[Thread merged into here --admin LadyGeek]
I've seen these posts here but never thought it'd be a reality anytime soon for me, but, here we are, 2 commas (hit this about a week ago) in investments!
As is posted often here, things like this are hard to celebrate/share with non-anonymous people
I thought I'd lay out where we are, how we got here, and how a "domino effect" of choices ended up helping us a lot over the years....it's kind of wild to think back at certain choices, 6-7 years ago, that made such a huge impact on things now.
I don't quite recall how it started/why but I've now tracked expenses/income/investments since 2013.....pretty cool to see the numbers then vs. now. Of course, it's been a good 8 years which I realize but still, cool to see!
My
actions from here as this ramped up quickly is to re-assess our overall finances, clean up a few things investment wise to simplify even more, and stay the course we are on.
-
-
Him 36, Her 37
2 kids (5 and 7)
Household Income:
Notes here......fairly steady from 2015 to 2019 but 2020 was a huge increase (my wife is a mortgage loan originator) and her income was ~225k of the 2020 income. It can be pretty variable year to year in that world but 2020, and 2021, have really helped the ramp up of income which most of the extra has gone into investing, thus, helping with the 2 commas.
2013: $113,806
2014: $109,748
2015: $166,313
2016: $169,624
2017: $173,281
2018: $172,749
2019: $192,500
2020: $275,872
2021 Projected: $275k
-
-
Investments
$1,013,000
375k Brokerage Accounts/Cash
638k IRA/401k Accounts
Planned Yearly Savings: ~64k/year
Note, with the variable income we get over the years we've done big "chunks" of savings....a 30k month for my wife, a few times a year, and we take 10-12k and put into the brokerage accounts or if it's early in the year we super fund the 401k to fill it up early in the year.
401k---$19,500
SEP IRA---$6,000 (I own my own (just me) personal training business and will use this bucket moving forward)
ROTH/Trad IRA---$12,000
Brokerage---$14,000 (~1,200/month)
"Free Money" Given to us
Cash Pension---$5,000
401k Match---$8,000
-
-
Right now current ratio is:
85% Stocks
15% Bonds
Rebalancing is new to me and not something I've really ever worried about. The
majority of funds are in VTSAX.....and the bonds come from various target retirement vanguard funds we hold.
While it might not be the most efficient, right now, we have a few, the 2015, 2035, and 2050 target funds.
I did this to choose the target funds that had more/less bonds, to, over time, balance our stocks/bonds a bit lower. Note, I'm no super pro with this so in my mind this was the easiest way. Open to some thoughts on this though.
The
target date funds are held in ROTH's and 401k......brokerage accounts have VTSAX only.....so I think that's the proper placement/way to have things, right?
-
-
Retirement Savings Tracking:
These are all as of May 1st of the particular year
2013: 108k
2014: 142k
2015: 175k
2016: 211k
2017: 289k
2018: 403k
2019: 425k
2020: 476k
2021: 1,013,000!!!
The over 500k jump is suprising to me as well. Below I'll list a few "lucky" events that we've used over the years to get ahead quickly. I say lucky because, well, it feels lucky. If we made a different choice things may have went down an entirely different path. Some bigger highlights below:
Lucky Events
1. In 2013 we bought our first home, the LOWEST priced home in the new subdivision
However, we owned a condo at the time and chose not to sell as the complex had too many builder owned units thus traditional financing would be tough = tough to sell. LUCKILY we could afford to quality with both mortgages so we RENTED the condo.
Fast forward, 7 years later, we had the SAME renters the entire time. We cash flowed every single month AND my wife and I aggressively payed down the mortgage. If we put that money in the market back then I'm sure it would've been more, but this focused us big time.
The condo mortgage was 137k in 2013 when we bought our first home and was ZERO 4 years later. So, from mid-2017 on there was no mortgage......so when then took that extra ~$1,000 from the renter and pushed that into retirement savings.
2. The second lucky thing was that lowest priced house in the old subdivison appreciated nicely from 2013 to 2017.....which is when we moved to the hosue we are in now. I enjoy landscaping work and a lot of sweat equity really helped us sell home #1 for a great profit. We built a deck, a patio, and put in lots of nice landscaping. We purchased for 309k in 2013 and sold for 444k in 2017.....of course, the mortgage was down to ~200k at that time so we then took that large cash chunk and used to buy home #2....ALSO the lowest priced home in the new neighborhood
Notice a theme?!?!? We've cleaned this house up nicely as well.
3. Event 3......in 2020, right after the pandemic started, of course, we sold the condo. We had decided in 2019 to sell in spring 2020, so, interesting timing how it all worked out. BUT, it worked out well. We had 0 mortage on the condo and sold for 245k, thus, a pretty hefty cash check we got.
As you can see from the large savings jump in 2021, we put almost all of that into the market back in July 2020 (~180k). It grew nicely and we also kept a nice cash buffer.
Now, don't tell the people in the
kids playset post but we did spend 30k (yes, not a typo) on a mega ultra playset for our kids in the backyard LOL. It is awesome though! Don't worry, the 30k includes the playset AND landscaping.....but I did the landscaping myself!
I recognize that these lucky events like what we purchased, when, the renters, etc., all helped significantly, especially in the last year.....but it is good to reflect
A few other things
I'd call these things we do SMART over lucky and having been on these boards, reading mostly, for years, has helped immensely.
1. We carry 0 debt. CC (just have 1) is paid off every month. We sold our 10 and 13 year old cars ~2 years ago and purchased 2 gently used (18k and 11k miles upon purchase) Toyota Rav 4's......about 18k each. Paid cash for one and while we took a loan for the second, we paid it off with cash in a few months.
2. We have cash to pay for large purchases (like the playset!). Going to Disneyworld? We have a bank account we save so the cash is there. Putting a new deck railing on our deck, the cash is on hand before doing the project. I think this mentality works well as we never get behind and are always "ahead" of things.
3. Tracked income/expenses monthly. This applies to us moreso as our incomes can have some high variability month over month. Since 2013 I can look and see each months NET income vs Expenses. For me, I like to track NET income which is purely the straight money we get each month in our accounts from work. I don't like using gross to compare to expenses as gross isn't cashflow. In addition, I don't track money we put into brokerage/roth/etc into expenses. Those can be stopped so I purely use expenses as, well, expenses to life, not savings "expenses." So, overall, we have a pretty consistent savings rate over the years even as income has changed. Yes, expenses have gone up a fair amount but in balance with income.
Only current debt in expenses currently is home mortgage......414k mortgage remaining (29 years, refi this year) with estimated value ~800k....plan is to stay in current home a loooong time though. Mortage is 1,800/month but Property TAXES are ~12k/year, OUCH! We have an account we save that 12k in so each year we can pay it off in one burst so it doesn't sneak up on us
INCOME EXPENSES SAVINGS RATE
$7,259 $4,583 37%
$7,056 $6,132 13%
$9,137 $5,315 42%
$9,355 $6,353 32%
$9,967 $6,806 32%
$10,721 $9,113 15%
$11,523 $8,611 25%
$15,587 $12,183 22%
$12,301 $9,474 23%
-
-
Well, if you made it this far, thanks for reading
Honestly I think it's helpful for me just to lay things out and "see" it all out here. Hope you may have found this useful and happy to answer any questions you may have.....although I'm mostly an ask the questions person here
Thanks to all here for strong and effective advice over the years.