My primary goal is to have the freedom to retire at age 40.
I am still working out the details of how much money I want to have in early retirement, and thus, how I want to live in early retirement. As such, I am also still working out the details about how much money I need to save in order to enable my early retirement.
I’m a big believer in completing monthly net worth updates as a way to stay on top of your financial situation and work towards your goals. I will share my monthly net worth updates here.
April 2015 –
March was another decent month. The markets continued to keep chugging along. Not doing amazing, but not tanking either. This single factor continues to have the biggest impact on our net worth growth or decline.
We reached a new all time high of $994,406! SO CLOSE to the big $1 Million milestone! If things keep going well and we’ll be in the “double comma club” soon!
Net Worth Notes:
Cash (-$8,147): This continues to be considerably higher than I would like. While having an emergency fund is important, we have too much money here at the moment that is doing little for us. I’ll be looking to invest up to $75k of our cash in the next few months. The challenge with that is where. I’ve considered another rental property, but haven’t seen any worth while in our area and I’m also just not sure I want to deal with that additional hassle. The market is another option, but it’s been so hot for the last several years, I feel like it has to come down sometime soon. I’d like to have money on hand to take advantage of a market decline, but I also recognize the folly in trying to time these things. I’m torn!
Taxed Stock Account (+$16,327): This month I reallocated $10k from savings to investments within this account. In addition, I made the regular $4k contribution here.For the last year I’ve been pumping $4k per month into this. It primarily consists of ETF Index funds, including some tax-free munis. I intend to continue funding this at the same level (or more) for as long as possible. There may be a need to reallocate some funds here to more tax favorable investments (e.g. munis, growth stocks, less dividend holdings). Also in this bucket is a small amount invested recently in a LendingClub account.
Retirement Accounts (+$6,476): This consists of my 401k, Trad IRA and Roth IRA, as well as Mrs. Freedom 40’s 403b, and two Roth IRAs. We maxed out the 401k/403b the last two years and will do so again this year. We make too much to directly contribute to a Roth, but I did a backdoor conversion last year and may do so again this year. We’re only able to do this for Mrs. Freedom 40 at the moment unless I roll my existing Trad IRA into my 401k. I used to be a big believer in the Roth, but now I’m a little torn on it based on this great article on the Great Roth Controversy by GoCurryCracker.
Rental Property ($0): This is a 2BD/1BA across the street. We used to live there and rent it out now. I updated the approximate value at the beginning of 2015 and will probably not change this until early 2016. I plan on holding onto this asset for a long time. Currently, this creates nearly $0 cash flow, but the tenants do pay the mortgage every month!
Home Value ($0): As with the rental, I updated the approximate value at the beginning of 2015 and will probably not change this until early 2016. We have no plans of moving in the near future. If we do, there is a strong possibility that this will become a rental property.
Other (+$269): this consists of two cars, some gold and silver coins, and my HSA. I may separate the HSA in the future, but for now I’m fine with it here.
Home Mortgage (-$668): This just keeps going down a bit each month as we make our regular automatic payments. I used to put a fairly substantial amount of money towards additional principal payments, but I now believe it is better to invest this money as I should be able to get a better return than the 4.375% on the mortgage and I can have access to the money if needed.
Rental Mortgage (-$359): Pretty much the same deal here as our home mortgage. Keeps going down a bit each month. While we’re not making much (if any) money on the rental now, here we can see we are getting a benefit from our tenants paying our mortgage. This one is at 4.5%.
Other Loans (-$171): This includes 2 Student loans Mrs. Freedom 40 has. Both are at 1.875% so I firmly believe in making only the regular payments and no more. We can put our money to better use than paying these down. This also includes my car loan which is at a whopping 0%. I could have bought my car in cash, but instead I financed at 0% and will have that money working for me in the market instead.
Here’s what our Net Worth looks like over the past 12 months. Thanks to continued dedication to savings and lots of help from the stock market, we’ve seen great growth!
Let’s hope it keeps going!