The Big Scratch – October 2017 Net Worth Report

Since the beginning of the year, our investments have earned over $50,000 (earned not contributed)! That is a whole separate salary!

The earnings are due to a strong market but, I insist on taking the time to revel in it.

Pop open the champagne and celebrate for a second! Yell from the rooftops! Part-tay! Not all years are like this.

We also surpassed our year-end net worth projections of $784,000. We now sit at a healthy $788,200 with three months of contributions to go! If the market holds, we could reach $800,000 by year’s end.

 

October 2017 Net Worth

We saw substantial growth to our net worth in September. In addition to our “normal” automated savings, we also received dividends. We get paid dividends from index funds every quarter. Dividends are automatically re-invested.

Let’s check out the numbers!

The table shows the balance sheet for the beginning of the month September 2017 and October 2017.

Year-to-date results

Net worth in January 2017 was $663,042.

January 2017 to October 2017 difference = $125,158! This total includes:

Increase/decrease in home equity = $5,897

Investment contributions = $68,491

Earnings/losses = $50,770

 

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 find some ways to generate additional income this year.

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

 

In September, we contributed to:

*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 September, we realized a net income savings rate of 81%! Cumulatively for the year, we have a SR of nearly 69%.

Despite taking three vacations this year, we continue to keep our expenditures low. Soon, our savings rate will achieve 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 $521,051. These funds are held in equities and a minor amount in cash. These monies will provide 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 full, and 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.

 

Several FI bloggers have surpassed their year-end projections! Have you?

 

This entry was posted in The Big Scratch and tagged , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *