1.1 Million Invested

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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.

Millionaires!

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We’ve finally moved into millionaire territory after flirting with it for so many months.  It’s still less than our desired amount for retiring, but we’ve passed another major financial milestone.  Our retirement accounts are flirting with $875k right now, and I’ll be happier when those reach $1million.  Our net worth includes our vehicles and our house (minus mortgage of course).

We’ve been both busy and boring this year. Saving a lot of money, spending some of it on vacations and fun, but otherwise boring in the money department, enjoying our summer with an almost 2nd grader, and resting up for the upcoming school year.  Daughter Person is at her first sleep away camp for the week (Girl Scout camp), and we’re picking her up today, so we’ll see how she liked it.  We already got a call that a cabin mate had lice, and could they use a lice preventative shampoo on her – seriously, like you had to ask?? What parent is going to say no?

We’ve made three trips to the Niagara, Ontario region – took our exchange student to visit the falls, and then had a nice week with just the adults touring the wineries up there, and a final one visiting friends who have just completed the adoption of their foster children having a welcome home party.  Our exchange student’s family came to visit, and we visited DC with them, and they enjoyed some of what Pittsburgh has to offer.  We’ll be visiting them in Slovakia next summer – it will be Daughter Person’s first (non-Canada) international trip.

Other than those few trips, summer has been uneventful, although we’re starting to plan to finish our basement next summer (another DIY job!), and that’s becoming a bit eventful as we try to figure out how we’re going to use that space.

Updating our Asset Allocation

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As we move nearer to early retirement, we’re making steps to change our asset allocation.  Previously, we were pretty aggressive in stocks, and we’re slowly starting to reduce that exposure.  We were 15% bonds, 5% real estate, 20% international (15% developed), 10% small/micro cap and the rest (50%) in total stock market.  Over the last 5 years, I consolidated the international to only developed (20%), and 55% in total market, 5% in small/micro cap.  This year, I’m moving to 17% bonds, 53% total market (the rest the same).  It’s been nice to capture some of our gains over the last year – and our allocation was way out of whack at the end of the year thanks to the markets. Next year, I’ll move to 20/50, and slowly move to a 40/40 (bonds, total market, but reduce international to 10) over the next 5 years.  I will probably rebalance once per quarter this year as I tweak our 40k/403b contribution percentages to get them on autopilot for the next year or so.

I use a spreadsheet I created to monitor our asset allocation across multiple accounts – especially since I don’t want to be selling/buying in our taxable account.  It has worked well, and lets me know when we’re more than 1% out of our desired allocation.

2017 Early Retirement Progress

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This year, we contributed $70997.76 (101.43% of planned) to our retirement accounts, and have gained $108,709.34 (298.25% of planned) in investment value.   11k of that is still waiting to be invested – we’re on the cusp of whether we can contribute to a Roth and if so, how much. As of right now (using preliminary numbers from final paychecks), we won’t be able to contribute the full 11k.  Anything we can’t contribute to a Roth will go into our taxable account.  I just need to wait until we do our taxes.

2017 was a good year financially.  We made several large purchases, deck materials, a piano, tonsils and adenoids out, and still managed to contribute more than 50% of our take home pay towards retirement – I can’t say it hasn’t been tight at times though.  I got a slightly higher than standard raise this year, and Dad got a raise (apparently, at his new company, that’s less frequent than “regularly”).  We’re moving more and more into the Roth phase out income bracket.  There are worse things than raises though.

I’m not looking forward to the new tax laws restricting state, local, and property taxes, as we pay a *lot* of those, well more than the 10k limit (heck, our property taxes alone are higher than 10k).  There’s not much we can do about that other than move, and that’s not a move we’re ready to make yet. Depending on the implementation, we may also have a much higher MAGI under the new tax code and will push us even further into the Roth phase out bracket – or even into the not able to contribute range.  We’re still going to save the 11k, but probably put more of it into our taxable account next year.

 

 

New Milestone: 750k invested

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Since the number has stayed above 750k for the last few weeks, it’s time to say that we have more than 750k invested.  15k of that is a 529plan for college, so it’s not all retirement focused, but it’s still a significant chunk of money.  It doesn’t seem that long ago when we had half a million in our accounts (just over a year and a half).  It’s true, once you have money, it grows quickly.  We’re approaching the 1 million networth mark as well – Personal Capital claims it’s 867k right now, but I know that’s off since it hasn’t synced certain accounts in over a month.  When it comes to deciding if we have “enough” to retire, it will be purely based on our non-529 investment accounts and not our net worth.

