December 2014 net worth update (+0.5%)

31-Dec-2013 30-Nov-2014 31-Dec-2014 MoM YTD
cash $13,500 $8,200 $12,300 +$4,200 -$1,200
savings $27,400 $52,100 $47,800 -$4,300 +$20,400
investments $134,600 $166,600 $164,500 -$2,100
+1.3%
+$29,900
+22.2%
mortgage $187,600 $147,700 $143,000 +$4,700
+3.2%
+$44,600
+23.8%
net worth $345,900 $529,200 $531,600 +$2,500
+0.5%
+$185,700
+53.7%
taxable assets – debts $135,200 $70,400 $70,600 -$200
-0.3%
+$64,600
+47.8%
$ until FI $823,900 $845,000 $811,300 -$33,700
-4.0%
-$12,600
-1.5%

This is the last net worth update of 2014!

You might notice that the ‘taxable assets – debts’ numbers look a bit different than they did last month. This is because I decided to start calculating them ignoring the “cash” numbers since I would not ever empty my checking account in order to pay off the mortgage.

I, ahem, have used the money that normally goes to savings from my November and December paychecks to pay for our awesome trip that is coming up soon, so I saved a lousy 2% of my paycheck this month and 4% last month. As you would expect, that has pretty significantly dropped my overall savings rate for the year, which I’ll talk about when I look at the year in review over the next week.

I’m not doing very well with keeping such a larger savings account buffer. I tend to like to move money somewhere useful as soon as possible. I made an extra payment on the mortgage near the end of December to lower the balance a bit. I’ll probably also use $5,500 from savings to make my 2015 Roth IRA contribution before I start the new job and then hopefully I’ll be able to leave the rest of the money alone until I start the job since I will have about 4-6 weeks unpaid and possibly 1-1.5 months between paychecks. But in reality, I don’t need to have a $50,000 emergency fund.

The $ until FI is a huge moving target since even a $200 increase in average monthly spending requires an additional $60,000 saved or for example, my estimated savings from my boyfriend moving in lowers the target by about $100,000. Here are the past numbers on this:

  • EOY 2010: $1,027,400 (average monthly spending $3,600)
  • EOY 2011: $856,500 (average monthly spending $3,300)
  • EOY 2012: $1,104,800 (average monthly spending: $4,220)
  • EOY 2013: $823,900 (average monthly spending: $3,730)
  • EOY 2014: $811,300 (average monthly spending: $4,000)

It is in general going in the right direction (down), but it is pretty variable. If things go according to plan in 2015, this number should drop down under $500,000!

Expenses: I spent $4,369 in December (ignoring work reimbursable expenses) after the mortgage or $3,342 without it. My total spending for 2014 was $47,994.

Some of my controllable expenses broke down as follows:

  • $151 Clothing/Shoes – bought two white tank tops and a pair of warm black flats
  • $207 Entertainment/Social [average this year: $211, last year: $224]
  • $40 Eating out by myself [average this year: $18, last year: $25] – this was increased a bit from the moving
  • $89 Groceries [average this year: $185, last year: $152] – this is my half and I’m not really sure what happened here. We were gone for a few days for Christmas and we ate out a bit more than usual, but this is abnormally low grocery spending.
  • $161 Work lunches [average this year: $147, last year: $77]
  • $495 Presents [$1,228 so far this year, $627 last year] – I had a lot more people to buy presents for this year and I also bought more expensive gifts than I did last year.
  • $33 Internet – yay for split internet :)
  • $0 Household goods [average this year: $17, last year: $29] – a lot of this has gotten rolled up into groceries and I’m not concerned about that since it’s easier to split things this way.
  • $38 Electricity – October/November [$719 so far this year, $699 last year – rates went up about 7% year-over-year and my boyfriend and I are now splitting this]
  • $57 Hair cut
  • $110 Toiletries [average this year: $33, last year: $31] – new shampoo, conditioner, and a couple other hair products. I decided to splurge on less cheap shampoo, conditioner, etc. and my hair is feeling so much better already!
  • $77 Accessories – my cost of a bigger purse after Christmas money
  • $77 Furnishings – some wood swatches to look for a new piece of furniture for the kitchen/dining room (these will be returned for a full refund once we’ve decided what to buy!)
  • $354 New camera, 64 GB memory card, and some filters – my point and shoot was from 2008, so we decided to buy a new camera before we go on our trip
  • $5 Transit fares – took some transit while visiting my family over Christmas
  • $7 Car maintenance – bought a tire pressure gauge
  • $37 Electronics – some more rechargeable AAs and AAAs
  • $12 Fuel [$224 so far this year, $393 last year]
  • $30 Tolls – filled up my tolls account again
  • $900 More flights and one of the hotels (we accidentally prepaid for the hotel) for our overseas trip
  • No more HOA dues to pay :)

Cash: $12,300 (up $4,200)

This is mostly up because I’ve set aside all of the money to pay for our trip and the funds are just hanging out in my checking account until we pay for more stuff.

Savings: $47,800 (down $4,300)

These funds are spread across a checking account that gets free ATM fees anywhere in the world, my health savings account, a savings account at my credit union, and a bit of a buffer in my credit union checking account.

This is down because I made an extra payment on the mortgage and I needed to borrow a bit from savings to cover the gap from my December paycheck in my checking account.

