Tag Archives: networth

Networth Update May 2016: $365k

2016 networth goal $500k – aborted. I’ll be lucky if I break even this year. It’s my own fault. I’m making a really solid income I’m just spending way too much on my wedding. I mean – wayyyyy too much. I’m torn on how bad I feel about it. On one hand, financial blogger self feels nauseous about how much this wedding costs – and how I failed to manage to keep the budget within my very generous parent’s contribution that at first seemed impossible to exceed. Well, it seemed impossible to exceed before I fully understood the difference between $2000 and $6000 wedding dresses and how the higher petal count of garden roses makes them just so much more elegant than a standard rose and that DJs really aren’t our style and venues which rush you out because another couple is getting married an hour after your celebration ends make the whole day feel so unfortunately rushed and unromantic.

Ok. I went overboard. Way overboard. You can see how overboard in my networth chart for the year to date:

It’s going to look flat for the next few months. I’ve paid off the entirety of my dress and alterations, as well as deposits on the florist and photographer and videographer. I still don’t understand how despite how much we’re spending on this shindig it still feels I have to cut corners all over the place.

I’ve revamped my networth goal this year to $400k. It’s $100k under where I was hoping to be at this point but then again it doesn’t look like I’m having a kid anytime soon — and the real goal is $500k before my first child is born. If I add in my future husband’s savings and count it in my networth we’ll be close to $500k by that point. I’m still going to account my own networth separately going forward though – I don’t really think we should merge our bank accounts. We’re doing just fine splitting rent and food at this point. When we have kids or buy a house I guess we’ll have to figure it out.

So… I don’t think I’ll be able to save any money until after the wedding. I’m still maxing out my 401k this year… about half way there so far… but the rest of the wedding expenses will wipe out my sizable take-home income for the next few months. We haven’t even planned a honeymoon because that will be too expensive and there’s no time… though I’d like to take one. In any case, I figure July will be the first month this year I can start saving something. I have a zillion weddings to go to this year as well which are across the country, so I’ll be spending a lot even after my wedding is done. I’ll somehow make it work.

If I break even by July 1 — say, $360k — I have $40k to make up in the next six months of the year… or $6.6k per month. Fortunately with my income that’s doable but I really cannot buy anything other than gifts for my friend’s weddings and plane tickets (you know, and food and rent and such.) I just really really really need to keep my job. Odds are looking ok on that but not great. If I lose my job all bets are off. I’ve been struggling to manage wedding planning and job together so once that’s over I can get back to focusing 100% on work… hopefully I’ll last that long.

Farewell $500k goal… on my way to $400k this year. Next year I think $500k is really possible with interest and such or at least getting closer to it. 2017 will be my half million year, I hope.

Waking Up from The American Dream

Today, we received notice for our annual lease renewal. Our rent will be increasing $170 a month to a total steal of $2465 for a one bedroom apartment, not including any utilities. If we lived in the city the same apartment would be at least $1000 more. That’s life in the most expensive area in the country — no matter how much you make, you’re still not making enough to afford the life you thought you’d have at this point. You just have to wake up from the American Dream and realize it’s just that – a dream.

I’m incredibly fortunate to be one of the few who is making a high salary — more than I could ever had imagined making and more than I believe I deserve. At the same time, I acknowledge that in order to afford a house here you pretty much need to be taking home $400k (as a couple) which isn’t in the cards for our future, despite my relatively very high income – even if I manage to find success and stability in my job. I realize that many others will never even make as much as I do, and I feel I make too much, but it’s a loop of relativity when I try to comprehend how much I’d really need to make in order to purchase a 3 bedroom house with a tiny backyard.

Do I need a 3 bedroom house with a tiny backyard? Even if I don’t, soon our rent, for a one bedroom apartment, will creep up to $3000 a month, even in the suburbs. We won’t exactly be priced out but we’ll be able to save less and less each year. At some point, I think we’ll have to accept that it’s time to leave. And with a total income of about $250k, we’re doing much better off than a lot of people who live here. It’s just not enough and it will only get worse as we attempt to start our lives together.

