Welcome to the middle of summer Net Worth Update! Or would this be considered more of an end of summer variety?
In any case, someone stole a big chunk of our summer, and I want it back!
Sticking with the seasonal theme, July was packed with outdoor adventures.
When I moved to Minnesota two years ago, one interesting quirk I learned about the northern states is how everyone here knows a family member, friend, or friend-of-a-friend, who owns a lake cabin “up north.” These cabins often nestle themselves among any one of Minnesota’s 10,000 lakes, or more likely for Twin Cities residents, Wisconsin.
Fun fact: Minnesota bills itself as The Land of 10,000 Lakes, and it must be true, because I saw it on their license plates. Right?
In reality, Minnesota holds 11,842 lakes. The surprise upset? Wisconsin has 15,074.
Anyway, I guess I’m becoming a true Minnesotan, because at the beginning of July, I packed up my bags and headed north, where I spent America’s birthday as a guest at a cabin on the lake.
The weekend served as a relaxing getaway. I spent most of my time lounging around the water, reading, and marveling at how happy the world seemed without work related stress. When your biggest obligation is showing up on time to see the July 4th parade’s aerial fly-by, you know you’re living the good life.
The Money Pup was feeling awfully patriotic too:
And of course, it wouldn’t be a cabin trip without a big old fire that we used for roasting golden brown marshmallows to top our ‘smores.
Of course, my mind couldn’t stop tabulating just how affordable this lifestyle would be to live permanently. Spending a week isolated from the madness of the big city only confirmed my thoughts about financial independence.
But returning to the big city wasn’t all bad. A few weeks after the holiday, Target sponsored its annual “completely-unrelated-yet-suspiciously-close-to-July-4th” fireworks show. Every July, Target holds a firework show over the city of Minneapolis to celebrate the city’s Aquatennial, whatever that means.
To be fair, that description is selling the spectacle short. Every year, Target holds the most absolutely unbelievable firework show I have ever seen. Imagine a firework display where the entire show is a Grand Finale, and then the Grand Finale looks like someone dropped a nuke on the night sky.
The amazement comes in two parts. 1) How close they let you get to the fireworks, and 2) The sheer megatons of explosives they’re willing to set off, again and again.
I walked away with my mouth on the floor, and I was so impressed that I swore to buy my groceries at Target the next week. Score one for marketing!
In other news, I made my dumbest purchase of the month. I accidentally learned that the classic computer game, Roller Coaster Tycoon, is available for download in the app store.
$5.99 and far too many hours of my life later, I remembered just how dangerously addicting video games can be.
Playing the game for the first time since I was in elementary school hit me with a maximum dose of nostalgia, but it also made me wonder just how much experiences like this shaped me into who I am today.
For those who might not be familiar with Roller Coaster Tycoon, it’s a sort of strategy game where your goal is to build theme parks, fill them with roller coasters, and ultimately attract guests to your park.
Even as a youngster, I remember my friends loving the game because you could build roller coasters that crash into each other, causing a fiery explosion and massive havoc to the poor saps inhabiting your park. But that’s not what I remember most about the game. I remember loving the game for the thrill of building up an efficient park, and then watching your bank account cha-ching its ways higher and higher as the rides from your imagination turned into money making machines.
As I sat 20 years later, playing the game of my childhood and watching its virtual bank account grow, I couldn’t help but wonder how much a game like this re-wired my impressionable brain towards chasing profitability. And I couldn’t help but see the similarities between myself, 20 years ago, doing everything I can to build up the bank account numbers on Roller Coaster Tycoon’s computer screen, and myself today, doing everything I can to build up the bank account numbers on Personal Capital’s computer screen.
Making money is nothing more than a real life game, and I’ve never been so obviously smacked in the face with this irony.
Speaking of which, let’s check the score.
Net Worth Update: July 2017
And the detailed breakdown:
Wow… a bananas crazy month! So crazy, that it’s officially my best month ever! Although that’s sort of cheating to say, which I’ll explain in a second…
Cash: $7,784 (+$2,400)
It’s relieving to see the cash reserve building up, since I’ll need a pretty big chunk of change if I’m ever going to implement my plans of owning a rental property.
This month’s cash increase was driven by one of those rare months where no unusually large expenses pop up, so I was able to save a whopping 69% of my pay. Here’s to hitting 70% next month! And read on for a breakdown of my spending.
Brokerage: $102,453 (+$1,033)
No contributions this month, so the thousand dollar increase was just a bounce back after last month’s $700 decline.
At month end, my brokerage account included:
- $52,300 invested with Vanguard’s Total Stock Market Index Fund. (Related: How to Choose a Vanguard Index Fund)
- $50,100 in a mixture of Vanguard ETFs, with a few 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.
401(k): $62,324 (+$4,859)
Not bad for doing absolutely nothing other than not turning off automatic contributions.
