate amount of dehydration. I would go to the kitchen to get a water bottle but I can’t because I live in a one bedroom apartment my son sleeps in the living room, next to the kitchen.

I feel so ridiculous to consider my problems problems when the real problems in this world and in this country are so, so much worse. Anyone reading my story, especially without context, would think—man, what a crazy rich woman who is afraid of spending money. Maybe I am. Maybe I shouldn’t be. But my mental health issues make it really hard to know what my life will be like in a year let alone a day. So what do I do?

Looking at houses here that are under $2M and you wonder why anyone buys a house. If they cosmetically are acceptable then there is something wrong with their bones, if their bones are in good shape they are three bedrooms in a space only slightly larger than my current one bedroom apartment. With my husband’s mission to have his dad live with us (which I support IF we could find a place that worked), it makes it all the more difficult.

Part of me says — rates are so low right now, now is the time to buy your forever home. It will hurt financially for the first 5-10 years and then not be too bad. But that is if I can maintain employment for 30 years. I cannot imagine doing what I am currently doing for 30 more years. I desperately need a career change. Without a clear vision of what that is or the income on the other side, I really don’t know how to plan at all. And my husband mutters how I make unreasonable requests of him like try to earn $150k in 5 years (he is at about $80k now but works part time, and he is 38.) I try to tell him I don’t care about his income but if we are going to buy a house that changes things. I need to know we can afford the mortgage or at least most of it on one income—mine OR his.

I know many families have one SAH parent and buy a house. But around here the only families like that I know are one engineer households. If you are a good engineer at a good company you are pretty much set for life unless you massively fuck up. I’m not in a position like that. My job is a weird one that in some companies would be considered a junior role and in companies where it is paid anywhere near what I’m making it would require a lot more management experience.

So I am in this weird spot. I am earning more than I ever thought I would and my networth is climbing (it is realistic to think, if I can keep my job, I’ll have $2M in 2-3 years saved up pre tax, unless the stock market crashes) but I still don’t feel at all stable or accomplished. Yes living in the Bay Area is living in lala land — anyone reading this post from anywhere else would say leave! But my husband grew up here, our friends are here, I am better mentally without my typical seasonal depression in most of the country, and we really want to stay.

I just wish my husband would step up a bit. I know he is tired since due to COVID we lost our part time childcare and now he is watching our son all day while also working part time at night or whenever he finds time to do his work. So maybe I am asking for too much. I would like him to take an online class or something—just to move in the direction of building a career. Like my job, his doesn’t really make sense outside of his company. Some skills would translate but since he has worked for one small company his entire 13 year career, it’s harder to show variety or new learnings. I still think he could get a better paid full time job if he tried, but he never has been interested in having a career.

And some days I think—maybe I can just work my way up to VP and consistently earn, say, $300k a year. For others in my position, that might be doable. But I’m no VP. I do not like managing people or hiring or firing people. In my creative field, I find it very difficult to give feedback without redoing the work myself—and even then I don’t like what I’ve done so how am I supposed to guide someone else to do better?

All of this is to say, here I am, 36, pregnant with #2, with a good chunk of change in savings, and I feel more vulnerable and scared than ever. Up until now I’ve lived with no debts. Some of that is due to fortunately having parents who footed my bill for college (and I really want to pay my mother back for that one day!) But I’ve also bought my cars used with cash and live in small apartments that are less than I can afford based on any housing to income cost calculators.

It’s hard to go from NO debt to $1,500,000 in debt.

But isn’t that how wealth is acquired? My friends who 11 years ago paid $800,000 for a small house, probably with $180,000 down, now own a small house valued at $1,700,000. Maybe $2,000,000 in 10 years will sound as cheap as $800,000 sounds now? Though it’s hard to imagine these homes being worth $3M let alone the $2M they are going for today.

On top of all this, I dislike the real estate business as a whole. Sure, if you know what you are doing and buy the right investment properties you can do very well for yourself. But when you are buying a home for yourself, you are in it on your own while all the people who are supposed to help you don’t really have your back —

your lender — well they want you to be as low risk as possible and any small risk they say you have gives them a reason to charge you more for it. This makes sense for actual risks — but my latest finding from one lender is that we qualified for 3.125% 30 year fixed except when they realized my husband is self employed it jumped to 3.85% (clearly they don’t care that my husband has worked for the same one non profit for the past 13 years and has always made the same annual income with them plus raises while in that same time I’ve had six jobs. Whose income is more stable???)

Then, since you can’t do contingencies in the Bay Area if you want to buy a house, you apparently have to risk 3% of the price of the house (your “earnest money deposit”) and pray to god your loan closes in the allowable amount of time. If not, bye bye $30k! Well, none of these lenders are giving me much confidence our loan will close with no hiccups. With my husband’s self employment status and some new rules around that, not only will our rates be higher, they also will need to see some crazy things like a deposit within 10 days of close. Maybe that makes sense for someone with ongoing business income, but my husband gets paid four times a year for each quarter of work. That is not a big deal—to hold a check and deposit it, but only one lender told me this. What other weird rules will pop up during our closing process that we don’t know about?

your realtor — she drives a nice car, always. And she is an extrovert and smiles and sells you on why to buy a house. She may look at the disclosures and warn you of major risks, but she isn’t really an expert on that stuff, that’s what inspectors are for. But you don’t need an inspector to see that this house built 60+ years ago has issues. There are tiny cracks here and there. The floor is uneven. A tree looks like it’s roots might be going under the house. Everything creeks when you walk upstairs. The layout is nonsensical which is a cosmetic issue but still will you regret having to walk a weird way to get around for the hundredth time? What other issues are lurking in the foundation and in the walls?