If kids end up not in the cards, maybe it’s doable. We can stay in a one bedroom apartment, no need to pay for extra space when it’s just us. We can live in a one bedroom for the rest of our lives. This isn’t at all the life I had imagined, but we can survive easily without that much space. If we do have children that changes the story quite a bit. I don’t see how we can have children and remain here, especially if I need to take time off for any reason. The pressure of being the breadwinner, especially suffering from severe anxiety, is too much. If I am responsible for me, myself and I — that’s no big deal, I can roll with the punches, live cheaply when needed, and just weather any storm that comes my way. With children, we need a much bigger security net. We’ll have to move. We will have no choice.

I write this at a time when many entry-level workers here are seriously struggling, unable to feed themselves or pay rent on minimum wage. I feel embarrassed to look at my quite high income and still feel so hopeless, because if I feel hopeless, how on earth is the rest of everyone supposed to feel?

I’ve come to accept that if I’m going to have children we can’t stay here. I don’t have a solution yet or an answer to “where to do we go,” but sooner than later we have to get out. I’ll very much miss the beautiful scenery and sunshine. I’ll look back on my 20s and be glad I had the opportunity to live in such a glorious part of the world. But it’s time to grow up and move out. Or, at least it will be soon.

People say to not worry about the future and to just live in the moment. I find it very hard to do that. We now face the choice of staying in our current apartment and paying an extra $2000 to do so next year (and continuing my 3 hour a day commute) or finding a place closer to work that will either be more expensive or less livable or both. We’ll probably just stay here for another year – neither of us wants to deal with moving, and $2000 doesn’t seem like that much compared with the inconvenience of finding a new apartment and lugging our stuff to it… moving isn’t free either. So we’ll probably give it on more year here and hopefully by the end of the next lease I’ll be pregnant and we can then figure out where on earth we’re going to live in the future (aka not California.)

I had hoped that I’d be at a point in my career where I’d feel so distraught over losing my job / career in order to have a family… but while I appreciate my job for what it is now, and really admire my colleagues and am so grateful for this opportunity… I have no personal investment in this career. I feel no sense of pride in my progress or role. In five years, to continue on this path, I end up in a leadership role were I will never fit. I acknowledge it’s soon time to leave. Right now, the best I can do is hold on for dear life, do the best I can, and try to save money by living relatively frugally and bringing in a good income where most of it goes straight into the stock market / my savings accounts. This may be my last significant savings opportunity in my life, given I plan to move to an area with a lower cost of living and obtain a job which pays significantly less in my next career move. My goal is still to get to $500k in savings before I make this move, and the goal is becoming much more dire given that I’m rounding the corner of my mid 30s and I know I can’t handle this life for much longer. If I can just hold out until $500k — I can completely shift my lifestyle to one of lower income and greater flexibility in another part of the country. We can live off of, say, $100k total across both of our incomes and still live a decent life. If we make more than that, great, but we don’t have to (or, in the case of staying here, I’d likely have to earn over $300k in order for us to hit the $400k mark and afford a small home.)

What was once kind of this running silent joke in my head about how one day I couldn’t afford to live here and that I’d move away is proving true. I guess what has changed is that I’m more ok with that than I was before. I used to think that I didn’t want to trade my career for a simpler life. I didn’t want to be one of those women who had kids and no longer had her own identity, especially a professional identity. But now, I don’t know, my professional identity is not who I am. Despite not making it to Hollywood or Broadway I’m an actress nonetheless, everyday portraying someone who I’ll never be. I’m over this obsession with what I thought was success. I have nothing to prove, no one to impress, no game to win. I have maybe 60 good years left on this earth if I’m lucky, and many fewer with all of my loved ones in good health. I hope to make the most of them, and it doesn’t matter if that occurs within a tiny apartment or a giant house. It feels good to finally accept that… to embrace the loss of this embedded classism my parents have taught me, to stop feeling like if I can’t maintain the level of comfort and luxury from my childhood that I am a failure. The only true way to fail is to lock myself into a life where I no longer have any reasonable options for escape.

