The stock markets giveth; and the stock market taketh away; and they giveth …
You get the idea 😀
We recorded an increase of $46k in net worth in May, bringing us close to where we were in December of 2019.
Nothing much has changed from April to May, in terms of how the stay-at-home situation that we are in. School has been distance learning. D’s handwriting is getting much better due to daily writing of letters – school work.
As the school year draws to a close, we’re thinking of how to keep D engaged amid the pandemic. Our state is lifting some restrictions on June 1. Some camps and summer day care centers will open in limited capacities. Since M can be at home, we are quite a bit less concerned if this would have happened a year ago.
Can’t have a post for May and not mention what happenings of the last week of the month that has ripped major cities up in the US. George Floyd. Black Lives Matter.
The markets clawed back some of the losses last month. We gained ~$60k from the lows of March. I still believe that we have yet to test the very low of this bear market before we got onto another bull run.
Stay-at-home orders are in effect in our state. We’re mostly hunkered down at home. And living a good life.
First things first. Let’s acknowledge the extraordinary times we are living through right now. We are in the 4th week of school closure. Stay-at-home orders have been in place in our state for 3 weeks. Over 10 million Americans have filed for unemployment in the last 2 weeks. The markets have dipped about 30% from their all-time high, hit just under a month ago. The end, or a glimmer of an end, of this ordeal is not in sight.
In spite of all the calamitous numbers from above, life has been pretty good for us.
D’s distance learning started 2 weeks ago. M’s mornings and afternoons are spent assisting D with school work. W gets to sit in the comfy home office and work in peace. I can’t put in words how difficult it would have been for us if both W & M had to work from home AND had to make sure D is getting all the school work done. We get to take long walks in the afternoon, keeping lot of distance between other walkers. We watch a movie or a show almost everyday. We workout in the house with minimal equipment. We work on puzzles and play board games. We play in the yard. Cooking at home has been on the rise with fresh, delicious, and healthy meals on the table. We still order in food about once or twice a week to a) help out local restaurants, b) to have something different.
Right, March numbers. Carnage really. Our net worth is down about $75k for the month and $122k down from the all-time high reached in Jan ’20. I was actually surprised that we’re just $122k down and not the close to $200k I was anticipating. Strongly feel we are still quite a bit from the real low. Q1 earnings will start pouring in and those won’t bring any sort of reassurance to this already hammered market. The overriding health situation will only get worse before it gets better.
But …all is good 🙂
In a few years time, we’ll look back at this as a necessary – the market correction, not the virus! Things will be back up again.
In the meantime, let’s take this once in a lifetime opportunity to appreciate the good things in life: family, togetherness, the ability to ride out this tempest from the confines of our homes, the food that is still readily available, the first world country we live in with robust healthcare infrastructure.
And let’s be thankful to all the superheroes out there, doing their jobs under tremendous pressure: health care workers, first responders, grocery store personnel, delivery people, sanitation workers, and all who are working to keep the lights on in all of our homes.
Aha, the correction is here! This is going to be a fun few weeks. Or months. Who knows?!
On Friday Feb 21 the DJIA closed at 28,994. The next Friday it closed at 25,402 – the largest ever drop in any single week in its history. Naturally, our numbers are down as well.
We recorded our largest over drop in net worth, month over month, at over $47k. But …all is good. We’ve pumped in about $5k from our “dry powder” to take advantage of the dip. I’m almost hoping for a 20% correction, which would take us into official bear market. Bring it on!
Major expense for February was $1,183 we paid in home insurance premium. We decoupled the insurance payment from our escrow a couple of years ago and now use credit card to pay the premium, which is already saved for in a savings account. Another expense was regular and preemptive maintenance for one of our cars at $450.
We had a phenomenal 2019. Our net worth increased by over $231k. Assets rose not only because we maxed out contributing to our respective 401(k) and in taxable brokerage but primarily due to the extraordinary run of the stock market which raised the valuation of all our investment accounts. Debt has gone down by aggressively paying down our mortgage.
Since we started tracking and documenting our financial journey from beginning of 2017, we’re amazed how far we’ve come. In January 2017, our net worth stood at $458k. In 3 full years, it has more than doubled to $943k.
