Welcome to the newest net worth update!
Every month I share my progress towards a nearly $1 million portfolio and an early retirement by age 37. Money tends to be a pretty taboo subject IRL, but I hope that sharing all my details here will help you in your own situation.
Well, April arrived. Around here, that means the snow (finally) started melting, and the weather (finally) started warming up. Like a switch, the sun peeked out of the clouds, the landscape suddenly started looking greener, and cheerful moods abound.
Soon enough, it’d be time to break out the shorts, flip flops, and, oh yes… burgers!
But the arrival of grilling season presented a tough challenge for this new homeowner. I didn’t have a grill.
In fact, I’ve never had a grill.
As I’ve moved from apartment to apartment these last few years, I kept my head high as a proud renter. But there’s one aspect of home ownership I always drove by with a longing gaze. Whenever I saw a nice, shiny grill on a deck, or whenever I tasted the sort of juicy steak only the kiss of a flame can create, I secretly craved more than a tasty sirloin.
I wanted a grill, damnit!
So, when my story took a left turn earlier this year, and I saw an opportunity to plant roots in a way that’d make me richer, I pulled the trigger. And as a tiny footnote, I also started dreaming about owning a grill.
In April, I finally made that dream come true. And I did it for next to nothing.
I started with a tiny bit of research, and I found something peculiar. Unless you’re getting crazy with a championship BBQ smoker or a charcoal egg, nobody could actually explain to me what makes an insanely expensive grill so much better.
From what I gathered, fire is fire, and me nor the salesmen could split the hairs on all the different gas grills if our lives depended on it.
Which led me to an honest conclusion. Sports cars might get all the credit, but as far as I can tell, a grill is one of those macho status symbols guys love to show off. Which leads to some pretty ridiculous price tags.
So, I headed to my trustiest resource, where big, heavy objects are always on sale: Craigslist.
And after about a day and a half of looking, I picked up this beaut. For $40!!
We soon fired her up for the backyard’s first inaugural barbeque. Burgers and hotdogs, like a true ‘Merican. It was my proudest moment of home ownership yet.
But, my love affair with the house was short lived, and so were my frugal wins. Shortly after flying high on my grill deal of the year, I crashed back down to earth with an expense that’s had me shaking in my boots for the past few months:
The kitchen remodel.
We broke ground on this $10,000 budgeted beast. As our awesome contractor diligently worked away, each day was like a lottery of destruction to come home to.
Surprise! Your wall’s split open!
Surprise! You’re cool with a dirt floor in your office for a while, right?
Surprise! Your wall is even more split open!
It’s easy to complain, but overall, we made some impressive headway during the month. Things are really coming together, and it’s fascinating to seen a plan come to life.
And the change is going to be life improving. The addition of a dishwasher means we’re going to finally stop wasting time scrubbing everything by hand. And our kitchen, which was previously the size of a shoebox and made fitting two people and a dog a serious logistical challenge, is turning into an open, beautiful space.
We should be on schedule to finish by the end of May. Like any good home renovation project, we’re a couple thousand dollars over budget, which is a nice transition to this month’s update and spending report:
Net Worth Update: April 2018
And the detailed update:
A $23 increase!
I’ll chalk up surviving a month of remodel without a drop in net worth as a small win.
Cash: $15,414 (+$2,655)
This account got a nice boost thanks to Lady Money Wizard writing a check for her portion of the kitchen costs, but it will fall back down once the credit card bill for my portion of the costs comes due.
Without her contribution, my cash balance would have fallen about $3,000 since March, which is accurate since most of the labor costs were paid out of my checking account.
Brokerage: $110,707 (+$1,287)
With all the kitchen craziness, I haven’t paid much attention to the market, so I can’t comment on the cause. I also haven’t made any contributions to these taxable investment accounts in a while, so this is just market movement.
As usual, my breakdown remains:
- 50% in Vanguard’s Total Stock Market Index Fund. (See: How to Choose a Vanguard Index Fund)
- 30% in a mixture of Vanguard growth, value, and bond ETFs.
