Tag Archives: net worth

November Networth Check-In and Retirement Update

Now that I am “in between incomes,” so to speak, I am re-focusing my objectives for total assets this year, and beginning planning for 2016 based on my potential earnings at my new opportunities.

As a reminder, my goal was to close out 2015 with $400,000 in net worth. That figure was always a stretch, but it isn’t going to happen this year. My new goal is to wrap up the year with at least $350,000 in net worth, which is about a 15% increase in my nest egg – not bad but not great either. My goal is to give birth to my first child in the summer of 2017, when I’m about to turn 34 (yikes.) That means getting pregnant in the fall of 2016 or soon after would be ideal. That means that I still want to aim for $500k in net worth by the time I have my first kid (let’s call that July of 2017.) This is about 19 months to increase my net worth by $150k.

Let’s start with where I am today — according to www.networthIQ.com my current net worth is $380,783. I will subtract my car ($8000) and stock options that will soon be worth nothing from that ($16,000) to what is my “actual” net worth — so about $356k. I’m also losing money now since unemployment doesn’t cover my monthly expenditures, so assuming the stock market does decently this month and I land a new job for December start (which is looking quite likely) I should be able to close out the year about $350k. A reminder, in January of 2009 I had about $5k to my name (see graph below.)

november net worth

In order to hit my goal of saving $150k in 18 months (assuming ending 2015 with $350k), I need to “save” $8333 per month. How is THAT going to happen?

If I (knock on wood)  increase my income levels in my next job to $190k (which is super exciting and feels like too much yet if the market will pay that for my services, I’ll take it!), that is a take-home of about $9400 a month (which is a lot and really starts making this dream possible – this is where it gets exciting!) Even with my average spending of about $3500 a month,  I will have $5900 per month to put away. But this also, theoretically, is two years of 401k investment, which I can max out each year. So that’s $36,000 of the total $150k right there (assuming I can keep my job and do well at it!) Ok, so one opportunity has a 3% match of your salary on that, which is awesome (I’ve NEVER had a 401k match in my entire career!) That means each year I’d make an extra ~$5700 just for putting the money in my 401k (if I’m understanding the match thing correctly.) So that is $11,400 on top of the $36k. Ok, so that takes care of $47,400 of the $150,000, and leaves a slightly more realistic $102.6k left to save over 18 months, or, $5700 per month. Income is reduced a bit with the 401k investment, of course, by $18000 a year – but that’s all pre-tax. But with bonus, etc, it should balance out to still taking home somewhere around $9k a month, or maybe a little less. That’s still a lot for the short-term goal.

Now, let’s assume my stock portfolio / the market increases by an average of 5% each year. It could be less and it could be more, but let’s say 2% – 5%. That is somewhere between $7000 and $17500 for year one, and a max of $20.9k in year two (at 5%), minimum of $8368 (for the entire year, but I’ll count that in these numbers since even if I’m not working my portfolio will continue to gain interest.) Ok, so on the more conservative end with just a 2% year-over-year gain, I’ll have another $15,368 covered by investment interest…

$150,000 goal
$36,000 = 401k investment
$11,400 = 401k match @ 3% of income
$15,368 = portfolio interest at 2% YoY
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$87,232 to save in 18 months, or,
$4846 per month

This is very doable, as long as I select a job where I can stay a minimum of 18 months. One opportunity does not have 401k match, so I am leaning toward the one that does, since this clearly helps substantially in reaching my long-standing goal of $500k by childbirth.

Once I have kids, I am expecting to work part-time and see my annual savings levels decrease. Of course, I’ll have a husband who is also working, but he doesn’t earn as much as I do or invest his savings beyond a Roth IRA (which he’ll no longer be eligible for once we’re married – yeay marriage.) We’re not really combining incomes when we’re married – just continuing to split major household expenses. We’ll probably start to split a little more… right now we just split rent (I pay more since I make more) and food (we spend way too much on food for two people) — but in the future when we’re married I can see us splitting healthcare expenses, and maybe things like gas/transit. When we have a kid all those expenses will be split too. Luckily I have a penchant for household accounting. What a great hobby!

