THE PROFESSOR’S END OF Q2 2020 FINANCIAL UPDATE

This is my third 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 big comeback. Almost everything that we lost came back. My 403(b) is the only one that did not show a massive jump. I'll explain why later in this post.

*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.

Assets:

Cash - $2,818 Down $1,478.74

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. Down here because we are currently remodleing our basement.

TD Ameritrade (taxable) - $2,144.66 Up $809.02

This is an account that I started so I could buy individual dividend growth stocks. Good recovery in stocks. Haven't added any new money this quarter.

Vanguard (taxable) - $4,291.79 Up $1,334.95

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) - $57,218.72 Up $1,422.05

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. 

Now this account is FINALLY in Vanguard. It was sold at the bottom and bought back into the market after the big climb. Too bad it missed out on over $15,000 in gains....

My IRA - $261.31 Up $26.36

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) - $143,217.66 Up $20,843.59

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.

Massive climb with the market rebounding. Almost back to its peak.

My Health Care Savings Plan (HCSP) - $19,989.90 Up $3,579.05

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. It has also regained all its losses from the collapse.

Liabilities:

Clinic - $0 

It sucks to have low-back pain.  I just got my procedures done again. It will give me another big bill here in a few weeks.

RAV4 Loan - $16,541,56 Down $1,008.09

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 - $8,794.06 Down $1,338.69

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. Making good progress on this.

My Student Loan - $5,559 Unchanged

This is what's left of my loan for my Master's degree. With the pandemic, I was given forbearance on this loan.

Mortgage - $111,000

This is the mortgage that we have on our home. The house currently appraises for about $207,000, so we do have some equity in it. We are finalizing a $75,000 line of credit. I don't plan on touching that line of credit for anything but an investment. We signed on our refinance at 15 years and 2.5%. We will have the house paid off just as I am ready to retire from teaching. Great timing!

Net worth (assets-liabilities) - $88,046.72 Up $24,729.10

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!