January 2015 net worth update (-0.3%)

31-Dec-2014 31-Jan-2015 MoM
cash $12,300 $11,400 -$900
savings $47,800 $42,300 -$5,500
investments $164,500 $168,600 +$4,100
mortgage $143,000 $142,300 +$700
net worth $531,600 $530,000 -$1,600
taxable assets – debts $70,600 $75,400 -$4,800
$ until FI $845,000 $713,200 -$131,800

[Note: I updated the investments and net worth numbers 3/1 after I realized I had an error.]

This is a bit late, but these are the numbers as of 1/31. We got back from New Zealand and it was an amazing trip! Such a beautiful country. Thanks to NZMuse and her husband for showing us around a bit while we were in their city :) I’ll post about the trip later – we still need to sort out all of that spending and will probably work on that this weekend.

Kicking the year off with a net worth loss, just like last year. This year’s loss was only $2,700 though compared to last year’s $5,300. Spending wasn’t too bad either as most of the New Zealand trip was in February. I only worked a small bit in January, but if I had seen a normal paycheck, I would not have seen a net worth drop at all – things would have come out about even. January seems like forever ago now!

There is a positive financial note though: this January’s spending was so much lower than last January’s that the rolling 12 month spending total went from $48,045 to $44,012, which caused most of the dramatic drop in the “$ until FI” number.

Expenses: I spent $2,974 in January including the mortgage or $1,946 without it. Some of my controllable expenses broke down as follows:

  • $242 Clothing – a new pair of black leggings and two pairs of pants, plus 9 pairs of socks since all of the ones I bought in early 2014 now have holes in them. Not very exciting.
  • $261 Entertainment/Social [average last year: $211] – I originally set out trying to spend less money during my unemployment, but then I had all this new found time to hang out with friends while not stressed out! So I did and I had fun.
  • $12 Eating out by myself [average last year: $18]
  • $89 Groceries [average last year: $185] – We somehow managed to spend exactly $0.15 less on groceries in January than in December. This was low since we left partway through the month.
  • $44 Work lunches [average last year: $147] – There weren’t too many work days in January :)
  • A big chunk of charitable donations, that I’ve mostly saved up for – just need one paycheck to be able to finish covering it! I’ll be fully prepared for this next January.
  • $23 Presents – a straggling Christmas present that I needed to pay someone back for.
  • $83 Internet – I overpaid as I was playing around with something payment-wise. It’ll be negative in February to compensate.
  • $161 Travel health insurance for 4 weeks outside of the US
  • $20 Eyebrows
  • $23 Toiletries [average last year: $33] – moisturizer, ointment, bandaids, and shaving cream while in New Zealand.
  • ($47) Furnishings – returning the wood swatches and buying some silicone spoons with a post-Christmas sale
  • $70 Car maintenance – an overdue oil change and wiper blade replacement
  • $243 Travel – cash, a bit of food, maps for the GPS, a New Zealand SIM card, and a cave tour. There will be at least ten times this in February’s report…

Savings: $47,800 (down $5,500)

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 from making my full 2015 Roth IRA contribution.

Investments: $168,600 (up $4,100 or +2.5%)

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. Making my full 2015 Roth IRA contribution
  2. ~$1,500 in stock market losses

Mortgage: $142,300 (down $700 or -0.5%)

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%
  • 0: months of payments eliminated with this month’s pre-payments
  • $0: extra payments made on the mortgage this month
  • $0: interest this month’s extra payments will save me on the next regular payment
  • 29.0%: portion of my regular payment went to interest (originally was 59%; down 1.0 percentage points)
  • 60.3%: amount of equity in my condo, assuming purchase price (up 0.3 percentage points)
  • 50.2%: amount of the mortgage I’ve paid down (up 0.2 percentage points)
  • $24,500: amount extra remaining to pay to be on track at the end of 2015 to pay the mortgage off before the rate resets in 2018

I’m just letting the regular, automatic payment go for now. Nothing special to see here.

TOTAL: $530,000 (down $1,600 or -0.3%)

I ended 2014 with a net worth of $531,600, so I’ve seen a change of -$1,600 or -0.3% 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, but I’m too lazy to make the graph right now since it’s already almost the end of February and I’ll have to make another one next week.



