Hey everyone, welcome to The Mid-Summer Classic – another net worth update!
Money tends to be a pretty taboo subject IRL, but I hope that by sharing all my details here, you just might find something helpful towards your own situation. So, every month I share my progress towards a nearly $1 million portfolio and an early retirement by age 37.
This update isn’t like all the other months though. Because I just hit a quarter of a million in net worth! We’ll get to those numbers right after a few updates from The Money Wizard headquarters.
Regular readers know that I’m nearing the end of a kitchen remodel, which has been going on for so long I’m sure they’re sick of hearing it. After our contractor / family friend had to take a couple month hiatus, we’ve been sitting on a 90% completed kitchen for over a month. The good news? We’ve cut the final check, so we’ve finally escaped the ~$13,000 of remodel expenses. The bad news? Our contractor lost all motivation to finish the project once he got that final check, haha!
He’s actually making his glorious return later this week, and should be able to knock out the final cosmetic touches in a couple days. Stay tuned for the final update!
In other July news, we got our ‘Murica on over The Fourth.
In Minnesota, that means a statewide tradition of heading up to the nearest lake cabin that you can coax your friends and family to letting you crash in. I actually managed to squeeze in two lake weekends with generous friends/family.
The first was packed with all the July 4th festivities you could expect, as The Money Pup can attest:
And the second trip was a more relaxing, event-free getaway. There’s something about running away from the busy city to the silence of the woods, and staring over the calm lake water. Find yourself a dock and a good book, and I could sink in there all day.
And I did! In one weekend, I crushed through nearly 600 pages across two books.
The first, Dollars and Sense, is written by Dan Ariely, the author behind one of my favorite books of all time, Predictably Irrational. Dollars and Sense takes a interesting look at all the irrationality we have with money (backed up with evidence from behavioral psychology and economics) and then offers the most practical advice for avoiding those traps I’ve come across.
On round two of my book marathon, I finished Flash Boys. It’s a fascinating glimpse into the world of high frequency stock trading, told with the movie-like storytelling skills Michael Lewis is famous for. If we ever needed even more ammo in the case against active trading, the book does a great job explaining how much those of us without multi-million dollar high speed internet connections are just the suckers at the table.
To round out the weekend, we trekked to a nearby town for maybe the most bizarre and interested sporting event I’ve ever been to. The Lumberjack World Championship!
Avid 1990s viewers of ESPN 2 will recognize this event, and I’ll just say that watching lumberjacks slicing up giant logs with the ease of a hot knife through butter might be even more addicting in person than on TV.
And on that note, to the numbers!
Net Worth Update: July 2018
1/4 of a Million!!! Let’s check out the details:
Lots of green across the board! And a crazy exciting milestone.
I’d already reached the staggering realization that with just 5 years of “sacrifice” the investments I’ve built in my 20s means I’m already set for life. To be honest, I’m still having trouble wrapping my mind around that, and the recent aftermath is even more boggling.
Since I wrote that post, barely 3 months ago, my net worth has shot up another $25,000.
And even crazier, when I wrote the post, my portfolio was expected to grow to $1.5 to $2.0 million by age 60. Now, again just three months later, that same portfolio is expected to grow to $1.6 to $2.2 million by age 60. An eventual $150,000 to $230,000 increase from just 3 more months of savings.
How crazy is that?? The snowball effect of compound interest is seriously blowing my mind, and leaving me even more motivated to continue saving, investing, and building income streams.
Also crazy: when I started the site a few years ago, most monthly increases were $1,000 or so, and the unbreakable record for the longest time was a $9,000 increase, back in December 2016.
Now, I just had an $11,000 month, and the monthly increases seem to keep getting larger and larger. Just goes to show the power of having a large chunk of assets working away for you.
Cash: $14,028 (+$2,857)
Still building up a cash reserve as I look to dip my toes into real estate investing. I’m hoping to have over $20,000 saved by the end of the year.
Brokerage: $116,951 (+$3,812)
Not making any contributions to my index funds until I build up enough cash to start playing with real estate.
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.
401(k): $104,342 (+$3,251)
I’ve bumped down my 401k contributions to just receive the employer match, which is 7% of my salary.
As discussed in the post where I realized my 401(k) is bursting at the seems, after years of maxing out my 401(k) for the amazing tax breaks, I’ve shifted my focus towards investments to build cash flow for an early retirement.
Like my brokerage account, the 401(k) is invested in a mix of low fee index funds tracking the US and International Stock Markets.
Roth IRA: $24,398 (+$178)
I still plan on contributing the full $5,500 to my IRA each year, for the eventual tax benefits.
Credit Cards Payable: $2,512 ($1,135)
As usual, a little inaccurate due to some reimbursable work expenses. So let’s take a look at the detailed spending breakdown:
Total July Spending: $1,991
Despite all the red marks, July was a good month!
Rent: $750
My half of the mortgage plus utilities and expected maintenance. For the new readers, I split a house in Minneapolis with my girlfriend.
Groceries: $260
A little over budget this month, mostly likely because of a mammoth $70 Aldi trip on the last day of the month. Hopefully August will be lower thanks to that head start.
Dining Out: $239
Fell back into my bad habit of eating out at lunch. Gotta work on this one…
Gas: $110
Way higher than usual, probably due to road tripping to the lakes.
Entertainment: $314
Mostly expenses related to the cabin trips, which of course included tickets for the Lumberjack Championship! I also pre-ordered two tickets for an all-you-can-drink August Beerfest, at $50 a pop. I’ve been before, and it’s sure to be a blast.
$250,000 Later…
That’s a wrap on the best month of net worth growth since I started this site.
I can remember years ago, reading about $250K and thinking what a crazy huge, unattainable number that was. And yet, just a few years later, I’m there. I still can’t believe it.
If you’re just getting started, I hope you find this fact more motivating than discouraging. Because believe me, if I can do it, you can too!
BTW – if you’re looking to start tracking your own net worth, I still think Personal Capital is the way to go.
Readers, how was your July?
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Congrats on hitting a quarter of a million dollars!!!!! It’s an amazing feat and you should be proud of yourself.
🙂
Onward and upward. 🙂
Thanks!
Congrats on the milestone! Quarter million is no joke… I’m also saving up the cash fund for a future rental property so we’ll see how it goes!
Thanks FIRE Knight.
What a great month for you, $250.000 is quite an accomplishment. Congratulations!
“If you’re just getting started, I hope you find this fact more motivating than discouraging. Because believe me, if I can do it, you can too!”
You’re really right about that. I started only 3 years ago and suddenly 70,49% of my first retirement goal was accomplished in July. I am fascinated by the speed that comes once the snowball starts rolling.
Awesome to hear, congrats! It really is crazy how fast it adds up once you get serious about it.
Congrats on the milestone! You’re blog has been such a big help for me and I share it with literally everyone . I’m curious, what do you invest in for your 401K? I know your philosophy is VTSAX for your brokerage, but is that for your 401k as well?
Awesome to hear! Thanks for sharing!
My 401k is roughly 50% in an S&P 500 index fund, 30% in a small cap index fund, and 20% in an international index fund. Vanguard isn’t offered in my 401k unfortunately, but I was able to find similar low fee funds. No idea why I don’t include this info in the updates, haha! Thanks for the idea.
Love this – slow and steady progress on the path to riches yields BIG results! It’s a shame more people don’t fully appreciate the power of compound interest and start saving early like you did.
Congrats
HH
Compound interest really is nuts. Hard to conceptualize… fun to experience. 🙂
Congratulations MW!
This site is always inspiring and this post especially so. It’s this site that had me turn around my money story (and getting married). I was the donkey at this time last year, and now I am more neutral than anything.
Amazing to hear Cole. Keep it up man.
Congrats MMW. You hit a key milestone. One of the things I like about your blog is you track EVERYTHING (including little details). What gets measured, gets improved.
Love that quote. So true.
Congrats on reaching that milestone. $250k is a nice financial foundation to continue to build upon. You are well on your way.
Thanks Dave!
You inspire me to save! Thank you!
Awesome! That’s what this site is all about ?
Way to go on a great month! I have been following you a few months now. We have a lot in common: age, net worth, region (mid west), and job background (finance/accounting). One thing that keeps bugging me on your budget each month is car insurance. Why do you pay monthly vs paying it in full? Most insurances give a discount if you pay in full. Did you do some analysis that showed the amount you would save paying up front was less than investing that amount each month? Just curious. I can’t wait to see how your real estate investing turns out, its a great idea for cash flow purposes.
