Category Archives: Net Worth

2015 Net Worth and Expense Recap

2015 has drawn to a close. Last week I wrote about how great my year went in terms of my goals, and then discussed my 2016 financial and non-financial goals. Now I want to get into the nitty-gritty money details, since that is what everyone cares about anyways.

The last time I reported my net worth was at the end of July when my net worth crossed six figures for the first time ever. Now I’m at $120k which is about $10k higher than what I originally planned for 2015, which is great, but this also lets me know that I am bad at projecting since the equity markets were basically flat and all appreciation was due to my contributions. There are just too many variables which go into projecting your net worth that I don’t really put to much effort into the exercise. In 2016, my income WILL change, I will NOT predict equity market returns, I will NOT predict my exact savings rate, etc. And that’s just projecting 12 months out! Projecting 10 years out is just asking to be completely wrong, but I do appreciate that the exercise is educational and gives me somewhat of an idea of where I could be. But on this journey to financial independence, I’m going to concentrate on what I can control, which is mostly working hard to increase my income, monitor my expenses, and invest the difference.

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Cash – Checking account, plus savings account, minus outstanding credit card balances.
Post-tax investments – Mix of a couple individual stocks (which I’ll most likely divest from in 2016) and Vanguard index funds in brokerage accounts.
Tax advantaged accounts – Pre-tax and Roth 401k, Roth IRA, and HSA. The Roth 401k is from previous years, I know better than to contribute to something other than pre-tax now!
Pension – I have a cash balance pension plan with my current employer that I’m fully vested in. I believe if the balance remains small I can roll into an IRA when I leave, but if it gets higher I unfortunately would have to leave it alone until standard retirement age.
Student loans – Only one left at 3% and I’ll pay this off in 2016.

Let me be honest here – I don’t do a good job of tracking my expenses and I am by no means as frugal as some in this community. Personally, I’d rather spend more effort on increasing my income instead. Throughout 2015, I just made sure my average expenses each month were below $3,000 and I left it at that. As you can see below I’ve easily exceeded that goal with total 2015 expenses of $32,056.

In December I really decided to buckle down and monitor my expenses. I’m going to do an internal monthly review in 2016 and really see where my money is going. I used Personal Capital to compile the expenses below, but I’ve noticed it isn’t always right and has double counted expenses before, so this year I want to be on top of that. Therefore I created a great excel template to track my expenses in 2016. I plan on getting my expenses below $30,000, and this will definitely be doable if my remote work arrangement plan is successful.

I won’t go into too much detail about each expense category below but I’ll talk about a few of the big ones. As you can see my rent is my largest expense by far. I live in Manhattan, but actually have a pretty good deal on a place within walking distance to work that I split with two of my friends. Travel is high due to the fact I like to travel, had some weddings to attend, and am in a long distance relationship. The “other” category is something I plan on really locking down in 2016. This is basically ATM withdrawals, expenses I didn’t want to break out on their own, and other miscellaneous items.

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I don’t include student loan payments in my expenses, because the accountant in me knows that it is all balance sheet (except for a small portion of interest). But I did paid off $6,300 of student loans in 2015, and plan on paying off the last $4,200 in 2016.

2016 is going to be a year of many changes for me, but I’m hoping to use what I learned in 2015 to earn as much as possible and invest as much as possible, all while having a great time. I plan on moving out of Manhattan in 2016 which may shift my expenses dramatically, and hopefully in a good direction. I am a person who is totally comfortable with change, and am looking forward to what 2016 has in store for me!

I know I mentioned up above that I don’t really like to project my net worth, but to have some fun I’m shooting for $180k, while keeping expenses below $30k.

Did you hit your net worth and expense goals in 2015? How closely do you monitor your expenses?

The First $100k is the Hardest!

Jason from Dividend Mantra recently asked “Is The First $100k The Hardest?” I can officially answer that question with a resounding “YES!” as I just crossed that barrier last week. Woo hoo!

Man was I ecstatic! It’s hard to believe that I just started on this journey to financial independence last year, and really didn’t get serious until the end of 2014. In the past 365 days I have been able to increase my net worth approximately 67% to over $100,000! And that was without any windfalls, just hard work and dedication.

Last year I was already somewhat “decent” with money, but I could have been a lot better. I was contributing over 10% to my 401k. I had sold my car as soon as I moved to NYC. I was paying down my high interest rate student loans first. I was never someone to just shop for the hell of it. I had a decent job. So I’m not going to deny, that the cards were already stacked in my favor. It just took one conscious decision to knock it out of the park and really pursue financial independence to really get the ball rolling.

To get to where I am, the first thing I did was take a look at my retirement savings. I didn’t have an IRA and I wasn’t maxing out my 401k. So I logged onto my retirement account website and reset my 401k contribution rate to a percentage that I knew would get me to the IRS contribution limit.

The second thing I did was look at my expenses. I canceled the stupid $60 a month clothing subscription service I was a part of. I reduced the amount I was going out to bars and clubs in NYC, and “but everyone else is doing it” was NOT going to be an excuse anymore. I began to cut down on meals out, and began shopping more at the grocery store.

Fall of 2014 rolled around which is open enrollment season at work. I selected the HSA medical plan option and set my contributions to max out for 2015. I then opened up a Roth IRA with Vanguard and basically threw all this “new” money from cutting expenses straight into my Roth IRA. Anything left over goes into an after-tax brokerage account with Vanguard.

That’s the quick and dirty of how I got here, now onto the good stuff. What are my numbers?

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Cash – Checking account, plus money market account, minus outstanding credit card balances.
Post-tax investments – Mix of individual stocks and cheap Vanguard index funds in brokerage accounts.
Tax advantaged accounts – Pre-tax and Roth 401k, Roth IRA, and HSA. The Roth 401k is from previous years, I know better than to contribute to something other than pre-tax now!
Cash-balance pension – I have a cash balance pension plan with my current employer that I’m fully vested in. I believe if the balance remains small I can roll into an IRA when I leave, but if it gets higher I unfortunately would have to leave it alone until standard retirement age.
Student loans – These puppies are at 3% and I’m not really in a hurry to pay them off.

Man it’s been a wild ride, and it hasn’t even been that long! I’m just excited for what’s next. When I calculated my financial independence day I thought I would get to $110k by the end of the year, but as long as the market cooperates I should be able to beat that.

I definitely want to thank this whole personal finance community that doesn’t shy away from taking time to share their stories and best practices to help others like myself achieve their goals!

Is your net worth progressing as you planned? Have you crossed any milestones lately?