November marks the sixth consecutive month of net worth updates we have shared on The FI Project! At first we were really hesitant about how much we wanted to share on this blog, but in the end we wanted to be fully transparent and open with all of our numbers, unique circumstances, and our personal path. I will admit putting all of this on the internet can be scary, but we are trying to share a story and the journey of how we are achieving financial independence. This narrative is different than the typical narrative that seems to have become standard (or at least promoted) in a lot of media on the topic of financial independence.
Ultimately we think that every path to FI is unique but there will be some things others may be able to replicate, or learn and apply to their own personal situation. As a teacher and a researcher my hope is that anyone reading this blog views it as only one of many possible perspectives and paths that they will read and draw from to determine what can be assimilated into their own personal circumstances. That has been my approach to financial independence for years, and I enjoy adding just one more unique voice.
So now looking at our progress this month we had quite a jump in our net worth. At the end of November our net worth grew to $984,100 with most of that increase coming from gains in the market. If only gains could continue at this rate (they can’t), we would be wrapped up pretty soon!
Specifically looking at this from a month over month perspective, our net worth is up, and so was our savings by a small amount. At the end of October, our net worth was $955,600 which means our net worth increase by $28,500 in one month!
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 $7,573 which was an decrease of almost $2,500 from last month. This variability in income is not uncommon since my spouse works for herself. If some of her clients pay on time we should see this number increase a fair amount in December.
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 $3,075 this month, which is a big decrease from last month and actually under our typical amount we budget to spend . This was helped by a work trip (academic conference) where all of my expenses, including food, were reimbursed. Actually I received $695 more than I spent from my reimbursement since I paid for the conference registration 7 months ago and I can only be reimbursed for it once I attend. Also, yes academic conference registration fees are ridiculous!
Our goal we set for 2019 was 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. So far this year we have saved $43,216 including the amount we saved this month (November) which was $4,498. By the end of the year I will have contributed the maximum allowed amount to both my 403(b) and 457(b) accounts as well as both our IRAs. To hit our minimum goal we still need to save $6,784 by December 31st. Whether we meet our goal or not is going to depend on my wife’s clients paying on time, which lately is not often. I really want to see us hit the goal this year!
Some Closing Thoughts
December is always a month in transition. In a few days I will wrap up the Fall semester and have a nice three week break before the spring semester starts. In the past I would normally continue to work on articles, grants, and course prep during this time, but with the exception of approximately two days I completely shut down any work related activities. The time is competently devoted to family, travel, and some personal projects I want to work on that are not in any way related to my job. I know this seems like a common sense approach, but the expectation in academia sometimes is that your never stop working. It took me a long time to break away from that type of mentality.
Next week we are also starting a large decluttering and belongings reduction effort. We started this several years ago and it worked great, but in the time between things have returned to a cluttered state with too much stuff (mostly kid related). A lot of this accumulation is gifts or items given to our children, even when we ask for these types of things to be limited from family members. I will post on our efforts once we start.
Finally, in the next couple of weeks I will be posting the details and history of our income, savings, spending, and investing so that a full and complete picture of our path is more visible and transparent. It has taken a while to find, analyze, and compile almost 20 years of data, but I found the process to be quite fascinating. This is one of several things I have been working on for a while since I started posting on the FI Project.