The First Net Worth Post – August 2018 $266,116.37 (+$7,281.17)

Time to take a closer look at our Net Worth.  Posting our net worth is a little bit scary, but I want to be transparent and accountable (at least to myself) and I want to document the journey to $1,000,000.  Posting and tracking our net worth is a part of achieving financial independence and gaining the stress relief that (hopefully) comes from hitting some net worth milestones.

Just as a reminder, the $1,000,000 goal is only in regards to the retirement accounts and does not include all of the factors that are included in our net worth statement.  So without further adieu:

August Net Worth Update:

So there is it.  Our net worth increased $7,281.17 over last month.  We’ve been tracking our net worth for 13 months straight.  Tracking our net worth for one year was one of the criteria that I wanted to reach before I started this blog.  The blog is the next step to keep us accountable to our goals.

House (no change)

I’ve been keeping this amount pretty steady since I started keeping track of our net worth.  At some point I might use Zillow and use the market estimate, but I think $360,000 is much closer to the actual value of our house.  Last year we had it appraised in order to take a Home Equity Loan out to completely renovate our kitchen/first floor. The house was valued at $325,000 and we spent $80,000 on the renovations.  I felt that 40% was a fair amount to recoup from the renovation cost onto the value of our home, and I rounded up to $360,000 (I actually think we probably got closer to $50,000 in value added to our house with that remodel but I know I’m biased).

Cars (-$47)

Cars doing what they do; depreciate.  We own a 2011 Hyundai Sonata (bought new) that runs great and has lots of upgrades, but it has some gnarly scratches on it from when it got into a fight with a big metal garbage can.  Our other vehicle is a 2012 GMC Terrain (we bought used in 2015) that is fully loaded and (other than stray Honey Nut O’s) is in great condition.  As a newly minted family of 4, we think that we will need a minivan in another year or so, since we are planning on having another baby.  When that day comes, we’ll buy used and pay cash.

401k (+$4,103.57)

The markets have shown a lot of volatility since March, and this month was no different.  It certainly helps that we are adding $843 to the 401k every 2 weeks, so roughly $3,260 came from market gains.  I can’t control anything about this account other than making sure I keep contributing and making sure I have picked a diverse group of index funds to stay balanced.

Roth IRAs (+$982.24)

These accounts are also climbing slow and steady.  My wife and I each have a Roth IRA with Vanguard.  We contribute a little bit each week and maximize ($5,500 maximum annual contribution per year) each spring.  The goal is that our weekly contributions will eventually get us to the contribution limit by themselves.

Brokerage (Monster Vacation Fund) (+$528)

We had a larger than normal increase in our brokerage account this month.  My wife got some cash for her birthday and I got some money from doing online surveys.  We took all of it and bought a few shares of VTI (Vanguard Total Stock Market ETF).

Cash (+$38.29)

Small increase here.  We are stabilizing a bit after the last couple of months (-$4,144.58).  Cash is going to be getting much tighter over the next several months once my wife stops getting her paycheck.  She is taking 6 months off unpaid.  If things end up getting too tight, we have a lot of levers that we can pull to reduce our monthly outflow – but we’re hoping it won’t come to that.

Mortgage (-$606.68)

We paid down the principle by $606.68 last month.  It’s the 2nd time our mortgage payment has chipped off over $600 from the principle.  At some point, we’ll hit $700, then $800, and before we know it, we’ll own the house free and clear! We’re about 6 years in a 30 year mortgage, but we’re only about 12 years away from paying it off at the minimum payment.  For the first 5 years we overpaid in order to hit 21% equity and eliminate PMI. We had to pay for a minimum of 5 years, and getting rid of it as soon as we were eligible was important, especially since we could not claim any of it on taxes after our 2nd year of the mortgage.  We now pay the minimum on a low rate (3.75%) and devote extra money to the higher interest rate Home Equity Loan and saving!

Home Equity Loan (-$638.19)

We took out our Home Equity Loan in 2017 in order to remodel our kitchen/first floor.  We took out a $60,000 HEL with a credit union.  It equates to a ~$495 monthly loan payment to the credit union.  In order to speed up the HEL, we are making bi-weekly payments of $450. The reason is because we have a goal of paying off the HEL in about 4 years so we can remodel our backyard to make it much more usable to our kids.  We just cracked 1% paid off each month on the HEL.  That’s another small step milestone that we “celebrated”. Once we pay off the HEL, we will probably take out another HEL for the backyard.

Car Loan (-$430.32)

We’re making the minimum car payment on our vehicle, we are paying a 3.95% rate.  Unfortunately, CarMaxAuto Finance makes it very hard to put additional money towards the principle.  They take any extra payments towards the next 3 payments before anything is applied to the principle, so I feel like making extra payments is like giving CarMaxAuto Finance an interest free ~$1,500 loan.  So we’ll pay it off at the minimum for the last 2 years and work to accumulate enough cash to buy the minivan in 2020.

Average Month of Growth

This is about an average month of growth (2.74%).  What is really great to see is the change from August 2017 to 2018: +$75,297.37! about 39.5% growth in 1 year.  As I said in a previous post, I do not want to look back and be disappointed about where we could be if we had saved more.

Here’s a chart of the growth over the last 12 months.

Total change in retirement accounts this month: +$5,085.81!

We are 15% to our $1M retirement account goal.  Slow and steady will win this race. We just need to keep being diligent and pay ourselves first.  We need to keep resisting the temptation to keep up with the Jones’, keep our heads down, and chip away at the loans and enjoy our time together.

Goals for this month
  1. Spend less than $600 on food
  2. Throw something away every day (reduce clutter)
  3. Post two times per week

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