The gap in the graph is when Dad’s 401k moved from Mass Mutual (cheapest S&P500 index was .83%) to Fidelity (.05%).  I’m much happier about the move, since we have real choices for investments in that account now – and significantly lower fees.  We didn’t have access to log into either account for just over a month, so neither did Personal Capital.

Are you basing your retirement off of invested assets or net worth?

Deck is Done

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We had our final inspection yesterday and passed with flying colors – even got a few compliments on how well we did things. We’re still doing some last minute cosmetic cleanup before it’s completely done, but that includes things like painting over where the temporary railing was across the sliding glass door, attaching the post-caps to the post covers, and installing the LED lights on the Sunsetter.

The total cost is somewhere in the 16k range – I need to settle up with my friend who’d stop by Lowe’s on his way over and buy a small thing or two that we needed. Not bad for a very well made deck, not a single nail in it, and includes the Sunsetter (which was $3300 at Costco). We chose high quality screws and fasteners and wood, so we raised the cost on it a bit there (the footings between the wood posts and the concrete are $55 each!)

We’re working on arranging our furniture on it, as it’s smaller than our deck was in Virginia, but we still have the same furniture. I will be buying a new dining table though, as the one we have will not survive the winter winds here.  I’m waiting for the one we want to go on sale “out of season”.

Panoramic of deck

 

 

 

 

 

 

 

The fancy lights are from Dekor, their Holly rail light in white, and their pyramid post caps.

 

 

 

 

The Sunsetter is the largest one available, and it’s quite nice – has all the bells and whistles.  The pattern isn’t my favorite, but it’s growing on me.  Because we have blues and grays on the house, Sunsetter only had three colors that would “go”, and the other two were midnight blue and charcoal.  Since we’re going with this to provide shade, to keep cool, the darker colors weren’t acceptable to us, so we ended up with “Sky blue” (aka French Bistro as our friends refer to it).  Where I’m standing to take this picture is the direction afternoon sun comes into the house.  We have the Sunsetter weather breakers to provide more vertical shading.

I’m looking forward to having my weekends back – just in time for our exchange student to arrive!

Q2 2017 Early Retirement Progress

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This quarter, we contributed $15,780.11 to our retirement accounts, and have gained $21,516.55 in investment value.  That averages out to just under $5,300 per month on the contributions, and just over $7,100 per month on investment value.

We’ve survived Daughter Person’s tonsillectomy and adenoid removal, and she’s doing great now – she can breathe at night so much easier.  The total cost there was about $2900, and we met our deductible, so our health care for the rest of the year is 10% of the insurance cost unless we meet our out of pocket amount (I doubt we would).  We’re taking advantage of that for any delayed/elective visits for the next six months.

We’ve made the almost final purchases on our deck materials – the railing and the decking at least.  I suspect we may need to buy some smaller items like more screws or a lag bolt or two, but the major purchases are done – and we’ve gotten the cash back from some of it (one of the charges cleared after the closing date of our credit card, so we haven’t seen the cash back from it yet.

We’re also on track to contribute 11k to our Roths at the beginning of next year if we’re able.  I’m putting aside $917/mth in a cash account for now, and it will either go to our Roths or to our taxable account once I know if we can contribute to the Roths.  I’m not counting that money in our contributions yet however.

Things are looking good for fully retiring in 2025/2026!

2017 Totals

In 2017 we contributed $31,346.44 (44.78% of our goal of 70k), and we gained $51,246.68 in investment value (81.57% of our planned total).

Building a Deck – There is Light at the End of the Tunnel

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All spring, and so far this summer has been all deck work all the time.  We’re making serious progress at this point though.  I just dropped about $4500 on the decking and railing, which will be delivered in the next week.   Here are a few in-progress pictures to review.  We’ve done a lot of work, and all that remains is the larger staircase and guard rail posts from a substructure perspective, and the decking and railing from the finishing perspective.

After putting up one ledger board, we’ve conceded that we’re just going to use a sunsetter for shade for now.  Those are a PITA to put up, and fastening it into the house was difficult enough when we had access to the framing in the unfinished basement.