- 20% in individual stocks, back from the days when I thought I could beat the market. I’ve now wised up and decided not to trade individual stocks.
A reader recently asked why I don’t just sell the individual stocks and move the proceeds over to more Vanguard index funds. My reason, for what it’s worth, is that I’d incur a taxable event this way. I’d have to pay long term capital gains taxes (15%) on any earnings/appreciation of the sold stock, and I’d rather just let them sit and defer those taxes to a later date. As the saying goes, a tax deferred is a tax saved!
401(k): $94,870 (+$3,396)
Getting soooo close to 6 digits here.
For some reason, my contributions were an extra $200 this month. My first suspicion is that maybe Personal Capital is counting some dividend distributions within the account as my own contributions. In any case, note to self: follow up on where this free money is coming from.
Roth IRA: $22,793 (+539)
Just a little bit of market movement for my backup-backup emergency fund.
Mortgage Payable: $739 ($20)
The lowest utility bill yet! Thanks, nicer weather.
As usual, I split housing costs with Lady Money Wizard. $739 represents my portion of the total mortgage + insurance + taxes + utilities + $300 a month towards a maintenance fund.
Credit Cards Payable: $9,851 ($7,874)
Well, I knew that streak of green was going to end some time this month.
What a bill…
My only comforting thought is knowing that I opened a rewards credit card this month. So, at least some of that spending will go help me reach a lucrative travel sign up bonus.
Total April Spending: $6,438
Wow! One of these categories doesn’t seem like the other…
Rent: $759
Still pretty normal…
Groceries: $135
Nothing to see here…
Dining Out: $182
A little higher than previous months, probably because it’s so hard to motivate yourself to cook at home when you have no sink, oven, stove, or… a kitchen.
Travel: $409
No travel, but I did buy my $400 ski pass for next season (shout out to the Mountain Collective, for any skiers out there).
Entertainment: $112
A couple nights out with friends, two afternoons at the breweries, and a few unusual (for me) trips to the coffee shop, in order to get some work done while my home office was the previously mentioned dirt patch.
House Expenses: $4,482
Theeeere it is. This is my half of the remodel costs so far, although we aren’t out of the woodwork yet.
We’ve still got a little more labor and materials to pay in May, plus we’ll likely need a little more quartz than in the initial plan. All told, we’re about $1,000 over the initial $10,000 budget so far, and I expect the final price to be $15,000 or so.
It’s painful, but we’re getting a TON for our money. A full gut job of the kitchen, new appliances, structural work to the house itself, opening the floor plan, plus re-flooring of my office to boot.
We’re lucky to have a reasonably priced contractor that we trust, but the HGTV Rule of Blown Reno Budgets is in full effect.
(Stay tuned for a full summary post about this experience, along with tips I’ve picked up along the way.)
Other: $133
The Money Pup needed an unexpected vet visit to deal with some bad allergies, and we all know those aren’t cheap.
That’s a wrap on April
Quite the shift from “No Spend March” but things could be worse. And besides, I finally got a grill. 😉
Readers, how was your April? I hope you spent less than me!
BTW – If you’re looking for an easy way to track your spending, check out my detailed Personal Capital vs. Mint comparison.
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Wow that’s gotta feel great knowing your net worth didn’t change given all those remodeling costs.
Hope it turns out great and looking forward to reading the recap of how it all went down!
Definitely feels like I’m dodging bullets! And I’m looking forward to putting together that recap too. Lots to share!
There’s an elephant in your kitchen. Why pay for half the remodeling costs on a house you don’t own?
A kitchen remodel into an open plan is all the craze these days and would surely increase the value of the home. If you were an owner your net worth would have gone up this month…at least on paper. Paying half the mortgage and even contributing to the maintenance fund is understandable because a landlord would pass these costs on to the renter, but making a lump sum payment into a remodel is more of a long-term investment into home equity and the potentially increased future rental income.