The sellers, at least here, pay for their own inspections. I’ve read plenty of reports. Termites. Water damage. Fungus. Liquefaction zones. Flood zones. Seismic hazard zones. Environmental hazard zones. The list goes on. In any area where we are considering a $1.8M home (that will probably go $2.1M anyway) the ground water apparently is 0-10ft deep. That’s not in the inspection report, I found that online! But two “tanks” with one leaking(?) is in the report. What does that mean? My realtor said she would be comfortable with that risk. But we don’t know what’s leaking.

I’d feel so much better buying a 3/2 for under $1.4M. If it turns out to need work we would have the money to do that work. Husband refuses, wants a large home on a large lot with an in law where his 76 year old dad (who can pay $2000 a month until he goes into assisted living) can live. I want that too—but without me knowing I can maintain a mid-senior role in public tech companies every month for the next 30 years, well, that seems like a horrid idea.

your inspector — ok, they are going to try to find issues to help you out (that is their job after all) but given no inspection contingency is allowed in most cases, you won’t actually have your own inspector.

Ok, so maybe we should rent-forever. It is difficult to find rentals I want to live in (at a reasonable cost) and I can’t fight the nagging feeling that if we don’t buy now we will be priced out forever. I certainly know most people would recommend we rent for a few years then move to an area with a lower cost of living. But we really plan to stay here forever. At some point, into the far off future, buying becomes a better financial Option than renting. Emotionally, it is a better option day one.

The reality is that houses that really check all the boxes are around $2M-$2.5M. Y’all think I’m crazy but look at Bay Area listings on the Peninsula and in the nicer areas of San Jose. Can we get a house for less than that? Of course. It’s even possible to get a dump for $1M! But if we get what we want — 1800 sq ft, 4br/2ba with an in law or ADU on 7000 sq ft in actual good shape, in a half decent school district, that’s easily $2.2M. So then I question should we just wait until we can afford $2.2M? Will we ever be able to afford that? And by then I won’t that house be $3M and the mortgage rates will have gone up?

i know I know first world rich people problems. But most rich people have either trust funds or faith in their career and ability and skills and value, and often two parents who are earning a good income. What do I have? A few crazy good years of income thanks to RSU growth then back to earning $150k a year, if that?

I feel like I can’t buy a house until I figure out my career but at 36 that now seems like it’s never going to happen. I want my son and tbd child 2 to grow up in a house. It isn’t necessary, it is a want. But when I’m making $600k a year (what I will likely earn this year if I keep my job which is absolutely insane) I feel so confused about how I should think about my “class,” my risk tolerance, and my home purchase price. A few more years at this income and I can afford that $1.8M house. Heck, I can afford that $2.2M house. But in 2 years my income drops to $300k, then $210k, as my stock isn’t being refreshed enough since I am not a very valuable employee. I should get some small stick refresh this year so I’ll probably hover around $210k if I stay in this company in this role forever (last year I got a 1.7% raise so I’m not expecting any big salary growth here.) $210k isn’t bad either, but with my husband’s $80k that is not enough to afford $2.2M or $1.8M.

AND that $210k is IF i keep this job forever. It is good for now—I am going to stay at least to get all of my initial grant as long as I don’t get fired or let go, and maybe one more year, but then I need a change. Maybe I need to make $80k for a few years (or less) while I figure things out. Maybe I need to go back to school. Maybe I want to take some time off to spend with my kids while they are young and consult part time, I don’t know what I want but I know I don’t want to overbuy and close doors to whatever out there could make me happy, if such a career exists.

So this is where I am. We’ve agreed it we don’t buy a house by October we will rent a bigger place for a while. We are considering putting a $1.8M offer in on this 5br listed at $1.875, which I am fairly confident we wouldn’t get. I’d prefer to lose out on a bunch of bids then overpay. The house is far from my current job but I won’t have to go back to the office this year and in 3 years I can change jobs. But it’s also far from SF which most jobs I’m qualified for are. If I change careers, maybe that doesn’t matter. But it’s scary to think I might get stuck with some crazy San Jose to SF commute one day to not lose our house.

we are looking at another two coming up—not as nice, both $1.8-$2M, both with built in laws. The inspection report on one was pretty scary though most old buildings have issues so who knows.

I wonder at what networth I will be able to relax a bit and enjoy life. I have the $5M number in my head. It’s arbitrary, as all my numbers are, but I think that’s it. That’s enough for a $2.5M basic house and enough to stay in the stock market and grow as long as we keep working and at least pay our living expenses each year. That’s enough to pay my mother back for college and my wedding and help my sister out a bit if she is still earning minimum wage or close to it. And to start giving to charity in substantial ways. I mean, $10M sounds better, but more realistically I want to aim for $5M. I guess that’s my FAT FIRE number. I don’t know how I’ll get there (unless I manage to keep getting jobs at rocketship companies where my RSUs go up in value.) I mean, realistically I’m looking at $2M by 38 or so. If I don’t touch that and get 5% on it YoY, in 20 years we will have $5M. Of course, in 20 years $5M won’t be worth $5M today. The real question is how do I get to $5M by 45? That’s saving about $400k a year for 8 years in a mix of interest, stock growth, and new earnings. It seems impossible. But my first $100k also seemed impossible. So maybe it is possible. Maybe it’s only possible if I buy a house. Maybe it’s only possible if I don’t.

 

 

 

How I Grew My Networth from $15k to $1M in 15 Years

In 2005, I had about $5k to my name. By 2010, I had increased that amount to $88k while living in high cost of living (HCOL) area and earning an average salary of $56k for those first years out of college. Five years later, my networth hit a respectable $342.4k. I kept working at startups with decent-but-not-great pay (stock options are worthless) and lived relatively frugally over the years.

