Now THAT’s what I’m talking about! What What! Of course, I cheated and sold some stuff to get it up there (aka $50,000 of it is a one-off) but still – $430,000 is $430,000 ;)
And if compared to the lowest month this year – January – we’re up a whopping $100,000! Which is a 30% increase in 10 months – for all you % lovers out there :) (See – I kept it in this month for you too! Even though I had to re-figure my calculations cuz I goofed last month and didn’t do it *exactly* right. I had to actually Google for the correct math equation cuz I was thinking too hard on it and got lost, haha… Here it is if you get confused with this stuff too: percentage change equation.)
Anyways, one of the best months ever over here – if not THE best one – and now we work towards hitting that half a million mark :) It hasn’t been easy, but it’s all been worth it so far!! I’d rather work my ass off for a solid 5-10 years now and relax the rest of my life, than go half-speed and have to work ’til I’m 60 or 70 or God forbid 80 (even though I’ll always be tinkering around with stuff anyways – but at least it will be a *choice* rather than *mandatory*).
This actually reminds me of Paula’s 4 routes of retiring she blogged about earlier, you should check it out when you get a chance. There’s not just 1 way of doing it contrary to popular belief :)
Here’s How October Broke Down:
CASH SAVINGS (+$50,329.78): BAM! Finally in the green after all these months! Even *without* that $50k infusion we’d still be in the green too – woo! Pretty proud of that one… First time in a while we haven’t bled cash :) And while a chunk of it will be going into maxing out some IRAs later (you can see the plan for this $50k here), for now it’ll sit here looking all sleek and sexy…
529 College Savings (+$166.31): Nothing new added here – and probably not for a while until The Perfect Storm has passed.
IRA: SEP (+$2,029.85): Nothing new added here either, though it will get a nice bump come Jan or Feb once I max it out for the 2013 tax year. Probably looking at around $15,000 invested, which will come out of that $50k surplus mentioned earlier. Not sure what I’ll invest it in yet, but probably a Vanguard fund…
IRA: ROTH(s) (+$2,527.96): Same here – nothing added, just the markets doing it’s thang!
IRA: TRADITIONAL(s) (+$6,764.97: Same with this one too… As you can see the more you have invested when times are going well, the more return you get on top of it :) Of course, the opposite is also true when the market goes down.
Here’s how the three accounts break down – as part of our never-seem-to-be-ending IRA Test, haha… Just haven’t mustered up the energy and patience to pull the trigger and combine them all yet..
- IRA #1 (NOT Managed): $76,034.95 **Leader for two years now
- IRA #2 (Managed, USAA funds only): $71,041.59
- IRA #3 (Managed, ALL different funds): $72,077.98
AUTOS WORTH (kbb) (-$134.00): Oddly enough my caddy (the one on its last legs) went up about $150 this month according to KBB.com, and the Toyota (still almost as good as new) went down $300. I think once 2014 hits though KBB won’t give me the option to check the value of my Caddy anymore cuz it’ll then be over 20 years old :( So I guess I’ll have to just keep it at whatever it is going forward and that will be that.
Here’s how they both break down:
- Pimp Daddy Caddy: $1,837.00
- Gas Ticklin’ Toyota: $6,425.00
HOME VALUE (Realtor) ($0.00): The same $300k as it’s been since July when we revalued it w/ our realtor. I still very much want to sell it and be done once and for all, but in the meantime we’re getting more and more exposure to the world of renting, so at the moment it’s at least serving a purpose.
MORTGAGES (-$647.07): Another month, another big chunk paid away! Mainly from the principal payments already built into our 1st mortgage, but there’s also that $200ish extra we pay in every month too as we round up when making our payments. One of my favorite things to pay every month :)
Here’s how both our mortgages break down:
- 1st Mortgage: $276,407.65– 30 year conventional @ 5.5%
- 2nd Mortgage: $28,896.87 – Maxed out HELOC @ a variable 2.8%
That wraps up October! It was a good one! :) As you can see from that graph up there, it’s been quite the turn around over the past 5 months. Especially coming off that DROP of about $40k, ugh… That’s where it REALLY hit home and got me to hit pause and reevaluate life/career/money… I’m still trying to wrap my head around it all, but it’s been easier to do lately with this recent infusion ;) Just can’t get too comfortable because we’ve got a ways to go! We may have more cash on our hands now, but our cash *flow* is still looking pretty anemic compared to yesteryear… (and we have a new baby coming in 7 months! Woo!)
