October 2015 net worth update (+2.2%)

31-Dec-2014 30-Sep-2015 31-Oct-2015 MoM YTD
cash $12,300 $9,300 $6,600 -$2,700 -$5,700
savings $47,800 $50,500 $59,600 +$9,100 +$11,800
investments $164,500 $205,200 $210,800 +$5,600
+2.7%
+$46,300
+28.1%
mortgage $143,000 $136,400 $135,600 +$800
+0.6%
+$7,400
+5.2%
net worth $531,600 $578,600 $591,400 +$12,900
+2.2%
+$59,800
+11.2%
taxable assets – debts $70,600 $57,100 $51,000 +$6,100
+10.7%
+$19,600
+27.8%
$ until FI $811,300 $821,400 $851,300 +$29,900
+3.6%
+$40,000
+4.9%

October’s net worth is finally a new high for the year. The previous high was back in July at $582.1k. I used my savings and the ESPP sale this month to bulk up my savings accounts – I’m trying to get my non-grad school savings up to $30,000. I have about $9,400 more to go on that plan. My savings rate this month was 66%, which seems to be about solid for the year.

Back when I thought the stock market might give me some positive returns this year, I’d thought my net worth might get to $630,000 to $650,000. Now even $600,000 would be lovely!

Now that I’m done contributing to my retirement accounts for the year, I can make some headway on the “taxable assets – debts” figure. I have to pay the next course’s tuition before the year is out, but I should still be able to get that figure down to about $43,000 by the end of this year.

Expenses: I spent $5,651 in October including the mortgage or $4,623 without it. Some of my controllable expenses broke down as follows:

  • $1,386 Clothing
    • $219 Athletic wear: online shopping for a winter workout top. Picked one and am returning the others. Final cost should be $55
    • $149 Bottoms: dark skinny jeans ($90) and cost to hem them ($15), 4 pair tights ($46)
    • ($71) Bras: returned the one I fit last month that didn’t work out and exchanged the bras I had bought a few months ago that no longer fit (Nordstrom has such great return/exchange policies!)
    • $989 Dresses: 10 dresses, 6 of which I am returning, and 1 return that finally posted from September. net cost of the purchases after returns: $465
    • ($25) Outerwear: returned the vest I bought last month and bought one I really like and turned out to be cheaper
    • $26 Socks: stocked up on a few more pairs of socks
    • $28 Tops: 5 returns from last month and increasing my camisole supply with 4 more
  • $207 Entertainment/Social [average so far this year: $131, average last year: $211] – some cash ($40), eating out with friends ($112), and printing photos ($55)
  • $4 Eating out by myself [average so far this year: $7, average last year: $18]
  • $8 Work lunches [average so far this year: $42, average last year: $147] – bought my lunch one day and the rest was some snacks
  • Donations – spent the remainder of my donations budget for the year! That felt good.
  • $241 Presents – starting on my Christmas shopping. I’m now done with 3/9 people! Now to finish the rest in November :)
  • Second half of my annual property taxes (not discretionary, but definitely makes October always an expensive month)
  • $20 Eyebrows
  • $86 Hair cut
  • ($138) Toiletries [average so far this year: $46, average last year: $33] – Refresh of my multivitamin supply, returned the skincare products that weren’t working for me, and bought a different cleanser that does seem to be working.
  • $38 Shopping – two charging cables for my new phone and a 2016 calendar
  • $269 Transportation: tolls replenishment (x2), one tank of gas, one taxi to an event, and renewing my vehicle tabs

*Note that I’m not counting my grad school costs in this spending report because the point of this is to track my general living expenses. I am still tracking the grad school costs myself, but won’t include them in all of my reports.

Yes, I’ve been spending a lot on clothing this year. But a) I can afford it while still having a healthy savings rate, b) I’ve been changing sizes a lot, which has resulted in not a good selection of clothes, and c) my overall spending for the year should still come in under last year’s. For example, I found myself getting dressed to go to an event with a closet full of dresses (about 10-15 that I’ve bought over the last ten years) and only one fit.

Savings: $59,600 (up $9,100)

These funds are spread across a checking account that gets free ATM fees anywhere in the world, my current employer’s health savings account, a health savings account at my credit union, a bit of a buffer in my credit union checking account, and general and grad school savings accounts at Ally.

