THE PROFESSOR’S END OF Q1 2021 FINANCIAL UPDATE

This is my 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. 

Q1 in 2020 was good for us financially. We still aren't as "liquid" as I would like. We need to increase our savings to be able to weather any financial storms, but we are working to get there.

*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 - $3,442.64 Down $1,278.86

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. This account always seems to stay pretty steady. 

We need to build this up more. My goal is to build this to $10,000 by the end of the year.

TD Ameritrade (taxable) - $2,936.92 Up $336.18

This is an account that I started so I could buy individual dividend growth stocks. I've sold some of my dividend stocks and put more into growth stocks. This is the reason for the increase in this account.

Vanguard (taxable) - $6,708.94 Up $1,394.75

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. Steady growth and savings here.

M1 Finance (taxable) - $163.56 Up $163.56

This is an account that I started so I could buy high growth tech stocks. It allows you to build a portfolio and put money into it and buy fractional shares instead of having to wait to save enough to build a position for each stock. Will add some as I can to this.

My 403(b) - $80,516.82 Up $6,685.38

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. 

It's continuing to climb.

My IRA - $401.28 Up $95.96

This is where I will roll over my 403(b) to when I retire. I did add a little bit of money to this account, but only like $50.

Wife 401(k) - $198,779.61 Up $15,091.55

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 12.5% 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.

Market continues to go up. We did up her contributions to 12.5% from 11.5%. Closing in on that $200k mark! This account reinvests almost $2,500/year in dividends. The power of compounding!

My Health Care Savings Plan (HCSP) - $25,642.17 Up $1,338.93

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 and continues to grow and reinvest its dividends.

Liabilities:

Clinic - $2,387.24 Down $1,200

It sucks to have low-back pain.  I just got my procedures done again. I'm paying $400/month at 0% interest until it's gone.

RAV4 Loan - $13,467.50  Down $693.08

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 - $0 Down $6,075.97

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. ACHIEVED! Used part of our most recent stimulus check to completely pay this off! One yearly goal accomplished.

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 - $106,381.55 Down $1,549.17

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 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!

HELOC - $10,000 Up $2,000.

This is money that we pulled out to pay for the update in our basement. We pay 4.5% interest-only on this for 10 years and then we pay over the next 20 years on the loan. My goal is to pay this off within the year.

We had to replace our hot water heater. This is a reason that I'm looking to build a little bit more of an emergency fund. For things like this. I just hate selling stock! I still would like to pay this off within a year. We will see if that is possible.

Net worth (assets-liabilities) - $180,796.49 Up $31,345.67

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 2021:

I'm going to keep a couple of goals here. I definitely want to get that clinic bill paid off and also fund a Roth IRA ($6,000) for the year. I was able to continue to grow the Vanguard Index account. I am planning to continue watching the current rental properties available in my area. If I can get one at a fair deal, I will definitely pull the trigger. We do have a senior that will be heading off to college next fall, so that will be a BIG expense, but one that will definitely be worth it for her. We also have another high schooler that will be getting her license in March. I am currently looking for an older vehicle that I can pay cash for. I do NOT want to take on another monthly payment.

Quarterly Comments:

Big quarter in the market really grew our net worth. We also were able to pay $4,400 cash for a car for our newest driver! Super nice to be able to bank roll that and not add another monthly payment. The water heater replacement was a bit of a disappointment as the previous one was only 8 years old. Paying off that Corolla loan was great. We are now putting that $400/month payment directly into savings to build up that cash position. The housing market is just too damn hot right now. There are no deals out there that aren't gobbled up before they even get on the market. I would love to have a rental property or two for the cash flow, but it's just not in the cards right now. Someday......

So how's your financial situation? Throw some thoughts down in the comments and as always....

KEEP STACKIN!