July 2020

July 2020 has carved out a niche little space in our FIRE journey.

Our net worth, for the first time ever, crossed the million dollar mark.

A few things happened in July, some on a macro scale and some just pertinent to us.

The stock markets continued its remarkable upward trajectory. The dip in February/March seems to be but a minor glitch. I’m still waiting for the another dip. Not complaining though …but it’s staggering how seemingly decoupled the markets are from the overall economy.

This generator of wealth – the stock markets – to which a sizeable chunk of our are assets are directly linked to, catapulted us over the our January highs.

As mentioned in last month’s post, we refinanced our old 30-year mortgage at 3.875% to 15-year at 2.625. We made the first payment towards the new loan in July. Couple of things to note on the mortgage:

• The new mortgage amount went UP to $176,250
  • Why? Some of the closing costs are baked into the new loan
  • After closing, we got checks from
    • the closing/title company – $972.52 (Excess cash to closing. Though we did not have to bring actual cash to closing, the closing costs that are baked into the new mortgage were estimated higher)
    • the old mortgage – $2,037.93 (escrow and accumulated interest)
  • If we add back the amounts of the checks to the old balance of $172,262.85 (June balance) and then subtract from the new loan, we arrive at $976.70 – which is effectively what we paid as closing costs for the refinance.
• We also made the payment for August in July, so currently the outstanding amount of the mortgage is $175,335.55
• We also increased the valuation of our home – from $300k to $325k. In June when we almost put our home on the market, the list price that we had talked to our agent was around the $350k mark. Based on the market assessment our realtor did, we would have likely ended up with an offer more than the list price. BUT, we didn’t actually list it and consequently didn’t receive any offer or had an official appraisal done. So, being very conservative, we decided that the base value of the home should be $325k for the purpose of calculating our net worth.

Second big thing to happen in July: We filed our taxes for 2019 and paid what we owed. This time it was a whopping $5,682!! Old readers will know that we have always owed money to the IRS when we have filed taxes. But not as much $5k+. No sweat though. We had the funds in an saving account marked specifically for “Tax” and paid it.

That’s it for the numbers for the month.

We took one road trip in July. We went on a boat. Socially distanced, of course. Summer is going good.