By 2017, I achieved my first goal of $500k — a bit milestone, as I wanted to have $500k in the bank before having my first child–and I made it! Thanks to finally switching to work in a public company (and that company performing stronger than the market), I’ve been able to dramatically increase my networth in a short amount of time… doubling it in under 2 years. I haven’t really spent time to appreciate that I actually doubled my networth in two years.

Do I think anyone can do this? No. I got lucky. Some of this lucky has to do with my working at a lot of different startups and building up a reputation for being good at one thing that ultimately got me the job I have now. Will I continue to make such a high salary? No — probably not. My income is largely dependent on my RSUs and after I vest the remaining two years of stock, I’ll be back to a lower (but still good) salary. I’ll need to leave my company and find a new job for a chance at making close to the same income. Hopefully by then my experience at this company will get me the ticket in the door at another company that pays well and will offer me a good compensation package.

I know a lot of people look at my income now and think–well, I’ll never make that much. And that’s probably true if you work in a different industry that doesn’t offer RSUs as part of your compensation package and you aren’t a highly skilled employee. But you can see you can still save quite a bit on a lower salary in your 20s if you are single and don’t have kids. Now, I admit I did not have college loans to pay pack (thanks to mom & dad) so you can fairly say that my total networth should be about $200k less than is now, or even less than that since I would have lost out on compound interest repaying a loan. So comparably to others who have loans, my networth today is about $800k and by the end of this year will be $1M or more.

I still have a long way to go to achieve my goals. I want to get to $2M before having my third child (whether or not I have a third child is dependent on achieving this milestone by the time I’m 38 or 39) and I want to buy a $1.7M house. Below, you can see my income, networth, and YoY growth for the last 15 years. I plan to continue tracking this for the rest of my career — subscribe to my blog to get updates and learn more about my path towards wealth. If it inspires you to save a little more each month — awesome! Remember, I live in a 800 square foot apartment with my 22 month old and husband and drive a used car built in 2011.

Year Income Networth $ Growth % Growth
2005 $15k n/a n/a n/a
2006 $35k n/a n/a n/a
2007 $50k $24.9k n/a n/a
2008 $60k $15.8k -$9.1k -37%
2009 $60k $32.7k  $16.9k 206%
2010 $120k $88.6k $55.9k 270%
2011 $90k $145k $56.4k 64%
2012 $100k $200k $55k 38%
2013 $110k $253k $53k 26%
2014 $125k $299.5k $46.5k 18%
2015 $160k $342.4k $42.9k 14%
2016 $190k $416k $73.6k 22%
2017 $130k $551.3k $135.3k 32%
 2018  $300k  $625k  $73.7k  13.3%
 2019  $400k  $1.05M  $425k  99.83%
 2020  $500k $1.3M Goal  $250k goal  23% goal

Saving for a Two Million Dollar Networth by March 2022

Life has been busy these days. I’ve been busy saving 2 million dollars. Well, not yet. But I’m shockingly well on the way to a family networth of $2M before I turn 40. This number seems ridiciously large AND small at the same time. It’s obviously large. If $1M seemed large, $2M seems much larger. It is an amount many people would consider “rich” — although not in the Bay Area.

I also don’t really consider my networth close to $2M, since I actually track everything on a post-tax basis. I map my investments to an allocation plan that my former CFP provided. I also have a chunk in cash (not seen below) because that’s for the downpayment of the house I will be buying soon (hopefully, house TBD.)

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The orange are areas where I’m underinvested. I’m quite over in large cap but that’s because of my probably too high concentration in company stock. My company has performed quite well (so well that I do kick myself for selling my RSUs at a fraction of the price it is today.) I’m glad I held on to a good chunk of my ESPPs (for now) as it is unwise to do this financially speaking (you get a discount up front you’re supposed to sell immediately and not take a risk on that money) but I decided to hold a little under 1000 shares and it definitely is helping get me closer to achieving my goal. I still have a significant chunk of RSUs and ESPP coming in the next two years… so that’s where I’m estimating my family will achieve $2M PRE TAX by the time I’m 38. Maybe we’ll get there post tax by the time I’m 40.

Do I feel rich? NO. But I do feel INCREDIBLY LUCKY to have a job that pays well, let alone a job at all right now. It feels weird and I’m looking for ways to give back. I donated $100 to a local food bank but that’s not enough, so I’m considering how to give more while also still staying on track to our goals. My donation plan was always to save as much during life, invest well, and then in your will put a % of your savings towards charity. That way if times get tough later in life you have the money if you need it, but you still have a plan to give back to the world. But right now the world clearly needs it, and I’m overwhelmed by trying to figure out where to give and how much. It is definitely on my mind — but so is buying a house and having a 12 month emergency fund and hopefully being able to work part time in a few years because…

I’m apparently pregnant.

Shh, don’t tell anyone. It is top secret. It’s super early and only my husband knows. We started trying this month and thought it would take a while because last time I needed infertility treatment to get pregnant. Low and behold, boom, happened right away. I’m excited and scared and will write more about this later but clearly it shifts our financial picture. Before I was considering moving further from my office to have more space in case I had another kid, now I definitely am thinking about this option. We’re still talking about $1.5M homes, but they are much bigger and right now we want space and with another kid we will def want that space. We could still rent for a few years but I want to settle down in a neighborhood where my son can make friends  and we can meet other parents and just feel at home. I’ve been living semi frugally my whole life (we’re still in a 1 bedroom apartment even though we can clearly afford more) and I guess I’m ready to take the plunge.

