Secretly entered two comma club

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Easy Rhino
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Secretly entered two comma club

Post by Easy Rhino »

Well, this is weird timing.

for background, cash flow has been tight for the last year or so (home + home repairs + expensive daycare), and I've been arguing with my wife about whether to send our daughter to a expensive private kindergarten or the free mediocre public one. Just two nights ago, i was combing through Quicken report to try to figure out which leaks could be plugged in our spending.

And then this morning, while checking the bills, in the bottom left corner, I see "Net Worth $1,060,000". (With the usual caveats, there might be an account out of balance in Quicken, the figure includes home equity, and there's been a long bull market.)

But the "dos comas" still made me feel better, I think. But I can't volunteer this news to my wife, because she'll want to take it as carte blanche to spend a bunch of money. :beer :confused
Last edited by Easy Rhino on Wed Apr 05, 2017 7:19 pm, edited 1 time in total.
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Pajamas
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Re: Secretly entered two comma club

Post by Pajamas »

Well, you should at least give into your wife on the kindergarten issue.
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Easy Rhino
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Re: Secretly entered two comma club

Post by Easy Rhino »

Pajamas wrote:Well, you should at least give into your wife on the kindergarten issue.
Fair point. :wink:

I figure we would break even cash flow wise with the private kindergarten for our 5 year old (it's not that much more than our current preschool). However, the wrench in the plans is that we're expecting another baby in July, and I don't currently see a way we're going to cover private school or daycare for two kids. And I don't want to be dissaving for 13 to 18 years.
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Re: Secretly entered two comma club

Post by Liberty1100 »

Maybe "economies of scale" can help you out! (Sarcasm)
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VictoriaF
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Re: Secretly entered two comma club

Post by VictoriaF »

Easy Rhino wrote:However, the wrench in the plans is that we're expecting another baby in July.
Easy Rhino,

Congratulations with two commas and two babies. Well done!

Victoria
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HoosierJim
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Re: Secretly entered two comma club

Post by HoosierJim »

It's actually not a secret anymore. :beer
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knpstr
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Re: Secretly entered two comma club

Post by knpstr »

Fantastic! Congrats!

:beer
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why3not
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Re: Secretly entered two comma club

Post by why3not »

First congrats on both fronts.

Second, you don't want to be that guy who forces himself, his wife and kids to live a life of a miser, only to die and his wife to discover they were multimillionaires, do you?
mmcmonster
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Re: Secretly entered two comma club

Post by mmcmonster »

Congrats.

As for the kindergarten issue: I would most humbly suggest that if you're young enough to be having two kids, you're probably young enough to re-enter the millionaire club in a few years.

As many have said before: 'Happy wife, happy life'.
Apophis
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Re: Secretly entered two comma club

Post by Apophis »

Great job indeed Easy Rhino. :sharebeer onward and upward

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GrayS26
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Re: Secretly entered two comma club

Post by GrayS26 »

I went to private schools until college then I went to a party school. Personally I feel like it was a good decision bc I turned out ok and I met people who were also from the same socioeconomic background so then no jealousy issues etc. and fitting in was ok.
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Re: Secretly entered two comma club

Post by digarei »

Easy Rhino wrote:

But the "dos comas" still made me feel better, I think.
I'm surprised you can feel anything.
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sp0704
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Re: Secretly entered two comma club

Post by sp0704 »

Nice! Your situation is similar to mine. Recently got there at 33, have one due very soon, just started our 15 mo. old in daycare, and bought a new house recently and have been spending $$ on house stuff. Good news is these expenses will subside.
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Re: Secretly entered two comma club

Post by TimeRunner »

Congratulations! :beer
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cheese_breath
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Re: Secretly entered two comma club

Post by cheese_breath »

Easy Rhino wrote:...But the "dos comas" still made me feel better, I think. But I can't volunteer this news to my wife, because she'll want to take it as carte blanche to spend a bunch of money. :beer :confused
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wolf359
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Re: Secretly entered two comma club

Post by wolf359 »

Easy Rhino wrote:...But the "dos comas" still made me feel better, I think. But I can't volunteer this news to my wife, because she'll want to take it as carte blanche to spend a bunch of money. :beer :confused
It's probably advisable to tell your wife now, or at least some time in the near future. Your 2 comma status is based on house equity, which you can't access unless she is willing to sell the house. It will be some time before you're in 2 comma status based on investments alone, and this gets you both the chance to get used to the concept.

