I’m just saving…April 2018

It is time once again, dear reader, for the discussion of my private financial laundry.  I hope maintaining a journal of my savings will help provide additional motivation and allow me to spot trends.  If you are more interested in investing topics, feel free to move along, as I won’t be discussing my new, huge, Disney/Netflix merger arbitrage position in this post.

I posted a couple of prior updates in this journal.  All of these are available on the “Savings Diary” page.  The first, I’m Just Saving…Personal Finance Diary kind of set the table for the series.

In that first post, I mentioned that I’m really more interested in obtaining “F.U.” money than retiring early.  I think the psychological comfort that comes with having significant assets is going to be worth a lot more to me than the current consumption I am foregoing.

As I mentioned before, when I first got serious about saving, a few years ago, I did use budgets.  I kind of think of budgeting like a diet plan.  It’s a good kick-start, but the more lasting benefits are going to come from lifestyle changes that become automatic (and require less willpower).  So, I am planning to track and closely monitor my savings accumulation rather than create and monitor a detailed budget.  If I notice trends in savings accumulation I will dig into the data and see what is causing the trend.  By the way, I use Mint to closely track my spending, so its not like I don’t have a grip on where my dollars are going.

With that reminder, in my March update I mentioned that I prefer to automate and use mental accounting, by using separate accounts for different things to help minimize the negative impact of behavioral biases on my ability to reach my long term goals.

I’m also trying to use tax incentives as motivation.  We have access to a number of tax advantaged accounts in my household.  If we were able to contribute the max to all of these accounts we would be able to place roughly $60,000 per annum into tax advantaged space (and that’s not even using our allotment of I Bonds).

So, I am really trying to push toward that (or at least use that a motivation to save more).  I get a nice contribution from Uncle Sam and Auntie Carolina for every dollar that I save. Getting to the max for all of these options is proving to be a challenge.  As I mentioned before we have a new baby in the house and childcare is absolutely outrageously expensive in America.

I recently read the below book which proposed a different way to handle raising and carrying for kids (consistent with a FIRE lifestyle).  I wish we had some of these options in the U.S.

But, hey life would be boring if there was no challenge, right? So let’s see how we did.

Ok, so last time I had worked up to about $175,000.  As a reminder, I only include liquid investments in these monthly figures as I don’t think it is very valuable to start marking my real estate and other illiquid assets monthly.

At the end of April, I am up to a little over $180,000 in investments.  So, I made a little progress last month.  I saved about $3,500, so we had a little bit of investment appreciation.  Looks like about .80%.

SPY was up about .40% basis points in April, so my ex-US tilt probably led to a little outperformance.  See  Best Foreign Value Factor ETFs,  Resource Roundup: More CAPE, and Foreign Value Factor ETFs Update.   MSCI AWI was up like 1.6% and EAFE was up like 2% in April.

So, I think that’s it for this update.  All figures above are, of course, before the Tesla Tithe starts in earnest.