I did run some numbers based on a more conservative house buying formula and found that we need the following amount in savings/cash before we buy a home for the following prices:

House Cost Cash Savings
$1.5M $436,542
$1.7M $494,000

I also determined that to have 30% of our networth be in home equity (and emergency fund) that we’d need approximately $1.95M in networth to buy a $1.6M home. (My gap analysis below) but clearly we’re not going to get there before we buy a home now, so I’m going to do my best to try to reduce the home cost while also buying something we can grow into. More on that later.

30.0% 43.0% 5.0% 27.0% 5.0% 12.0% 8.0%
23.1% 33.1% 3.8% 20.8% 3.8% 9.2% 6.2%
43.00% 5.00% 27.00% 5.00% 12.00% 8.00%
goal $450,000 $645,000 $75,000 $405,000 $75,000 $180,000 $120,000
gap $450,000 $284,705 $47,142 $252,465 $47,525 $160,066 $89,103

 

Right now my estimates have us at about $1.96M pre tax in March 2022. That’s so soon! If I can do this, it will be pretty incredible. I just have to keep my job. Through a pandemic. And a pregnancy. How hard can it be?

But the reality is I’m scared. Yes I have a lot in stocks I could sell to cover the mortgage for a while… and right now I have a job. But will I have a job in a year? Who knows. My company may need to have layoffs at some point. I really don’t understand how they would decide that and who would be laid off, but I definitely am not “safe.” So I have to assume that at any time I could lose my job, and at that point it would be hard to find a new one. I will just hold my breath through my vesting periods and pray (even though I don’t pray) that I can get through the next 19 months until I get most of my stock. That’s 8 months of pregnancy, 3 months of maternity leave, and 8 months of being exhausted and holding on for dear life.

Please, wish me luck. I’ll need it!

Networth Check-In Before End of Year

I just ran my numbers for the year and realized that I crossed the $1M threshold on my own (not counting my husband’s smaller nest egg) and I feel like I should celebrate somehow. (Blows a party horn alone.)

I have a fairly unique way of calculating networth so I consider this a false victory… my before tax total account value is $1,127,789 BUT after I factor in probable taxes (conservatively) my total networth is $845,052. Wah, wah.

Still, $845,052  AFTER TAX in networth isn’t so bad at 36. With my husband’s savings, we’re close to $1M total.

I’ll feel much better when I get to $2M after tax networth, but that will take a while. However, right now I’m on track to hit $1,869,286 before tax (solo) in two years and $1,215,801 or more AFTER TAX in two years as long as my company stock holds close to its current value (TBD.)

I will do a more formal breakdown at some point but just pausing to smell the fiscal roses and celebrate with my fellow readers who have been following my blog for many years (and new readers as well.) When I was 22 and had less than $10k in my bank I thought $1M was an impossible feat to accumulate let alone $100k. That was a long time ago, but on my worst days when I feel hopeless and like I’m a total failure, I just need to remember where I came from and how I’ve somehow held it together to build some sort of stability in my life, at least to cover a few mental breakdowns. Go me. (Blows party horn again.)

The after-tax breakdown is as follows:

  • Cash – $144k
  • Debt – $3k
  • Investment (Taxable) – $457,951
  • Retirement (Roth) – $69,355
  • Retirement (IRA) – $144,580 (assuming 50% tax rate)
  • College Savings – $32,455
  • FUTURE RSU AFTER TAX Next 2 Yrs – $370,749

Trying to feel accomplished because I feel like a big ‘ol failure these days.

Sept Check-In: HOME STRETCH!!! $920k of $1M Goal

It looks like I will be coming very close to my $1M goal this year.

Current breakdown*:

Cash: $2,915
Debts: $0
Down Payment: $100,000
529: $27,354
Taxable Invest: $435,521
IRA (Roth): $60,930
IRA (Trad/401k): $254,101
Company Stock (after tax est): $40,500
(*does not include husband’s savings of $55k)

Expected Oct-Dec Income: $67,296
Expected Oct-Dec Expenses: $24,000
TOTAL EXPECTED SAVINGS: $43,296
TOTAL EXPECTED NETWORTH EOY: $964,617
TOTAL EOY GOAL: $1,000,000
DIFFERENCE: $35,383

So that $1M goal looks unlikely… but it could happen! I should get close.

Will this be my $1M year? One million is just the start.

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It’s crazy how one turn of good luck (or perhaps a series of turns) can make such a huge difference in your net worth. As you can see from the chart above, my net worth has been gaining steadily since 2007 — but suddenly in the last year it has jumped from $625k in Dec 2018 to $884k in July 2019. That’s kind of insane.

How did my networth increase $259k in 6 months?

Well, it’s mostly paper gains at this point — and given we’re likely headed to a recession, I see the blip up evening out over time. Still, $259k in 6 months — seems impossible, except I have the data to prove it actually happened.

Between the stock market doing well overall and my company stock doing even better, I’m achieving some major milestones faster than I ever though I would. My goal of reaching $1M by 40 now seems like it might be achieved THIS YEAR. It’s possible, depending on when a recession hits. I estimate by the end of the year, I should have another $100k in my various workplace stock plans, which, if the market doesn’t drop, gets me to $984k. That’s close enough that I could hit $1M by the end of 2019 or even before my 36th birthday.

If you add in my husband’s accounts, our overall networth looks even better. Currently, our total net worth (we do not own real estate so this is cash/stocks/bonds only) is 130k (his) + 884k (mine) = $1.01M!!!

So, while I don’t count my husband’s $ in my net worth, if I did, this actually IS the month we crossed the $1M threshold. I feel like I should celebrate or something. I wish my husband was as excited as I am.

It’s funny because when I was 21, I thought $1M was completely unachievable. I also haven’t increased my lifestyle that much. After all, I’m still living in a one bedroom apartment with my husband and 1 year old.

