How does the saying go, something about a Merry New Year and a Happy Christmas?
Statistically, there’s a 50/50 chance that you’re new here. If so, welcome! It’s time for a monthly Net Worth Report, where I reveal every detail of the taboo subject of my own finances…
Despite the retail marketing machine’s best efforts to convince us that the holidays are all about spending as much money as possible on pieces of plastic, to me the holidays are really about spending time, not money, on the people we care about.
And on the front, December began with a bang. The girlfriend and I started the month with a trip to Denver, Colorado. We like to return to my former home-of-two-years around the holidays, and it is becoming a bit of an annual tradition for us.
Denver truly has some underrated Christmas charm, I mean just look at these decorations!
We explored the familiar city, reliving old memories and finding new spots. I finally cashed in a 2 year old giftcard to a cooking class, and I surprised myself by whipping up this gem.
And for all the snowy, chilly nights in the Denver city, you’re always a few hours and a short drive from a sunny day illuminating some beautiful scenery. On this trip, we decided to sidetrack to El Dorado Canyon State Park, about 30 minutes north of the city.
The park is known partly for its incredible vista views and, unbeknownst, to me, mostly as a rock climbing mecca. Which means I first marveled at sights like this:
The was absolutely shocked by sights like this (click and zoom in for a surprise):
I can be a bit of an adrenaline junkie. Roller coasters are my idea of a great time, the bigger and faster the better, and I’ve been known to drop in on some ski terrain that’s far steeper and more challenging than my ability level. My bucket list is even rounded out by sky diving and race car driving.
But it only took one look at these tiny dots of humans before my palms started sweating profusely.
Nope, nope, nope. Respect to them, but no way.
Back in Minneapolis, I did my best to enjoy the winter weather. The cold and the snow really can be beautiful in its own way, especially during the holiday season. Plus, it makes for a great excuse for a toasty fire.
I then headed to my original home of Texas, where I took a relaxing week off work and spent time with my family and friends.
A perfect holiday.
December 2016 Net Worth Update
On the finance front, I passed $150,000!!!
My Forbes and Business Insider pieces had wonderfully complimentary headlines exclaiming “26 year old nearly saves $150,000.” To be honest, that nearly was taunting me.
“So close,” it said, “but not quite…”
A new car purchase and a brief moment of stock market panic later, and I was back down to $140,000 and wondering how long that little adverb would keep taunting me.
Not long, apparently. Reaching $100,000 took me 25 years, while saving another $50,000 took just about one more. Hey thanks, compound interest.
Cash Savings: $8,111 (+$4,918)
Wowza! ‘Tis the season, as my cash savings were bolstered by three factors:
- During the second half of the month, I temporarily dropped my 401K contributions from over 25% of my paycheck to around 10% in order to make sure I have the liquidity to kill that damn car loan ASAP.
- I started living pretty frugally, in order to make sure I have the liquidity to kill that damn car loan ASAP. I’m really not a fan of this whole debt thing, so I spent a lot more time in the kitchen cooking my own dinners and less time paying people to bring food to me.
- Holiday bonuses! I got an nice, unexpected year-end bonus at work.
Vanguard: $60,437 (+$1,290)
This stock market is crazy! I keep thinking it will come crashing down, even hoping so that I can buy some discounted stock, and it just keeps flying upward.
At the end of the month my allocations looked like this:
- Vanguard Total Stock Market Index Fund (VTSAX) – $47,000
- (Roth IRA) Vanguard REIT Index Fund (VGSLX) – $13,000
No contributions to these accounts this month, so the $1,300 increase was all market changes. December does mean year end dividends, of which the two funds spit out about $550 worth.
In 2017, I’m hoping to more regularly contribute to both of these funds.
Merrill Lynch: $45,919 (+$1,694)
Just more market changes here. The idea that your money can silently work away and create more money never ceases to fascinate me, and is a big reason for my initial interest in investing.
401K: $48,219 (+$3,054)
I was surprised to see this rise so much faster than then other two funds, since I adjusted my automatic 401K contributions downward during the second half of the month in order to build up some cash to kill the car loan.
The index funds that the 401K is invested in does have more exposure to small cap and international markets, and it looks like these two asset classes had a slightly better month than the larger US based stocks I’m otherwise mostly invested in.
Rent Payable: $690 (+$2)
Still proudly renting an apartment, and the rent is set through the summer. Right now though, it’s COLD, which means a slight increase in the heating bill.
Credit Cards Payable: $3,840 (+$2,024)
At first glance, this looks like I went on a wild spending bender compared to the previous few months. In reality, December was a pretty frugal month. My credit card bill is artificially high right now for two reasons:
- My friends and I are taking a surprisingly cheap ski trip to Whistler soon, but I was still the guy left holding the bag and fronting $1,400 for 8 people’s hotel rooms. I know they’re good for the money; I just don’t want to have to bust any kneecaps on this, the day of my daughter’s wedding…
- I signed up for the awesome credit card deal that is the Chase Sapphire Reserve, and I got hit with the $450 annual fee. A small price to pay for over $2,000 in rewards.
Auto Loan: $7,500 (+$0)
That loan is just sitting there, looming, with the first payment not due until March. Jokes on the loan though, I’m quickly saving up enough cash to give that thing a swift blindsided knockout, before any interest is due.
Year In Review
Here’s a chart showing my (almost) complete year’s progress, which you may recognize from my New Year’s Resolution post.
Who ever said little changes can’t add up to something big?
Looking at the chart, I still can’t quite wrap my mind around the power of saving.
At no point in the past year did I feel I was “sacrificing” anything to build up my net worth. Yet a bunch of small, consistent decisions added up to a big surge of growth – probably over $40,000 if we had data on the whole year.
And the most amazing part? I’m not doing anything special, really. I skipped a $5 coffee here, ignored the giftshop there, and resisted the temptation to upgrade my life just because I “deserve” something.
Probably the biggest contributor to the growth, a big automatic contribution to my 401K every paycheck, happens before I ever even get my paycheck, which makes the whole savings process totally autopilot.
If I can save like this, anyone can. Sure, we all have different numbers, and I’m sure there’s just as many people laughing at my puny net worth as there are impressed by the number. The point is, consistency is key.
My biggest takeaway from the graph? Small decisions really can add up to something huge.
Happy New Year Everyone!