Hello my overly neglected blog and readers! February is over and I find myself reflecting on a month that really was mostly just a blur of seasonal depression mixed with viruses going back and forth in our family that we just have not been able to shake since the beginning of this year. From a series of colds to the flu I feel like we have had them all and hoping the coranavirus does not visit our household.
It looks like the market has not been doing that well either, but regardless of the news associated with the virus and fear, I feel it has been over extended for the last little while and at some point and for some reason a downturn was bound to happen. While I accept this, I will not lie and say it does not bother me, in fact there are very few people with large amounts of money invested that would not be impacted emotionally and psychology from such large drops. I know there are certainly a lot of bloggers and people on twitter “flexing” saying “now is the time to buy”, or “it is no big deal”, but don’t ever confused what is being said from how that person actually feels. While some of the flexing can bother me at times, I recognize it for what it mostly is… a coping mechanism even if the posted does not recognize it as such. Anyway enough rambling, let’s take a look at how everything ended in February.
February investment losses were high and as was expected at some point we lost our “millionaire status” . Our net worth ended the month at $936,939.04 with about an 8% drop in our investments. Both the percentage change and actual amount is quite large, but this does not impact our planned timeline.
Looking at the changes in February we are now a little bit above where we were in June of 2019. Even with the market drop we are still working on our goal this year to save at least $50,000. At the end of January 2020, our net worth was $1,013, 962 which means our net worth decreased by $77,023 this month even after contributing $4,094 into our retirement accounts. We know to expect these fluctuations, but they are still hard to see, and I am trying hard not to dwell on it! Maybe I will continue to limit my twitter and news feed time in March as well.
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.
This month our income was $9,244 which was an decrease of $1,206 from January. This is mostly a function of the variability of my spouse’s self-employment income.
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).
We spent $5,126 this month, which is under our average budgeted amount each month . It helps that there was no unexpected spending, no school tuition, and aside from an already paid for trip to Florida, we really did not do much this month.
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 pretty good start this year. This month we again saved $4,094 in our pre-tax accounts. Last year we were able to front load the maximum contribution in at least one Roth IRA, but this year we are going to be making smaller regular contributions throughout the year.
Some Closing Thoughts
As I mentioned in the open of this post we are still struggling with illnesses in our house that I am hoping improves soon, or we at least get a break. I also mentioned that I was experiencing some seasonal depression, and this is fairly common for me during the winter months and particularly this time of year. I am not going to shy away from being honest about this, because it does have a huge impact on my life and in this past month has caused some motivational issues on several items that I really need to be working on. I do feel like I may be coming out of it soon, but I am just not quite there yet.
The decluttering process (see 2020 goals) took a pause this month, and we still have only completed the clothing/closet part of our plan. It is still high on the priority list once the motivation returns and time allows.
I hope everyone has a wonderful March!