Once my own networth hits $1M, I think I might be willing to move into a larger space. I’d like to get to $1.5M (doable in the next 3 years) before I purchase property. This way if I own a home worth $1.8M, I know I have the $ to pay it off (mostly) if I had to… that’s what financial security is to me. I don’t mind debt, as long as I have the money to cover it available and the debt has very low interest rates. Or, maybe we’ll buy sooner. I think once I get pregnant with #2 it will speed up the process. For now, we like our apartment a lot, and it’s hard to think about moving. Maybe an extra room would give us more quality of life, but it probably would just become a storage room (however, I would like if my husband moved his office/gaming computer out of our bedroom!)

Anyway, I’m celebrating our $1M here because my husband doesn’t care and it’s a pretty big deal. I certainly don’t feel rich at all, but I feel like we’ve achieved the first major milestone to wealth. Wealth to me is not buying things you don’t need or designer crap, but it is being able to spend freely on your friends and family without worrying about running out of money now or in retirement. I think about $10M is the amount needed for true wealth based on what I could ever want to spend in life (assuming its invested and about $2M of it is in a home and another $1M or so is paying for my mother’s home and life, since I do want to pay her back for all my parents gave me in my life and hoping I can do this before she gets too old!)

Well, we’re a long way off from $10M, but I finally feel like we’re on our way.

Q1 P&L Report

Better late than never.

This post is a P&L report on my Q1 profit and “loss.” It does not include my husband’s income or spending. (We split household expenses 50/50.)

Key Notes:

  • Maxed our 401k (so overall take home higher since $19k of it was pre-tax)
  • Includes one quarter of RSU vesting (on incredible, fairly life-altering vesting schedule for 3 years if I keep my job and my company keeps performing as well as it has.)
  • I also did not pay enough tax yet but my husband’s income is much lower so it might balance it all out. Making 2x last year at least so we will at least be safe harbor tax wise. Keeping a substantial amount in cash to pay taxes next April.
  • We have about $20k in my son’s 529 plan so have delayed monthly investing more in that, and considering skipping 529 going forward as its tax benefits in CA are not that great, and just keeping my investments in taxable accounts.

Q1 Profit Analysis

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Loss Analysis (Spending)

Notes

  • Household expenses generally split 50/50 – below notes my 50% of household spending + personal spending (i.e. 1/2 rent, food is not included here. Yes, we spend too much on food.)
  • I pay for any travel to visit my family out of my income
  • I pay $1200/month for “childcare” to my husband that he will put into a Solo 401k for his retirement (this includes that amount – since his father watches our son, I “pay” my husband 50% of what daycare would cost, plus $200 a month for doing my laundry… which hasn’t really happened yet. 🙂 )

Spending by Category

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Spending vs Saving

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Monthly P&L

  • Jan: +$29,215 (*includes annual bonus)
  • Feb: +$4,571
  • Mar: +$30,457 (*includes quarterly stock vesting)
  • Q1: +$64,243 

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As noted above, this does not include enough taxes being taken out, so my annual report will be more accurate. I am going to meet with my CPA because we now have the very nice to have problem of having no idea how much in taxes we will owe for the year, since it is all dependent on my quarterly stock vesting amounts. I can estimate but it’s really impossible to know what our stock will be doing in a week at this point, let alone December.

By tracking quarterly, I hope to achieve my goal of $1M in networth by 2020.

Networth Report ($833,655 Q1)

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Target networth rest of year:

Q2: $850,000
Q3: $875,000
Q4: $900,000
2020: $1M Year!!!

New Goal: $1.3M Networth by 2022 (age 38)

In 2008 or so, I had $29k in total net worth. Ten years later, my net worth closed out the year at $625k. Ten years ago I couldn’t fathom having more than $100k in a bank account. At age 24, I was just getting started in my career, making very little, and wondering how on earth to save money.

I started out ahead of many–a college degree with no loans. I’m not sure I’d be where I am today or even close to it if I had massive loans to pay back, because that would have not only cut into my savings, but also likely prevented me from taking some of the risks I’ve taken over the last 10 years that helped me save so aggressively. But, I do try to take a few moments to be grateful for what I have, and how much I’ve been able to save–despite not being able to afford the high cost of living in the Bay Area.

Today, I’m especially grateful that my current path has not only enabled me to hit my goal of saving $500,000 before giving birth to my first child, but also is looking to possibly support my second goal of saving $1M before my second–which was a long shot just years ago.

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The last few months have been especially fruitful, thanks to vesting stock–my first stock vesting period working for a public company–and selling it off immediately. I do not include any unvested stock in my networth calculations since if I lose my job that $ isn’t real. But it’s hard not to fantasize about it being real–even with it being not that much once taxes are taken out–it’s still a substantial amount and can be life-altering given my whole financial strategy is save as much as possible as fast as possible… not for FIRE, but for financial freedom (working PT, consulting, or pursing more risky opportunities, or those that don’t pay as well, in order to help others and/or just spend more time with my family.) And I won’t give up a decent lifestyle today to assume that I’ll have enough money for a frugal one “tomorrow” that doesn’t require working. I want to LIVE today but support a future where I’m not worried about money and can afford a decent lifestyle with a family.

I’m still uncertain what my “number” is. At last estimate it was about $4M-$6M, including a house worth about $1.8M. I still don’t think I’ll EVER get there, but as I set new financial goals for myself along the way, it helps to keep focused on these mini wins towards this major goal. Even if $4M is my “goal” that’s far off.

