We made it to 2021! I bet you already heard, read, or thought that, but it is true. Despite the pretty horrible year, our net worth turned out pretty good and that’s even being out of the market for nearly the entire year. Although we had some large expenses this year, some good things happened to us, too. I compiled a brief list to share.
- I now work from home 100% of the time. This saves on gas, mileage, and car wear and tear.
- We no longer pay for child after school care as we can now pick our daughter up from school each day.
- We paid off a total of $19,423.57 in debt. However, we added a $14,500 0% loan for a new AC system.
- Dr. SoS had some rough months in her private practice during the pandemic, but ended the year only 3.71% below 2019 for gross income.
- Our net worth increased 12.57% in the past year from paying off debt and contributing to investments.
- When including the reappraisal of our house our net worth increased 28.05%.
- Simple daily workouts increased my good health and helped me lose weight
- I managed to study a ton of Japanese as you can see from my recent Duolingo post
Let us now look at how our net worth changed from November to December.
Monthly Net Worth Update
Assets
We increased our assets by 0.52% or $5,918.08. Our cash savings and vehicles took a hit. Our cash back and cryptocurrency were up. I also made some shrewd options trading and increased our investment balances.
Cash Savings
We spent some of our cash savings to pay property taxes. When we refinanced the house at 2.85% earlier this year, I elected to forego the standard escrow account. This is not available for all borrowers, but if you pay your mortgage on time for a year or more and have some significant equity in your property, you may be able to control the payments for home insurance and taxes.
As you may know, we use YNAB to track our budget. I budget categories for insurance and property taxes, which enabled us to save the crazy amounts needed by the end of the year. We also paid property tax on our vehicles. These large expenses lowered our overall cash savings.
Cash Back/Gift Cards
In addition to $225.16 in cash back credit card rewards during the month, we received $200.00 in gift cards for Xmas gifts and purchased another $100.00 local restaurant gift card at a 20% discount. This raised this section up 19.83% to $3,173.81.
Cryptocurrency
Coinbase shows our balance is up another $2,374.65 (23.84%) for the month. That’s after being up $3,588.71 (56.33%) in November. We are now nearly back to our initial cash deposit from January 2018. Earning 0% for 2 years is not my idea of a good investment.
Investments
Last month, I decided to name this section Investments instead of Retirement. I made this decision because it increasingly has items, which are investments, but no necessarily for retirement. I do not currently include cryptocurrency as an investment. It is difficult to invest in something that has no innate way to generate income. This category includes the following accounts.
- 403b account, similar to a 401k except for a non-profit company
- 401a account, for my employer match
- HSA with my employer
- IRA, which I rolled from the 401k from my previous employer
- Roth IRA, which I rolled from my Roth 401k from my previous employer
- IRA for Dr. SoS, which she rolled from the 401k from her previous employer
- Roth IRA for Dr. SoS, which she rolled from the Roth 401k from her previous employer
- Our cash brokerage account
- My private stock investment in Digitally Imported Radio
- My private stock investment in the Tuttle Twins cartoon TV show
529
This account balance is a mere $43.57, but we will begin using it again next month to help pay for K-12 education and school supplies for our youngest daughter. We will use this account to use pretax dollars and help save on our state taxes.
House
We kept our home value at $405,000, but we added a significant purchase to help with the value. During the holiday season, Costco sold a Samsung appliance set for 10% off, free delivery, free haul-off of previous appliances, and an additional 2% cash back. I bought all new kitchen appliances for Dr. SoS. The appliances look great in the freshly painted kitchen.
Cars and Boat
Our cars took a serious hit from Kelly Blue Book in the previous month dropping $1,426 in value. My guess is that next month they may increase some, but perhaps not. Only time will tell.
Liabilities
We decreased our liabilities by 0.26% or a total of $975.79. This was quite a bit less than the month previous. Provided we keep our credit card balances at $0.00 at the end of each month, we typically pay about $1,130 on our debts each month.
Credit Cards
We finished the month with a charge from the grocery store on our Amex Blue Cash card and a couple charges on our Citibank Double Cash Card. However, we still pay them off weekly.
AC Loan
We paid $300 and have 44 more monthly payments to pay off this 0% loan.
Car Loan
We no longer have a car loan. Next month, I will remove this section, but know that I already have $1,200 saved toward our Tesla Model S. My plan is to take our previous $600 monthly car payment and save toward our next car. It will be interesting to see if I can keep that up for the next year.
Mortgage
We have 29 years 9 months (357 payments) to pay off our mortgage. Something interesting to ponder. The government pumped over a trillion dollars into the economy. This will undoubtedly cause inflation. I hate having a mortgage, but we will pay for the same house with dollars that will be worth less in the future. Since we have a fixed rate of 2.875%, our payment stays fixed, but we benefit from increased inflation since we will pay the loan back at a much lower value than when we borrowed.
Student Loans
We have 22 years 2 months (266 payments) to pay off the current $197,914.24 balance. Again, I hate having this loan, but we benefit from increased inflation in this case, as well. Meanwhile, we are pumping money like crazy into our investments.
Savings Rate
We continue to calculate our savings rate each month in various ways. This month resulted in even lower percentages because of an influx of cash from Dr. SoS’s business for end-of-year accounting purposes. Here are the resulting calculations for the month.
- 6.67% – Percent of Debt Payments / Income earned
- 11.36% – Percent of Personal Retirement Savings / Income earned
- 1.73% – Percent of Employer Retirement Savings / Income earned
- 13.09% – Percent of all Retirement Savings / Income Earned
- 19.76% – Percent of Savings + Debt Payments / Income Earned
The debt payments are for our home mortgage, my car, and Dr. SoS’s student loan. The savings is only what I and my company contribute to my company 403b and HSA, excluding any cash savings.
Summary
As of the first day of January 2021, we are up 0.88% increasing our net worth to $786,147.42 from our December 2020 net worth of $779,253.55, and up 28.05% from our January 2020 net worth of $613,952.04.
We compile this information each month to keep us accountable and to hopefully inspire others to spend less than they make, save more, and make wise investment choices. Please leave any comments or questions below.
Thank you for reading!
Mr. SoS