Quite a lot has changed in the last year and a half, both personally and financially. Besides moving up at work and a growing family, we have also continued to save a large chunk of money each month. In addition, we bought a fixer upper and continue to sort-of invest/dump money into it. So where are we at?
Our Net Worth has skyrocketed! Well, sort of. Part of this change from $50k to bouncing around $130k is that I have added in more accounts to Personal Capital; but we have also saved much more in the roughly eighteen months since the last financial update. Let’s cover this one by one…
The House
We bought a house for $168k with 5% down so that we could do all the needed renovations (such as gallons of KILZ oil-based primer to cover all the smoke stains). We essentially have a new house as the floors, kitchen, and bathrooms (save the tubs) are all practically new. But we knew this all going in. The home is in a high-value area; close to many well-paying jobs but far enough out that you aren’t in endless congestion. The SEV x2 on our house is $240k (and in a few years after all the work is done and the market likely goes up farther it will probably be worth that), but a rather conservative estimate would be $200-205k. The large bump in April 2018 in the Personal Capital chart above is due to me raising the value of the home to $200k from $190k, which was the appraisal before all the work was done when we bought it in July 2017.
Included in the kitchen renovations are nicer cabinets with soft-closing drawers and hinges, quartz countertop, and a custom layout. The floor has a nicer pergo flooring through-out and we are working on finishing a part of the basement in addition to finishing the first floor. And, we are fixing up the decent two-car garage and 15x30ft workshop; both of which have power and the workshop has natural gas with heaters hung from the ceiling. And did I mention we have over an acre with only a two minute walk from a high-end downtown. It’s a very nice place to live, and while taxes are quite high, it is the perfect place for us now. And we only have $197k into the house so far. Our best estimate is $210-215k depending on how much we fix up before selling in 5-10 years.
As an FYI, I use a manual value for my home value as opposed to Personal Capital’s Zillow “zestimate” because it is [in my opinion] wildly high and rather volatile making the growth charts hard to follow. We currently have $44k in home equity given a conservative estimate of the home’s value.
Retirement Accounts
Besides two work retirement accounts, the wife and I each have an IRA with Vanguard (a company we highly recommend, by the way). All said and done, we have roughly $50k in investment accounts, although either the market took a beating (I mainly use index funds) or Personal Capital glitched in syncing an account. This is in addition to cash (~21.6k per PC) and other liquid assets held in non-linked accounts.
Speaking of retirement… There are two scenarios I am tempted by. First is a semi-retirement starting at 50 years old and then working part-time for another 10 years as a well-paid, but no-benefits-package consultant. This simulation is at a 63% chance, and a decent/median chance of working out just fine:
The other option is to retire at 60 years old after having worked full-time for 40+ years. Both options delay taking Social Security until age 70 (the current age to receive the highest monthly payments) and a conservative estimate of only $25k/yr combined for the two of us. This second option results in a 77% success rate and a median ending portfolio value of a million dollars more than the first:
The nice thing about these two plans, and the real one I finally decide on, is that I don’t have to decide now. I just keep putting in the work now; earn more money and save more money and invest more money. And, options will open up.
Miscellaneous
A short section, but I did want to clarify that the Net Worth above doesn’t include sundry consumable items up to and including vehicles. In fact, we have one auto loan and I haven’t even offset it with the value of the vehicle that is worth maybe a thousand dollars more than the loan (need to set a reminder to add that in to make it a fairer value). We are also working on paying off a <$5k loan from a 401k to help with the home remodel, along with a no interest credit card from Home Depot. And that about sums up where we are at. Oh, thanks to paying cash and some help from work tuition reimbursement, I do not have any college debt having just completed by Bachelors in Business.
I wrote in 2016 that I was very frustrated with where we were at financially. We have definitely made up lost ground, but we are not there yet. But all of this only happened because we have been saving, saving, saving and increasing our income by working hard and smart…