Hope your net worths are looking good as well! Let us know how you did last month in the comments below… And if you’re not tracking it yet, DO SO TODAY! Download my money snapshot spreadsheet and get to work :) Or one of the other dozen or so budgets to start tracking that money…
Once you *know* where everything is, it makes it MUCH easier to shoot for your goals. ‘Cuz then you’re dealing with REALITY vs. what you THINK is reality ;) And believe me, our heads are never as smart as the numbers. Took me 25 years to realize that and I hope you have/will soon too!
Till next time, friends…
———–
PS: If anyone misses Halloween and/or hates bill collectors, you’ll enjoy this 2 min video: Killer Student Loans: A Horror Story. It’s pretty funny :)
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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Oh so close to half mil. Congrats!
I’m glad you shared Paula’s article. I hadn’t read it and it’s perfect. I’m on the mini-retirement path and loving ithe lifestyle it allows me to have.
Good!! I always think of it now whenever I write, or read, about retiring, haha… You don’t often hear the varying ways to do so – Paula’s brilliant :)
Congratulations! That’s excellent progress. We are about to turn a corner on our budgeting as one daughter graduates from university in a year and a half. Both daughters earned partial, renewable scholarships which has allowed the 529 savings to stretch and cover the rest. We’ll always be willing to help our daughters out in times of need, but for the most part we are looking at our income and acting like kids in a candy store. “What? You mean we get to keep it all? That’s crazy! What should we buy (invest in) next?!!!”
OK….that might be a little over dramatized…but saving for their college educations required a sizable chunk of our take-home pay. I think the challenge will be to continue putting it aside instead of having a little fun with it. There are a lot of temptations out there!
NICE!!! You’ve put in all the hard work and done right for your family, and now it’s time to concentrate on YOU. I love it :) And congrats!
“Movin’ on up”.
Congratulations on a successful report.
Is a 529 a good idea? Is it something I should start?? Now that I have 3 I am sure AT LEAST one would use it.
Have a good day!
I have a 529 and it is a solid plan. The real trick is if your state gives you a tax credit to make the investment a home run (along with low fees). In my state I can get up to a $1000 tax credit (20% up to $5000 I put in). I don’t know of too many investments that offer me that kind of garunteed return. My dad also puts money into my son’s 529 plan so he can help pay for college in the future and get a huge tax credit now.
You can also transfer the 529 plan to other family members if none of your kids decide to go to college (or certain trade schools). If you don’t want to do that you can take the money out, pay ordinary tax on it and a 10% penalty (which you should have more than covered over 18 years of investing).
In the end it is a personal choice, and I would recommend worrying about your own retirement first since you can borrow to pay for college but it is a lot harder to borrow money to pay for retirement.
Did Brian just answer his own question?!….had to do it :-)
YUP! What Brian (#2) Said :)
(And I was thinking the same thing, Scott, haha…)
Nice work man! That’s a huge jump for one month. I read that article you did on selling your websites for $50K. Now THAT’S some tight sh*t! I can’t wait to sell one or any of my sites for that much.
I did have a question: When you sold your websites, didn’t that money go into your “business account”? Or are your business accounts and personal accounts the same thing?
Why no taxable stock or brokerage accounts? You seem like you will be close to maxing out the IRA’s, and that’s a lot of money to lie around in a cash account.
RE: Business account — Yes, it all goes in there first, and then I take a “contribution” of whatever amount into my personal account. Normally it’s a set number like $6,000 or something a month (a “paycheck” to yourself, if you will), but it’s ultimately up to you. At least with the setup I have. And since cash is super important to us right now, I’ve xfered it into our personal account.
RE: Stock/Brokerage accounts — I invest all my stock/mutual fund money into our retirement accts so I can max those out and take advantage of the tax situation (rather than investing into taxable accts). They’re set up so I can pick up individual stocks if I want, so they work the same, but at the end of the day I don’t get tempted to pull any money out or go day-trading, etc – since they’re all for retirement ;) One day this will have to change, but only when I have *too much money* where I can’t invest into my retirement accounts anymore. A good problem to have!
