Ugh. What a perfect storm.
Between moving, renovating, losing my wife’s income, and just having an overall crap month in the markets and with business, our net worth takes a major nose dive into the 10% mark and gives us our biggest drop we’ve quite possibly ever seen since tracking our worth.
What a bummer.
None of this out of the blue or anything, or towards any “nonsense” mind you, but it definitely has me hitting pause and muttering a few curse words under my breath. It’s also the point where I have to triple ask myself if I *really* know what the hell I’m doing? Haha… I’m 99% certain I do, but a $40,000 drop is pretty scary either way you cut it :(
On the plus side, everything we did last month sets us up for a much better off future – something I’m holding on to tight right now while watching these numbers plummet :) Things like:
- Finally living in a new place/state! (Have I mentioned this recently? :))
- Having our house rental property updated and looking sharper than ever. (I’d show you pics, but my damn phone died and I lost everything since my last backup 3 months ago :( My phone literally started vibrating out of nowhere for 15 minutes straight, and then went completely black – wtf?)
- Opening up my wife’s schedule all week to work solely on her dissertation, which will then lead to a new job and salary next year. (We’re currently on my income only right now.)
So lots of big changes here in the Money household lately, and I pray this is only a one-time drop. Regardless, I’ll be blogging about all these ups and downs so you can follow along. At the very least, I hope these posts help you guys out! It’s further proof that we *all* have to sort through the money poop regardless of what phase or position we’re in.
Here’s how June broke down:
MONSTER CASH (-$29,245.16): The was by far the biggest hit this month. Mainly because we paid all renovation costs and deposits and pretty much every thing else outright with cash (after putting it all on credit card, of course, so at least I got *SOME* good feeling out of it. Should be interesting to see how much cash back we get at the end.) This major drop pretty much puts our net worth back to where it was almost 6 months ago. And is also a far cry from the $70,000+ we had banked in cash too. Though, as I mentioned before, most all went back into some sort of investment or another.
529 College Savings (-$123.47): This pretty much wipes out last month’s $125 gain. But to be expected with market fluctuation lately. Soon we’ll have to either convert it all to a Virginia plan, or start a 2nd one to continue investing in – haven’t looked into much yet.
IRA: SEP (-$996.04): The market was at work here too, along with the following IRA investments. We haven’t put in anything extra ourselves lately.
IRA: ROTH(s) (-$1,633.76): Bleh.
IRA: TRADITIONAL(s) (-$7,500.87): Triple bleh. But a good time to invest if you have cash laying around! Unlike me :( Here’s how our IRA Test is still going:
- IRA #1 (NOT Managed): $69,522.23 **Leader for over a year
- IRA #2 (Managed, USAA funds): $65,078.90
- IRA #3 (Managed, ALL funds): $65,478.26
AUTOS WORTH (kbb) (-$619.00): While I did keep the Caddy as I blogged about yesterday, the one thing I changed in the valuation here was to downgrade it from “good” quality down to “fair” (I use kbb.com for this stuff) since it now has some additional “character” ;) That alone dropped the value by a good $500, but since we now all of a sudden have our AC back in working condition (I’m still so shocked!), it added a hundred or so back into the calculations, haha… So at least there’s that.
Here’s how our cars break down:
- Pimp Daddy Caddy: $1,793.00
- Gas Ticklin’ Toyota: $6,965.00
HOME VALUE (Realtor) ($0.00): Now this area – while still stagnant – may be changing here in the near future. Places in our (old) community have been moving around quite a lot, so I’m getting tempted to hit up our realtor and ask for an update on what he thinks it’s now worth based on a fresh set of comps. The last time we did this was a couple of years ago which set it at $285,000, so there’s a decent chance it’s since moved up. Not that it matters until you actually go and find a buyer for it, of course, but still. If it’s going to be in the calculations, you might as well get it as close as possible.
MORTGAGES (-$643.21): This is the shining light of the entire snapshot :) It continues to go down each and every month (albeit much slower than our original mortgage killing plan we had, and which is now paused), and I pray it remains a solid variable we can count on month in and month out.
Here’s how our mortgages break down (they’re both on the house we own and are in the process of renting out, btw. Our new home is a rental.)
- 1st Mortgage: $278,962.12 – 30 year conventional @ 5.5%
- 2nd Mortgage: $29,553.42 – Maxed out HELOC @ a variable 2.8%
And that wraps up the worst update since the start of this blog :( Again, nothing too surprising here which is at least good, but it still doesn’t pad the sting very much. If only we could include all those house updates into its value!! THAT would be something sexy!! Oh well… We keep our heads down and continue to fight the good fight.
How did you all do this month? Everyone better than me, I take it? :)
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PS: This is one of those times I wish I didn’t put my numbers out there for everyone to see, haha….
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Empower account instead (formerly Personal Capital)
Empower is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Empower - check it out here: Why I Use Empower Almost Every Single Day.
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Actually the way I see it is you’re not exactly down $40,000 for June, you are on the way to better financial health. Getting rid of debt or most of it is the best thing one can do. And the market loss is on paper only unless one panics and sells. Investing for long-term ought to be the order of the day.
