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.

June 2020

Last month was an interesting month for us.

After toying with the idea of selling our current home and moving to new place, we finally decided on staying put. Frankly, “toying” doesn’t do justice to how involved we were 🙂 We put in offers for 3 different places – 2 of which were outbid by other buyers; the third one we cancelled after the inspection.

Instead, we refinanced into a 15-year mortgage. Locked and closed at 2.625%.

Our monthly payments remain almost exactly same but we will be paying down principal way faster. For May, $620 went towards principal reduction from the monthly payment. For the new mortgage, from the first payment, which isn’t due till August, $800 will be applied to the principal. With this new mortgage, we decoupled the taxes from the mortgage payments – eliminated escrow – and will pay our property taxes directly to the county going forward.

You will notice that our mortgage liability hasn’t gone down from last month. Because we haven’t made any payments.

Also, astute readers might notice that our cash balance has decreased by almost ten grand. Well, this was an anticipated “expenses”.

When M left the corporate job last January, we knew we had to return a part of the sign-on bonus received when M started on that job. There was option to pay back the amount in 6 monthly installments or lump sum. We decided to pay out lump sum at the end of 6 months, and collect interest on the saved up amount held in a high yield saving account. That’s $12,698.13 gone.

We received $900 from our closing. This is was from the estimate they had based on the new mortgage loan amount and closing costs, and the costs came in lower. We are also slated to received a sizeable amount from the closed mortgage loan, but that hasn’t yet hit our accounts.

Other than that, the usual. Summer is in full swing. We made our first two road trips of this summer in June. There’s another one planned for August though we might take one in July.

May 2020

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.

April 2020

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.

March 2020

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.

Really. How?

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.

This too shall pass. And we’ll emerge stronger.

February 2020

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.

January 2020

Writing and publishing this post in the third week of February makes me cringe a little! What can I say, things got quite busy with the stay-at-home-parent thingy. 😀

Not a very flashy month but still humming along nicely. Modest increase of assets and similar decrease of liabilities.

Major expenses of the month was $817 for semi-yearly payment of car insurance premium.

Should have more updates when we post the February numbers.

December 2019

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.

November 2019

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

October 2019

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.