I had said I wanted to hit $1M by 40. Right now, I’ve sped up that goal to 38 (I’m 35 and a half now.) Within the next 3 years, I’d like to get to that $1M mark. A lot will depend on the volatile markets — if we have a crash, there is no way I’ll get there. If they stay stable or keep growing, there’s a good chance…

  • April net worth: $847k
  • Remaining 2019 stock value after tax: ~$92k
  • 2020 stock value after tax: ~$123k

With saving my stock amounts, and with the markets staying stable, it’s quite possible I’ll get to $1M even earlier… by 37… which actually is my goal since I want my second kid by 37 and I would like to get to $1M before I give birth. I won’t feel any richer for it, but I think with $1M in the bank I’ll start feeling ok about taking a few more risks when it comes to buying a house. Ideally I’d have $1M in the bank (investments) plus enough for downpayment and closing fees in cash. Perhaps I can get there in 3 years. That requires saving $500k in 3 years, or $150k per year.

  • 2019 (35): $92k (stock) + $25k (interest) + $35k (income savings) = $152k
  • 2020 (36): $123k (stock) + $25k (interest) + $35k (income savings) – $50k (IVF) = $123k
  • 2021 (37): $123k (stock) + $25k (interest) + $35k (income savings) – $20k (preschool) = $153k

Total end of 2021: $1.275M. Not quite $1.3M, but close. Close enough where at that point I’d be willing to put $300k down on a $1.5M house and have $1M in the bank as a safety net.

Past 2021, my savings will go down again… my stock will be vested and it’s unlikely I will find another job where I make anywhere near this much. If I can keep this job until the end of 2021, I just realized… I’ll be really close to my goal–my new goal– $1.3M by the end of 2021.

BUT – big but here – is that to do that, we need to stay living in our 800 square foot one bedroom apartment rental for the next 3 years/until I have my second child. Maybe that’s crazy–but it won’t be that bad. If it means in 3 years we can buy a house and feel financially stable (ish) then it’s worth it, right?

A Widowed Mother Who Lost Her Wealth (And a Grieving Daughter Trying to Help)

My family was never wealthy, but for my entire life we’ve been more than comfortable–comfortable enough to not pay close attention to our spending. While we never took lavish vacations (unless paid for by points acquired through my father’s work), we didn’t budget. We should have.

As an adult with my own job and an understanding of the value of a dollar (and my motto – no matter how much you make, every cent counts), I’ve managed to build up a networth of over $650k, give or take, at age 35. I want to be proud of that. I want to enjoy this as some sort of accomplishment. But I can’t. I can’t because I feel incredibly guilty and lost when it comes to helping my mother out of the financial mess she is in right now.

Some may look at her situation and say it’s not that bad. I guess it isn’t, but it will be soon if she doesn’t plug up the holes in her sinking ship. Not all of the holes are her fault–but she’s just so delusional and has no ability to stop spending. It is impossible for me to advise her beyond subtle suggestion that she cease spending when my parents paid for my college education, a nice wedding, and an overall nice life. Part of me feels like I ought to help her out and provide the funds to plug up some of those holes. And–most of me knows that even if I were to give her my entire $650k, she’d still find a way to burn through it.

This is a long story… a very long story… and one that is keeping me up at 2am with a newborn who is sleeping so I really ought to be sleeping. I can’t sleep. I can’t do anything but let my mind spin on this giant dilemma, trying to find some sort of solution to the puzzle. There isn’t one that’s pretty or that my mother will agree to. But, after sitting back and letting my recently-deceased father make a mess of the finances in his last years of life (not that I had much say in that, but I could have maybe done something… more on that in a minute)… I feel like NOW I have the opportunity to stop this sinking ship before it reaches the bottom of the ocean.

The picture was looking rather unfortunate on the first go-round of budget vs income that I quickly ran after my father passed away this summer and my mother had to make some decisions about her social security survivor’s benefits (which are confusing as hell, yet to be fully understood, and the subject of another post I’ll write one day.)

As we did more digging, we uncovered that in 2014 there was $1M in an IRA. By 2017, only $400k remained. During that time, there was the purchase of a second home which cost, including renovations, about $100k (or maybe more because my parents seemed to always underestimate the cost of their renovations and not keep tab.) There was my wedding, which, at $50k, was a lovely affair and something that made my dying father beam with joy, but was an event that never should have happened given the financial situation my father either somehow didn’t understand or hid from me and the family. He said, over and over again, he had $50k set aside for my wedding and $50k for my sister’s. He said many things. I’ll never know if he was delusional due to the cancer drugs, unrelated mental illness, old age, or maybe just a serial liar–to not only us but himself.

When he was working he was bringing in good money, at least for a middle class household. Ironically the man who left his family without a stable retirement spent his life’s work as an actuary–planning pensions for companies and accessing risk of running out of money to fund those pensions. I try to find humor in this.

But then, and I guess I didn’t realize this since I was already away at college, he stopped working around age 55 due to his obesity and mobility issues, and then shortly after that began collecting disability. His work paid out nicely for a few years, and also offered a good pension, but the reality was (and where I was blind sighted is) that the amount coming in did not cover the amount spent. I don’t know the exact gap, but it was substantial, and ignored.

Although the wedding was a big expense and the second home purchase wasn’t for pennies,  what really did them in, based on my research into the last 10 years of spending, was their crazy high expenses. My mother, ever in denial, would say she doesn’t spend like rich people do, then come home with piles of clothes “on sale” from Chicos or some “non luxury” store, not to mention a pile of face creams on auto-purchase from QVC and who knows what else. Then, there was the dining out bills, and the $600-a-month house cleaning services (I’ve convinced her to drop that to 2x at $300 a month.)

I’m not one to judge how they spent their money — they had a right to spend it any way they wanted. And I understand my father, facing certain death, wanted to enjoy his limited wealth in his final years. It was just the perfect storm of financial chaos. Even his long term care policy, dutifully paid into for many years, likely costing over $20,000, ended up going unused because he refused to admit he was dying–or, perhaps because he realized that the policy didn’t actually cover enough to not require dipping further into the shrinking retirement savings left.

