Category Archives: Net Worth

networth re-calibration

After much thought, I decided to re-calibrate my networth. It is a painful move because my networth heavily benefited from the equity of my condo but I was using the number provided by Personal Capital which is powered by Zillow, and I have seen wild swings (we are talking +/- $50k). I recently refinanced so I decided to use the appraisal value quoted for the refi. It pains me to see the value drop so much but I would rather be conservative in estimating my wealth than too liberal.

Hopefully this is the only huge networth decrease I see this year… 🙁

cost of flakiness of others

This week is turning into an expensive week due to flakiness of others.

On Monday, I had a meeting with folks who are generally difficult to get a hold of. I had promised them sugar as an incentive to attend the meeting. Just as I was checking out at the gourmet bakery nearby, I received the meeting reschedule notice moving it to Tuesday. At this point I had already paid and gotten the items wrapped up, there was no way I could return the items. I ended up sharing them with my team.

Today, I was supposed to go to lunch with my mentor at work. It has been on our calendars for the past week. I almost brought my lunch today but didn’t when I remembered that I was meeting up with him. He ended up getting caught in a meeting and canceled. I had to go out and buy my lunch today.

I still have business days left for this budget period (I put money into the various categories 2x a month) and I have already blown my work budget for things that didn’t even take place. I get that I would have blown my budget anyway if the events occurred but there would have been advancements in the project and career. I am now out of cash and, since the lunch has been rescheduled, I will go even further in the negative on this category.

It isn’t the end of the world and I can move my cash around to make it work until the 15th. It is just irritating.

current cashflow & budget

Since I have shared my long term goals, I think I need to explain why I think this is feasible by telling you about my current situation. Since this is anonymous and I intend on keeping it that way, I can share the details with you.

I earn $185k base and qualify up to 12% for bonus and receive 10% in profit sharing on salary + bonus each year. I contribute the full $18k a year to my 401k since that is a good practice and also to lower my tax rate. In all, I expect my employer to put ~$20k in my retirement account this year. I also have contributed $5,500 into my IRA, which is in the process of being converted to ROTH IRA.

After 401k contributions, employer sponsored benefits, and taxes, I take home ~$8650/month. I have withholdings set high enough that each year I receive a significant amount in tax refunds. While I can change the withholdings so that my paycheck is higher each month and I receive less in taxes, I would rather receive a lump sum than to risk owing.

From there, I break it up into various categories of spending.

Expenditures MONTHLY
Joint Spending  $1,750.00
Cell Phone  $80.00
Gas/Transportation  $75.00
Audible/Books  $20.00
Dog  $500.00
Spending Money + Food  $450.00
Work Related  $50.00
Student Loans – 0%  $200.00
Student Loans – Interest  $800.00
House Maintenance  $100.00
Travel  $400.00
Gym  $130.00
Gifts  $100.00
Investments  $4,000.00

My boyfriend (JA) and I live together at my condo. We have decided to create a joint expense account and items such as my mortgage, HOA, groceries, and house cleaner come out of that account. I debated whether it  was fair for JA for us to do it this way since the condo is building equity, but I have decided it is fine since renting is much more expense than my monthly mortgage + HOA.

The dog came with me so I am responsible for his expenses, although JA takes care of him as well. Because I can work crazy hours, I have a dog walker that comes 1x a day during weekdays and whenever we are out of town he gets boarded, hence the high dog cost.

As you can see, my only debt (aside from the mortgage) are my student loans. One is at 0% interest so I have no incentive to pay it off early, but the other is at 6.5% interest. I have more than enough cash on hand to pay it off but I stress out a lot about parting with that much money at once. I pay much more than the minimum amount and the goal is to knock this off in about 2 years while still hoarding cash.

Now you know the dirty details of my finances. Every couple of months I reassess my spending and try to lower the monthly spend allocation if possible. While I am sure this is more than what some people with families spend, everyone’s situation is different and this is what works for me. I am excited to hear any suggestions anyone may have to reduce the budget even further.

 

what is so magical about $1MM?

To be more specific, my goal is to hit $1MM within the next 10 years, allowing me to retire at the age of 43, although ideally I will retire by the time I am 40. I want to have at least $500K in retirement accounts so that these are able to grow for 20+ years and have passive income of $4K a month, most likely through real estate.

I doubt that I would ever fully retire but, once I hit this magic number by that age, I will be free to take less stressful jobs and worry only about breaking even each year. I can decide to work full time or just stay at home with the kids.

Independence is one of the things I value the most and, for the first time ever, I am in a position where I can’t confidently walk away from a job knowing that another similar one is around the corner. While I can probably find jobs with the same titles and responsibilities, I have found that I am out of the pay range for most of those positions. I am golden handcuffed to my job. I love my job but the stress can be very intense, to a point that it has impacted my health. I am hoping to spend the next few years building the team so that I am able to have less stress but that may just be a lofty dream.

Here is to beginning that journey. I am happy to have you follow along.