January numbers:
- Personal:
- Gross monthly W2 pay: $5,375 (no change)
- Net monthly W2 pay: $3,470 (no change)
- Total credit card debt: $33,645 (-$1,251)
- Total other non-mortgage debt: $7,816 (+$6,460)
- Total mortgage debt: $146,729 (-$857)
- Cash/cash equivalents: $11,020 (+$327)
- Total retirement savings: $186,469 (+$8,422)
- Non-Equity Net worth: $9,299 (+$4,397)
- Total Net Worth: $285,300
It’s a brand new year, but not much is changing – mostly just chugging along. Spending continued to decline, with a spike around the holidays that will hopefully be offset by some reimbursements from family at some point this month. I expect spending to continue declining over the next few months as I focus more in this area. With the prospect of a vaccine I can plan to get back into thrift stores in a few months to buy product for online sales, reducing my reliance on the much more expensive ebay channel. That’s the plan anyway.
For the above you’ll notice a spike in non-mortgage debt and a corresponding increase in retirement savings. This is because I funded my Roth IRA out of my HELOC – getting the money in the market and planning to pay that down in time. This should be the last year I’ll fund that this way. In the future I can take long-term capital gains eligible funds out of my brokerage account instead. My Roth IRA functions partially as a part of my emergency funds (I should have a post detailing this posted next week) and is invested in a REIT (NLY) that pays a 10.71% dividend. I’m comfortable funding that account with debt at 5.25% to arbitrage that difference while I pay down the added debt lump.
Non-Equity Net worth climbed due to moves from the end of 2020, mortgage paydown continued predictably, and cash increased a little. I’m going to work on moving some money in the first quarter (essentially paying myself back out of business funds) so I’m hoping all categories will improve by April/May.
In the next few weeks you’ll see the second part of my emergency fund series and an annual change of my net worth due to recalculation of my Automatic Valuation Method (AVM) equity in my rental properties. There will also be a very large post – a yearly update with changes to income (based on an increased FSA draw effective in December), year-over-year numbers from 2019-2020, and a recalculation of W2 and passive income calculations. This yearly update will be done with an eye toward finally developing my Financial Independence (FI) date (I’d like to know what that date is by the end of 2021). I’m reasonably certain I’m Coast FI (defined as having enough saved that growth in time will allow you to retire at 67.5 without issue) but I’ll work to confirm that and put some planning around an actual transition. I know I don’t have a cash position to be able to early retire, but developing a plan for that will be part of my 2021 efforts.
In any case, look forward to sharing with you and hope you have a great 2021!