Now to keep us honest on our goals from the last year-end post.
First, we’ll be maximizing our 401(k) at our respective employers. With an increase to $19k in 2019, that’s $38k tax-free shaved right at the top.
– Check. Done.
Then, we’ll be contributing to the max in in either Roth or T-IRA. With new limits of $6k this year, that’s another $12k for both of us.
– Almost check, we’ll be working on this till April 15 to get our respective t-IRAs fully contributed with $6k each.
Next, we plan to invest at least $9k in our taxable accounts for the full year. This will almost certainly bump up to $10k by the end of the year. As a comparison, for 2018 we invested $6,850 in taxable accounts.
– Not quite but pretty darn close at $8,400.
With automated pulls we’ll be putting $2.4k in our child’s 529 account for the year. I want to top it off to $3k.
– Managed a bit more than just automated pulls, but at $2,550 a bit short where I wanted to be at. But we have about $500 that is laying in a saving account and I’ll pump that in when a correction happens.
Our mortgage balance stands at $206k right now. Aim is to bring this down to $160k, mixed between regular payments and additional payments applied towards principal. This will be the stretch goal!
– We were on our way to reach this stretch goal till about September but scaled back (reasons in the next section). Current balance of $175.8k is a reduction of $26.5 is not shabby
Looking forward to 2020.
So, a big change happened in the first week of 2020. M left the full time job and became a stay-at-home-parent, with part time work. We outlined the plan in this post. This is one of the reason that we slowed down aggressively paying down the mortgage. We still pay $106 extra to principal on the monthly mortgage payment.
Since this will be the first year riding out this big change, I’m not going to set goals for 2020. We’ll report the contributions to 401(k), Roth IRAs, taxable brokerage, and 529 account at the end of the year.
Here’s hoping to an amazing 2020 everyone! Maybe your life, and journey towards FIRE, be a glorious one.
Another solid month to wrap up the year. December 2018 was sort of a bloodbath for the markets, if you all recall. I was expecting at least a slow bleed for this time in 2019. But no, the markets just keep going forward!
Major expenses for last month was …surprisingly nothing, if you exclude the gifts purchased for the holiday season. As those are seasonal, and recurring every year, we already have them baked into our saving/spending buckets.
Net worth reaches another high of $915k. Buzz of an impending recession is everywhere but we still plow into our tax advantaged and taxable accounts. We are also hoarding some cash. The recession will come but we don’t, and neither does anyone else, know when. And it will pass too.
There were a major expense of $2,706 this month, where we booked a vacation with a credit card and then promptly paid it off.
Things to keep in mind when looking at these numbers:
These numbers are snapshots in time, most likely the last day of the month
Since I copy/paste the numbers from the online accounts, the decimals remain but they are insignificant (obviously, duh!). Neither are the ones and tens digits of each account balance. What is important is the trend.
If you’re reading this for the first time, welcome! If you’re thinking if now is the “right time” to invest in the market ….well, everyday is the right time to invest, if you’re in it for the long haul. Remember the adage, “time in the market is more important than timing the market“
Our net worth is close to $900K! After an initial hiccup at the beginning of October, the markets have continued moving up. As you’ll notice our cash holding is at an all-time high. Major part of it is due to known expenses coming up, part of it is dry powder when the markets takes a dive. Does this sound like market timing? Well, yes, it is! But the amounts are so small to what we have out in the market invested, it does not really matter in the large scheme of things. It’s more to do with mental jujitsu, that we have some cash around when the correction comes.
This is what we are on track to make through the end of the year.
W’s base salary is $101,296
W got a bonus of $2,865
M’s base salary is $153,000
M got a bonus of $11,400
Our total yearly income is (or would be if we continued our employment till the end of the year) $268,561
This puts us in the top 3% of US household income. Let’s pause for a moment and reflect on that. We are incredibly blessed to have a number of factors working in our favor, a lot of which are just plain birth circumstances. Sure, we work hard and made conscious choices to invest in college educations but that doesn’t even tell half the story.