Although this is the part where I sort of cheated on this month’s update. July was one of those once-or-twice a year events where the layout of the calendar meant I had three paychecks, instead of two. This meant I contributed right around $3,500 to my 401K this month, which is a whole extra paycheck more than usual.
I’m contributing over 25% of my pre-tax income right now in order to max out the 401k in 2017. Some readers last month cautioned about the dangers of maxing out your 401k before the year is up, because employers stop matching contributions once the account is maxed out. It’s a great point and something we should all be aware of.
Since I’m playing catch up with my 401k after a few months of minimal contributions to start the year, it looks like I’m on pace to max mine out a lot quicker than I actually will. In other words, I should be okay, but I will re-run the math sometime this fall to be sure. I encourage everyone else to do the same, because nobody wants to miss out on free money from their employer!
Roth IRA: $18,284 (+$318)
Still $0 contributions to this account in 2017, and it’s still a goal to contribute $5,500 during the 2017 tax year. I’ll get there… eventually.
My Roth is invested entirely in Vanguard’s REIT index fund. I like this allocation, since I otherwise have no exposure to real estate and do not own a house.
Rent Payable: $710 (+$11)
The most expensive air conditioning bill yet, and hey, it was the hottest month of the year! Glad to see the world is still in order.
Credit Cards Payable: $2,390 (-$1,105)
As usual, this is a little over-inflated due to some work expenses that I’ll get reimbursed for.
Personal Capital’s awesome automatic expense tracker helped me put together another spending report for the month:
Total July Spending: $1,511
- Rent – $699
- Groceries – $177
- Dinning Out – $214
- Gas – $45
- Gym – $27
- Entertainment: $233
- Major items: A concert, a day shooting guns at the range, the cabin trip, a few visits to some breweries, and my turn to bring the beer for my beer league softball team.
- Car Expenses – $99
- Insurance and a $22 oil change/tire rotation.
- Other – $16
- Some postage stamps and the highly addictive Roller Coaster Tycoon Classic app.
Overall, my best month of the year, with a savings rate so close to 70%.
Here’s to keeping it going through next month!
Readers, how was your July?
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Awesome update! Congrats on having the best month of the year, 69% savings rate is INCREDIBLE! Excited to see when you hit $250K!
Thanks Lance! If things keep up, $250K may be far earlier than planned. We’ll see.
July was my worst savings month in a while due to taking a week of vacation (totally worth it) and running out of room to contribute to my RRSP. But…I’m on call for the first two weeks of August, so I’ll have lots of income this month and no time to spend it. (Mixed blessing)
Typically July is a vacation month for me as well, but the low cost cabin trip kept things surprisingly cheap.
Good point too – working a lot is actually one of the most effective ways to save money. Can’t spend it if there’s no time. It’s a balancing act with our own sanity though.
Savings rate of 70%. Awesome. I shoot for 25-30% usually.
I just bought a Nintendo Switch and Zelda. I loved video games up until my late 20s. As I played last night, staying up later then I normally would, I realized I just don’t enjoy them as much anymore. I deleted my profile from the gaming system and packed it away at midnight.
No need to keep playing just because I bought it. I won’t let the sunk cost fallacy get me. Now it is on Craigslist waiting for a buyer in Northern Cali….
so yeah, I have no doubt video games shaped our youth. For me it allowed for withdrawal into an introverted state and wasted hours of my life. A nice escape, but not particularly productive.
As a kid I didn’t mind how unproductive video games were, but now the feeling of wasted time eats on me a lot more.
They’re still fun, but maybe too much fun. I can feel the games feed on my sense of accomplishment, but when I walk away having not actually accomplished anything, I feel pretty guilty.
YES!!!! Rollercoaster Tycoon one of the best games ever made! So many memories just seeing the screen shot. We actually pop it in like once a year and play for hours.
Congrats on your continued net worth growth. Killing it!
Couldn’t agree more about RCT, and thanks!
When you say you saved 69% of your income, is that your gross income or your net of tax income?
I calculate my savings rate relative to my take home pay, and I include my 401k contributions as both income and savings.
Standard advice is to also include 401k matches as both income and savings as well, although I left that out of this month. Including the matches would make the rate a little higher.
Gotcha, that’s how I calculate it too, but I wanted to be sure I could compare apples to apples.
FYI: your stories (and those of a few others) have helped motivate me to try to ramp it up – I’m at 46% now, up from about 15-20% at the start of 2016. Thanks and good luck!!!
Wow, that’s impressive. Awesome job!!! Really makes my day to hear.
Do you have a post on how you calculate? It’d be interesting to break mine down exactly like yours.
Roller Coaster Tycoon is one of the GOATs. So many hours spent playing that game. Very tempted to purchase it now….
