The lack of sleep has been getting to me and my sanity, but I need to keep my head in the game and focus on the prize. While the FIRE goal remains $5M, I have accepted that once we hit $3M I can start slowing down — a bit — as at that point we’d be basically Coast FIRE and not need to save more en route to the $5M (and we’d probably still end up saving a bit.) Since this year has been quite interesting in terms of net worth growth, I want to lay out the path to $3M and how long it will take to get there…
Cash: $60k of $60k goal
Stocks: $1M of $1.3M goal
Bonds: $30k of $30k goal
Retirement: $939k of $1M goal
529: $326k of $326k goal
Home Equity: $276k of $326k goal
Or something like that…
Getting us to ~$2.6M net worth by April 1, 2022.
Still a long ways a way from $3M, but progress in the right direction. And that’s only 7 months away for a net worth increase of ~$350k.
So I guess the $3M goal will have to come next. Step one is to get to $2.6M. After hitting this target then the next major goal will be $3M. I do think hitting $3M will be significant. I guess that’s because in 10 years if we don’t touch that money and don’t save a dime more it will be worth close to $5M. Now, I should probably remove the home equity from the equation entirely, but I’m keeping it for now because it’s a significant part of our net worth and I still dream of selling our home and moving somewhere affordable where we can FIRE and live a good life and have time to travel and see my kids and stuff. So it’s included for now.
Excited to see what will happen in the next 7 months. Of course, the stock market can fall fast and hard and given how heavily we are invested in the markets we can hit $1.5M or worse in 7 months.
Will keep tracking here to see how close we can get to the $3M by April 1… which, incidentally, is when I want to look for a new job!
Somehow it’s almost July 1 and half way through the year. That’s good and bad, I guess. Good, in that my mission to survive the year at my current employer is looking more and more likely. Bad, in that time goes by too fast, and my kids are growing up before my eyes and due to some of my own health issues and exhaustion I haven’t had the energy to engage with them as much as I’d like.
I know those who have been reading my blog for a long time think I’m crazy in that once upon a time $1M was my “impossible goal” and then I passed that and now I’m on to another “impossible goal” — it’s seems I’ll never be satisfied. But I promise, it’s not that. I know that once my family gets to $5M, we can FIRE and have $200k a year to live on, even if we’re unable to work. Given both my husband and I have some health concerns at the moment, who knows how long we will be able to remain employed. The more we can make and save now the better.
My hope is (was) to achieve $2.5M this year (including home equity after sale value.) Checking in on how I’m doing…
Clearly not making much progress towards my goal, but will see how the year shakes out. I’m probably paying too much in taxes so it’s possible I’ll have a refund (or not need to pay much for the last estimate this year) and things will look a little different then.
At the moment I’m heads down on keeping the job. My bosses have made it clear to me there is no place for me to grow at the company (in fact there was serious consideration about demoting me but they kindly decided not to — though I’m pretty sure that’s because it wouldn’t look great to demote a woman who just came back from maternity leave and what’s really happening is that they want me out and are waiting until it’s safe to pull the trigger.) I’m doing some good work (which they’ve also recognized) but I’m not a fit for the company. I had a heart-to-heart with my old boss (who my new boss reports into) and she basically told me to figure out what I want, what kind of company I want to be in, etc. But she also said to do this over the next year, which was great to hear since that means she’s not planning on getting rid of me tomorrow. I can now just focus on improving in the areas where I’m weak and see if I can walk away with a decent reference.
I need to celebrate somehow when I finish vesting my first grant. I wish my husband was on the same wavelength when it comes to finances and the significance of this. How hard it is for me to hold a job and how much our net worth increased in the past four years. While I’m disappointed I won’t be able to continue getting stock and promotions (I mean, get any promotion in the first place), my whole career has led to this. Did I deserve any of it? Probably not. But I’ve added value to the company and I’m still employed.
When I started this job in 2017 my net worth (personal) was $515k. It’s now $1.8M. It’s surprisingly easy to forget this, or take it for granted, or feel like $1.8M is not enough money. It wasn’t all income and company stock… my investments also went up during this time period. But… I mean, this is significant growth. It’s probably not comprehendible to many of you who are still aiming for that first $100k (and I’ve been there too.)
So, this December I should celebrate. And I wish my husband would care a little bit about it. I know he likes the house we live in. I know he’s pretty baffled by my ability to get jobs and earn more money when I seem to crumble at every single one of them. But I want to feel jointly excited about it. I want to have him recognize this accomplishment and take me out to dinner or something and — not say thank you but, I don’t know, have some appreciation for how hard it is for me and how I’m holding on for dear life and refusing to let go.
We’ll probably buy a minivan. A brand new mini van. That will be the celebration. Maybe a new garage door and kitchen table.