I’ve already met my original retirement goal

My primary retirement goal is to be able to retire at age 50. I already have enough money to do that at 26 years old, to spend $2,183/month of today’s dollars. That’s the power of compound interest.

In general, I assume that I will probably have some form of income over the next 24 years until I turn 50 and I’m also not going to spend it all since that would be the counter opposite of my personality, which will bring in this retirement date.

I remember reading rave reviews of FIRECalc as a retirement calculator over at the MMM forums that I decided to play around with it this morning. I started wondering how much I am really over saving for retirement by. Sure enough, it’s a lot! I already have enough in my portfolio to retire at age 50 and live for the rest of my life at my current spending rate. That’s pretty good! So then I started wondering if you just look at the contributions to tax-advantaged retirement accounts of ~$58,500 per year, when does FIRECalc think I could retire? Age 39! It unfortunately doesn’t seem to be able to answer the question of “How much more do I need to be saving now to retire at X age?” But when I told it I was saving $100,000 per year for retirement, it changed its mind to me being able to retire at age 32.

What do these numbers tell me? So long as I don’t increase my standard of living, I should be able to completely retire in about 10 years or in my late thirties. Or if I prefer to donate most of my current income, I could retire happily around age 48.

This is why I feel that there’s really no bad choice of where to stash my savings. I can pay down the mortgage faster, I can invest more in taxable accounts or in retirement accounts, or keep more money in cash. They’re all good options since I’ve already met my real goal. I still plan to keep contributing to retirement accounts since they help save on taxes.



2014 In Review: Spending

Now, let’s talk expenses. I spent $48,018 when everything was tallied up this year. I gave a small gift to my sibling to help out with something and I don’t count that in my spending. It certainly puts things into perspective the fact that I can’t even tell by looking at my net worth which month I did that.

2014 Spending

This pie chart looks pretty similar to 2013’s version, except that travel is a much bigger chunk of the pie. In my 2013 year in review, I talked about what I thought my 2014 spending/savings might look like. Let’s check in with that:

1) My boyfriend and I are working on a system to split some expenses more so than randomly because we’re working on incurring more shared expenses than we had this year. For now, the plan is to make it easy to transfer money between each other’s accounts since we use the same credit union for our primary checking accounts.

SUCCESS! We set up the transfers between each other’s accounts and near the end of the year, we set up a joint account that we’ve slowly started using. For now, we’re just using it for groceries. We’ve also talked about getting a joint credit card at some point.

2) I plan to contribute more to charity in 2014 than I did in 2013. The plan involves getting my donations up to 1% of my gross income, including my bonuses. I have a few annual contributions set up and will continue to donate to the random causes that my friends participate in. When my bonuses post, I will transfer 1% of the gross amount to my checking account, add that amount to the donations budget and then figure out where to go from there.

SUCCESS! I’m calling this a success because even though I only donated $30 more in 2014 than I did in 2013, I set aside the 1% of my gross income from every paycheck and bonus and the reason why it’s under is because I’m going to make a big donation in January 2015 and I wanted to have the money set aside for that. Near the end of the year, I moved the balance of this budget item to a savings account at my credit union in an attempt to separate it from my normal spending plan.

3) Overall insurance costs should be about $1,000 cheaper in 2014 because I had been paying monthly through July 2013 and then paid for a full year in August.

SUCCESS! In 2013, I spent $2,670.67 on insurance (auto, condo, and umbrella). I spent ~$1,800 on the same policies in 2014, a savings of ~$900. The new company raised my auto policy rate in 2014 by a decent chunk that I will probably try to shop around again in 2015.

4) I think that I will spend less on electricity. I spent about $700 in 2013. I’m hopeful that I can get that figure down to around $440 for the year, but we will see how things play out!

PASS! The average in 2014 was 0.33 kWh/day more than in 2013. I hadn’t planned on my boyfriend moving in this year when I set the goal to reduce electricity costs. All things considered, a 0.33 kWh/day increase for a second person isn’t too bad. I’m hopeful that with some of our new energy saving light bulbs, we should not increase our electricity consumption in 2015.