It's merely a milestone at this point, with no practical impact on your lives. It means what you're doing is working, and you can present it in the context of your goals. As long as she still agrees with your ultimate savings/investing goals, then she is unlikely to turn spendthrift. You should probably set some funds aside for fun to celebrate the milestone, then continue on with your plan.

Private school is a fixed cost that is potentially a very long-term commitment. The cost is more than the tuition -- there will be additional activities, spending pressures, greater transportation costs, and some of the kids' peers will be well-off if not better off than you. The spending on that will impact all other aspects of your budget. It doesn't mean you shouldn't do it -- it just means that you should balance the costs, benefits, and the impact on your other choices. I frequently used the phrase "We can do anything, but we can't do everything."
DTSC
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Re: Secretly entered two comma club

Post by DTSC »

Congrats on 2 comma and 2 kids!

I am forever indebted to you as you helped me out as a newbie 9 years ago.

Can I now give you a little suggestion?

Don't watch your money so tightly! You are young (OK, at least your wife is young enough to reproduce) and you already have enough assets that many would consider a lottery win. You're more than on the right track. It's time to let loose a bit! Bogleheads are great savers, but hanging around here for too long gives you a distorted view of the world. Where else would you find people wondering if a $5M portfolio is enough for retirement?
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Re: Secretly entered two comma club

Post by Jack FFR1846 »

That's very cool. So here's something you can do. Set aside $1M so the kids can all go to private college. Now start saving for yourself. :shock:
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FoolStreet
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Re: Secretly entered two comma club

Post by FoolStreet »

Pajamas wrote:Well, you should at least give into your wife on the kindergarten issue.
Well, there is a difference between balance sheet and statement of cash flows for a reason.

Just because your house has equity and your retirement accounts are funded does not mean you have the cash flow to pay for private.

But clearly you have relationship issues and priorities to work through with her. She may want to spend because you hide money from her. And maybe you should spend on education or buy a hous in a better district or augment with tutoring or get that Tesla or new pair of Choos.

Worth a discussion.
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Portfolio7
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Re: Secretly entered two comma club

Post by Portfolio7 »

FoolStreet wrote:
Pajamas wrote:Well, you should at least give into your wife on the kindergarten issue.
Well, there is a difference between balance sheet and statement of cash flows for a reason.

Just because your house has equity and your retirement accounts are funded does not mean you have the cash flow to pay for private.

But clearly you have relationship issues and priorities to work through with her. She may want to spend because you hide money from her. And maybe you should spend on education or buy a hous in a better district or augment with tutoring or get that Tesla or new pair of Choos.

Worth a discussion.
Agreed, cash flow can be tricky. We hit double commas a few years ago, but despite that, all of the last 10 years have required us to make hard choices about cash flow (and the kids haven't started college yet!) OP may want to make sure they have enough invested and growing in non-tax-deferred account so that they can rely on that cash if they either retire early or need to subsidize their cash flow later. We did exactly that, using post tax cash savings to subsidize regular spending, tax-deferred investing, higher ed, and a couple businesses for about 10 years. We had no idea we would have all those (mostly) productive uses for cash.
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Nestegg_User
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Re: Secretly entered two comma club

Post by Nestegg_User »

Yep, cash flow versus balance sheet-- (and I don't include home equity in two comma) you can't use home equity for paying bills nor can you access certain retirement accounts without significant penalties.

Stealth millionaire is better-- no expectation of keeping up with the Jones, needing the latest electronics, or having vehicles less than about three years old ( owned or leased). As noted above, the private school may create a different social expectation, by children or even spouse, that might limit your ability to get to the next level as quickly.
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Re: Secretly entered two comma club

Post by FoolStreet »

Nearing_Destination wrote:Yep, cash flow versus balance sheet-- (and I don't include home equity in two comma) you can't use home equity for paying bills nor can you access certain retirement accounts without significant penalties.

Stealth millionaire is better-- no expectation of keeping up with the Jones, needing the latest electronics, or having vehicles less than about three years old ( owned or leased). As noted above, the private school may create a different social expectation, by children or even spouse, that might limit your ability to get to the next level as quickly.

