The Big Scratch – June 2017 Net Worth Report

We just returned from an annual trip to Oklahoma. Every summer, Mr. TJL and Little Miss go to Oklahoma to find metal for the art business. They scour scrap yards, metal yards, antique and thrift stores, appliance stores; pretty much anywhere they can find cool pieces, cheap.

This year, I joined them because I had nothing better to do, and because I had a 50th wedding anniversary to attend. I have long promised to never visit Oklahoma during the summer, due to the high temperatures, humidity and bugs. But, it was really fun. 

I dread the trip because we do a lot of sitting around and waiting, somebody usually gets sick, and I gain five pounds.

This year, I decided to approach the trip as if I was already retired and this was just a normal part of my day. I was able to forget completely about work and purely focus on the things I wanted to do and be around the people I truly enjoy. I also tried to be far less negative than usual.

I have been trying out this mindset every weekend lately. Instead of thinking about how little time I have before going back to work, I just wake up on Saturday and pretend I am already retired and it is just a normal day.

This morning was particularly lovely. I woke up naturally around 7:00 am. The sun was high already and the air was warm but not too hot. Since we got home late last night, I had to run to the store for eggs, bread and milk. I rode with the car windows rolled down, music blaring, into an empty grocery store parking lot on a Monday morning. It was perfect.

I returned home, poured a cup of coffee and enjoyed the morning weather on the back patio. My kid was still asleep.

This is why I save. So I can enjoy this every morning. So I can see my kid when she wakes up. So I can drive her to swim lessons and meet her friends. This is why.

We are making fast progress toward our goals. Let’s take a look at our progress!

 

June 2017 Net Worth

The table shows the balance sheet for the beginning of the month May 2017 and June 2017.

 

Year-to-date results

Net worth in January 2017 was $663,042.

January 2017 to June 2017 difference = $75,360! This total includes:

Increase/decrease in home equity = $3,254

Investment contributions = $43,383

Earnings/losses = $28,723

 

Investment Contributions

Our financial savings goal for 2017 is $83,042. It includes investing the maximum to the 401k, Traditional IRA, Health Savings account and the brokerage account.

This has become a stretch goal for us due to a lower than expected raise and bonus. Regardless, I am going to continue to aim for it and possibly find some ways to generate additional income this year.

*Nearly 100% invested in low-fee index funds (VTSAX – Vanguard)

 

In May, we contributed to:

401k* = $2,416

Trad IRA = Fully-funded!

H-S-A* = $454

Vanguard Brokerage = $3,000

Dividends (re-invest) = $0

 

Total = $5,870

*My employer contributes a match of 10% of my base salary to the 401k. My contributions to these accounts are automatically deducted from my paycheck. I never even noticed it’s gone.

Savings Rate

Our net income savings rate goal for 2017 is 70%. A high savings rate can be reached through decreased spending and/or by increasing income.

 

In May, we realized a net income savings rate of 67.5%! After a rough start in January, we are now at a cumulative SR of 66%.

If we continue to keep our expenditures low, our saving rate will begin to approach the 70% range.

Savings rate on net income is calculated by Total Saved + Mortgage Principal paid divided by Total Income minus taxes and charitable giving.

NISR = Total Saved + Mortgage Principal / Total Income – (Taxes + Charitable Giving)

 

Investment Income

Our net worth minus our home equity is $473,896. These funds are held in equities and a minor amount in cash. These monies will provide us passive income during our FIRE (Financial Independence/ Retire Early) years along with income from our rental property.

ER accounts include Roth and traditional IRA, brokerage and cash

 

We will consider FIRE when our investments and cash reserves equal $937,424, each bucket is fulland the rental property is paid off. This conservative goal allows us a safe withdrawal rate of 3.5% assuming we need $32,800 investment income per year. We will also have an annual profit of $7,200 from the rental property bringing our allowable annual retirement spending to $40,000.

We aim to live off of $35,ooo or less in retirement so this FI goal should allow flexibility.

 

Do you have any great trips planned for the summer?

 

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