Seriously, though, if I can get to $500k before I have a kid, this frees me up so much from this looming fear of the future I have. It’s not exactly a nest egg that will make me rich, but it’s a very good start to be at $500k by 34. The goal was by 30 but so what… goals are meant to be hard to reach, but they keep you focused on getting to where you need to be.

With $500k, if I can manage to not touch that money until I’m 65, at an annual return of 5%, that gets me to about $2M in retirement (not counting any future earnings or my husband’s earnings/savings. At a 10% YoY return that’s about $8.7M in retirement. Heck, if that grows at 10% YoY in 20 years once hitting $500k, that will be worth $3.3M – not exactly placing me in the .01%, but certainly providing enough income for early retirement / starting my own business / doing what I want when I’m 55 years old. I know a lot of women in their early 50s and I can see this age being a good time to have that flexibility. You’re still healthy enough to trade and have fun, your kids are old enough to appreciate spending time with you (hopefully) and overall if you’ve been smart about saving over the years, you can take a moment to actually enjoy life.

So when people read this blog and comment about how this $500k goal is so silly, well, it really isn’t.

The MOST important thing right now for all of this is picking a job where I can stay stable at for the next 19 months, at a minimum. That’s a long time and I’m going to take it month by month and focus on being so productive my employer couldn’t even dream of replacing me. 18 months is just 6 quarters, and that will go fast, especially if I’m pregnant for half of them!

I really hope I can do it. I’ve come so far. This seems within reach. Having my first kid at 33/34 is not ideal, I’m going to have to have my second at 36 and if I want a third, well, that’s going to have to be pretty much right away after that. This leaves me little time to keep earning at the same rate, especially in my field, where having kids doesn’t seem to align with the amount of hours required to work. I have to make the money now, so I can leave the options open for the future.

 

 

 

 

 

 

 

 

I’ve Got $7 in my pocket…

I’m a person of extremes. I eat basically nothing, or, alternately, everything in site. I work my ass off and stay up all night to get projects done, perfectly, or I barely lift a finger. Same goes for my finances. It’s not the healthiest way of living, but it sure works a charm when I’m on the more positive end of it.

This month, I’ve been extremely frugal. Well, not in the sense of purchasing two pairs of jeans. One, my favorite brand, was on sale at the local mall for $100 and I couldn’t resist. I actually thought it was another style, which I realized it wasn’t, so I promptly went on eBay and bought a “slightly damaged” pair of the ones I actually wanted for $70. Given that the original pair I bought last year cost me $170 for one, I felt good about setting up this two-for-one designer jeans deal.

Regardless, that was really my only big spend in the past month. I’ve also been frugal about eating, in ways I probably shouldn’t be. I tend to go for as long as possible without buying food. Around the house, that’s fine, I still have some random frozen things and tuna. But I’m never home. At work, sometimes I’ll work straight through lunch, and live off the various snacks in the office. Lucky for me, at least my work provides some granola bar-type things. Still, not healthy for mealtime, but I survive.

I’ll be posting my January spending charts soon. Lately, I thought about making a goal to reach $50k in Net Worth by the end of the year. I’m still trying to figure out if that’s obtainable. I need to see what my Net Worth is after taxes this year, and then make a plan. I may not be in debt, but I can still live like I’m getting out of debt, so I can one day buy a house.

Monthly Income Goals

While sorting out my expenses is necessary in order to start saving money, I am going to try over the coming months to focus on my income. Here are my goals:

1. Startup / Part-Time Writing Gig: $3300
2. Marketing Company Writing Retainer: $400
3. Freelance for Magazine: $100
4. Freelance for Market Research Firm: $150
5. 5 hours per week for online news mag: $500
6. One Pro Bono (or Paid) Web Design Project: $0
—————————————————————
$4450

Then there’s taxes. So I really won’t make that much. But ideally, that’s what I’d be bringing in, at minimum, each month.

The Lawsuit and Rich Parents (aka, why I have $26k in my bank account at 24)

Many of you might wonder how on earth I have managed to save over $25k at 24… and to be honest, I’m a bit embarrassed to admit the truth. While I’d love to tell you all stories of how I worked my ass off through college, got an extremely well paying job the second I graduated and continued to watch my salary climb as the years passed, the reality is none of that is true.