Or maybe I’ll spend all my money on doctors since I can’t figure out why I’m so fatigued all the time. Maybe I’ll look back on this time and see it as the pinnacle of everything.
Or maybe I’ll keep managing to earn more and grow my net worth. The $2.5M this year still seems unlikely, but if I can get there than $3M feels all the more closer. And while $3M isn’t the goal, it’s definitely a serious step to my FIRE goals.
Next year COULD be a really big year for us. I’m estimating we can take our net worth from $2.2M to $2.75M by the end of the year. I would love to see us go to $3M, but I think $2.5M-$3M is within striking distance if I keep my job until Jan 1, 2022.
If you haven’t been following — the majority of this expected growth is from company stock which has increased a lot since I started the job. I am in my final year of vesting and each quarter I should get a chunk of change (and then some) which is the only reason I’m able to save so much next year. If I lose my job all bets are off. I’m trying really really hard to not lose my job.
These net worth goals are now family net worth goals. I continue to track my “own” net worth for comparison to my numbers since I started blogging in 2006, but the numbers presented here are family net worth numbers. When I refer to my “own” numbers I consider cash in my personal checking account, my IRA/401k, the full value of 529 (since I fund this directly), and half of the value of home on sale (even though I pay a larger percentage of the mortgage.)
I’ll be blogging my $500k-$1M net worth growth over the next year, so if you’re interested in seeing if we can hit these goals follow me at @everycentcounts on Twitter.
Numbers Below = 
Emergency Fund (Cash) [$65k][$72k]
FIRE Bucket 1 (2030) [$1.1M][$1.4M]
FIRE Bucket 2 (2050) [$428k][$746k]
529 (2-3 Kids) [$99k][$249k]
Home Value (On Sale*) [$493k][$505k]
Total Networth (Pre Tax):
2020: $2.2M ($4.4M age of use value**)
2021: $2.7M ($5.2M age of use value)
* house value on sale = value of house – 10% of house value (realtor and fixing up fees) – what is owed to bank – any taxes owed (actual cash in hand estimate after sale) **age of use value = I focus on “age of use value” in my net worth calculations, which is the value of each bucket * 5% YoY interest growth for my interest-earnings accounts and 3% for home value, for expected length of ownership. Ie the 529 accounts are considered 17 yr average investments (and each year that goes down a year.)
Holy hell. Personal capital shows our family networth crossed the $2M threshold. This was my goal for 2020, yet it felt so far away earlier this year. A bump in my company stock was really all it took, but it was far from guaranteed. Even with deducting $100k from the cost to sell our home (which I have set up as a liability in personal capital) we’re across that $2M mark. Insane!
It feels especially weird given the state of the world, with so many people struggling. While living in a HCOL area with 2 kids and hopes for one more, I can’t start throwing heaps of money at charity as I’d like to yet, I’m looking into doing a donor-advised fund next year, as well as where we can help locally at food banks and such. I’m a little nervous about next year as the breadwinner of the family who happens to be about to go into labor any day now (and who has to hold down a $7k a month Bay Area mortgage), so want to be smart about giving strategies, but it’s time to think seriously about that. I just feel overwhelmed as so many people need help right now. I feel guilty for having “so much money” and yet, so many people have a lot more $ here too. And many are struggling to put food on the table. I feel weird being one of the people benefiting from the state of the world as I have a lot of stock, but at the same time proud of myself for being frugal and investing in my 20s, and also landing this job and seeing the potential in this company a few years ago.
Sure, the stock market could crash overnight or my company could go belly up — and at this point I’m holding way too much stock in my company despite selling along the way. It’s about 25% of our net worth, which is way too risky. But I also want to hold off on cap gains until AFTER next year, since I’ll likely go back to a normal income once I vest my final year of my initial grant. But that’s super risky. Yes, I can and should sell my new RSU vest now, and I probably will (it’s down a bit so holding until 2021 to either take a loss next year to offset potential short term gains later in the year or just take a gain if it goes up again.) I’ve held on to most of my ESPP against the wisdom of finance professionals everywhere, which has proven to be quite a lucrative bet. Those get taxed at a mix of income and cap gains, and my cap gains right now in CA is basically the same as my income tax rate, so it feels prudent to hold just a year longer even if they could end up being worth nothing. I’ve decided that in order to build wealth there is some truth to needing to do stupid things and take risks that aren’t wise. Men do this often. Many of my male colleagues haven’t sold one share of their stock even though they know it’s super risky and you know what, they’ve made a fortune in holding. Sure, they could lose it all as well, but so far I know some of my coworkers are set to retire tomorrow, all because they are men who take on too much risk.