With this, I’m left to wonder if my father, as ill as he was, didn’t go to doctors outside of his cancer doctor because he hated going to the doctor–or, if part of this was because he couldn’t afford the treatment. In the end it wasn’t the cancer that killed him, but issues with his heart and blood pressure–perhaps related to his cancer treatments, but undoubtedly something he could have had treated better over his life and especially those final years… but he chose to only focus on his cancer. If his goal was to die of something other than cancer, then he succeeded. I’m pretty sure his goal was to live forever and he couldn’t think of the world any other way. I get that, no one wants to admit they’re dying–but when you are facing a terminal illness and are told you have 2 years to live (and then you manage to live more than 10) at the very least you can pick out a funeral plot and prepay for a burial, not leaving your wife to run around to cemeteries the day after you die to pay the highest possible amount for both of your graves (yes, this happened. Yes, I was out-of-my-mind with a one-week-old at this time, trying to provide advice.)

But now–now the biggest issue, and the one I find saddest–is that we’ve uncovered a horrible situation regarding taxes. Taxes unfiled and unpaid. All of the numbers I’ve been running to try to save her primary home in the northeast–which, while worth $500k, has a $200k home equity loan out on it, by the way–were thrown out the window. And I threw my hands in the air. I give up. This is looking bleak. Sure, she can cut all of her spending. She can stop the house cleaning services and limit work on the house to only vital fixes for a while… nothing cosmetic. But even then, she starts dipping into that small $400k IRA immediately–which shrinks to almost nothing after the taxes are paid, and she has nothing left to pay the home equity that comes due in 2020 and flips to principle and interest at 3x what she’s currently paying.

In short, the only real answer is to sell one of the properties, and sooner than either of us would like. I’ve told her clearly that the northeast home, while a place that holds all of my memories as a child, and one I’d love to keep, is a complete money suck and sadly I think it needs to go. She agrees, but wants years to clean it out (she’s a hoarder and my attempts to help her get rid of things on my last visit, outside of taking care of a 3 month old, did not make a lot of progress.) I selfishly want the house to stick around for a while too–although it won’t be the home for my “dream” visits with my family… holiday visits to grandma and grandma — long summer nights with my kid(s) playing in the backyard through the sprinklers, running after fireflies like I did as a child–I thought maybe a smidgen of this could exist.

I know a house is just home and a home is just a house. I’ve lived enough places since leaving that house now… gasp… 18 years ago. I mean, I knew, deep down, we couldn’t hold on to it forever. Mom would move out when dad died at some point. But either time went by too fast or I didn’t think it would be this soon. She clearly wants to stay there… but it’s not possible, especially not with the vacation home as well.

She could potentially sell the vacation home, which would pay off some of the home equity. But she doesn’t want to do that, and I think it wouldn’t be wise anyway–they invested quite a bit in renovating that property and, while it’s small, it is a good place for her to live in her “young” old age. Even though some of her friends still live in our development in the northeast, many are moving away, and few still go to the social gatherings she goes to–whereas the 55+ community with the vacation home is filled with active seniors, at least in the winter months. I’m worried about how she’ll like it there in the summer when it gets extremely hot with violent storms and most of the residents leave to the north–but maybe she’ll be ok. She seems to find people to talk to wherever she goes (or talk “at”, but to her there’s no difference and she’s pleased either way.) So, the financial planner in me says — get her out of the northeast home as fast as possible. Like, yesterday fast.

But she’s committed to not moving until at least 2020, and she still thinks she can make it there much longer. She keeps asking me how long she can stay and I try to explain to her that there’s no exact number because the question becomes how much she needs left in her IRA to grow to afford her lifestyle–AND what is going to happen to her later in life if she needs long term care (since my father cancelled her long term care policy years ago saying it was too expensive.)

Now, she does have an after-tax income of $60k+ per year once she gets full social security benefits. That’s pretty darned good. If she had one home, especially one home that doesn’t cost as much as one with a lot of property and an aging architecture, then maybe she’ll be fine. She can sell the house, pay off the home equity, take the remaining $250k or so to pay off the taxes (est $80k) and family loan ($30k), and then take the remaining $150k and, ideally, invest that somewhere safe, while slowly drawing down the IRA and minimizing tax damage in the future.

She could, alternately, sell the vacation condo and put that money into the northeast home, but the costs are just too high there and she’ll still run out of money. I think with the vacation home she can actually live on her income, even if she wants to travel to visit her grandson or spend some time in NY.

The problem is, the longer she stays in the NJ home, the harder it is to ensure her life when she moves is financially ok. What I don’t want to happen is that she burns through her IRA in a few years because of credit card bills and loans and having to pay this ridiculous amount of taxes that sadly are just so high because of penalties due to my father not filing (yes, getting to that in a minute)…

So the taxes… I really don’t know what happened. My father always, ALWAYS paid the right amount each year. He didn’t always file on time–but if you pay the right amount and don’t file the IRS doesn’t actually care. Somehow, whether on purpose or by massive mistake, he was short about $23k one year and $18k the next. The $42k in taxes owed is crappy, but the penalties on that because it was never fixed are what is extraordinarily sad. For that money, not only did he take too much out of the IRA in two years to cause such high taxes owed, but he ALSO then didn’t pay those taxes or file or anything. I want to ask him WHY? But I can’t. Because, you know, he died. And I’m still dealing with processing that and all these feelings I have around wanting to empathize with him for being such a sad, sick man but also then being angry and grateful and who knows what else–is why I can’t sleep.

