Ok so no one commented eager to read about retail REITs, so I’m going to do a personal finance post. For those of you more interested in posts about investing, “move along, nothing to see here.” I hope this will not crater my readership, but I thought I would start regular posts (likely monthly) tracking my savings and marketable securities levels. This will serve a diary for me and hopefully as motivation.
I am attempting to become “Financially Independent.” If you are unfamiliar with the concept, basically one seeks to accumulate assets sufficient to generate income and capital gains to support their ongoing financial needs to maintain homeostasis. Obviously, there are two primary factors in achieving this goal: Saving and spending. The spending impacts not only how much you can currently save but also how much you need to save to support your lifestyle from passive/investment income. If you are interested and want more information on the subject, check out Mr. Money Mustache and The Mad Fientist.
My goal is not really F.I. money. I think it is more like F.U. money.
At least initially, I am probably going to focus on tracking monthly savings/investments, as it will be a function of spending, and I don’t really feel comfortable disclosing a ton about income and spending. I will say that my household income is in the top 10% nationally based on recent data that I’ve seen. So it’s a good income, but we’re talking low six figures. Not software engineer money. All figures represent my own savings/assets as we sort of divide our finances in my household, with a fair allocation of joint expenses and the remainder staying separate.
This post will just sort of set the table for future tracking updates.
I started getting somewhat serious about building some savings in 2015. In January 2015, my marketable securities portfolio was worth $50,479. By December 2015, it was up to $81,087. This was both from savings and appreciation. I think I maxed out my 401(k) that year and partially funded a Roth IRA.
By the end of 2016, I was up to $109,148. That is really not that great now that I look at it. I mean just maxing out your 401(k) with a company match of like $5,000, would have added $23,000 (forgive the math flexing). I cashed in some investments, however, to pay for some home renovations (bigger stuff, like gutting bathrooms). So I did save fairly aggressively during 2016. Probably like $30,000.
For 2017, it looks like I finished the year with about $163,000 in securities investments. I probably saved about $30,000 again. The rest would have been due to investment appreciation. I know I had a fairly large percentage of my investments in Bank of America TARP warrants, where I caught a little better than a double. I did sell them way too soon, however, and missed about another 100% upside. In my defense, I was planning to switch to common, but the stock ran away and left me sitting there with my little $20 something target price.
As I’ve said before, the vast majority of my investments are in market capitalization weighted, low-cost, index funds, with a bit of a systematic value tilt. I also have a trend following allocation that I might discuss sometime in the future.
All-in-all 2017 was pretty, pretty, pretty ok. Around year end I calculated a total net worth estimate, including real estate and some other investments and came up with around $500,000. I am not planning to track the total net worth as a big portion is illiquid and hard to value.
In 2018, I have continued to squirrel away some cash. I actually believe I have experienced no price appreciation in the YTD period, so no riding the “Trumpian rally.” As of the end of February, I had about $172,000 in securities/investments. An increase of about $9,000 year-to-date actually surprises me on the upside. We recently gave up our DINK status to welcome a baby to our household.
My savings rate has been in a bear market since the kid came, but apparently it was not as deep a crash as I feared. Basically, I think my take away is that maxing out your 401(k), with a decent match adds up fairly quickly.
It also impacts your actual cash wages received a lot less than you would anticipate, depending on your marginal state and federal tax brackets. With a decent match and your combined taxes, it is pretty easy to get to a place where you only receive like 40-50 cents less for each dollar that shows up in your 401(k) type account.
Ok, so now the table is set and I will update monthly (or so) to track my savings and total liquid portfolio. If there is any interest in this line of posts, I can get more granular on savings versus securities gains we go along. Thanks for reading!