  • My grad school savings account is now at the amount I need it to be to pay for the rest of my grad school in cash, if necessary.
  • I also increased my HSA contributions to the maximum now that I’m done with my retirement accounts. I’ll re-evaluate this for next year (very shortly as open enrollment starts soon), but this felt like the right decision for now since my HSA was worth less than one year’s out of pocket maximum.
  • The rest of the savings increase went to my general savings account, which I’ll be focusing on for the rest of the year.

Investments: $210,800 (up $5,600 or +2.7%)

This includes my pre-tax 401(k), employer 401(k) matching, my after-tax 401(k), my Roth IRA, and my taxable investments including stock index funds, Series I Savings Bonds, and ESPP cash/shares.

The change here comes from:

  1. Employer matching contributions
  2. A month’s ESPP deposits
  3. Selling the Q3 ESPP shares
  4. Investment returns of about $9,000, almost bringing me to even for the year

I also did an in-service withdrawal of my after-tax 401(k) contributions, which got me a check in the mail and I then deposited it into my Vanguard Roth IRA. My Roth IRA is now worth about $65,000, which is pretty solid!

Mortgage: $135,600 (down $800 or -0.6%)

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% though current calculations would put it at 3.125%.
  • 27.7%: portion of my regular payment went to interest (originally was 59%; down 0.1 percentage points)
  • 62.1%: amount of equity in my condo, assuming purchase price (up 0.3 percentage points)
  • 52.6%: amount of the mortgage I’ve paid down (up 0.6 percentage points)

I’m just letting the regular, automatic payment go for now, until my cash savings is at the level I want and my 401(k) is fully maxed out for the year.

TOTAL: $591,400 (up $12,800 or +2.2%)

I ended 2014 with a net worth of $531,600, so I’ve seen a change of +$59,800 or +11.2% so far this year. I’m going to set the y-axis on this graph to $650,000 so we can see how my net worth grows towards that throughout the year.

October 2015 Net Worth Graph

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18 thoughts on “October 2015 net worth update (+2.2%)

  1. If you live in a state that has income tax and gives a tax deduction for 529 contributions, you should use it.

    I get a 2000 deduction on my GA taxes every year. As silly as it sounds, I put money in the 529 and 10 days later I pull the money out to get this deduction.

    • That seems like such a strange way to use a 529 to me since I picture them being used to save for children’s college educations, but it is a very savvy plan! Thanks for the tip.

    • Thanks! Yup, it was a little reassuring to see them rebound. It is a little tough to have a high savings rate and still not feel like you’re making progress in the net worth department for many months. But I know it’ll all work out eventually.

  2. For me, it’s extremely strange when the increases and decreases in the market is more than my typical weekly paycheck. I guess it means I’ve done something right.

    • Thanks for pointing that out – I had missed that because I was concentrating on the fact that they are still down $2,000 for the year. My investments increased by more than my net income this month. Pretty crazy. (Well, the two figures were within $100 of each other.) This is the largest $ increase I’ve seen so far. My largest $ loss was $10,000 back in August, which was definitely more than my net income. All these little milestones are fun :) I look forward to the day where my investments return more in a year than I can put into retirement accounts! That’s still several years away though considering how much I can stuff in retirement accounts…

  3. Mr Market was kind last month! I’m jealous that you’re able to do after-tax contributions to your 401K. Neither of our employers let us do that and it seems like a sweet deal to really boost your Roth account!

    • It’s a really great benefit. It’s most likely better than a taxable account and I can always withdraw my contributions later if I need them. I definitely plan to take advantage of it as long as I’m at this company and it is a part of why I want to front load my 401(k) – get the good match and the after-tax room that not every company offers.

  4. My favorite line in this whole thing: My grad school savings account is now at the amount I need it to be to pay for the rest of my grad school in cash, if necessary.

    That is crazy awesome.

    Congrats on hitting new highs across the board — it was the same for us at the end of October, which feels great. Don’t beat yourself up about the clothing purchases if you really needed all of what you bought, minus what you’re returning. It’s important to feel comfortable in what you’re wearing. Could you buy cheaper clothes or shop at thrift stores? Probably. But you can afford what you’ve been spending, and it’s not interrupting your progress.