5) HOA dues went up a small amount for 2014. I have been budgeting for property taxes to go up about 3% per year, but it looks like my property value went up by much more than that for 2014 and so I’m guessing that they will go up by closer to 20%, putting those two items at about an increase of $800 in 2014. I don’t have much control over those items without moving though.

These two items ended up going up by about $700 in 2014. It looks like my property taxes may go up an additional 20% in 2015, which I’ve budgeted for since they sent me a notice with my new assessment value for the 2015 tax year a few months ago.

6) I think that I will spend less on my household goods and toiletries items because there were a lot of cleaning products and different items that I stocked up on that should last for a long time – I shouldn’t have to re-buy very many of those items.

SUCCESS! This was accurate on household goods. I spent $342.23 in 2013 and only $197.10 in 2014, a savings of about $145.13. I spent $347.89 on toiletries in 2013 and only an additional $24.87 in 2014 of $399.76. That’s not bad.

7) I will spend around $400 more on recreation in 2014.

SUCCESS! I spent $882.01 on recreation in 2013 and only an additional $97.43 in 2014 to $979.44. Looks like I underspent on recreation! This is definitely true – I didn’t exercise nearly enough in 2014.

8) I will probably spend around $1,500 less on shopping in 2014- fewer condo projects.

FAIL! I spent $3,538.94 on shopping in 2013 and $3,383.68 in 2014. So yes, I spent less, but not $1,500 less like I had predicted. Where did all of the shopping money go this year?

  • $1,666.59 painting and second half of closet install
  • $411.38 small furnishings: picture frames, a pizza stone, a nice knife and some other kitchen things, new sheets, artwork, a temporary desk, and some wood swatches
  • $354.37 a new camera
  • $301.59 small electronics: batteries, a new router, a speaker
  • $267.54 fixing my laptop (includes shipping costs)
  • $141.07 plants and a container
  • $123.69 three hats and a scarf
  • $108.13 new thermostats
  • $20.22 a case for my cell phone

9) I will spend a lot less on taxis and nothing on tolls.

PASS! I spent $52.83 on tolls in 2013 and only $30.00 in 2014. I spent $259.25 on taxis in 2013 and only $63.85 in 2014. Since I own our one car and pay for that, my boyfriend tends to pay for taxis when we’re going somewhere together.

10) I will increase my overall savings rate to 85%.

FAIL! Hah! This would have required my income to be in the higher end of my estimate and to have spent much less.

11) My current forecast is about $38,500 in spending in 2014, which would be about a $7,000 reduction from 2013.

FAIL! Hah! I spent $48,000 or about 25% more than my forecast. Oops! It was a good year though :)

Comparing 2014 to 2013:

  • I spent $619 more on housing (internet, condo insurance, electricity, HOA dues, household goods, mortgage loan fees, property taxes, required mortgage payments).
  • I spent basically the same amount on clothing/shoes (~$1,900) and personal care (~$800 on hair cuts, eyebrow waxes, toiletries, and make-up).
  • I spent $697 less on entertainment in 2014 than in 2013, for a total 2014 cost of ~$2,500.
  • I spent $109 less on eating out by myself in 2014 than in 2013 (almost all of my eating out these days is with my boyfriend or with friends rather than by myself).
  • I spent $354 more on groceries, which was to be expected since I’m eating out a lot less and we also cook meat a lot more at home than I was on my own. This amount is less than the decrease in entertainment and eating out though and still under $200/month so I think this is fine.
  • I spent $863 more on work lunches since I didn’t take my lunch very much in 2014, for a total 2014 cost of ~$1,800.
  • I spent $637 more on presents.
  • I spent $671 less on health (medical, dental, and vision) than in 2013. I estimate I’ll spend even less in 2015 since my premiums are lower with the new job.
  • I spent $155 less on shopping.
  • I spent $1,448 less on transportation.
  • I spent $3,082 more on travel – a whopping $7,558.45 on travel in 2014!
  • Overall, I spent $2,736 more in 2014 than in 2013.

Where would I say my $9,500 over my spending goal went?