RE: Lots of cash – True, it is. But when business is shaky and your entire family depends on your income, it’s needed ;)
Bam! Makes me wonder – for a guy like you that has all sorts of business interests, is it selling your net worth short not to include some of their value as part of your net worth even before you sell? Just because you hadn’t sold them in the past didn’t mean you couldn’t have… I bet people could argue about it either way, but seeing how big of a jump you got from selling something you already owned and were basically attributing no value to makes me think about it…
Funny you mention that, I *literally* just started writing up a future post about this stuff :) My short answer to this is that yes – it could go either way – but for me all this online stuff is just too shaky and hard to really value it, so I prefer to keep it away and then if things work out in the end, include it when you’ve got the cold hard cash in your hands, haha… otherwise our net worth will fluctuate all over depending on the buyer and transaction, etc etc…
A perfect example – those 4 sites I just sold? They would have been valued at $75,000 last year, and maybe $20,000 the year before. But when all was said and done (aka deal day), they came out to $50,000. which would have been a large hit, or miss, depending on what value you put on it when initially included in the net worth :)
I just avoid all that and count on the “definites.” Helps me sleep better, haha…
That $50,000 gave you a solid boost. Congratulations! I’m sure you’ve listed your age somewhere before, (I think it’s 30), but I think it would be neat to see a graph of net worth by year (age included).
Haha, that’s a good idea :) And you’re right, I’m a little older than 30.
Awesome month, congrats! These positive months make the not-so-good ones bearable.
Kevin
Way to go! That is a really great month! I can’t wait to read more in the future, I am sure you will be even more successful!
Awesome, great month – wherever it came from!!
When do you aim to hit the $500k mark by?
That’s a GREAT question… I haven’t forecasted it out or anything yet, but I like to shoot for $100,000 increases every year. And usually only get around $50,000 :)
So, maybe by this time next year?
I agree with Mrs. Pop- when we prepare personal financial statements at work, we include the value of closely held businesses. With businesses like blogging that dont have lots of assets, this can be more difficult to measure without an actual business valuation. (Which aren’t cheap.)
Right. I could easily put a value on it that I think a buyer would pay one day, but with how fast the internet changes, it really can be way off. I prefer dealing with realities and *then* including in our worth :) Whatever works for people though.
Looks like an awesome month!
I don’t think you cheated with the 50K! It was yours….you earned it! =)
Congrats on the great month. I’d say your net worth went up more than many people’s annual salaries, but I bet you put a ton of work into those sites you sold!
Wow. Haven’t thought about it like that before – but you’re right. In both the salary thing AND putting in a lot of hard work. It takes effort, but on days like this it all becomes worth it :)
Nice work, son! I’m looking forward to such days when my net worth goes up by that much in a month :) But for now I’m satisfied with my small increase!
You rock! Congratulations on the sky-high net worth and thanks for the love!
Thanks Paula! I always think of your retirement scenarios now too anytime it comes up :) We tend to forget there are *different* ways to “retire,” and your post was a perfect reminder. Well, yours AND Len Penzo’s, haha… I should probably give him some credit too, huh? ;)
Looks great, but you should really consolidate your Traditional IRAs! If your SEP is at Vanguard, I would even consider moving the Traditional IRAs over there, but the first step is to consolidate them into just the first account.
That will definitely be done one day :) Whenever I’m ready to close up the IRA test.
I don’t think you cheated. That would be like saying I cheated when Boston Scientific purchased Guidant several years ago and I got stock + cash (worth more than the previous stock price). Sometimes one time capital gains happen. You would add your lottery winnings in there if you hit it big (or maybe you wouldn’t since then people would be coming out of the woodwork to get some money)
I agree with Leigh above. Since we now see who the winner in the IRA game is, it is probably time to consolidate the other two into that one. I mean you did just write a post about simplifing you finances!
Haha… don’t pin my posts against each other! Why are you so smart? :)
Congrats! You’re really bouncing back nicely. Weird about the caddy.
