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Net Worth Update: January 2018

Welcome to another addition of my monthly Net Worth update! This time its Net Worth January 2018 edition:

For those that are new, I will be posting these on a monthly basis to show my progress towards Financial Independence.  The purpose of these is not to brag, or show off what I have, merely to show that little by little, even over the course of just 28-31 days, much progress can be made.

In addition, by tracking and posting this on the blog where everyone can see, I’m hoping this helps to hold me accountable to my goals. Where slip ups and unchecked spending can easily be passed off by keeping it to myself, with other people watching it should help to keep me in line! (Nothing like trying to avoid public humiliation to keep you motivated!)

If you haven’t already, check out last month’s report from December.

January

After a hectic second half of 2017, where I was hardly around DC, it was nice to have  a month off with no real plans on the schedule.

Unfortunately, going back to work after a week off around the holidays was tough, especially with the freezing temps I came back to! And it really didn’t help when my heating unit was broken for 3 days… 🙁

Due to the coldness I was in a kind of hibernation mode throughout where it was tough to drag myself out of the apartment!

I was able to do a lot of research and manual, behind the scenes work, on the blog with my free time.

I’ve never done anything even remotely similar to this in the past so everything is new. There’s a lot more to it than I had originally thought there would be! (All those “How to Start a Blog” posts casually forgot to mention this part ;))

I eventually ventured out (lest I get cabin fever) and was able to snap a few photos of a frozen DC!

Follow me on Instagram! (@youngfireknight) That’s where I post a lot of my photography/life/travel pictures!

My roommate and I also hosted a friends game night! We played monopoly, which was my first time playing in so long. I promise we are all still friends afterwards!

Finally, at the end of the month the weather turned and we had a 60 degree weekend! I took advantage by going on a long hike to get some fresh air!

Sugarloaf Mountain in Maryland!

Overall an excellent month!

Net Worth

January breaks down as follows:

For the second time in three months I’ve broken my record for biggest monthly gain!

I just narrowly beat out November from last year and this time was able to do it without the help of a bonus from work. (Though as you’ll see, market gains surely helped this time :))

To the details!

Cash: $13,658 – $244

My cash account was aided by lower spending than my budget for the month.

I feel most comfortable with around $10K in Cash on hand, in case of any emergency that potentially could arise. I don’t get too worried if this fluctuates, so you may see it above and below at times.

With the extra Cash I have at this time, I will probably use it on one of two things at some point this year:

  1. Contribute and max out my Roth IRA
  2. Save up to purchase a property (to live in or as a rental)

It would be ideal if I could find someplace in DC (or surrounding area) to live in, though the housing prices are much too high for me. The ones that are affordable are condos that have INSANELY high HOA fee’s (no thank you). So it’s not looking too likely in this area.

I’ve been intrigued by purchasing a place further away which I could turn into a rental or airbnb property… but definitely will need to do some more research before I’m comfortable with that.

What do you think is the best course of action?

401K: $53,023 – $3,916

Contributions this month totaled $1,329 (Employer Matching included), while the rest was pure market gains. This Bull Market has been incredible and really has helped my Net Worth rise, especially recently.

I understand times aren’t always this good, however, I’m not worried about a crash. I don’t plan on touching this money for quite a while, so there is plenty of time to ride out the booms and busts.

My balance is 100% in stocks right now, split roughly 70/30 – Domestic/International. I may reevaluate sometime in the future, in order to re-balance and move a portion to the Bond Market to lock in some of these gains, but I haven’t decided yet.

Roth IRA: $6,146 – $255

No Contributions this month, so this is all market gains. Though if I do not purchase a property later this year I will definitely be maxing this out.

This account is all invested in a Vanguard mutual fund for Mid-Cap stocks. In the future I may move this elsewhere, perhaps to a REIT as I currently have no exposure to real estate.

Brokerage: $13,602 – $565

Again, no contributions here, so all market gains! My dividend paying stock did particularly well 🙂

I originally invested $12K into the account, $10K in the low fee VTI (Vanguard Total Stock Market ETF) and $2K in a high yield dividend paying stock that, after a few months of research, I believe was undervalued.