Investments: $164,500 (down $2,100 or -1.3%)

This includes my Roth and Traditional 401(k), my 401(k) employer matching (fully vested!), my Roth IRA, my taxable investments including stock index funds and Series I Savings Bonds.

The change here comes from:

  1. Stock market losses
  2. No contributions (status quo for the rest of 2014)
  3. Almost $1,000 in dividends (maybe next year I’ll surpass $1,000 one quarter!)

Mortgage: $143,000 (down $4,700 or -3.2%)

Some statistics here:

  • 2.5%: the interest rate on my 5/1 ARM
  • January 2018: when the interest rate on my mortgage is set to reset, possibly to 7.5%
  • 6: months of payments eliminated with this month’s pre-payments
  • $4,000: extra payments made on the mortgage this month
  • $8: interest this month’s extra payments will save me on the next regular payment
  • 30.0%: portion of my regular payment went to interest (originally was 59%; down 0.1 percentage points)
  • 60.0%: amount of equity in my condo, assuming purchase price (up 1.3 percentage points)
  • 50.0%: amount of the mortgage I’ve paid down (up 1.6 percentage points)

I made my first extra payment since August! That was awesome. I’m looking forward to getting back to making extra payments soon, although how much extra I’ll pay the mortgage down in 2015 depends on whether I have access to the Mega Backdoor Roth IRA or not with my new employer. I’m about $19,400 ahead of where I needed to be at the end of 2014 to pay the mortgage off before the rate resets in 2018!

TOTAL: $531,600 (up $2,500 or +0.5%)

I ended 2013 with a net worth of $345,900, so I’ve seen a change of +$185,700 or +53.7% so far this year. I’ve set the y-axis on this graph to $465,000 so we can see how my net worth grows towards that throughout the year. I have now surpassed my original y-axis of $465,000 (!), so I’ve increased it to $550,000, which is my new estimate for the year. I didn’t quite meet my $550,000 estimate for the year.

December 2014 Net Worth Graph

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28 thoughts on “December 2014 net worth update (+0.5%)

    • Thanks! Happy new year to you as well!

      It looks like I’ll hit $1MM in 2017-2018 right now, somewhere around 2018-2019 for FI at my current spending levels, and mortgage paid off sometime between 2015-2018 depending on whether I can do the Mega Backdoor Roth IRA at my new job.

      • Nice! Good luck with the jet lag. It killed us coming back from Australia last spring. See if you can stop in Hawaii for a few days to break it up. =)

        • It totally killed me when I came back from Japan a couple years ago! That’s part of why I wanted to do this between jobs. We’re coming back mid-week and I don’t start work at the new job until the Monday, so I should have ~5 days to readjust to the home time zone.

  1. Your updates always astonish me. +185k in one year is ridiculously awesome! Well done on averaging less than $4k/month as well.

    My parents are going to NZ in a couple months for 5 weeks. I’ve asked to go in their suitcase, but for some reason they aren’t interested in that.

    • Your net worth actually went up a very similar $ amount to mine this month – $2,387 yours and $2,500 mine!

      We’re both super excited about the trip! I’ll do a budget breakdown soon – it is going to be pretty expensive! But hey, we have to balance life with saving and what’s the point of money if I don’t get some enjoyment out of it?!

  2. Two words: Crushing. It.

    Heck of a successful 2014 – adding $185k to your net worth is tremendous, and the coming years will only help to accelerate that number. You will really see an explosion once you start putting your income towards investments after the mortgage is paid off.

    • Thanks! If I can do the Mega Backdoor Roth IRA with my new job, I’m going to do that instead of using that money (~$30k/year) to pay down the mortgage, so I may start seeing that explosion soon! I’m starting to wish I hadn’t taken out an ARM – if I had a fixed rate mortgage, I would probably be diverting money to investments about now. Hope you had a great 2014 as well!

  3. I’m a little curious why you value the tax advantaged investing over the mortgage payoff, but not investing in a regular account?

    • That’s a great question! Since I’m on the high end of the 28% tax bracket, contributing to a traditional 401(k) will save me $5,040 in federal income taxes in 2015. That’s a pretty decent chunk. The other point is that the contribution room is use it or lose it. If the unused contribution room for the retirement accounts rolled forward infinitely like I think they do in Canada, I would have been paying off the mortgage and ignoring retirement accounts until the mortgage was gone. I am also contemplating moving to a much lower paying career path in a few years and it would be nice to have lower expenses and live within my means with the reduced salary.

  4. Wow! That is an insane move in your net worth. I really like the emphasis you are placing on paying off your mortgage. I paid mine off a little over four years ago. That is the point where my journey to FI really started accelerating.

    Good luck in 2015!

    MDP

  5. Great job this year Leigh! Looking forward to hearing more about your 2015 and seeing how the new job treats you. Hope you have an amazing trip to New Zealand!!

    • Thanks Mark! Happy new year to you and your family! I’m really looking forward to the break! The end of 2014 was pretty stressful.

    • I do buy market index funds. I split my stocks 50/50 between the US and international stock markets though and international was down this year.

  6. Congratulations. 2014 seems to have gone really well for you. I hope 2015 is just as good and that New Zealand is amazing (as if it could be anything but). Also, you should make use of that new camera and post pictures of your trip!

    • Thanks! I’m looking forward to an awesome 2015 :) I’m not a big pictures on my blog sort of person, but we do plan to use the camera a lot while we’re there!

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