I haven’t posted in a while, but I’m keeping the web server up for other purposes, so I left the blog up anyway.

Not much has changed, we’re still saving aggressively, but Dad has a new job that pays 30k less than his old one, and the benefits aren’t quite as great. But, the benefits to him and the family as a whole are definitely worth the difference in salary. The new place also pays 8% into his 403b – whether he contributes or not (he does). We lost the ability to contribute to an HSA, but that’s OK. Adjusting to paying just a co-pay for our health care has been an adjustment, we know what we’re going to be paying at the time of care.

We have over $1.1 million in our investment accounts, and it’s finally staying there through some ups and downs. We’re still contributing just as much to our investment accounts, just not all in the same types of accounts – there’s a lot more money going into our taxable investment account these days. We’re just living on less – giving up a few things that were nice to haves like the cleaning service, or meeting with the personal trainer twice a week and meeting with her once a week instead.

The maxim of “money makes money” is certainly true in our case. The graph of our investment balances is exponential, and continues to grow. We’re slowly starting to shift our asset allocation more towards bonds as we approach retirement (less than 10 years!), but we’re still pretty heavily invested in stocks to support a longer than “standard” retirement. We’re shooting for 25% bonds for now, but all of our new investments are going to 40% bonds/60% total market to slowly change over that allocation over time. We’re also starting to increase our cash buffer from 3 months of cash to 6 months of cash, and eventually to 1 year of cash.

Fidelity (and most of Vanguard) have posted their end of year distributions this weekend, and after adding all of ours up, over multiple accounts: We’ve “earned” $10,850.60 in investment income this year – with most of it ($6521) in December.  We’re primarily invested in total stock market funds, and those generally dump all their goodies at the end of the year.  We do have about 18% bonds in our tax-advantaged accounts and they earn us about $100/month throughout the year.  Most of this money is in tax-advantaged accounts and  “untouchable” for us, but our taxable account generated $138 in dividends/capital gains this year (almost 100% FSTMX).

If my goal was to live completely off dividend/capital gains income, we’d need about 3.4million in the bank based on this year’s income.  But, if that was my goal, I wouldn’t be as heavily invested in equity index funds, and instead would have more money in bonds, which throw off more reliable income.

Still, $10k in almost completely passive income isn’t much to sneeze at – that’s about 2 months worth of living expenses for us.

How did your investment income do this year?  Did it increase as you wanted it to?

We’ve got our final cash-to-close number for the house – and even after we put the down payment, pre-pay 9 months(!!) of escrow, buy all the new appliances we need, and pay the movers to actually move us in, we’ll still have about 6.5k left over to do with as we please.  We already have a list of things we want to buy for the house to “improve” it – like blinds, a humidifier, and a deck – in that order most likely.

What does it take to buy a house?

We’re putting 20% down, we have a 3.875% rate (no points), and we’re borrowing just over 293k.  Some of these costs are based on the APR and the purchase price, so that’s why I give background 🙂  I’ve rounded off the numbers using the standard round down if less than 50 cents, round up if more than 50 cents.

Underwriting/Processing fees: $1297

Appraisal, credit report fee, etc: $844

Title Charges (mostly lender’s title insurance): $3119

Taxes/fees to the local governments: $3967

HOA origination fee: $200

Total closing costs (that we’ll never see again): $9427

Then there’s the pre-paid amounts – this includes the first year of homeowner’s insurance ($420/yr through USAA!) 1 day of interest, 3 months of homeowner’s insurance, and 9 months of property taxes (there are three: “Property taxes”, “city property taxes”, and “school taxes”).  If I didn’t escrow, the rate would have been > 4%, and there’s no way I can make that up in interest on what sits there waiting to pay taxes.

$7215 (most of which is school taxes of $4464 <- about a year’s worth of property taxes in NoVA)

For a grand total of: $16,642 in closing costs and fees, about $9500 of which is just “gone” to never be seen again (aka the “cost” of financing/purchasing).

Now, there are likely better rates available, and better closing cost prices, but we’re getting a 35k credit from the builder for going through their lender, which pretty much makes up for any extra costs (and lowers our property taxes over time since they’re based on the purchase price of the house, and the purchase price is where that 35k came off).  That’s hard to compete against.

This time of year is when most people wax nostalgic about what they are thankful for – aren’t we thankful the other 364 days of the year?  Not that I’m any different, but Thanksgiving reminds us to be actively thankful, and tell those people we’re thankful for what they mean to us.

This year, I’m thankful for the opportunities I’ve been given to change our lives and make a new start.  I’m thankful for my support system (Dad and my mom) for helping see me through my Post-Partum Depression and the stresses of moving.  And I’m thankful to Daughter Person for making me a mother – one that I hope she will appreciate in the years to come and as she becomes a mother herself.

This year has been long and difficult, and we still have to live at my mom’s until at least March, but I’m thankful that I have a mom to annoy me and drive me bonkers.

I’m also thankful for the community of bloggers that I’ve gotten to know in the last few years.  Good luck to each and every one of you on your journeys to wherever you wish to go.

Now go out and tell your loved ones why you are thankful for them.

Happy Holidays, Merry Christmas and (slightly late) Happy Hanukkah!

We’ll be leaving to drive to Grammy’s soon, and we’re looking forward to watching Daughter Person open her presents, since this year she sort of understands what’s going on, and can fight off her older cousin from “helping”.

We’ll be back after the “vacation” with new posts, but we hope you and your families have a joyous and safe season!

I’ve just upgraded my hosting to a “real” hosting provider instead of wordpress.com, and am playing around with the new themes, new plugins, and all of the other options available.  I switched the DNS over this morning.  I used wordpress way before it was version 1.0 (I even wrote a plugin for an older version!), but the updates since them have been phenomenal, and I’m a bit overwhelmed.  I’m not exactly new to hosting, but watching me sort through all the options is probably entertaining to Dad.  If there are any plugins/widgets (other than Akismet and Jetpack) that you recommend, please let me know!

I will probably change the theme or at least customize it as I go along, so things may look ugly for a while until I settle on something I like.

PS. I took the picture in the header from Aiguille du Midi in the French Alps last October – beautiful place!

I’ve taken the game theory class through coursera previously, and really enjoyed it.  I signed up for the cryptography class, but life got in the way and I had to “drop out”.  The Intro to Finance class just started.  So far, it’s a repetition of the engineering economics class I had in grad school (time value of money), but it got me thinking – when I generally do “math in my head”, I don’t generally consider the time value of money – it’s a bit of math, and I generally don’t feel like getting out Excel to do the math – especially when the interest rates are changing monthly (makes the math really nasty).

Does it really matter?  Technically, yes, it does, but the amounts for the balances I have are pretty small that they kind of get lost in the shuffle.  If you’re working with very large balances – like figuring out how much you need to retire on or how much you need to save for college, then it makes sense to consider it, but I don’t think it’s that big of a deal in daily use (unless you’re running a business)

I feel like this is Slashdot….

I’ve read a lot of mommy blogs and frugal living blogs, but none really speak to me in our situation.  We make a lot of money, but we have a lot of debt and live frugally to get rid of it.  We don’t home school and I hate clipping coupons. We send our daughter to daycare; we pay someone to clean our house and mow our lawn.  At the moment, I don’t particularly like spending time with my daughter (I’ll get into that later), and I always have 300 projects “in progress”.

My goal here is to document several of those projects: getting out of debt, losing weight, and learning to appreciate my daughter.  I’m sure things will change as I go along and decide where I want this to go.