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Net Worth Update

January 1st, 2020 at 03:12 pm


Wow, what a year! My money worked harder than I did this year, for sure.

{We've many times had six figure real estate increases in a single year, but have never had these kind of stock market gains}.

It was a good year to have this win. I had taken a pay cut and we had some significant expenses. Which makes it all the more incredible how the year turned out.

I was just excited and wanted to make sure to crunch numbers first thing to see where we landed.

We paid down the mortgage by $9,000 and the rest was stock market contributions and gains. (If you are wondering why I'd rather invest than pay down my mortgage more rapidly, this is probably a good illustration. Maybe especially considering that we have also had many $100k+ gains with a mortgaged home).

Today we could pay off our mortgage and still have $340,000 cash/investments. For the first time, we could do this with only cashing out about 1/2 our ROTH IRA and all of our taxable investments. It's the first time we could leave everything else intact (emergency fund, kids' college, rest of retirement, etc.). I am not tempted yet, but honestly, if I had an additional $50k in investments, we could pay off our mortgage AND leave six figures in our ROTH IRA. At that point, I would probably be tempted. Especially with just cashing out at a peak. Taking the money and running. I've always said there is a tipping point. I just have never been so close to the tipping point. If my stocks go up $100k next year, I wouldn't rule it out. (We seriously considered doing this with our house in 2005, but we just missed the boat. We had literally decided to move and cash out our house, doing a second "moving to a significantly lower cost region" move, but the market started to tank before we executed the move. We clearly weren't the only ones who had this idea). I am afraid we are probably in "will just miss the boat territory" this time too. Will see...

P.S. I'd honestly rather the market go down and be able to buy stocks cheaper. While it's fun to see big numbers on the balance sheet, I don't think of this huge stock market run up during my prime working years as being terribly useful to my long-term wealth.

We need our net worth to continue to increase (on average) $50k per year to reach our Financial Independence goal at age 50.

Estimate Net Worth Change for 2020:
Mortgage: Paydown $7,000
Investments: Contribute $4,000
Retirement: Contribute $21,000
Investment Returns: $18,000 (would need 4% gain)

Our net worth changes never look anything like our estimate (it's rare any asset class actually has an average year). But, I go through this exercise just to make sure my goal is realistic and doable.

P.S. We will likely hit the $1 mil mark with our assets this year. Just $30k to go... That will be a very exciting milestone.

P.S.S. Good Riddance to 2019! I wish I was more optimistic about 2020, but it's shaping up to be very difficult. I can only hope for some space whatsoever to breathe and process anything that is happening.

3 Responses to “Net Worth Update”

  1. Butterscotch Says:

    I was reading this morning about more states making the minimum wage $15 in 2020. Will your husband be affected by this? Or has he already advanced from the position you mention in your sidebar?

  2. Petunia 100 Says:

    Congrats on reaching such an exciting milestone! I hope that 2020 has nothing but good things in store for you and your family.

    Butterscotch - California passed a minimum wage increase several years ago: minimum wage is increasing to $15 in annual increments. For 2020, it goes to $13 per hr for employers with 26 or more employees, $12 per hr for employers with 25 or fewer employees. Answering your question just in case Monkey Mama does not come back for awhile, and you are on pins and needles meanwhile (and because I just happened to see it).

  3. MonkeyMama Says:

    We've always had one of the highest minimum wages in the country, which I have blogged about often how that makes extra income just bigger gravy. Everyone complains about the downsides of higher cost regions, but I am always quick to point out that we also have several financial advantages. Of course, we live in a "high cost region" but is also literally 70% less expensive than where we started. I like the best of both worlds. I think that $15/hour minimum wage is probably somewhat excessive for our city. Mostly meaning that we get the benefit of the "big city" minimum wages though we don't live in SF or LA.

    Butterscotch, your question is timely because I am updating all of our spreadsheets today for annual #s. So it's right in front of me anyway, my husband has had a 40% raise in income since he took job. Some is working more hours, but most of it is minimum wage increases.

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