2020, what a year… Part of me wants to skip the details, but I know in a few years we will all look back and scratch our heads. COVID-19 started in China, initially was concealed so it quickly spread globally, and the panic and concern caused rolling shut-downs and economic hurt the world over. Still looking for data, however at least 50% of the US workforce had to have claimed at least 1 week of unemployment during this time. Stimulus checks, employer loans, extra federal dollars when claiming unemployment… You have to where a “mask” everywhere, even a piece of cloth. And many are either working from home or not working because their businesses/employers are shuttered. This caused shortages for most things, even toilet paper early on. Most people are shopping online with malls and physical stores far emptier than years past. Plus, a very contested Presidential election with very different ideals from each side.
Debt Free!
We didn’t have much left; just a zero interest Home Depot purchase from the home remodel. That is paid off and we are deft free aside from our home mortgage (~70% LTV) and the credit cards we track our purchases with, get cash-back, but pay off each month.
One of our two vehicles is having issues, so we are deciding between purchasing another budget vehicle or down-sizing to a single minivan, mainly since we are working from home now. Given very low interest rates, we may likely take out an auto loan, but pay off in 2 years, just to conserve cash now, or but that is still up in the air.
But it is a great feeling to be debt free and keeps our minimum monthly expenses lower.
Looking at this S&P 500 graph, you can see the large dip in March and April 2020. You can even spot it on the long-term chart. We kept invested, and adding to our investments during the dip, essentially buying stocks on sale. Between inflation, the US Federal Government supporting the economy with more debt, and the US Workforce and Businesses all needing to make money to stay afloat, it will continue to climb.
Net Worth
Even with all this, our Net Worth steadily grew this year. In fact, we surpassed even our streeetch goal of $320k; which was a 25% or $64k increase. We committed to maxing out both our employer retirement accounts + the HSA, and hoped to save additional money into our IRA’s. Weeks of unemployment made it difficult to calculate percentages needed to max, but we got close. We did max out the HSA. And we even moved some “left-over” money from a cash-out refinance, from all the home remolding we had done, into our Roth IRA’s near the market bottom in April.
Our Net Worth would be even higher, but with all the uncertainty, we did spend $1-2k stocking up on common items plus a few “capital expenditures” that gave us a safety net.
2020 Net Worth graph from Personal Capital. The dip/rebound in December is from our CARES Act withdrawal. We had a lot of money in our 401k and wanted the contributions more available in a Roth IRA if 2021 is no better than 2020. We also converted some IRA $’s into a Roth IRA.
But a $83k increase between contributions and investment returns is awesome! So excited to see our hard work paying off! Maybe we can duplicate next year, but we will see how it works without a stock market plunge [hopefully].
After a very conservative increase in our home’s value from remodel projects in the kitchen and bathrooms, our final Net Worth figure for 2020 is… [drumroll please]
The most important take-away from this whole year, and it’s the same story as in 2009-2010, is to maintain your income, save as much as you can, and stay invested. When everyone is panic selling, you are slowly but steadily buying more VTSAX or a quality total stock market index fund. To be honest, it’s what you should do every month and every year, the stock returns usually are much higher though because you are buying stocks on a sale.