    Good luck with November’s goals!

    • Thanks! Can you tell I really don’t like debt? :) I probably could have taken out a HELOC to pay for grad school, but I didn’t want to do things that way. I plan to keep increasing my cash savings buffer over the next year while I’m not concentrating on retirement accounts because I want to be able to afford finishing grad school full-time if I so decide to. I don’t want money to come in the way of that decision!

      I could probably shop at thrift stores, but that is a far more time consuming and frustrating experience than just buying the right size to begin with! I have a post in my head entitled “I don’t need to save 65% of my income”. Even just maxing out my retirement accounts and my regular mortgage paydown is about 47% of this year’s net income. My general goal is to let myself spend freely (but consciously) while saving 60+% of my income. Money is at least partially for enjoying, right?! I definitely have some money hoarding tendencies that I try to stem ;)

      • I look forward to reading that post! I think it’s all about balance — for people who are natural spenders, we need to work on reining that in. For natural savers, it’s good to loosen up a bit. We’re in the former camp, but you’re clearly in the latter. That will always pay off for you, so it’s not a bad thing to enjoy a little bit of your hard-earned cash! :-)

  5. You should really consider seeing a financial advisor or accountant. You can’t do an in-service withdrawal of solely after-tax portions of a 401(k). Each withdrawal you make is deemed to carry out a pro-rata portion of taxable and any nontaxable dollars. So you run afoul of that and now you are depositing more into a Roth IRA than allowed because only the after-tax portion is able to be rolled into the Roth.

    • You can’t do an in-service withdrawal of pretax funds while you’re still employed with the employer servicing your 401(k). That’s part of why you can withdraw only the after tax amounts. My 401(k) keeps the pretax, Roth, rollover, and after tax money all in separate accounts. As well, the SPD for my 401(k) specifically calls this out as an option.

      If you search for “Mega Backdoor Roth IRA”, you’ll find more information on this.

      Could you point me at the tax code that supports your points? Thanks.

      • “No, you can’t take a distribution of only the after-tax amounts and leave the rest in the plan. Any partial distribution from the plan must include some of the pretax amounts. Notice 2014-54 doesn’t change the requirement that each plan distribution must include a proportional share of the pretax and after-tax amounts in the account. To roll over all of your after-tax contributions to a Roth IRA, you could take a full distribution (all pretax and after-tax amounts), and directly roll over:
        pretax amounts to a traditional IRA or another eligible retirement plan, and
        after-tax amounts to a Roth IRA.”

        https://www.irs.gov/Retirement-Plans/Rollovers-of-After-Tax-Contributions-in-Retirement-Plans

        • My understanding (and I’m not an accountant, but this is how my employer’s plan works with this) is that since I am younger than 59.5, I cannot withdraw the pretax money, full stop. The only funds that are accessible to an in service withdrawal in my employers plan are Rollover (previous employer money) and after tax money. They’re all tracked in different sub accounts and that’s how I’m able to withdraw the money. The IRS article you referenced assumes you’re of retirement age or your plan doesn’t track these amounts in different sub accounts like mine does.

          Can you make after tax contributions to your 401(k)? I know the rules aren’t exactly the same on every plan.

        • Which begs the question why you think you need to be rolling the after-tax amounts into a Roth IRA right now anyway. The IRS is pretty clear that when you separate from your employer you are 100% allowed to do this. There is little benefit to doing it now (earnings in the after-tax 401(k) that would otherwise be taxable can just be put into a Traditional IRA when that time comes). I guess if you think you’re going to be at your employer for a long time, it could matter.

        • The benefit is that by rolling the funds into a Roth IRA now, I don’t have to pay tax on the earnings or fiddle around with a Traditional IRA for the earnings. I have no idea how long I’ll be with my employer. I don’t need to be rolling the amounts to a Roth IRA now, but that is the path that I am choosing to consolidate the funds into my growing Roth IRA rather than leaving it in funds I would not prefer in my 401(k). I would also prefer to take advantage of this so long as it is available rather than possibly running it no longer being available in the future.

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