The two “ledger” boards.  One has the joist hangars, the other is only bolted to the house for about 10 ft, then sticks out the rest of the way as a kind of ledger/joist.  We used it to measure what the height of the far beam should be (with a slight drop for water runoff).

 

 

 

All of the beams up, with joists as needed for blocking to support the cross-bracing required by our municipality.  Those sticks were removed when we had the permanent cross-bracing up.

 

 

 

 

 

All of the joists up looking out from the house (the screen door we’ll use to walk out onto the deck).  It was less hard to get the joists up than I expected – and a lot harder to get the beams up (they’re joined beams – and lifting a 2x12x16′ piece of wood directly over your head sucks).

 

 

 

 

This past weekend we completed the landing.  The landing needs to be complete and decked so that the upper set of stairs (the big ones) will have some place to rest on – and be fastened to.

 

 

 

We can see the end coming – definitely looking forward to having my weekends back, and not working on the deck in super hot conditions.  We did most of the work from January through now, and we’re guesstimating 4-5 more weekends of work to complete it.

Q1 2017 Early Retirement Progress

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Let’s make this easier, a quarterly report (although I’m still recording it monthly for my own records).

This quarter, we contributed $15,566.33 to our retirement accounts, and have gained $29,730.13 in investment value.  That averages out to just over $5,100 per month.

Next month will see an uptick in contributions, all because of cash back from our recent spending, and I suspect the following two months will as well.  We spent quite a bit on the deck wood – the framing is almost complete.  We should finish the joists this weekend.  Then we get to build the stairs.

 

 

We also made another large purchase.  Not completely unexpected, but not 100% planned for, but the opportunity arose, and we took it.  $6300 for a baby grand piano.  It’s a 1982 Sojin (Daewoo), reconditioned, and beautiful.  And, yes that is the easy piano edition of the Hamilton Soundtrack.  It was an anniversary gift from Dad.  We had been looking at “real” pianos to replace our digital piano, as it was starting to get in the way of our progress.  Unfortunately, the way our house is designed, an upright will literally not fit anywhere without blocking a door, window, (built-in) bookcase or fireplace.  So, I demanded that we get a baby grand, and it couldn’t be shiny ebony (black).  We visited Rick Jones Pianos in the DC area while we were visiting, and they had this beauty.  Met all of my aesthetic requirements, and met all of Dad’s playability requirements.  So, we bought it.  The price we paid included the piano, bench, a humidity system to protect it and delivery to our house near Pittsburgh.  It also came with one free tuning, and as long as we maintain it, we can trade it in for what we paid for it towards another piano – that’s likely to be a very long time away.

At the end of this month, Daughter Person is getting her tonsils and adenoids out, and we’re paying for that – definitely meeting our deductible this year, but taking advantage of the cash back!

2017 Totals

In 2017 we contributed $15,566.33 (22.24% of our goal of 70k), and we gained $29,730.13 in investment value (81.57% of our planned total).

Detailed Financial Picture – March 2017

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January’s Numbers

As of March 1, 2017, we are $299,544.21 in debt with a mortgage.  We currently have $1,073,633.00 in assets.  Our investment accounts are at $651,159.34. Our Net Worth is $774,088.79,  up from $736,973.30 in January (5.04% increase).

We were able to contribute the full amount we set aside to our Roths and since I had set aside an additional $1834 between January and February (intended for 2017), I contributed that as well – who knows how much we’ll be able to contribute next year – we were literally $400 under the lower contribution AGI limit.  We are on track to have 11k set aside for that purpose next year though, so we’ll see after next year’s taxes.

I’ve ordered the wood for our deck – $2666 of just wood – then we have to buy the decking and the railing (the decking will end up being about $2400, but the railing is looking like $3500 or more)  We’re going with composite and vinyl to save on maintenance costs, but I’m really looking forward to starting on the wood and getting a deck to enjoy this spring and summer.

We’re now paying $324 and some change “extra” on our mortgage, and starting to see the number go down – it will still be a while before there’s any *real* progress on it, and I don’t know how quickly we’ll end up paying it down – we know we’re not going to be retiring in this house (taxes are too high!).

 

Debt (in the order we’re paying it down):

  • Car loan – Camry (0%): $17,572.00 (-878.60)
  • Mortgage (3.875%): $281,972.21 (-1,579.06)

Total paid off in January and February:  $2,457.66