7-resources-for-startup-investment-opportunities-2e3d56b867

Current Investment Portfolio ($323k)

Some of you have emailed asking, so here is an overview of my current portfolio:

STOCKS – now @ $144,385 (2016 goal = $200k … which may be a stretch!)

  • $18402 – AAPL
  • $8665 – AMZN
  • $1891 – DIS
  • $1130 – FTR
  • $2783 – GE
  • $649 – GOOG
  • $20408 – IHI
  • $7315 – JNJ
  • $7862 – MCD
  • $6951 – SBUX
  • $2935 – VOO
  • $8178 – VZ
  • $33392 – VGHCX
  • $13690 – VMGMX
  • $5634 – Loyal3 Account (multi-stock)
  • $4500 – Robinhood Account (multi-stock)

RETIREMENT (mostly pre-tax) – now @ ~ $154,824 (2016 goal = $190k)

  • $9172 – DVY
  • $1487 – GLD
  • $2898 – XRT
  • $3088 – AMZN
  • $2199 – GOOGL
  • $2299 – NFLX
  • $347 – TEL
  • $2106 – VTI
  • $4658 – VFWIX
  • $12867 – VEMAX
  • $21943 – VIGAX
  • $16169 – VTIAX
  • $31170 – VTSAX
  • $12612 – VDADX
  • $5078 – VDIGX
  • $10928 – VSGAX
  • $15803 – 401k to rollover

OTHER ($24,164)

  • $6464 – 529 plan
  • $873 – Prosper
  • $427 – Lending Club
  • $16.4k – stock options that will likely be worth $0 in 2016

How I Increased My Networth 13% in 2015

Last year I increased by net worth from $309,894 in January of 2015 to $352,066 in January of 2016 (increase of $42,112 or 13% YoY increase.) This is not accounting for the last week of declines, which may or may not hinder 2016 growth. With a total net worth of $352k to start this year, I’m focused on my goal of hitting $400k by the end of 2016. Although this isn’t my original goal of $500k by the end of 2016, I think $400k is still a very aggressive and challenging goal for this year.

Screen Shot 2016-01-11 at 9.28.52 PM

In 2015, my stock portfolio increased from $144k to $171k. My retirement portfolio increased from $152k to $171k. Thus, the year concluded with approximately $342k in active investments (mostly stocks.) This is why when the market dips my portfolio significantly decreases. Since I have a substantial amount of funds in the stock market I tend to wait now a bit before putting large sums into play beyond what is already invested.

Goals for 2016:

Stocks: $200k, including $15k additional in Vanguard admiral healthcare fund, which has a $50k minimum. This would = $29k in net new investment, or ~$2.5k per month. If the market drops lower than monthly investments will have to increase to make up the difference.

  • $1250 / month — Vanguard Healthcare Fund (to get to $50k admiral minimum)
  • $400 / month — loyal3 fee-free partial stock investing
  • $850 / month — Vanguard fund TBD to get to $10k admiral (might reinvest in the dividend growth fund I sold for losses after a month or so. We’ll see.)

Retirement: $190k (max out 401k and IRA for 2016 — $23.5k additional investment, or $2k per month)

  • $18k = 401k max
  • $5.5k = vanguard IRA (post tax)

Cash: $10k – I’d like to close out the year with a $10k emergency fund.

This = a total monthly investment of approximately $4.5k per month, up to $6.5k if the market drops further. $6.5k is fairly impossible w/ my general monthly expenses plus the wedding, so I think the $4.5k goal (esp with some of it in pre-tax dollars) is a reasonable objective. If the market sucks this year then I probably won’t get to $400k, but I’ll still be buying discount stocks which will hopefully go up at some point in the next 10 years to make up for any losses.

If I can do this then and maintain my job I should be able to close the year out with $400k net worth. This would be a very exciting achievement for this year, as I’d still be on target to hit $500k prior to 35 (2018.)

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
———————————————
$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.