  • $3,558 to travel (a $900 bachelorette party for a friend and our upcoming month-long trip to New Zealand)
  • $1,344 in unplanned shopping spending
  • $907 of unplanned medical/dental/vision spending (partially an increase in premiums)
  • $1,094 in unplanned clothing spending
  • $1,026 in unplanned food spending
  • $229 in unplanned personal care spending
  • $1,338 in other miscellaneous unplanned spending that I’m too lazy to research since my budgeting isn’t really that thorough

Basically, I spent the exact same as I did in 2013, plus I spent an extra $3,000 on travel. Lifestyle deflation is apparently really hard and I think I should try to make fewer sweeping lifestyle deflation changes going forward. I was too optimistic for my spending in 2014! I recognize that $48,000 is a large sum of money to support just one person. I try to instead remind myself of the fact that I saved 68% of my net income in 2014 and to evaluate whether I enjoyed the purchases I made throughout the year and so long as I did, then my spending is fine. I also don’t want to regret not going to a friend’s wedding because I thought the price was too high to go.

How do I think my spending in 2015 will be different than 2014?

  1. I will spend $3,035 less on housing with my boyfriend moving in. I don’t know what the property tax bill will look like yet, but I’ve estimated for a 20% increase. There’s also a small special assessment due. I justify not caring about this by how much cheaper owning is than renting (~$14k to own my two bedroom condo last year versus ~$39k to rent a similar place).
  2. I am planning to spend less on clothing, but who knows how that’ll actually end up going.
  3. I think I’ll spend about the same on entertainment, dining out, and personal care.
  4. We’ve each set up automatic transfers for $200/month to the joint account to cover groceries. I’m reasonably sure this will be sufficient, but it may be more than we need.
  5. I’ve estimated to spend about the same in 2015 on work lunches, but I’m going to see how the new job goes, how much the cafeteria costs, and then see if I can reduce this at all.
  6. I estimated in my budget that I’ll spend less on recreation. My new employer will cover a certain amount of fitness related expenses. I haven’t decided whether I’ll count the funds as income or a reduction in spending. If it’s taxable income, I’ll probably count it is a income. That’ll affect what this category looks like this year.
  7. I’ve estimated only $500 for shopping compared to 2014’s $3,400.
  8. I estimate spending about $400 more on transportation. Hopefully that’s not the case and car insurance will go down!
  9. I’ll spend about $500 less on travel.
  10. Overall, I plan to spend about $9,200 less in 2015 than in 2014: 33% of that is housing, 10% clothing, 13% health, and 31% shopping.

Readers, how was your 2014 spending?



Goals for 2015

I’m not really sure what to expect from 2015. I’m starting it off with some big changes: my boyfriend having just moved in, our big trip, and then a new job. I’m also considering throwing another big change into the mix (see the mystery goal below), so I’m not sure what things will look like.

1) Enjoy living together! Have an awesome trip to NZ!

2) Contribute the maximum to all tax-advantaged accounts available to me. This means $5,500 in a Backdoor Roth IRA, $18,000 in a pre-tax 401(k) and possibly some additional funds to the after-tax 401(k) and possibly my 2016 Roth IRA amount in a savings account ready to deploy in January. This will account for probably about 2/3 of my savings in 2015.

3) Learn the ropes at my new company and have an awesome first year!

4) Exercise for at least 45 minutes per day. My phone is really helpful at tracking this for me!

5) Go to the gym (or run) three times per week.

6) Contribute enough to a Health Savings Account such that Out Of Pocket Maximum ~= Current HSA balance + Employer contribution + my contribution.

7) Succeed at Operation Bayes – I’ll explain this later.

8) Spend under $40,000.

9) Save 70% of my net income monthly…and 100% of my bonuses. (Yay for a big raise that will allow me to save that much of my monthly income!)

10) Contribute the maximum that I can to the Employee Stock Purchase Plan.

11) Pay down the mortgage with any funds that are leftover after 2), including the proceeds of 10).

Even if I make no extra mortgage payments, the mortgage will pay itself down by about $9,000 in 2015. I’m becoming much less concerned about the mortgage with the smaller balance and the likelihood of the interest rate jumping up to 7.5% when it resets seeming less and less likely. Right now, if it were to reset today, it would likely reset to 2.875%, which would actually lower my required payment by ~$400/month and increase the January 2015 interest cost by about $46.