Home equity is part of your net worth though, but I get your point.
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Re: Secretly entered two comma club

Post by dotstar »

Woot - that is fantastic! Well Done.
TravelforFun
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Re: Secretly entered two comma club

Post by TravelforFun »

Next step for you: two commas without including home equity.
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elgob.bogle
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Re: Secretly entered two comma club

Post by elgob.bogle »

"Stealth millionaire is better"
+1

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WorkToLive
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Re: Secretly entered two comma club

Post by WorkToLive »

Don't know where you live but private K is about $35k/kid/year. If you can't sign up for that for 26 years (13 years*2 kids) don't start now.
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Re: Secretly entered two comma club

Post by whodidntante »

Congrats. Did anyone tell you about the bogleheads.org tithe?
artibug
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Re: Secretly entered two comma club

Post by artibug »

I totally get the secrecy. I unfortunately do the same with my husband. His family esp the parents in law love to tell us "you can afford it. Spend it". So trips to WDW mendate stay at 4 season or on the monorails. Broadway shows demands best seats in the house. And I am the one who does the heavy lifting. So now I don't share the exact amount we have in our investment, retirement accounts, etc with DH. luckily, DH has no interest in anything dealing with investments. Definitely the "don't ask don't tell" policy here.
fortyofforty
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Re: Secretly entered two comma club

Post by fortyofforty »

Congratulations, Easy Rhino,

Personally, I don't count home equity for anything in my personal family balance sheet. I can't get it easily. It is stuck money. It can also evaporate, should the housing market collapse. Besides, I have to live somewhere, so if I sell this house I need to buy or rent something else at commensurably higher prices. How much that switch would cost is an unknown.

I can count retirement savings easily. I can also count savings outside of retirement accounts. That money is easy to access, but I still count those "pots" of money separately because they are for somewhat different purposes.

Again, well done. Pat yourself on the back. Then get back at it. It's what you do.
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Re: Secretly entered two comma club

Post by abuss368 »

Congrats on your achievement!
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LeeMKE
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Re: Secretly entered two comma club

Post by LeeMKE »

Congratulations on reaching this milestone!

Secrecy might not be a bad thing.

Fidelity tried to warn me about the "millionaire" disease as we approached $1 million. I didn't think it would affect us. But when I shared with DH this milestone, he got a case of affluenza that worried me a bit. Yup. He thought we were rich and wanted to start throwing money around. Somehow he no longer connected the prudence and careful money management with our new status. We got through it, and he still likes to get a little more "nouveau riche" than I'm comfortable with, but mostly he stays on an even keel now.

That said, there are lots worse things to spend money on than education.
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Frugal Al
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Re: Secretly entered two comma club

Post by Frugal Al »

One comma to two comma status is a non-event because it's small change: literally one penny. The change has been happening all along, gradually, from that initial milestone of $100k all the way to $1000k. Or, to look at it another way, like the frog in water gradually heated to boiling, but in a good way.
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Easy Rhino
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Re: Secretly entered two comma club

Post by Easy Rhino »

Thanks for the emotional support everybody.

For those who are interested, here's more info on why I have this secret dos comas dilemma:

So, I've been trying to debug the cash flow situation in Quicken. (Note that Quicken accounts for all our income and most of our spending, but some spending is out of my separate wife's account, I don't ask and she doesn't tell what she spends it on)

While income vs expenses was still positive, our free cash flow was -$5k last year. The difference was due to transfers to retirement accounts and paying down mortgage principal. Last year was a little more expensive than baseline, because we had some home repairs and large down payments on two car leases.

Ironically, our net worth increased over $100k during that period, about half stock market, and half home equity (we had our house appraised when opening a HELOC).

Our daughter's preschool is already expensive ($1200 a month), so private elementary school would be maybe $3-400 more per month. But then when #2 starts preschool and school we'd get hit with the double whammy. There's no obvious silver bullet in the budget to pay for all this. Even if we dropped retirement and HSA contributions completely, it wouldn't quite cover it, nor is there one obviously frivolous spending category to make it up on.

We do have about $170k in a taxable brokerage account, so we could "dissave" from that for a long time to support this increased spending, but that really doesn't seem like a prudent idea to me.
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Re: Secretly entered two comma club

Post by deltaneutral83 »

DTSC wrote:Congrats on 2 comma and 2 kids!
Bogleheads are great savers, but hanging around here for too long gives you a distorted view of the world. Where else would you find people wondering if a $5M portfolio is enough for retirement?
It's therapy for a lot of guys to come on here and see the frugality ($5MM NW and debating a 4 year old Honda/Toyota) on another level. Makes me feel better about my own dealings.