 

 

 

 

 

 

 

 

New Unemployment/Unemployed Budget

Well. Here I am. Unemployed. Since I received no severance and was not eligible for payout of any PTO (side effect of the supposed unlimited vacation perk), I’m left with my final paycheck and waiting for unemployment to (hopefully) kick in.

When you apply for unemployment they ask you a whole host of questions and I’m concerned I won’t qualify, though I should. Even if I do qualify, it’s a whopping $1800 a month (before taxes) and they make you wait a week to start claiming, so the first month is actually more like $1350 for the month. And $1350 is about how much I pay in rent. Thank goodness I’ve been somewhat smart about saving this year (I knew the job was not going to last long given how I performed with the heaping of anxiety and lack of sleep brought on by a very non-supportive work environment and a long commute I should have never signed on for in the first place.)

I thought it would be a good time to check in regarding my networth and budget. My networth goal for this year was $400k but that was a stretch to begin with (a $100k increase from 2014 including savings and interest.) Right now, counting all my assets I’m at about $350k – which isn’t bad considering the way the markets have performed this year to date. I’m sure with some better investments and less stress spending I’d be a little closer to my initial goal, but not by enough that it would really be meaningful. I have to take a moment and applaud myself for reaching $350k networth. Even though it’s not the big $500k, $350k feels sizable enough to merit a moment of self congratulations. For some reason, this amount makes me feel better about my lack of job stability due to my mental illness. While I can’t touch all that money immediately, and after taxes it would be less, if I was desperate there’s enough there to get through my own personal instances of deep depression (yeay bipolar life.) I don’t feel secure enough yet to have kids, or quite frankly, to get married (which is happening this spring anyway), but I feel like this is an accomplishment of some sort I can be secretly proud of… especially given that just 10 years ago I had about $5k to my name and was basically living paycheck to paycheck.

Here’s how the $350k breaks down:

  • $27.5k – cash
  • -$46 – credit debts
  • $153.5k – stocks (taxable)
  • $178.3k – retirement funds
  • $6.5k – 529 / grad school fund
  • $8k – approx car value

Now, my goal for the rest of the year, revised, is to end the year above $350k. This just brings me back to my older goals of saving $50k a year – which I’ve been doing for the last couple of years. I though this year given my income increase I could save a whole lot more, but you know, markets fluctuate so much, and maybe I actually bought enough stock “on sale” this year that I’ll have a really good 2016. Who knows.

The trick at this point is not significantly dipping into my cash to live between my current job and my next job… especially since I don’t know when said next job will start (or what it will be.) The $1350/$1800 a mo in unemployment is barely enough to cover standard recurring expenses, so I’ll have to dip into my savings a bit. I’m hoping that by Dec 1 I have a job so this leaves me with just 1.5 months of unemployment, which shouldn’t hurt too much. With the wedding coming up, and all the expenses for that, I really, really, really need a job – even though I admit it’s nice to have a few weeks to just stop and focus on planning this crazy event since the lack of time to do that was also stressing me out.

But I want to plan for “worst case scenerio” 3 months without a job. I’ll give myself 3 months to find something I really think I can be good at – because the last thing I want to do right now is to jump into a position where my anxiety will get to me again. I’m hoping to find something with a bit more flexible work environment – the amount of work I can get done at home in a quiet space far surpasses what I can do in some horrible open office environment filled with stress-inducing distractions. I’ve made a pact with myself that I’m not going to apply for things I know I’ll ultimately fail at given the work environment. I also am probably going to apply to grad school because I know the field I’m in now rarely meets my minimum requirements for sanity, so despite the great pay, I think I need to take a break from chasing income and now start to actually plan for sustainability. In short, I can’t be crazy mommy who gets fired from her job every year – my future kids don’t need to see that. I want them to see me in my best state – one where I actually like my job more or less. Not the me who I am now. I would never want them to see that person.