Overall, I’m anticipating a net worth increase of about $100,000 to $120,000 for the year to increase my net worth to $630,000 to $650,000. I expect my gross income to be somewhere between $140,000 and $150,000 in 2015.


Re-balancing my investments: 2015 Roth IRA contribution edition

I set my 2014 investment allocations back in December 2013 and then left them alone, which went great!

As of 01/02/2015, my investments portfolio was worth ~$164,400. I decided to re-balance my investments now with this Roth IRA contribution and then I’ll re-evaluate things once I start the new job. That will likely be calculating what my new 401(k) contributions should go into and then re-balancing my overall portfolio when I make my 2016 (!) Roth IRA contribution and set my 2016 401(k) contributions.

(Note: when I wrote this post last year, I estimated that my end of year balance would be $156,000. It is $8,400 higher than that! Crazy!)

First, what are the balances in my various accounts?

  • $38,900 Roth IRA (with $5,500 new contribution)
  • $8,400 Old tax-deferred CDs
  • $10,200 Series I Savings Bonds
  • $15,300 Taxable account
  • $97,100 Now-old 401(k)
  • $169,900 Total investments

What is my asset allocation?

% Category Amount
27% Fixed income $45,873
36.5% International stocks $62,013
36.5% US stocks $62,013

My allocation has gotten itself to the following with the markets and contributions in 2014 (a tiny bit out of whack):

  • 27% Fixed income
  • 34% International stocks
  • 39% US stocks

And if I just added my 2015 Roth IRA contribution to total US stocks, my allocation would get a tiny bit more out of whack:

  • 25.8% Fixed income
  • 32.8% International stocks
  • 41.4% US stocks

At which point, US stocks are 4.9 percentage points higher than they should be, which warrants re-balancing in my 401(k) account at the same time. Last year, since I’d just re-balanced in November 2013 to make my 2013 Roth IRA contribution, I didn’t do any when I made my 2014 Roth IRA contribution and instead re-balanced with my 401(k) contributions over the course of the year.

If we follow my ordering from my post on tax-efficient investment placement, what does that ideal portfolio look like?


  1. (not necessary – all in S&P 500 index fund) My employer match to the company stock
  2. Series I Savings Bonds that already exist in taxable
  3. CDs that are already in my Roth IRA
  4. The remaining portion of my fixed income allocation to the stable value fund in my 401(k).
  5. (not necessary) As much of my remaining fixed income allocation to Total Bond Market in my Roth IRA as possible
  6. (not necessary) If my tax-advantaged balances weren’t enough for all the fixed income necessary, added $10,000 in Series I Savings Bonds (possibly early for future-proofing)
  7. (not necessary) Any other fixed income went to a tax-exempt bond fund in taxable.
  8. As much of my international allocation in taxable as it allowed (in the first few years, my entire taxable balance; in later years, the entire international allocation)
  9. Next, I added any of the remaining international allocation into my 401(k).
  10. The remaining 401(k) funds went to the S&P 500 index fund. Call this amount X.
  11. (X/0.8)-X is how much I put into the Extended Market index fund in my Roth IRA (minimum of $3,000).
  12. The remaining Roth IRA funds went to Total Stock Market.
  13. (not necessary) The remaining taxable funds went to Total Stock Market.

Ideal portfolio

Account Fund Current Ideal Difference
401(k) Stable value $25,300 $27,300 +$2,000
Taxable Total international stock index (admiral shares!) $15,300 $15,300 (same)
401(k) Total international stock index $40,400 $46,700 +$6,300
401(k) S&P 500 index $31,400 $23,100 -$8,300
Roth IRA Extended Market index fund $7,100 $5,800 -$1,300
Roth IRA Total Stock Market index fund (admiral shares!) $26,300 $33,100 +$6,800

Note that these numbers are all rounded, so they may be slightly off if you try to make calculations with them, but they should still illustrate my example sufficiently.

My portfolio is pretty simple right now: one taxable account, one 401(k), and one Roth IRA, with one fund in taxable, two in the Roth IRA, and three in the 401(k). My re-balancing here is really just adding new money to the Total Stock Market index fund in my Roth IRA and then adding some money to fixed income and international stocks in my 401(k).

