Hey Traveling Wallet readers,
It’s net worth update time. When I first posted my net worth out for the world to see, I wasn’t so sure how I felt about it. I’ll be honest I’m still a bit paranoid about the whole thing. It’s probably not a surprise that I feel like I am leaving myself a bit exposed.
While I am not sharing my net worth here monthly I do track it regularly. Finally, I decided that giving a yearly snap shot was probably not so bad. (& since Mr. Roamer is on board, then all engines go)
Today I will be sharing the growth we saw in the last 12 month period. Sometimes, a year can just fly by, but it turns out 365 days is a lot of time to make improvement to our finances.
- Net Worth Update (for 2015)
- 2014 Financial goals reviewed and Net Worth Revealed
- Big Savings & Happiness: Can you have both?
- Family of 4 ( 2 adults, 2 children ages 8 and under)
- Home: Southern California
- Occupation: Manufacturing Engineer and stay at home mom/ blogger/ child wrangler
I saw a fellow blogger include these stats in his net worth post and I thought it was a great idea. Context is important.
Saving tens of thousand of dollars is a great feat no matter what. But understanding what’s really behind the numbers is helpful. A single mom of 5 kids saving that much, requires different planning compared to a pair of DINKS( Dual income no kids). If I was a single mom, who wanted to save aggressively I would be super happy to find another mom already doing it. I would follow her posts more closely since she would be dealing with a similar life challenges.
So I share this to illustrate how someone living in the expensive area of Southern California can still save.
So as of Jan 1st 2017 this is where our numbers stood.
How these funds are broken down?
- 401K Mrs. Roamer- $61,859.02
- 401K Mr. Roamer- $68,188.09
- Barclay Savings Account (Cash)- $47,622.06
- IRA Mr. Roamer- $17,139.97
- IRA Mrs. Roamer – $16,637.42
Total Assets: $211,446.56
Why do we have so much sitting in cash?
Originally we had started building the cash stash to put a down payment on a home. But after further discussion we decided California home prices did not offer the value we were looking for. For us California’s real estate market is too hot. Now we are keeping the money in there to pay for our up an coming 3 month adventure. Not just that, it also serves as our emergency fund.
Liabilities (in other words DEBT)
None. Zero. Zip. Nada.
It wasn’t always that way. After graduating college we both had student loans. Then proceeded to purchase new cars. However, I always planned to pay off my student debt as quickly as possible. This drive was later used to funnel the newly free funds to pay off our cars as well. In total we were able to pay off all $114,200 of debt in just 3.5 years. Last year we spent ZERO Dollars on debt since we paid it all off in 2014.
What about a home? We’ve never purchased a home so no mortgage either. I felt I needed to clarify that since so many people say they are “debt free” except for mortgage. (Which lets be honest is still a type of debt)
We are completely and absolutely Debt Free.
Total Liabilities: $0
Our growth chart!
Putting it all together
- Assets- liabilities =Total Net worth:
- $211,446.56- $0=$211,446.56 (+51,260.94 since last update)
Progress to Financial Independence
While tracking your net worth is a great goal, to keep you on track financially, we have an ulterior motive. We track our net worth because we are working towards financial independence. So we need to measure if we are moving in the right direction and if we are hitting our milestones.
Our FI dollar number is $750,000 to produce 30 k of passive income.
We figured out our retirement number by multiplying our yearly spend (or desired spend*) by 25. *Desired spend because we spend a great deal on rent, remember we are in California. But we will be moving somewhere more affordable very soon.
Why 25? Well I defer that explanation to the people who know more. So read up on the 4% rule by MMM to get more of the details. So to reiterate our goal is to save 25x our spend.
So far we have 7.05 years saved, or funded.
How are the kids doing?
For Jr who is older we have a rule for money he gets. The rule is, you save half. Half goes into a bank account and half goes into your wallet. His assets only include bank account money.
Jr. Roamer’s assets : 436.13 (+ $127.38)
Minnie at 3 year doesn’t quite grasp money. But her gifts were starting to accumulate. After discovering that last year she got $170, we decided to open her an account as well. This was a recent change so currently her bank account has $11. ( but that’s because Christmas money still hasn’t hit her bank account.)
More random financial info.
I remember when I was young, and earned .25 in interest. I would read the bank line that said at $10 it becomes reportable income. Pshhh I thought, well I don’t need to worry about that.
Now I do!
This year our money made ~$2,111.87 in interest and dividend babies. That money is reinvested and earns interest babies of its own. It’s great!
How did we do it?
Since our entry into the workforce in 2011 we have been in aggressive debt repayment mode. This aggressive debt repayment meant we kept our spending in check. Mostly. When the debts were all gone we had lots of available cash. At first we maxed out our 401 K accounts. Then I kept on learning about other ways to grow our money, like sheltering our money from taxes. We save aggressively because we spent 3.5 years focused on killing our cumulative 6 figures of debt. Those habits we established during our debt repayment have helped us see big net worth growth.
Tips to grow your net worth
- Treat it like a bill. We pay ourselves, like we pay bills. We identify how much we can save and then pay up every month.
- Automate your savings. Remembering to pay yourself can be a challenge with all the other stuff you have to do. So automated a monthly savings transfer a few day after receiving your pay checks. We also automated maxing out our IRA’s.
- Front load your savings. If you can swing it consider saving as much of your yearly savings goal at the beginning of the year. You never know what the future holds so it makes sense to save the money you already have in hand. Instead of assuming earning in the future. This worked out well for us in 2015 when I was unexpectedly laid off at the end of the year.
What to read more about our financial lives. I share our monthly spending with you. All you have to do is sign up below and you’ll receive a monthly summary.
How is your Net Worth doing? Are you tracking?
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