Nice work on the savings rate and NW growth! Keep it up.
Thanks J Savvy!
Great progress! That lake is beautiful – if you don’t mind me asking, which one? We are going to head up later this month to the McGregor area. It’s true that somebody you know in this state has a cabin up north. I am pretty sure it’s a requirement of living here!
Keep up the awesome work 🙂
The picture in the post is Lake Superior. The cabin is on a smaller lake nearby.
Thanks!
Awesome job! I always love seeing the month-to-month changes. I’ve recently opened a Personal Capital account in July, as Mint was my only go to for the last couple of years. I still actively use Mint, but do really like the PC net worth format.
I briefly looked through past articles, but couldn’t really find anything in the way of online-only banks. I’d very much appreciate an article on the topic.
I too have been saving more cash for a real estate investment, and decided to open an Ally account back in Dec 2016 for the 1% interest rate (now at 1.15%), so I don’t feel as bad seeing the cash sit and be unproductive (compared to investing it). I still keep “spending” cash in a normal bank account so I have access to amounts above general atm limits, but it’s definitely been nice to see $15+ interest income per month just from my combined savings and CD ladder.
Ally is awesome. My only complaint is they don’t link up to PayPal, which is PayPal’s fault not Ally’s.
Haha, you might wanna check that again. It takes a few days to setup where they make you verify how much change they deposit as a test.
I’ve had them linked up for maybe close to 3 months now, and I send all my iBotta, Checkout51, and On The Go Survey app earnings to my PayPal, and then I transfer that money straight to my Ally savings account.
Maybe we’re talking about different kinds of linked accounts?
Wow, very interesting. When I looked into this about a year ago, PayPal’s official response was that they don’t support online banks. Glad to see that it looks to have changed!
If you max out the pre-tax for the 401k to early in the year, employers won’t match any after tax contributions?
Btw I’ve been competing with you since I found this site. I’m just a couple months behind now (you buying your car helped me catch up). It’s nice to have someone in the same age to benchmark against. 🙂
The key is that employers match your contributions each paycheck. If you hit the $18,000 maximum before the year is up, you won’t be able to contribute for the rest of the year, so the employer won’t be matching anything. Since the match is usually a percentage of your salary per paycheck, any paycheck they’re not matching means serious lost coin for you and I.
And zing about the car, haha! I knew the car set me back, but I’m not sure I’m mentally prepared to see how much ground it helped you make up.
Ah I see. My employer lets us make after-tax contributions so even if I hit the the pre-tax 18,000 early, I can continue to contribute so they’ll continue to match. Then I mega backdoor roth all those after-tax contributions to my Roth IRA.
Haha I’ll just keep it to myself. But again thanks for posting your financial info each month it (competitively) inspires me to save more and build more wealth!
If you love Roller Coaster Tycoon, you might also love Factorio. Changed my life. Glad to see you had so much fun celebrating ‘MERICA! Lake looks beautiful.
I’ve been reading the blog for awhile now, and the progress you’ve made is impressive. I have to say I’m somewhere around 2 years younger than you, but have a similar income and net worth compared to yourself at the same age. I may be a little ahead of you if we are comparing age to age, but I’m hoping to keep pace with you going forward. We also make a similar amount of income but have some key differences:
1. I’m married and have a 1 year old kid.
2. I am a homeowner. The house is somewhat bigger than I need, but real estate is going crazy around here. Not regretting it much as of now, we’ll see though. A fast growing city with more and more high paying jobs coming in. Forcing real estate up 6-8% per year.
When I look at my savings rate it is only around 35-40% on a given month. My home value continues to grow about 1,000 per month or more, which also pulls up net worth. I am conservative with my home value and hang my net worth a few thousand lower than what they say the home is worth.
My net worth is pretty 50/50 between home equity and investments. I recently switched jobs to a career with more earning potential down the road. Unfortunately it is a 2 year contract without a 401k so I am missing out on that. I am sitting on 10k+ in cash, and scared to invest it while i’m contracted. Once I go full time somewhere I’l feel better about putting it in something. I would go with a HELOC for emergencies but am not quite at 20% down yet (another year or so). Also, I find it tough to invest much with stocks at record highs, and combining that with my contracted job, am stockpiling until either a drop in the market, or to invest like crazy once I go Full time.
I just found the Roller Coaster Tycoon original last year! (And promptly downloaded, and played, just like you!) That is so funny. I read every week, but have never felt compelled to comment until Roller Coaster Tycoon in this post- haha. I bet it did shape those of us that it! I also enjoyed the challenge of building a successful park more than the coasters themselves, particularly when they limited the loans, made you start out in debt, or other difficult concepts. Have fun!
Haha, RCT is awesome like that! And I agree, it was always such a rewarding feeling paying off that loan. Some things never change!
Thanks for being a long time reader, by the way!