Both have worked out pretty well so far! I’ve seen gains every month, but as I noted in the 401K section, I absolutely realize that this won’t last forever. At least they both offer dividends that I will continue to harvest through the bad times and good.

HSA: $1,042 – $855

I opened my first HSA account at the end of November last year after turning 26.

The reason for the big jump was due to my employer contributing $750 to the account. It’s an awesome benefit! The rest ($105) were my own contributions.

Unfortunately, this is all held in a Cash position right now as I need a minimum of $2,500 to invest in a NTF (no transaction fee) mutual fund.

As I’m on track to max this out this year, I will hit this mark later this year and will immediately invest most of it.

Auto Value: $11,055 – ($288)

I have my Auto Value pegged at $2,500 above what the remaining value on my Auto Loan is. The negative value is simply monthly depreciation. The reason for this? Simply put, that was the value of the down payment I placed on my car.

I verify through Kelly Blue Book each month so that if I desperately needed to, I could sell my car for around that value, which has always been the case. However, I plan on having this car for a long time so ideally the need to sell before the loan is paid off never comes up.

Credit Cards: $(959) $336

I pay off my credit cards in full every month so this is just the monthly balance. By doing this I build credit and get free travel rewards and cash back while paying the credit card companies nothing in interest!

This number is what I pull from my credit card statements which ends on the 4th of every month.

So technically there are a couple expenses from next month being counted in here but this is what’s easiest for me to track so I’m not too worried about it.

Credit Card expenses were much lower this month. See below for the Expense Summary to see how I did against my budget!

Auto Loan: $(8,555) – $288

The value on this increases as the amount of principle on the loan decreases with my monthly payment.

I got the loan with a 1.9% Interest rate, which depending on whom you talk to, I’m either an idiot, working with free money, or somewhere in between.

As the interest rate is pretty low, I’ve been investing my money into the market instead of paying this off further.

Monthly Expenses:

It was a great month Spending wise for me! This was the lowest month I’ve had spending since 2016! (As I’ve mentioned, 2017 was a pretty bad spending year for me).

The details:

Monthly Rent $1,131:

Have to love living in a HCOL (High Cost of Living) area right? This is for a 2 BR apartment with my friend in which we split the cost. We could have found a place a little bit cheaper, however it would have been much further away from where we wanted to be (leading to an even longer commute), and with much less perks than what we have now.

Utilities $69 / Internet & Cable $65:

Utilities are up for the month probably due to how cold its been around here!

Internet/Cable is pretty standard at $65 as I split the costs with my roommate every month.

Groceries $148 / Restaurants $60:

Personally, I view these together so if I can stay under the combined $250 ($150 + $100) budget, then I am happy with the month.

This budget is much lower than 2017 as I’m giving myself a challenge to not eat out as much and lower grocery spending. I also discovered the magic of Aldi and how much cheaper that is than where I used to shop which gave me more confidence in lowering the grocery spending.

I went out a couple times to eat this month, but definitely not as much as I usually did last year.

Car Payment $302:

Monthly car payment to pay off my loan. Less than 2.5 more years now! (If I don’t pay it off sooner). With only a 1.9% Interest rate I believe I can beat that payment towards interest with returns through the market, which is the only reason I haven’t paid it off so far.

Auto Insurance $257:

After my insurance company (yet again) raised my rates, I decided to shop around for new car insurance. It was puzzling that they consistently were increasing it when I’ve never made a claim, been in an accident, or gotten a driving ticket. And wow was this a great move!

While I would’ve paid $450 over 6 months with my old company, I found a quote (with the exact same coverage) that would only be $292 over 6 months! (I ended my old policy a few weeks early and got a partial refund which explains the $257).

I paid in full for the next 6 months so the over will even out with time.

Be on the lookout for a post in the future about my experience with this.

Auto Fuel $102 / Auto Other $0:

I also have a lengthy commute to work – 60 miles round trip – leading to high fuel costs each month. The under this month is probably just due to timing.

The Other category includes any maintenance, repairs, taxes, etc that I budget for.  Luckily nothing in January for this!

Cell Phone $0:

I’m still under my parents plan so this is my portion of the bill. I pay my parents directly up front for 6 months at a time.