Here’s what really happened:

I was born into an upper middle class family. My mother stayed at home. My dad was an actuary who made a strong six-figure salary. While my mother and I kept spending his hard-earned money, he still managed to save quite a bit. Additionally, his company had a pension plan and all of those old fangled tricks to keep people working at one company for their entire lives. And it worked… my dad, after dropping out of his graduate program in Physics at Cornell, ended up spending his entire life working for this one company and climbing the corporate ladder. He never seemed happy, as he certainly did not like my mother, and having to commute one hour each way into the city everyday couldn’t have helped.

But as he worked hard, I continued to reap the benefits. He saved up more than enough money to send me to a relatively expensive private institution for four years. Somehow he also managed to pay for my frequent shopping sprees to discount clothing stores. I was spoiled in an upper middle class sort of way. It’s not like I went out and bought Prada or even Coach. Designers always meant little to me, but nonetheless I had a major talent for spending heaps of cash.

If all of that were the entirety of my story, I would have graduated without debt, and with about $9k in savings thanks to dad’s “apartment for daughter after she graduates” fund. That would have been plenty more than I deserved.

But here’s the secret to my minor fortune:

In 6th grade, I broke my arm at my birthday party. I’m not quite sure whose fault that was, although my parents, our lawyer, and the judge all seemed to agree that the company running the party was at fault for negligence. As an 11-year-old, all I really wanted was an apology from the folks running my birthday party… after all, I had to leave three minutes into the festivities while the rest of my friends stayed and got to enjoy games and cake. Well, my “apology” came in the form of $15,000. Although $5000 was taken out in lawyer fees, by the time I could access the funds at 18, my bank account had grown to about that original sum.

So if you were wondering how on earth I have so much money – that’s how.

I do feel guilty about it, as I have many friends who had to take out loans to get through college and who will be paying for their education for years to come.

I’ve had the luxury to move across the country, to rent a $1050 a month apartment, and to mess up at a few jobs and figure out my career through trial and error. I’m lucky. I’m very, very lucky.

It’s hard to compare myself to others my age. I don’t know a great deal about people’s personal finances, but I have friends across the spectrum of class (ranging from “upper lower” class to “upper middle” class.)

My boyfriend’s situation is somewhat different, yet he also has money in savings and graduated with no loans. His mother has never moved out of her parents house. She’s worked consistently throughout her life, and has saved most of her income. While I was a spoiled little brat as a kid, my boyfriend never experienced the finer things in life… even though his family had the money to show him such things if they wanted to spend it. But instead, his mother believed in buying clothing from the thrift store. Last Christmas I was shocked that she got me a gift (it is the thought that counts) but I just found it interesting to see that the “gift” was a red wool coat that she had bought from a thrift store a while back, knowing that at some point she’d give it away as a gift.

I don’t judge her for this at all, I’m just fascinated by the different financial mindsets of people in America. I wonder how much of it is based on culture and religion, and how much is unique to each family and person. Even I believe that the best part of making more money is being able to share that money… at least with the person you love and your close friends.

There’s plenty more I can write about all of this, but I need to get some more work done this evening before heading off to bed. Please leave comments about this topic, as I’m interested in hearing about your families and how that influenced the way you spend and save today.

Edited to add: My parents no longer send me money. I’m on my own. If I was in debt or something awful happens, I know they’d be there to help as much as possible. But now I’m earning money and paying all of my bills, including rent.

Is this "Diversification?"

Where my money at, yo:

Bank of America Checking: $2,492.28
Bank of America Maximizer Savings: $674.96
Bank of America Family Checking: $421.19
Bank of America Savings: $1,156.67
Bank of America Investment CD #1: $7,570.29
Bank of America Investment CD #2: $5,136.60
ING Direct Savings: $100.6
Paypal: $604.36
Prosper Lending: $125
Vanguard Individual Account: $4,505.46
Vanguard Roth IRA: $3,649.51
Sharebuilder GLD, 4 Shares: $348.92
Sharebuilder COMV, 4 Shares: $91.84
———————————————————
Total Net Worth (in USD) : $ 26,912.96 as of Jan. 18

Goal: $30,000 by end of 2008. If the stock market keeps sucking, I don’t know if that’s possible.