This is my second post showing how we are saving money both in and out of retirement accounts. I always like to read blogs that give real-life examples of those people practicing what they preach. Going forward, I will try and give a quarterly update of our financial position and the thoughts that go into it. I will warn you, I don’t have huge amounts of money socked away anywhere, but I think we have done a solid job in putting money aside.
This quarter was definitely a tough one. Actually, it was really just the month of March that was tough. It took a pandemic like we’ve never seen in our lifetimes to take the economic bull run down. The numbers you’ll see below are not pretty, but I’m not panicking. We have a plan and we are sticking to it.
*Always keep in mind, these numbers DO NOT include my teacher pension. My goal is to make that money just a part of our financial future and NOT the entire amount we will have.
| 12/31/2019 | 3/31/2020 | |||
| Assets | December | March | Change | % Change |
| Cash – All checking and savings accounts | $ 4,648.50 | $ 4,296.44 | $ (352.06) | -7.6% |
| Stock Account (TD Ameritrade) | $ 1,160.41 | $ 1,335.64 | $ 175.23 | 15.1% |
| Index Fund (Vanguard) | $ 2,435.15 | $ 2,956.84 | $ 521.69 | 21.4% |
| My 403(b) | $ 74,563.08 | $ 55,796.67 | $ (18,766.41) | -25.2% |
| My IRA | $ 269.75 | $ 234.95 | $ (34.80) | -12.9% |
| Wife 401(k) | $ 143,699.19 | $ 122,374.07 | $ (21,325.12) | -14.8% |
| My HCSP | $ 19,834.26 | $ 16,410.75 | $ (3,423.51) | -17.3% |
| Total Assets | $ 246,610.34 | $ 203,405.36 | $ (43,204.98) | -17.5% |
| Liabilities | ||||
| Current Debt (Credit Cards, Etc.) | $ – | $ – | 0.0% | |
| Clinic | $ 1,238.88 | $ – | $ (1,238.88) | -100.0% |
| Corolla Loan | $ – | $ 10,133.29 | $ 10,133.29 | 0.0% |
| RAV4 Loan | $ 18,549.07 | $ 17,549.55 | $ (999.52) | -5.4% |
| My Student Loan | $ 5,764.82 | $ 5,559.16 | $ (205.66) | -3.6% |
| Property #1 Mortgage (Primary) | $ 107,469.98 | $ 106,845.74 | $ (624.24) | -0.6% |
| Total Liabilities | $ 133,022.75 | $ 140,087.74 | $ 7,064.99 | 5.3% |
| Total Net Worth | $ 113,587.59 | $ 63,317.62 | $ (50,269.97) | -44.3% |
Assets:
Cash – $4,296 Down $352
This includes all of our checking and savings account balances. I’m not a big believer in carrying 3-6 month emergency fund. We have enough room on credit cards to put any emergency purchases on and then pay them off with our other accounts before those bills are due. These types of accounts just don’t return enough in interest to provide any value to me.
TD Ameritrade (taxable) – $1,335 Up $175
This is an account that I started so I could buy individual dividend growth stocks. Not much change here due to the fact that we added another $500 and purchased 4 shares of General Dynamics, a solid defense contractor.
Vanguard (taxable) – $2,956 Up $522
This is an account that I use to purchase Vanguard index funds.This is where I prefer to keep my “emergency” fund. I know that I need to grow this out more in case of any significant emergency expense. My plan is to get between $10-15,000 in this account and let it grow and replenish as needed. We are putting in $500/month into this.
My 403(b) – $74,563 Down $18,766
This is my main retirement account. I have been paying into this since I started teaching. Our district currently matches $800 each year into this account. It is kind of small for having taught for 20 years, but my early years of putting money into this account robbed me of many gains. I was invested in annuities with heavy fees and surrender penalties. It’s just been in the last 8-10 years that I have really become more knowledgeable about these accounts.
This is the first area of the big fall. Not much to do but ride it out. I am in the process of switching from TD to Vanguard in this account. It’s currently all cash. I just wish TD would have liquidated it about 3 weeks earlier than they did and I would have missed out on the big drop…. Oh well, you can’t time the market!
My IRA – $274 Down $35
This is where I will roll over my 403(b) to when I retire. Not putting anything in here at this point.
Wife 401(k) – $122,374 Down $21,325
My wife has a good job as a nurse and the organization that she works for contributes 9% of her salary each year into this account. She’s also contributing 11% of her salary so about 20% of her salary goes here each year. This is the account that I learned first-hand the power of compounding.
The other big fall. Again, thinking long term and just riding this downturn out and picking up shares on the cheap!
My Health Care Savings Plan (HCSP) – $16,410 Down $3,423
This is an account through our school that we both contribute to each month. It can only be used for medical expenses AFTER I retire. It has grown nicely the last 5 years, but fell hard this quarter. Think long-term…
Liabilities:
Clinic – $0 Down $1,238
It sucks to have low-back pain. I get a procedure done each spring that costs about $3,000 out of pocket. Got this all paid off. I’m hoping I won’t need the procedure this year, but we will see how that goes.
RAV4 Loan – $17,549 Down $999
We had to add another vehicle to our “fleet” last spring due to another driver in the household. We also needed a little bit larger one with two teenage girls. Slowly working this one down.
Corolla Loan – $10,133 Up $10,133
This is the loan for the vehicle to replace our previous car that was totaled. It’s a nice fuel efficient vehicle. My goal is to have it paid off in the next 12 months.
My Student Loan – $5,559 Down $205
This is what’s left of my loan for my Master’s degree.
Mortgage – $106,845 Down $624
This is the mortgage that we have on our home. The house currently appraises for about $160,000 so we do have some equity in it. I opened a $30,000 line of credit on it last spring just in case I found an investment property to purchase. I don’t plan on touching that line of credit for anything but an investment. We are currently in the process of refinancing this into a 15-year mortgage. We locked in at 2.5%, so it’ll be great to pay this off more quickly.
Net worth (assets-liabilities) – $63,317 Down $50,270 OUCH!
Key Points:
You’ll notice that I don’t have assets linked for our major liabilities. I do NOT believe that you should include the value of your house or vehicles as assets for your net worth. You only realize those assets if you sell them, and I don’t plan on ever selling those things, but I DO have to pay off those loans. I think it gives a clearer picture of how much money you actually have.
Goals for 2020:
My biggest goal for 2020 is to pay off the clinic bill DONE. My goal is to fully fund ($6,000) my Roth IRA for the year. I’m also going to continue to grow my Vanguard Index account to use as a down payment on a rental property. Our goal is to have one cash-flowing rental property by this time next year.
So how’s your financial situation? Throw some thoughts down in the comments and as always….
KEEP STACKIN!