I still need to send my parents their check for January-June of this year so I’m technically late! They know I’m good for it though 🙂

Medical $0:

I rarely need to visit the doctor so this will be for dentist co-pays and such so I can keep my HSA fully invested!

Entertainment $79:

As it was so cold out for most of the month I spent a lot of time holed up in my apartment.

These costs were from a couple nights in which I did venture out with friends, as well as my monthly Spotify payment.

(Spotify is technically a partial Christmas gift for all my siblings too, but it would be too complicated to break it out each month so I leave it in here).

Travel $42:

This category is for flights/hotels/etc portion of travel. I booked a round trip bus ticket to NYC in March to see my college friends. Very excited!

Gifts $51:

Birthday gift for my mother!

Misc $125:

Haircut (which I get every 2-3 months), Laundry for the month and my fees for filing Federal and State Tax Returns.

Savings Rate

Here’s the overall picture:

*Note – Take Home is my after tax pay (what shows up in my bank account). 401K is only my contributions. 401K Match is my company’s 3% match. HSA is both mine and employer contributions.

I was stoked to see a 51% savings rate! That’s the highest it’s been in a long time and would place me on target for my stretch goal of a 50% savings rate this year.

Hoping to keep up the pace next month!

Check out the Net Worth Updates page to see how I’ve done in the past.

How did your January turn out?

16 thoughts to “Net Worth Update: January 2018”

  1. Great month! I had a similar January, under budget in spending and very nice market increases 🙂 …although those may be disappearing in the short term from the looks of it, LOL. Doesn’t really matter though, we’re in it for the long haul.

    Really looking forward to your post on the auto insurance experience. I am taking your advice and will be shopping around at some point this month. Have to get my rates, down, although I don’t know if that’s going to be possible in my state!!

    1. Thanks Brian! Not much we can control with the markets so just have to ride the waves (good and bad) and stick to the plan haha.

      Yes I’ll hopefully have it out soon! A lot of it surely has to do with the area you’re in, but can’t hurt to get quotes from other companies to see if you can get a better deal.

  2. WHAT how did you get auto insurance for so cheap? I shopped around last year and will definitely do so again before it renews in May but I’m paying something closer to $90/month with a 2006 car!

    Yeah, my roommate and I definitely had a higher-than-normal month on the utilities, too. But at least our heat wasn’t broken this month! That must’ve been awful.

    Congratulations on still being friends with everyone after Monopoly 😉

    1. So technically I live in Rosslyn 😬 (it’s just so much easier to say DC though!) which is probably the biggest reason I’ve got a cheaper rate than you. I wonder since you car is fairly old (not sure how much value it has?) whether you’ve considered dropping some of the coverage to lower your rate? (Like no collision, etc as if it got totaled it might not be worth it to repair). Just a thought as I know some people do that.

      It was so cold! We survived though haha (barely).

      But yes I feel like still having friends after playing that game is a small win for the month 😂

  3. Aha, the truth comes out and you’re only pretending to be in DC! Good thing we accept all you MD/VA interlopers into the DC group 😉 That’s very likely a huge part of it. I’ve thought about dropping comprehensive/collision in the past and I might honestly do that this year. My insurance deductible is $1,000 at the moment and if I’m self-insuring for that amount anyway, it probably doesn’t make sense to keep the coverage. I like to think my car is worth about $4,000 but that’s probably way too much and that $1,000 deductible is actually more like 40%-50% of what it’s actually worth.

    1. Haha I wanted to live in DC when I moved here! It just didn’t make sense with my job out near the Dulles airport so I settled with being as close as I could 😄

      Yes exactly, if you do drop collision/comprehensive it may be beneficial to up your emergency fund a bit more (with the insurance savings!) just in case, but that would probably save you a lot of money! Just something to think about and really depends on your individual risk preference

  4. I think the biggest factor is absolutely where you are! Just the way it is. I’ll definitely be putting some quote requests out there over the next few weeks.

  5. Out by Dulles? Yeah, living in DC wouldn’t make any sense with that drive! And given how expensive DC proper is, those of us that actually live in the city are a very small minority of the group. So don’t worry, we will invite you to group meetups 😉

    This one looks like it’ll post as an actual reply to an existing comment. So maybe it’s just me haha.

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