August 2020

Another month, another $50k+ rise in net worth …you know, the usual 😀

Actually last month was pretty crazy …in terms of what we did with our vehicles.

At the beginning of August we had 2 vehicles for our personal use. One was paid off. One had a 0.9% loan. The balance on that loan stood at $5,797. We decided to pay that off and did exactly that on August 17th. The decision was kind of derived from the fact that Ally Bank lowered their rate to 0.8% and it made little sense to pay more in interest than what we could get if we just kept the cash in a savings account.

I will repeat this again – if you can get a guaranteed rate of return on your cash greater than the rate of interest on your loan, it is best to keep the loan as long as possible to take advantage of that interest arbitrage.

On August 24th, we sold our other car for $8,600 – the one which had been paid off for a while.

On August 29th, we went and bought another car! 😲 I know, horror of horrors!

I’ll leave the details of the car buying transaction for another post, or club with September’s post, as the financial details only appeared on Sep 2.

This was the 4th time we’ve sold a vehicle that we’ve owned to a private party. Every time we’ve got significantly more than what dealers have offered us. This time, to further validate this idea, we took it in to 2 dealerships and one offered $4.75k and another $5k. I listed the vehicle in Craigslist for $9.4k knowing very well I would take $8.5k. KBB for “excellent” condition for the year, make, model, trim, and options for our vehicle was $9k. The first buyer that came to see the car negotiated it to $8.7k. But they were such a nice young couple – planning for the extension of their family – that I knocked $100 off it. We sold for $8.6k.

Increase in our cash holding is the difference of paying off our car and proceeds from selling the other car.

On thing I might have missed to mention about our retirement accounts is that M is not contributing to the 401(k) any more (hasn’t since January). All movement is just market valuation fluctuations of underlying investments. M still contributes $50 to Roth IRA every month.

W continues to contribute to 401(k) but at a lower rate than last year. W is on pace to hit the Roth IRA contributions limits for this year ($6k).

We also sock aside $100 every month for D’s college in the 529 account.

That’s it. Summer is drawing to close and schools are reopening to a new reality – distance learning and hybrid models. The markets seems to be in the mood for some wild swings. The pandemic is still raging. The elections are less than 2 months away. New examples of systematic racial injustices keep on rearing their ugly heads. Football starts next week.

We will take each day – week/month – at a time.

Read about our Assets and Liabilities and why we don’t consider personal vehicles as assets.