I’m now looking at any tax relief available to my mother, but it seems unlikely she will get any help from the IRS. Innocent Spouse theoretically applies to her–my father was abusive to her for years and refused to let her partake in household finances, even when she offered, and later, begged–especially regarding the taxes. He would yell at her and occasionally become violent. There are even police records of this (though not in the years the taxes are owed.) But “innocent spouse,” as far as I can tell, is for partners who lied on their returns. Well, he didn’t file a return, so there’s not much innocent spouse we can claim…

Now there is an abatement of penalty clause where, if you were in good standing the 3 years before the year you failed to file, you can get the penalties waived for that one year. But you only get to do this once. Not only was my father failing to file year after year (always having paid the full amount on time except apparently in 2011 when he had a small payment plan), it’s impossible to know if he already requested this one time penalty abatement. There are no records. He did all of his own taxes. My mother is perplexed–after going through all the of the papers… she says to me, it doesn’t make sense–where are all the taxes? The papers from the IRS?

My theory is he, either strategically or in a rage or in a fit of paranoia, threw them all out one day. Maybe he just straight up lost his mind and got rid of a box of important things by accident. Maybe he realized he did that and was so ashamed he just gave up on ever doing the taxes. Who knows.

One thing is for sure – he refused help–even from his few close friends and his family. And, for a man who said he wanted to leave his family with wealth and ensure his wife was financially ok for the rest of her life (which never made sense to me given how emotionally abusive to her on a daily basis) he sure made quite the mess. He just couldn’t admit he was struggling. He had way too much pride. And, in his final years, he didn’t want to accept his mortality. He told my mother she was overspending, but then he’d overspend himself. He once asked my mother how much my aunt and uncle gave me for my wedding — $500. He immediately wrote out a check to their daughter for $600! It wasn’t about generosity with him, though he’d like you to think it was. It was always about showing off how generous he was.

Even during the year of my wedding–I offered to pay for more of the wedding up front, even if he wanted to pay, so he wouldn’t have to withdraw so much out of his IRA that year. I knew the taxes would be high. No, he said. He was offended by the suggestion. He had the money and he wanted to spend it. Yes, I have guilt for spending it, but I didn’t know how bad things looked. Last I heard there was still $1M in the bank and a home that was paid off. I failed to dig in too much–but as blind as I was with eyes shut to the downfall of the great American dream, my mother seemed to have clawed her eyes out in order to be incapable of looking.

So now what? I have my own life to sort out here. I’m doing well, but have a long way to go. My first batch of RSUs vest in a few weeks… and with that I should have a $50k bonus after tax (should the stock market not completely disintegrate before Christmas) and I could say, you know what, mom, you guys paid for my college and wedding, and now I’m gifting you $50k (or, $15k in 2018 and $15k in 2019 and so on.) But what good would that really do? She needs to understand the value of money. I think I’m starting to get through to her a little bit. I paid for dinner the other night and she actually said thank you. It’s not that I want her to have to thank me – it’s that I want her to realize the value of a dollar. It may be too late to fix this mess… but maybe it isn’t. Maybe I can gift her a happy next however many years she has… for as narcissistic and childish as my mother is, I still think she’s been beaten down by an emotionally abusive mother then an emotionally and physically abusive husband, and she deserves the right to happiness in her old age. She has to throw out the clutter and really be wiling to simplify… and that would be good for all of us.

I just don’t know if I can convince her of this in time, and also let go from my crazy ideas to “save” my childhood home by either purchasing it or providing enough money in gift form to pay off the home equity or… plenty of bad ideas that not only wouldn’t help stop the bleeding, but also could financially ruin me as well. So I hope we can all make the right decisions and fast enough to stabilize and move on from this challenging period of our lives.

June Networth Check-In: $612,000

I haven’t written on here in a while, so I thought I should check in on my networth goals for the year. Things are looking strong for the year thus far, with $612k in networth hit June 1. The goal for the year is somewhere between $650k-$700k, but I’d really like to hit my stretch goal of $700k by Jan 1.

This seems somewhat doable if the stock market continues to perform as well as it has for the first half of the year. I’m likely going to see about $50k-$55k from stock before the end of the year as long as I keep my job, which leaves less than $40k to make up to get to that $700k goal. Of course, maternity leave is not going to help me achieve this at all, but that is what it is.

I’m still very confused as to how maternity leave will impact me financially. I have some idea on this, but there are so many nuances to the rules it will only make sense after the fact. I know that for my disability leave I get a percentage of my pay for six weeks, but it’s pre-tax, so maybe it will be somewhat close to my total salary. I also know I won’t be eligible to contribute to my ESPP when I’m on leave, which is crappy but makes sense since I’m not actually earning income during that time.

At this point, to minimize the hit on my financial goals for the year, I’m planning to work up until my due date and then to take the 12 weeks off that are semi paid and deal with the losses from those weeks which hopefully won’t be too bad. I can take another 6 weeks protected unpaid, but I’ll prob save those weeks until 2019 and decide if I want to take them then, since if I manage to keep my job all 2019 I’ll be in a higher tax bracket then and the loss of income will be less noticeable, maybe. Still, may decide not to take that time since it’s unpaid and I can’t contribute to the ESPP again then.

Really, my #1 focus is on keeping my job as long as possible. With my stock (which is RSU not options) at this point my networth is really ~ $892k+, but I’m not counting the stock that isn’t in my back account yet since I don’t actually get it until I get it. But, seeing $892k as my approximate networth feels good and makes me think that $1M goal before kid #2 is achievable. After all, I’m $112k over my goal of $500k before kid #1. So grateful for saving throughout my 20s and focusing on savings. Once I get to $1M, I’ll feel a lot better about my life stability.