I performed a few transactions to accomplish this:

  1. Contribute $5,500 to the money market account in my Traditional IRA.
  2. Convert the $5,500 from my Traditional IRA into the total stock market index fund in my Roth IRA once the funds settle.
  3. In my Roth IRA, exchange $1,300 from the extended market index fund into the total stock market index fund.
  4. In my 401(k), exchange $8,300 from the S&P 500 index fund to $2,000 in the stable value fund and $6,300 in the international stock index fund.

D’oh! I did all of these transactions and then realized while writing this post that I needed to set it to only use my Traditional 401(k) portion to do the exchange, so it’s trying to do the re-allocation using all sources (also my Roth 401(k) and employer matching money), which I have conveniently set to only have one fund in those “accounts”. Oops! I called the plan administrator on Monday and they couldn’t do anything to fix the transaction. So my asset allocation is on track, but my accounts are a tiny bit more complicated than I like them to be. Oh well.

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2014 In Review: Goals, Savings, Net Worth, Investments, and Mortgage

Whew! 2014 was a very full year. A lot happened that I didn’t plan on at the beginning of the year: my boyfriend moving in, job hunting, sharing Christmas, finding a new job, about to quit my job, and a big trip happening in early 2015.

This post has been delayed since I finally left my job. I now have a bit of a break until I start the new job next month. I’m really curious as to what will happen with my net worth in January and February!

Goals review

1) My first priority in 2014 is to continue to develop my relationship with my boyfriend. Things are going great and I want to continue to prioritize that.

SUCCESS! If anyone remembers a haphazardly mentioned Operation Penguin from a monthly goal post this year, that was my boyfriend moving in. He’s moved in officially now, which is awesome. We have a ton of physical stuff to sort through from merging households still, but we’re in one place! We’ve also planned a big trip for early 2015, went on three trips in 2014, attended two weddings, and shared Christmas with my family this year.

2) Rock out at my new job. Without the high-paying job I have, I wouldn’t be able to accomplish any of my financial goals.

FAIL! I’m going to give this one a big red fail. The new job went great for oh, the first five months and then it just fell flat on its face. I couldn’t have predicted how this would go and then I ended up job hunting partway through the year, which was incredibly stressful. I’m really excited about the new job and it’ll be such a change that I’m feeling much more confident about it!

3) Max out all tax-advantaged accounts available to me. This means $17,500 to my 401(k), $5,500 to the Roth IRA on January 2nd from savings and $5,500 to a savings account to fund the 2015 Roth IRA.

SUCCESS! Woo! I accomplished this one 100%. I maxed out my 401(k) in July, thinking I was going to quit my job. I did make my full $5,500 Roth IRA contribution in January 2014. Mentally, $5,500 of my savings account is for my 2015 Roth IRA. It’s possible that my income might drop to the point that I can contribute directly in 2015, so I may end up waiting a bit to do the Roth IRA contribution. I haven’t fully decided yet. I may just wait until February. Who am I kidding, I’ll probably just do it January 2nd like I did last year.

4) Pay down the mortgage. I would like to get it under $91,284.28. That should keep me on track to paying it off by the end of 2015.

SUCCESS! This was a super vague goal and by its vagueness, I succeeded at it! I did pay down the mortgage, yes I did. I did not get it anywhere near $91,284.28, hah! It is currently sitting at $143,000, which represents it being half paid off. My savings account has about $20,000 extra in it, which will possibly go to the mortgage once I start the new job, so that would have put the mortgage at $123,000. If we weren’t taking this unplanned awesome trip, it would be down another $6,000 to $117,000. My bonuses were less than anticipated, accounting for another $7,000 in a higher mortgage balance, so $110,000 in the ideal scenario. That’s still ~$20,000 above my “goal”, but I was expecting to hit closer to $110,000 anyway.

5) Spend less than $39,000 for the year. If I can accomplish this, it would be my cheapest year since graduating from college! This would map out to 4.4 years of expenses saved up, which is about 17.6% of the way to FI if you count it as having 25x annual expenses saved up.