Ouch! I feel for you guys. We had to put $4K into one of our rental unit this month – not quite the same as what you put in, but it still hurt a little! =)
Heck yeah that still hurts! Esp if it was more for maintenance vs upgrades :)
My net worth is still a negative number (-$4,401) but that is an improvement over last month. I predict a positive net worth by mid-September.
Still hoping some long lost elderly relative will bequeath me a big chunk of cash and fix all my financial problems. I am rushing toward the big 50 and I feel it may be too late to get it together financially.
It’s never too late! But yes a nice miracle could most def. help :)
There is a lottery draw in Canada this Friday for $50 million. That would fix all of my retirement problems.
It is easy to understand why people keep buying lottery tickets. If you think you don’t have much chance at getting ahead then it is easy to be drawn to a chance at a dream.
For sure. I mean, you gotta play to win, right? And *someone* will! The trick is just doing it responsibly and not blowing all your money on something that will more than likely never ever happen.
A bad month isn’t a huge deal if you’ve made major changes that will make your life better! Hopefully your new location will save you some money over your old location, and even if it doesn’t, you need to like where you live if you can afford to!
Ick. That blows. However, it is to be expected when you’ve had as many changes as you have had lately. The important thing is that you planned for the major chunk of that, which is good. Plus, it really kind of skews your numbers a bit, so it isn’t as bad as it seems/feels. I love the IRA test. Now that I’m self-employed, I’ll be chunking much more money down in IRA’s as well.
If you end up trying out a test yourself, let me know :)
That blows J! Though, like you said, it should be helping set you up for potentially a better long term picture. That’s also not to mention the fact of all the big things you had happen at once. Our June was fine. We took a bit of a hit in the market, but I took some gains which mitigated a good bit of it. Now I get to decide what to do with that cash. :)
I hate you :)
No pain, no gain…to use a worn out old saying. Ten years from now you’ll most likely experience fluctuations like this in a matter of a day or two, if the market is anything like the roller coaster ride it is today. But the good news is, the fluctuations can be hugely positive, too. Those will be the fun, go out to dinner and celebrate days! Keep up the good work. You’re journey is inspiring!
Hi J.
Perhaps you’re being too harsh on the accounting? The $29,000 spent in cash for renovations is actual value being put into the house. So instead of -$29K, maybe it’s only -$15K as your place should be at least $14K nicer after the improvements no?
How about dumping a good portion of the rest of your $28K into the market if you think it’s a good opportunity?
Sam
Yeah, you’re def. right – I am being hard on myself. But I guess we have to be in order to keep things on track, eh? I don’t think I could stomach leaking more cash anytime soon though, even IF the potential in the market is good. That’s our last resort as a security blanket, haha…
I really hope that in the end it works out for you putting all that money in the house. I still think that sinking that much money into a house that you were already underwater and renting wasn’t a great idea especially since hearing about my neighbors rental requiring $10K in renovations after one year of renting.
Be diligent about your renter requiring previous history and perhaps a generous deposit.
It def. could have been a bad idea, but either way it is what it is now and just praying it goes in our favor. The sucky part is we have to wait years and years for us to find out! :)
Backwards to go forward. No big deal, and totally expected. You’ve got a lot of shiny spots, but nobody likes seeing that math.
Keep on rockin’ in a free world, and have a great holiday.
You don’t *have* to switch your 529 plan to your new state’s. You can have your 529 with any state. It’s just, you might be missing out on your home state’s tax benefits (if any) or you might pay a fee that you wouldn’t otherwise.
Keep your old state’s plan in the running, but it’s worth evaluating Virginia’s options in case there’s a sweet tax thing you can capitalize on.
Oh yeah, as soon as we’re ready to start investing in it again I’m totally checking out VA’s plans and soaking up those benefits. I love me some free money!! :)
I guess everybody’s gotta have a bad month every now and again. Even though you had a bad month, you are still doing pretty awesome in my book! Things should only go up from here, right?
Yuck. My accounts went down this month, too. Not a good feeling :(
I feel your pain J! Buying a new house/moving is a nightmare full of expenses. Our net worth took a similar hit in May, but as you say it is really just an investment for a better future.
June was not a great month for us, but we are powering through it. Sorry to hear about the perfect storm, but you got through it and now time to rebuild.
June was definitely a tough month in the market. Here’s hoping that you bounce back really soon!
It sucks to see all that red! I’m sure you will be back in the green soon enough though! You did a lot of investing for the future so it will pay itself back. Plus the market will go up again!
This has nothing to do with your net worth but it’s driving me crazy, what is your wife’s dissertation topic (since your move is related to her schooling?)
Also, what is the reaction to the mohawk in VA?
Haha…
She actually doesn’t want me telling people what her topic is exactly right now (maybe cuz we’ll jinx it?) but I am allowed to say it has something to do with politics :)
As for the mohawk, I must say I’m pretty impressed. I heard VA is quite conservative but the most I’ve gotten is a handful of finger points and some “oooooh look at that!” from a gaggle of 8 year olds :) It got me into much more trouble over in the DC area than here so far, if you can believe that.
Ouch, that must have hurt – $40K is a LOT of money. But you are still ahead, and that’s what counts. Your biggest net worth hit is because you were paying cash for things, so it’s much better than taking on debt.
-10%, ouch! You’ll get it back soon I’m sure.