So I’m assuming I will need to spend about $2000 a month additional from my savings in order to cover everything from gas to get to job interviews to food to grad school applications to a potential trip home to the east coast to spend some quality time with family when I have the time (dad’s cancer isn’t getting better and despite that he drives me nutso whenever I see him I always think – will this be the last time?) So… say I have $5k of my savings to spend over the next 3 months… give or take. That puts me at roughly $350k at the end of the year – but I’d then be worried I couldn’t find another job. I know that I have some talent and abilities… but I just need to figure out where and how to apply them in a way where someone will pay me money to do so, and I won’t flip out after 3 months or so feeling like I’m so overwhelmed but the piles of things to do and not be able to prioritize those things or even know where to start. Yes, this is the life of a woman who has super anxiety, bipolar II and ADHD. I’m not saying those are excuses for anything – I take full responsibility for losing this job, for falling into the same pattern. But there’s a part of it that is just inherently who I am. I’m different than most people, that’s for sure. I just need to figure out where I fit.

And I’m going to be 32 in a month, which is – such an adult. My body definitely feels like I’m in my 30s — I pinched a nerve a week ago and my back and arm are still in pain. If I don’t sleep a full 8 hours a night I feel it for many days later. And don’t get me started on drinking / hangovers, oy. That’s just to say that I’m not a kid anymore. I’m a full grown adult. Looking around at my apartment I have to stop and wonder if this is what I pictured adulthood to be like. Well, I never actually envisioned myself as an adult. Maybe that’s part of the problem. But when I envisioned adulthood as a general concept, it certainly didn’t look like this — unfinished apartment, used couch that’s falling apart, bike in the corner of the living room because there’s no where else to keep it, a career that doesn’t feel right at all, getting married (ok that’s a start) to a man who also doesn’t have much of anything figured out yet either, to a long life ahead of me that I imagine will poof suddenly transform into one filled with maturity once I have my own kids (I know it doesn’t happen that way, I just like to think there’s some kind of inciting incident to finally growing up.)

Oh well. Today, I just need to focus on not dipping in too deep to my savings this year, and ultimately continuing on to my “round 1” $500k goal. That was supposed to happen next year. It won’t. But maybe I’ll get there before I’m 40.

 

 

 

 

 

 

Financial Independence – What it Looks Like to You

When one is on the road to wealth, the dream of financial independence lingers in the distance. Financial Independence means different things to each person. For some it may mean being able to take year-long luxury vacations around the globe and returning home to a mansion. For others, just being able to live a modest lifestyle and not have to work in order to afford it is enough.

I ran into this interesting article discussing financial independence.It posed a few questions which help paint a clearer picture of what this dream would really be like:

  • What time would you wake up?
  • Would you be awakened by an alarm clock or by your body’s clock?
  • Once you arose, what would you do first? Second?
  • When and what would you eat?
  • What would be the main activity of your day?
  • How would you spend the evening?
  • What would determine when you went to bed?
  • What would your home look like?
  • What kind of vehicles would be a part of this typical day?

I thought I’d take a stab at answering the questions, as they probably will help guide in my determining my ideal lifestyle with or without said financial independence. How would you answer these questions?

What time would I wake up?
Probably 8 or 9am.

Would you be awakened by an alarm clock or by your body’s clock?
Body’s clock. I hate alarm clocks.

Once you arose, what would you do first? Second?
I don’t know. If I don’t have work to go to, I tend to just waste time. I’d probably be bored very quickly. I’d likely waste away my days unless I had a project to work on… like work.

When and what would you eat?
If I had “luxury” financial independence, I’d have a cook who would make me healthy delicious fresh food everyday. I’d also be a better cook because I’d have a nice kitchen and a maid who would clean up after the mess I make. I’d frequently dine out – sometimes at fancy places but mostly at modest restaurants. I’d try to eat healthy. I’d have a personal trainer.

What would be the main activity of your day?
Well… other than sleeping and watching television, which would get old fast, I’d want to be working. Maybe I’d take classes. If was wealthy I’d want to just spend my life learning. I’d probably take a bunch of psychology, art and writing classes. Maybe I’d just get a bunch of master’s degrees. I’d spend a decent amount of time floating around my pool. I’d travel and take lots of road trips across the country.