FAIL! Flat out fail. When all was said and done, I spent $48,000 this year, $9,000 or 23% above my spending goal. I’ll go into this in more detail in another post, but I definitely didn’t plan on all of this spending.

6) Overall, I’m anticipating a net worth increase of about $115,000 for the year to increase my net worth to about $465,000. (For reference, I expect my gross income in 2014 to be between $160,000 and $190,000.)

PASS! If you take out the increase in my condo’s value, my net worth went up by about $93,700 this year, $21,300 short of the above guess. My gross income ended up being just under $170,000, in the lower end of the range I listed above, which contributed to most of the lower net worth increase. The other contributing factor was of course the unexpected spending.

2014 by the numbers

  1. My gross W-2 income was just under $170,000, a drop of about $30,000 from 2013.
  2. I churned three credit cards, which gave me $1,940.42 in credit card rewards including the regular 2-5% cash back and taking out the $89 Barclaycard annual fee.
  3. My gross income was about 353% of my spending for the year (my average since college is 317%).
  4. I paid down the mortgage from $187,552.40 to $143,000, a difference of just under $45,000. That’s about 16% of the original mortgage balance, putting it at 50% paid off, and giving me just over 60% in equity.
  5. Adjusted the value of my condo in my net worth by about 26% based on how similar units are selling around me.
  6. Increased my net worth by $185,700 over the course of the year to $531,600.
  7. I spent about $48,000, an increase of about $3,270 from last year.
  8. I saved about $86,700, for an overall savings rate of about 68% and about 54% of my regular income.
  9. My investments were up about $5,200 for the year, which was a return of 3.42% according to XIRR.
  10. Increased my assets and paid down my mortgage such that my assets were I to liquidate all of my retirement accounts are worth more than the mortgage and I am only about $70,600 in already liquid funds away from being able to pay off the mortgage, a $64,600 improvement from 2013.
  11. Decreased the amount needed to save to be FI by $12,600 to $811,300, though I possibly added 2.56 years to my FI date? (Clearly this is still very much a moving target.)
  12. Buying my place is now only $2,307.96 more expensive than continuing to rent would have been, ignoring the increase in value of my condo. It will break even assuming purchase price in February 2015.

2014 in charts

2014 Savings Distribution

My savings were split this year mostly between my Traditional 401(k), extra mortgage payments, and some cash savings in anticipation of changing jobs. Most of that cash savings will go to the mortgage in 2015.

December 2014 Net Worth Graph

I also had my highest net worth increase yet of $185,700, settling in at $531,600 at the end of the year. Things are moving along well! I really like the “Where in the world could I retire today?” game that Planting our Pennies have been playing. If I were to sell my condo and retire today, I could retire in Sofia, Bulgaria. I’m no longer stuck in India, which is pretty cool. I’m guessing that by some time in 2016, I should be able to retire in the lowest cost of living city in the United States or Canada on the Expatisan listing. I also have about 11 years of expenses saved at 2014 spending levels if you include my condo value or about 3.7 if you take the liquidated value of everything except the condo. This year, my expenses were about 9% of my end of year net worth. I’ve been noticing that the more money I have saved, the less motivated I am at work when I don’t like my job since that job looks more and more unnecessary as time goes on and my nest egg accumulates.

December 2014 Mortgage Balance

I finally paid the mortgage down to the 50% marker! I’m pretty excited for that one. I didn’t make nearly as much in extra payments as I did in 2013 (see $30,000 gross income drop). But I did manage to lower my monthly interest cost from $400 in December 2013 to $307 in December 2014 by paying down about $45,000 of the mortgage.

2014 Investments

My investments had a lot more ups and downs in 2014 than ever before. My employer and I contributed just under $25,000. My 401(k) was over $100,000 at some point this year and my Roth IRA is definitely over $30,000 now. I also saw just over $3,000 in dividends across all of my accounts and I’m estimating to get close to $4,000 in 2015. My largest one month gain was $5,235 and my largest one month loss was $4,373.



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
mortgage $187,600 $147,700 $143,000 +$4,700
net worth $345,900 $529,200 $531,600 +$2,500
taxable assets – debts $135,200 $70,400 $70,600 -$200
$ until FI $823,900 $845,000 $811,300 -$33,700

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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