You did a fabulous job!!!! Congrats!!!!
Tough to think about but if you believe that you would even consider Early Retirement (based on working hard the next 5 years or so) than at some point it might be worth looking into taxable investments as well as part of savings strategy. You lose some tax benefits going that route but if you invest in quality stock or a passive mutual fund/ETF which generate qualified dividends, the tax impact is lowered and it gives some flexibility and potential passive income between the Early Retirement period and when you turn 59.5, so you do not have to pay penalties if you pull money out of Traditional IRA or SEP IRA. You can pull the inital principal out of Roth but hard to pull out money that continues to grow tax free and you get to pull out tax free when need be.
Huh… you know, I’ve actually *never* considered what would happen when/if I do retire way earlier. At least with regards to my retirement accounts… I guess I’ve just been pummeling away as hard as I can that it hasn’t sunk in that it’s very much a real possibility! Haha… though we’ll see what happens when our kids continue popping out ;)
I will take your notes to heart man, appreciate it. Good for me to think about more!
Holy cow, that is a huge jump! I’d love to be able to ring up a nice cash infusion like that to jumpstart my savings, although honestly the market has been doing that for me all year now. I better keep moving or you’re gonna catch me real quick with jumps like this month’s!
Oh yeah??? And what, praytell, is your net worth number right now? ;) I need to know what I’m shooting for, right?
It is… $551,703.83. You can check the details on my latest update: http://bigdaycoming.com/net-worth-october-2013-progress/
SWEET!! So glad you put it out there too – a lot of people don’t for whatever reason, and it always fascinates the pants off me to see ;) Going over now to check! And I still have a ways to go to get you! Haha…
Sweet! Nice turnaround. I just took a look at our big picture, and really like they way it looks. We have been so focused on debt repayment, that I wasn’t paying attention to our overall net worth. It’s good to step back at least once a month and check in.
Good! I hope you do it more often than not, going forward :)
Good progress! Yeah!!! My net worth is up this month too:p
Oh wow! Congratulation! Great job in October. You are doing so well overall. 30% increase in one year at your net worth is hard.
We only went up 1.8% last month. That’s actually really good though. If we can do that every month, we’ll be set really soon.
Very fancy indeed!!! Keep rocking it out! I don’t know my net worth because I know it’s negative due to the hubs med school loans. :( But…. this just might give me the push I need to see just HOW negative it is.
You should!!! Really just so you can get motivated more and more as the months go by and you see your numbers going UP over time :) I’d imagine that will start happening fairly soon now too that your man is finished/finishing w/ grad school, yeah?
BOOM! Ballin’!
That is all.
That is incredible! Congrats!
Yours is really a terrific example of how small changes and small sacrifices early on can lead to huge gains down the road. Inspiring
Congrats, that’s awesome!!! :)
Thanks guys, appreciate the love :) Though I *swear* that’s not why I post these up every month, haha…
Congrats on the progress. I know I was shocked once I started keeping track of everything in Mint. It has really helped me keep my spending in line because I can see it creeping up all month long and can really nip excess spending in the butt. Nothing like seeing the hard numbers each and every day to help keep me in check.
Agreed.
Congrats J. Looking forward to the day when you can say “one million dollars”.
Question for ya: Does the $50,000 gain account for the taxes that you will have to pay for having sold your business assets? (And does your accountant think these will be business assets, so ordinary income, or actually capital gains?) I’m always curious to know how people account for such things.
It does account for it because I don’t have to pay any more taxes based on my business income this year compared to last (I’m down about 50%). So since I’ve been paying every quarter as if all was the same as last year (aka double what I should have been!), I’ve already in effect paid taxes on this money ;) So it is included, but not – if that makes sense? Not sure what type of income it goes down as (I’d guess capital gains?) but I do know I’m done paying taxes for the rest of the year. Which is the only good thing about losing business income, haha…
Wow, good job in your increase – that’s an absolutely huge amount! And even though the $50K is a one off, it’s still great progress.
Very nice! It’s fun when the net worth chart starts to look a bit more vertical. Mine’s doing the same mostly due to stocks. Do you think the market will keep going up for a bit, or do you think it’s going to peak soon?