Continuing my attempt to post at least my monthly updates, I am posting a status update from April. As I said last month during this coronavirus pandemic our family has had many challenges, while at the same time being in a fortunate position to have fairly stable employment, savings, food, shelter, and other things that so many have lost during this time. So for every challenge or setback I must always emphasize the good fortune we are also experiencing during this time. I have continued my policy of mostly shutting out social media and I think that has been a very helpful thing. At some point I have a lot I want to say, but I just do not have the mental capacity or spare cognitive load to even consider it at this point.
From a financial perspective we are in a place where our net worth has declined a lot over 2020, but the fluctuations from month to month are extreme. Even so we are continuing to follow our predetermined investment plan, without making major changes to our strategy. We have made some investment changes, but these were all part of our prior plan based on certain scenarios, mostly related to the approximately 10% we invest outside of index funds. So here is how we did in April 2020. At the end of April 2020 our net worth was $937,413 which was a gain of $51,524 in one month. For the year we are now down $76,549 for a loss of around 7.55%. While a loss still hurts psychologically, the loss is less than half of what it was last month.
Looking at the changes in April we are essentially back to where we were two months ago for our net worth. In March our portfolio showed a large drop in value that has essentially recovered in April. I suspect in the short term we are going to see a lot of this on a month to month basis. Even with everything going on we are still on track to meet our goal this year to save at least $50,000. At the end of March 2020, our net worth was $885,889 which means our net worth increased by $51,524 this month which includes our $4,223 contribution into our retirement accounts. Honestly I think if I didn’t already commit to updating this blog and our net worth monthly I would stop checking on a monthly basis.
We calculate our net worth by adding all of our pre-tax retirement accounts (403b, 457b, Traditional IRAs, and ORP), our after-tax retirement accounts (Roth IRAs), and our after-tax brokerage and savings accounts together. We also include real-estate equity (i.e. our home) discounted to a price we think we would be able to get after closing costs if we needed to sell the property as quickly as possible. After we add up all the assets above we subtract our current mortgage (our only debt) to arrive at our current net worth.
Income
This month our income was $15,513 which was far above our normal income. The additional income came from a couple of sources this month. First we received our economic impact payment for $3,400 (2 adults, 2 children), and we also received some reimbursements from travel that had already been paid. While I was not sure whether to include that amount in our income, I did include it as an expense in the past so I have to account for it in some way. While this monthly income is one of our higher amounts, we are also having some issues with my spouse being paid for work she has already completed. Several of the contract projects she completed are not paying because the businesses are having trouble paying their liabilities. We hope this resolves itself eventually, but we also wonder whether we are going to take some losses on work that has already been completed. While she will still retain the copyright for the work until it has been paid, it has been something impacting past work. At this point we are being understanding with some of the smaller clients until things improve in the economy.
We calculate our income by taking our net income (after tax income) and adding back the amount that was withheld/saved in our retirement accounts, including the 6% of my salary contribution I get from my job in my ORP account (I mean technically it is income).
Spending
We spent $9,005 this month, which is one of the highest amounts spent in one month. A lot of this reflects the fact that when we received our economic stimulus money, we spent it where we felt it would do the most good. Since we are still meeting our savings goals and so many people and small businesses are suffering, spending it was what we felt was the right thing to do.
Savings
Our goal we set for 2020 is to save a minimum of $50,000 inside our retirement accounts, with maybe a little additional amount in our after-tax brokerage or savings account. We met our goal last year (barely) and saved $50,414 and are off to a good start this year. This month we saved $4,223 in our pre-tax accounts, with an additional $2,285 saved in our after-tax savings account. We are continuing to increase our cash buffer during these uncertain times, and if things improve in the future some of this additional savings will go back into our travel category. We still have more than an adequate emergency and cash fund, but we decided to add to it a little bit if we make more than our targeted retirement account contributions.
Some Closing Thoughts
I am still torn between how much I would love to say and write on this blog, and also how much I just want to withdraw from online activity as much as possible during these uncertain times. Writing a post that is mostly about numbers and status updates is not too hard, but I just do not have the mental capacity to do much else. Keeping up with my job and homeschooling the kids leaves little cognitive load for much else. On top of that I have a legal case that has started to consume a lot more time and what little extra I have left. I think for the next little while these monthly updates may be all that I can manage until something changes. So until June, I hope everyone is staying well and healthy (in all aspects).
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