Well this all depends on when he’s planning on popping the question. Looking forward to hearing about that!
Lol, that’s what I was thinking but I didn’t want to call out that elephant too!
That’s probably the biggest elephant in my net worth, actually. At some point, we’ll combine houses/net worth.
Do you account for credit card rewards when calculating your net worth? If not, then you may be understating your net worth position slightly. For example, when tracking my own spending I’ll record the full cost of an item that I purchase using a credit card (even if I know that I will receive some cashback in due course using the card). Cashback earned in this way would be accounted for when calculating net worth because it would lower net liabilities outstanding.
Just out of interest – how did you go about costing the refurb? Has the change in price resulted because the spec. of the job has changed (e.g. you’re asking for more work to be done, better quality materials etc…) or is it simply the case that once work started it became apparent that the remodel is a bigger job than first envisaged?
Thanks
HH
Hey HH,
Your system makes sense, although I don’t consider credit card rewards in my net worth for simplicity’s sake. These updates are enough work as is, I don’t need be making things any harder on myself! Plus, even if my cashback or hotel/travel points totaled a couple thousand dollars, at this point that’d still make a less than 1% change to my overall net worth.
A little bit of both on the remodel. Our contractor is a family friend, so the “bid” process was very informal. The main cost differences are going with quartz countertops vs. a cheaper surface and needed some surprise structural reinforcement. Probably TMI to go into the comment here, but I’ll cover all the details in the upcoming post!
Nice update!
I’d love for you to eventually do an article on how you will eventually start taking distributions from your accounts at 37. What will be the most tax efficient strategy, while also allowing those investments to keep growing.
Thanks Steph!
I’ve got two posts about withdrawal strategies lined up in the queue. Look for them in the coming months!
Congratulations on your first step into a wider world – let the grilling adventures begin!
Thanks Paul! A wider world indeed.
Was really hoping to see some amateur photography of the feast you cooked up with that mighty grill. Oh well might have to wait until next month. Keep that net worth going up!
Haha! Ask and you shall receive! I just cut that pic from the final draft at the last minute:
https://mymoneywizard.com/wp-content/uploads/2018/05/grilling-kabobs.jpg
Hey, nice grill Money Wiz!
Looks like your kitchen remodel is coming along nicely too! Good job not letting that seriously impact your net worth!
Thanks Mr. Tako! Definitely feel like I’ve dodged a bullet so far on the remodel costs.
Are you planning on adding your portion of your growing home equity (assuming you’re paying down principal through your mortgage payments) to your net worth calculations? Or will you only consider tangible assets in your net worth? For many, home equity makes up a substantial portion of their net worth, which can only be realized by eventually selling. Of course, this means one is now homeless . . .
Good point Jim. I’d probably add the equity just because it’s standard to do so. That said, IMO it doesn’t add a whole lot to the calculation. My whole purpose for tracking my NW is to see my progress towards a number that will eventually support financial independence. Changes to the value of my home don’t really affect that, unless I’m planning on selling it to be a permanent traveler or renter.
Obviously though, there’s a huge benefit in having a paid off place to live. So I think the real benefit of equity tracking is measuring your progress towards becoming mortgage free.
My work offers a 457b, which I have maxed out (18K) at the age of 23. My thinking going forward is to open up a Vanguard roth ira account and max that out. 100% stocks with the VTSMX…with my age and salary (near 6 figures, to in the near future surpassing the 6 figure mark) would you take this route, or a traditional ira?
I wanna know how you only spend $100 something on groceries a month. That absolutely blows my mind. Haha. Please share your secrets.
What type of grocery store do you shop at? The prices at Whole Paycheck and similar “gourmet” stores absolutely blow my mind too. Shout out to Aldi; they’re even cheaper than Costco, and without the bulk.
I also don’t buy any junk. Everyone says eating healthy is expensive, but chips, frozen meals, box dinners, etc. are the highest margin items in the store. I literally never buy those. On the other hand, fruits, veggies, and chicken breast are all really cheap.