So it’s about time for another net worth update. When I first posted my net worth out for the world to see, I wasn’t so sure how I felt about it. Being transparent about you financials is a bit Taboo. It’s probably not a surprise that as the sharer I feel like I am leaving myself a bit exposed.
While I am not sharing my net worth here monthly it is something I keep and eye on. I decided that I felt that giving a yearly snap shot was probably not so bad. But I am running behind as these snap shots should be coming out during January. While I didn’t get the post out I did make sure to record my stats.
So in this post I will be sharing the growth we saw in the 12 month period since the last net worth post.
Also before putting this post out there I wanted to talk about our savings. Now that I’ve finally posted how much we saved last year I can finally share our new net worth. So if you haven’t read about our savings I highly recommend you head there first then come back here. Read about last years savings at Big Savings & Happiness: Can you have both?
Today we are already in May and that means this year is almost half over. Time seems to run right through our fingers so making big changes can seem so daunting. But a lot can change in just one year if you put your mind to it. That is the story behind our net worth growth.
It turns out 365 days is a lot of time.
- Family of 4 ( 2 adults, 2 children ages 7 and under)
- Home: Southern California
- Age: 28
- Occupation: Engineer (both of us) in 2015 we were both working parents
I saw a fellow blogger include these numbers in his net worth post and I thought it was a great idea. You know, because it’s important to understand things in context. Saving tens of thousand of dollars is a great feat no matter what. But you get a better picture of whats really behind the numbers with more info. A single mom of 5 kids saving it is different then a pair of Dinks( Dual income no kids). If I was a single mom and 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 am sharing because I know there might be some people who might use the cost of living as an excuse. To explain why a Minnesotan would be able to save more then a Californian. So now you know, we are accomplishing this out here in Cali.
So as of Jan 1st 2016 this is where our numbers stood.
How are all these funds broken down?
- 401K Mrs. Roamer- $58,356.04
- 401K Mr. Roamer- $38,422.90
- Barclay Savings Account (Cash)- $44,171.41
- IRA Mr. Roamer- $9,772.05
- IRA Mrs. Roamer – $9,464.22
Why do we have so much sitting in cash?
Its kind of strange to look at my numbers and realize our savings account is holding more money then Mr.’s 401k. There is a reason though. See, in our original life plan we were going to purchase a home in 2 years. So we started building up the funds to make the sizable down payments that California real estate requires. Not just that, it actually also includes our emergency fund money.
But plans have since changed and now we have a bunch of money sitting in cash.
Any other questions about our funds. Ask me in the comments below.
After graduating college we both had student loans and later proceeded to purchase new cars. However, I always planned to pay off my student debt as quickly as possible. After we completed that we decided to funnel the newly free funds to pay off our car as well. Last year we spent ZERO Dollars on debt since we paid it all off in 2014.
We are debt Free.
The other big debt most people have is a home. We’ve never purchased a home so no mortgage either. Felt I needed to clarify that since so many people say they are debt free except for mortgage.
Total Liabilities: $0
Check out our chart!
Assets- liabilities =Total Net worth: $160,185.62- $0=$160,185.62 (+74,313.22 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 how close we are getting.
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, and we know we will be moving somewhere more affordable when we retire ( maybe even sooner).
Why 25? Well I defer to the people who know more. So read up on the 4% rule by MMM to get more of the details. So our goal is to save 25x our spend.
So far we have 5.34 years saved, or funded.
How are the kids doing?
Here at Traveling Wallet HQ we have started tracking the kids numbers.
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. Since last year he has saved an additional $53.14
Jr. Roamer’s assets : $308.75* ( this information is a little dated as these are our January numbers, but I want to stick to 12 month blocks so I won’t count the money he received for valentines until our next update. )
Minnie doesn’t have an account but I did track how much money she was receiving. After discovering that she got $170 last year, we started to discuss whether we should open her an account.
More random financial info.
I also hunted down how much money we earned by doing nothing at all … you know, interest earnings and quarterly dividends. Last year we earned $399.19.
Now that’s not going to support us for a year but, I had no idea.
I seriously remember when I was young, and earned .25 and 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!
And its great. Now those $399.19 will be earning interest babies of their own.
How did we do it?
How did we get here? Like I mentioned earlier we have no debt and that is a big deal. I would attribute this years growth in large part to no longer having debt. We were able to save so aggressively because we spent 3.5 years focused on killing our cumulative 6 figures of debt. Debt that consisted of the usual student loans and car loans.
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 would put whatever was left over into savings. Soon I learned some things which I’ll pass on to you.
Tips to grow your net worth
- Automating our savings. This was big. 401 K contributions are automatic by default. The money is just pulled from your check. Last year I used this same principle to the rest of our savings. We automated a monthly savings transfer into our account a few day after receiving our pay checks. We also automated maxing out our IRA’s.
- Save first, then spend. Instead of saving what was left over at the end of the month. We changed it to saving first.
- Treat it like a bill. Saving first is easy if you treat your savings like a bill. Pick the number and pay up every month.
- Front load your savings. If you can it’s a great idea to take your yearly savings goal and adjust the numbers to save more of it in the beginning of the year. We did this for our 401 Ks and it turned out to be a great strategy since I was laid off at the end of the year.
Our low yearly spending coupled with automatic savings resulted in massive savings. Which equaled massive net worth growth.
How is your Net Worth doing? Are you tracking?
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