How would you spend the evening?
Cuddling at home with my boyfriend, watching movies, taking relaxing baths in a luxury bathroom that I designed. Sleeping.

What would determine when you went to bed?
What I was tired. It would usually be pretty late. I’d be doing something creative at night and fall asleep whenever, knowing I didn’t have to wake up at any set time in the morning (unless I had class.)

What would your home look like?
It would be in a neighborhood where I had friends who lived close by, who were also financially independent or had more flexible lifestyles. It wouldn’t be giant, but it would have a sizable yard with a private pool (optional) and enough room for entertaining and having guests. I would personally design my own unique kitchen and bathroom. I’d have a robot that does my laundry and folds/hangs my clothes!

What kind of vehicles would be a part of this typical day?
I’m fine driving the basic honda/toyota type car. If I was the rich kind of financially independent, I might buy a Tesla. But I’d be too scared to drive it because I tend to bump into inanimate objects. Maybe I’d splurge on a Lexus or something. I don’t need a Ferrari.

What is most interesting about this analysis is that clearly I’d be massively bored if I was financially independent. I like to work. In fact, I can’t imagine ever retiring. Still, I want to achieve financial independence. To me, financial independence is $2M in networth, or $1M with a modest lifestyle in one’s 30s/40s that is growing to $2M. It isn’t some super fancy lifestyle. And even if I was financially independent, I’d want to work. I would just want more flexibility in deciding where and when I work. And I’d also want to have the opportunity to take more classes and change careers frequently, not caring about taking lower level jobs to be learning something new all the time. Hmm.

March 2015 net worth update

Stealing this chart and breakdown from Leigh’s Financial Journey, because I adore how she tracks her networth (and man she’s doing amazing worth saving 80% of her income per month! Inspiring!)

Annual Networth Progress (Goal $400k)

31-Dec-2014 28-Feb-2015 31-Mar-2015 MoM YTD
cash -$2918 $10,646 $10,844 +$198 $13,762
investment (taxable) $144,021 $150,883 $150,096 -$787 +$6075
IRA/401k/hsa/529 $158,971 $166,019 $165,032 -$987 +$7048
net worth $299,894 $327,548 $325,972 -$1576 +$26,078
$ until FI ($2M) $1.7M  $1.67M $1.67M

March didn’t look that great on paper, but really the market was just doing really well in February so a lot of those gains pulled back a bit. I haven’t been very heavily investing in the first quarter of the year as I’ve bene saving an emergency fund in case I lose this job. I’m expecting to be in the job until at least June 30 and likely until Oct/Nov, but that could easily change and be sooner. I need to be prepared.

Overall the year is going quite well. I’m still on track (though I had been hoping to be ahead of target since Feb concluded at my quarterly savings goal. My focus now is really on the next three months – saving as much as possible. If it turns out I get to the end of June and I’ve saved $50k, I can still feel good about that as typically my annual savings/interest goal is $50k. This is just the first year I’m trying to save $100k for the year — which is still somewhat do-able if I were to stay in the job until Dec 31. Honestly, the best thing would be to stay until February so I can max out next year’s 401k, and then figure out next steps. But that’s a long time from now and anything can happen.

I really want to see April end with $10k increase in my account, or $335k. This is possible if the stock market goes up since I’m also putting 80% of my paycheck in April into my 401k (I haven’t put anything into my 401k yet this year.) Furthermore, I just did my taxes and am actually getting $1k back this year. My stretch goal for April is getting to $340k, leaving just $60k for the remainder of the year to save – so this is a very important month. Wish me luck! 🙂

Tracking Towards 2015 $400k Networth Goal

The big bumps in my networth have always come at times when other aspects of my life are completely out of whack. I am probably spending about 90% of my waking life on work right now, and that’s still not enough, but I’m really seeing successful growth in my personal networth, which will be very helpful later when I have kids and want more flexibility in life. Every time it gets really hard, I have to stop, breathe, and remind myself that there is an endgame to all of this.