Congrats to Rhino
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Re: Secretly entered two comma club

Post by keith6014 »

Easy Rhino wrote:Well, this is weird timing.

for background, cash flow has been tight for the last year or so (home + home repairs + expensive daycare), and I've been arguing with my wife about whether to send our daughter to a expensive private kindergarten or the free mediocre public one. Just two nights ago, i was combing through Quicken report to try to figure out which leaks could be plugged in our spending.

And then this morning, while checking the bills, in the bottom left corner, I see "Net Worth $1,060,000". (With the usual caveats, there might be an account out of balance in Quicken, the figure includes home equity, and there's been a long bull market.)

But the "dos comas" still made me feel better, I think. But I can't volunteer this news to my wife, because she'll want to take it as carte blanche to spend a bunch of money. :beer :confused
congrats.

Hope to be in your shoes soon.
Last edited by keith6014 on Fri Apr 07, 2017 7:38 pm, edited 1 time in total.
Church Lady
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Re: Secretly entered two comma club

Post by Church Lady »

fortyofforty wrote:Congratulations, Easy Rhino,

Personally, I don't count home equity for anything in my personal family balance sheet. I can't get it easily. It is stuck money. It can also evaporate, should the housing market collapse. Besides, I have to live somewhere, so if I sell this house I need to buy or rent something else at commensurably higher prices. How much that switch would cost is an unknown.

I can count retirement savings easily. I can also count savings outside of retirement accounts. That money is easy to access, but I still count those "pots" of money separately because they are for somewhat different purposes.

Again, well done. Pat yourself on the back. Then get back at it. It's what you do.
+1
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Utahdogowner
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Re: Secretly entered two comma club

Post by Utahdogowner »

Good Job on making it to the club! I hope to join you, but it won't be for years.
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Re: Secretly entered two comma club

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (Net worth).

Congrats! Now would be a good time to rethink your Financial plan.
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Re: Secretly entered two comma club

Post by sunny_socal »

Congrats.

Why would anyone pounce on the OP about "relationship problems?" :oops: We send our kids to private school as well and the decision is an annual event (discussion, tug-of-war...) Piano lessons are even worse, I'd pull the plug on that immediately but my wife is adamant about keeping them in it. :?
Zott
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Re: Secretly entered two comma club

Post by Zott »

Congratulations and keep it up. Regarding education, one option might be public elementary schools, and then private thereafter, where you may see more benefits than at the earlier grades.
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Re: Secretly entered two comma club

Post by nymeria.stark »

Zott wrote:Congratulations and keep it up. Regarding education, one option might be public elementary schools, and then private thereafter, where you may see more benefits than at the earlier grades.
Agreed. To an extent, kindergarten is kindergarten. Middle school and high school...definitely another story. That said, there are worse places to overspend than on than your kids' education.

Oh yeah, and congratulations. :sharebeer
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Re: Secretly entered two comma club

Post by sesq »

Congrats.

Some one teach him the secret handshake.
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JDCarpenter
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Re: Secretly entered two comma club

Post by JDCarpenter »

Easy Rhino wrote:...

Our daughter's preschool is already expensive ($1200 a month), so private elementary school would be maybe $3-400 more per month. But then when #2 starts preschool and school we'd get hit with the double whammy. There's no obvious silver bullet in the budget to pay for all this. Even if we dropped retirement and HSA contributions completely, it wouldn't quite cover it, nor is there one obviously frivolous spending category to make it up on.

We do have about $170k in a taxable brokerage account, so we could "dissave" from that for a long time to support this increased spending, but that really doesn't seem like a prudent idea to me.
We paid private all the way from montessori age 2 through college for all three. BUT there is no way I'd forego retirement savings and embrace multiple years of negative cashflow for it--especially with the online and other remote options for "age-inappropriate" study available today. If your soon-to-be-kindergartner is into dividing fractions and basic algebra, you no longer have to pay for private schooling to keep her challenged. Or, if there is a safety issue with your local schools, maybe it would be better to move?

OTOH, you are looking at the expense side of the ledger. How about the revenue side? Are you both full time now? Are there side gigs or promotion opportunities available? How about other jobs/businesses?
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simplesimon
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Re: Secretly entered two comma club

Post by simplesimon »

Congrats. Not knowing your expense structure it might be useful to think about the "illusion of wealth or poverty" mentioned in another thread.
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Re: Secretly entered two comma club

Post by bloom2708 »

Congrats! Good milestone.

Jut out of curiousity, what makes the "free" public school "mediocre" for Kindergarten? High class sizes? Cultural diversity? Older buildings?
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