Maybe risk is ok. The more money you have, the more risk you can take. It’s not quite putting it all on red. But I would not have $2M now if I hadn’t ignored my CFP’s advice and sold all of my ESPP up front. Instead, I have over 1000 shares I’m holding now, with the total value hovering around $500k. Is that stupid? Maybe. They say don’t hold your company shares as you have too much riding on the success of your company already just with your employment. That’s probably true. And RSU has no reason to hold since they’re taxed as income on vest and you should treat as a bonus (and you likely wouldn’t go and buy your company stock with a bonus – also true.) ESPP is a little more complicated. In typical slow-growth companies these give you the benefit when you make a purchase, a small 15% discount on shares, plus any growth within a lock back period. But holding you can pay cap gains tax on any growth, which can be substantial in a fast-growth company. So I’m holding. Maybe I’ll regret it. So far, doing this has catapulted us to our $2M net worth goal.
Looking ahead to next year, I see $3M as a possibility. It’s unlikely we can go from $2M to $3M, but it could happen. Right now I’m estimating about $2.5M-$2.75M by the end of next year if the market holds. If it goes up, we could get to 3. There is something about that $3M number… it’s equal to about $1M in 1981.. so hitting $3M, esp in a HCOL area, is when you actually feel like a “millionaire.” It seems like a shit ton of money (and it is) but when you have $3M in net worth, I think your world changes a bit. It definitely changed for me at $100k and $500k and $1M, but $3M is the beginning of a new chapter. It’s when you cross the threshold from upper middle class to entry-level wealthy. At least in the Bay Area — $1M, $2M, $3M, $5M, $10M are these levels of wealth. $5M is realistic for a family with 2 tech workers who are each making $250k a year. Since my family is 1 tech worker, it’s still possible if I can have a few home runs with RSUs (ie make 500k-1M per year a few times in my lifetime.) If you don’t work in tech, or settle for whatever a company decides your level is worth without convincing them you’re worth more, then it’s really hard to get there.
I still have my eyes on the prize ($5M net worth) but when we get to $3M, I’ll loosen up a bit. I’ll fly my mom out twice a year and put her up in an AirBnB for a few weeks so she can spend time with her grandkids. I’ll send my sister that TV and other random gifts she keeps asking for (actually maybe I will do that this year.) I’ll take my family on some nice vacations and pay for my kids to take enrichment classes that cost too much but it won’t actually hurt our retirement goals so why not? And I’ll seriously look at how to build the donor-advised fund I’m going to likely start next year so we can be quite generous with charity in the years ahead, which I haven’t made a priority in the past.
I’ll do a full recount of 2020 networth once the year is over as there are still a few paychecks coming in and expenses going out. I’ve spent way too much on fixing up my new house and it isn’t done yet. Next year I’ll prob spend too much buying furniture for the house (to be fair, we’ve moved from an 800 sq ft one bedroom where we were still using mostly craigslist furniture or IKEA stuff I bought when I was 22) to a nearly 2000 sq ft house… we don’t even have a kitchen table right now or any place to sit outside in our yard except our camping chairs. So I’m going to splurge because life is now and we are in a good place to buy things to increase our quality of life without going overboard. I’m not talking luxury items but thing that will make us happy because we spend most of our time in this house (well pretty much all of our time now) so…
My boss’s boss (my former boss) even liked a small project I did this week, which made me quite happy. I know I’ll never be able to be good enough for this company, but if I can keep turning in quality work I can survive through the end of next year, which means $3M net worth is no longer a pipe dream. And once you hit $3M, theoretically you can make 10% on that YoY and get to $5M in 6 years. Yea, 10% YoY gains six years in a row after a bull market is quite unlikely (might see 6% YoY losses) but being this close of striking range to the $5M net worth goal is… just… well, I don’t even know what to think about it. If I can get to $5M by age 40, that would be a whole other level of crazy. And if I’m going to do it, that’s on me. My husband brings in a stable $90k a year, and that certainly helps, but I’ve got to lean into the crazy that is RSU growth in Silicon Valley’s top-performing companies, negotiate well for my next gig, and just hold on for dear life. I have no interest in being a VP anymore — I just want to FAT FIRE (well FIOR – financial independence, optional retirement.) $3M gets us close. $5M gets us all the way. Can I get to $5M by 40? Even by my calculations that’s highly unlikely. But a few years ago $2M by 37 was also very unlikely. So anything is possible. And when I set my mind to something, well, either I ADHD space out and it never happens. Or I ADHD super focus on it and I get there.
To my readers out there, thanks for your support along the way. I hope it is as fun for you to watch my nutty progress as it is to live it on my end. Right now my biggest focus is on NOT getting coronavirus, surviving childbirth, having a healthy baby, and getting myself healthy in the year ahead. It’s ALL possible. The world SUCKS right now and it’s hard to stay positive, but at least for me, good things are happening. I don’t deserve these good things any more or less than the next person. I am grateful and in awe of how the world works in such mysterious ways.
And I like that my couch fits so nicely in my family room. And I want a kitchen table.