The level to conquer this year is passing over $400k in networth. With this being my first year aiming to save $100k, anything could happen. For the last four years I’ve saved (with investment growth and actual savings) $50k per year, so this $100k savings is a huge leap – made possible only by that previous savings and investments, plus growth in my own career.

While I’m a bit OCD about tracking my progress, it helps to see numbers hit month after month. It’s quite motivating to keep focused on the long-term picture.

I have a google spreadsheet where I’ve estimated were I should be bi-weekly for my networth throughout the year to keep on top of my progress. The stock market is always going to go up and down and up and down, so I won’t always be quite on track, but if I do notice that my progress isn’t where it should be, I’ll be extra frugal and invest more of my paycheck that month. If the market is performing well, I’ll usually pick a few individual stocks to invest in that have strong long-term prospects but haven’t done well in the short term. Usually I’ll just invest in index funds or wait until my portfolio is down a bit more and then buy more index funds. I like Vanguard because I can dollar cost average there for free, and I like Loyal3 to buy stocks because I can purchase them for free as well (I need to try out Robinhood too.) No more Sharebuilder investing, $7 trades for me!

Today, my “actual” networth (not including my car but including about $16k in private company stock that will likely be worthless in a year or two), is $322.6k, which is slightly over the goal for 3/15/2015 ($320.8k.) I’m pretty much right on track (always like to be trending slightly above target than under if possible.) There is still a long way left to $400k, of course ($77.4k to be exact) but it’s achievable if markets perform well. If I keep my job for the remainder of the year, I can realistically save $5k a month, or $45k for the rest of the year, which brings me to $367, $43k short of goal. It will take strong bonus income and investment growth to actually hit this number. Yet I’m at the least tracking to goal.

I’ll be satisfied if I end the year with $375k in networth, but am pushing myself to get to $400k. At $400k, if I can see 5% growth in 2016, that’s $20k of my $100k savings goal for the year taken care of – and if I see 10% growth, then that’s $40k of it, which would be a huge help.

I’m not sure how the next two years are going to play out – everything is so shaky and uncertain right now. I feel confident that I’ll be able to get to $350k networth this year (tracking towards my prior goal of $50k increase per year) but there’s a chance I could go well over that. I’ve just given myself $400k as a stretch goal to see how far I can, well, stretch to get there.

One thing is for certain – when I do have kids, there is no way in hell I would want to do a job like this. My current role is perfect for people who have no kids and no life. I’m ok with that for a year, or two, but then I’m going to figure out how to transition to a role that will likely pay a lot less and require a lot less hours – so I can finally find some form of work-life balance, or just overall life balance. Sigh, that would be nice.

 

 

February Wrap Up & Networth Update

February, despite being a short month, was quite a productive one financially. The stock market was going up and up and up, which provided quite a nice bump in my networth.

For the new readers:
My Objective: $500k in networth by 1/1/17, $400k by 1/1/16. First kid by 1/1/18.

Well, despite being in a bit of a funk/depression this February, my bank account looks quite healthy. So healthy, in fact, that according to my bi-monthy networth report, I’m actually ahead of plan. This is extremely exciting to me as this is the first year I’m attempting to see a $100k increase in my annual networth. Being as I hope for a more flexible career when I have children, I have only a few more years to achieve my goal. Including my material assets (namely my car), my networth is now somewhere between $327k and $337k. My goal for 3/1/15 was $316k to be on track to $400k this year.

chart

Now, not every month is going to be so great in terms of stock growth, and likely my portfolio will see a correction soon. It’s just fun how the more money you save the more it can go up in a month when the market is also going up. Also, I’m fortunate to have a job and lifestyle that enables me to save, save, save. Well, I did go shopping last month and bought a few new items, but overall I feel good about the month in total. Makes up for a fairly flat January.

My focus is really on being exceptional in my work so I can maintain this level of growth without flatlining or seeing a decline this year. This year can really go any which way. I’m hopeful I’ll continue to have good news next month, and be well ahead of plan by mid year.