Welcome to the first update of the new year!
A fresh start!
Before we get into all the juicy details, you know I’ve gotta share the spiel!
Every month I track my progress to a goal net worth of around $1 million, and hopefully… an early exit from my white collar office job. I’m currently 30 and hoping to retire by age 35. Let’s see the latest progress.
*As always, I am not an expert or financial advisor, so nothing on this site should be considered financial advice. These are just like, my opinions, man. Always do you own research, and always abide by The Dude.
Life Update: January 2020
You know times are getting tough when your winter vacation is to… Iowa?
Haha, I kid! I kid! (Are the Iowans still here?)
In all seriousness, Lady Money Wizard and I found an awesome cabin in Decorah, IA.
It was an easy sell, since apparently that little small town happens to have one of the best breweries in the country. (Toppling Goliath, for any fans out there!)
We had a great time and were mostly shocked at the price of life in small town Iowa. Filet Mignon dinner for $20 bucks? Winery tasting for $6 a bottle???
For anyone who’s really fed up with the rat race, I think I’ve got your answer. Just move to Iowa! You might not have to work another day in your life.
It’s always nice to know you’ve got options!
Back in Minnesota, winter was in full swing, so we did winter stuff. Snow shoeing, frigid dog walks, tending to our broken furnace, you know… the usual. 🙂
Otherwise, there’s not a whole lot to discuss, so we’ll jump right into the numbers.
Net Worth Update: January 2021
In case your eyes have a tendency to glaze over at the sight of a spreadsheet (we’ve all been there) the net worth went up a modest 1.5% over the month, which totals about $7K given the size of my portfolio.
That’s an amount that the hardcore gamblers on r/wallstreetbets wouldn’t bat an eye over, but I’ll still take it.
Plus, we’re still inching oh-so-close to the half-a-millionaire mark! One of these days!
Portfolio Allocation: January 2021
Ohhh, how oddly satisfying that the international stock exposure hit exactly 10%? I’d previously said that was my long term goal, which just makes the happy accident even better. Of course, it was helped along by some portfolio changes that I’ll talk about below…
Checking Account: $13,017 ($5,366)
The big news is that a new year means a new chance to max out retirement accounts.
And for the first time since forever, I finally didn’t drag my feet on this one! In January, I transferred the full IRS-allowed $6,000 from my checking account into my Roth IRA.
Brokerage: $211,318 (+$1,320)
No contributions this month, so this was just market movement. This segment of the portfolio mirrored the S&P500 pretty closely (both went up by about half a percent) which makes sense considering the vast majority of this portfolio is S&P 500 index funds.
To get specific, the brokerage account is roughly:
- Vanguard Total Stock Market Index Fund (VTSAX): $136,000
- Vanguard Total Bond Market Index Fund (VBTLX): $28,000
- Vanguard Money Market Fund (VMFXX): $14,000
- Gold & Silver ETFs: $4,000
The only portion I’m not super excited about lately is the VMFXX Money Market fund. A reader pointed out that with The Fed slashing interest rates, this fund no longer pays the 1-2% it used to and instead is much closer to 0%. And he’s right. With an expense ratio of 0.11%, if interest rates don’t change in the near future, I’m likely losing a few pennies on this investment each year.
Oh well. I consider the main purpose of that investment to be diversification – mainly some ammo in case the market tanks and I need to deploy cash to scoop up bargain investments.
And if that never happens? Well then having a $14,000 emergency fund isn’t the worst thing in the world, even though I think they’re overrated.
401(k) : $207,417 (+$2,664)
I max out my 401(k) each year. With no changes in the IRS rules in 2021 (that maximum is still $19,500 per year) my monthly contributions won’t change this year.
Those contributions are still broken down like this:
- 50% S&P 500 Index Fund
- 30% Small Cap Stocks Index Fund
- 20% International Stocks Index Fund
Roth IRA: $51,410 (+$5,997)
Finally, I did it! I didn’t wait half a year before maxing out the Roth IRA!
In previous years, I’d transfer the money to the Roth and then slowly dollar cost average into REITs or International Stocks.
This year, in the spirit of YOLO’ing wallstreetbets style, I threw the whole $6,000 right into Vanguard’s International Stock Market fund.
That might sound a little crazy, but it will give me an extra few months of compound interest to get to work. Plus, a lot of research shows that lump sum investing rather than a slow deployment (if you have the cash) usually outperforms anyway.
So, the Roth now has:
- Vanguard REIT Index Fund (VGSLX): $38,500
- Vanguard International Stock Index Fund (VTIAX): $13,000
PS – here’s why I like VTIAX more than VFWAX.
Rent Payable: $861 (+$4)
Nothing exciting here. Still splitting the mortgage on a house in Minneapolis that my fiance bought for $180,000 a few years ago. This “rent” covers my half of the mortgage, utilities, taxes, expected maintenance, etc.
Credit Cards Payable: $1,687 ($2,546)
Always a lagging indicator, as we’re about to see…
Total January Spending: $4,787
^^My actual face when I tallied up this month’s spending.
I think this is the hardest I’ve ever blown the budget!
So. Much. Red. Almost every category is a bloodbath!
PS – If you want that spending tracker spreadsheet for yourself, don’t forget to sign up for my email list. I’ll be releasing it soon!
Winter is always more expensive here because of heating costs. So far so good…
I got sick of people breathing their COVID-breath down my neck at the grocery store, so I started dabbling in Amazon grocery delivery.
My amateur research says it’s about 10-20% pricier than bargain stores like Aldi, but still definitely something I could get used to. (Especially at a time when I spend my whole grocery trip wondering if the guy who thinks 1.5 feet equals 6 feet uses the same logic for the rest of his life.)
Dining Out: $295
One of the only below-budget categories, and by a whopping $5, haha! Not looking great…
Mostly spluring on some board games. #COVIDLife
Higher than usual because of the trip to Iowa.
Vehicle Expenses: $1,073
Aaand the big one. Doing a little unnecessary winter driving, your boy Money Wizard found a nice, slick patch of ice and slid The Mazda 3 right into another car. Whoops!
Nothing a $1,000 deductible can’t fix…
Here’s how this happened.
Lady Money Wizard, looking at my raggedy shirt that’s starting to resemble swiss cheese more than respectable clothing: “You need new clothes…”
Money Wizard, oblivious to the problem: “No way! I just went clothes shopping! Look at all these new clothes!”
Lady Money Wizard: “You bought all those 6 years ago…”
Money Wizard: “That’s not true, I just got these in 2015!”
… Also Money Wizard: “So maybe I need some new clothes…”
Readers, how was your start to 2021?
Hope it was a little more controlled than mine!
PS – Want to track your net worth like this? Personal Capital is my favorite tool to do so. The free software is truly awesome, so just check it out already!