My insurance company doesn’t offer any discount for paying in full, so the choice was easy!
I’m a minority just finding this blog. I’m inspired. I want to get to this level one day even in my adult age just starting out. Learning all I can from you. I currently save at least 5% to match my 401k. Only have 10k net worth but I’m tracking it now.
Tracking your spending and taking advantage of your match are two of the most important first steps. Chip away at the rest, and you’ll be saving tons before you know it. Check out the best posts page, it’s probably the best starting point for new readers.
My net worth is about 110k. I’ve been doing the same but even more frugal than you for the past 3 years. I wonder how much you make as I save about 70% of my income… you must be on 120k+
If I’m remembering correctly, my 5 year salary history is roughly: $50K, $55K, $65K, $70K, $80K, and ~$85K this year.
That’s amazing! You are my inspiration! my goal is to cach you up within the next 5 years. I am the same age as you, maybe a couple of months younger. Currently maxing out my 401k and investing about 1800 a month in ETFs stocks bonds and so on.
I also have a question, can I have an IRA while maxing out my 401k? I make just under 71k not including bonuses.
Thanks!!
Thanks! And yes you can – $18,500 for the 401k and $5,500 for the IRA.
Congrats MW,
I have been following you since you were at about 100k. You had a 30k lead on me at the time and you have widened it to 50k.
Great work. Hope to get there in the next year.
Thanks for being a long time reader, Dan! Best of luck to you… nothing like the motivation of some friendly competition. 🙂
Hey Money Wizard!
Congratulations on such an incredible milestone. It’s amazing how much you’ve accomplished in such a short period of time. Your $11K increase this month made my eyes pop out of my head. You’ve come a looong way from just $1K monthly increases.
To the value of frugality and hard work. And of course, the magic of compound interest!
Haha, thanks and definitely true!
Hello Mr Money Wizard,
I am a 23yo with a maxed out Roth (100% in VGSIX), maxed out 457b (government worker) and roughly contributing 10k a year into a Vanguard brokerage account (100% in VTSAX). My question is, already having my 6 month emergency fund established, what else could or should I invest in? Or do you think having these three accounts is enough? Currently on track to break the 100k mark by end of next year at 24, just want to keep this ball rolling!
Cheers
Just keep it rolling! VTSAX is awesome and bonds don’t really serve a big purpose for you at your age. An international index fund would be the only asset class you’re really missing. I’ll have a post coming out soon talking about some of my other favorite index funds.*
Congrats on putting yourself in such an awesome spot.
*I’m not an investment professional and take my opinions at your own risk, yada yada yada.
A very nice net worth increase MoneyWiz! Congrats on the great progress!
Thanks Mr. Tako!
Can you give us the breakout of your taxable account? Looks like it grew over 3% within the month. Curious to see what is driving that growth. Def not VTSAX alone.
Not sure what you mean, VTSAX was up 3.3% last month.
How the hell do you spend so little on groceries every month? What are you buying? Top Ramen? Obviously I kid, but seriously. What are you buying? Would you say you have a healthy diet? I just can’t see eating welI and spending so little. I spend at least $400/month on groceries. Though, I do tend to eat really well and live in the Bay Area. I shop and Trader Joe’s and Costco. I can’t imagine what my bill would look like if I shopped at Whole Foods. This is one area where I could probably improve my saving – tips?
Keep it up!
Haha, check out my latest post about saving on the big 3 expenses.
If I’m buying groceries, I pretty much only buy fruits, veggies, and meat. It’s all the other junk that’s expensive.
Eating out is a different struggle though. 🙂
Thoughts on Fidelity’s two new index mutual funds FZROX and FZILX with a zero expense ratio? They’re also lowering fees across the board – lower the Vanguard.
They’re solid. The difference between 0.04% and 0.00% is definitely a diminishing return though, IMO.
I recently read an article that said you had purchased a house and you split the mortgage costs with your girlfriend, but I don’t see that in your Net Worth calculations. Shouldn’t there be a line for how much you owe and how much the house is worth? Personal Capital always offers me to add my home value through the “zestimate” value provided by Zillow.com. I personally don’t include that value in my Net Worth, but I do include the debt from my mortgage. My Net Worth without home equity is $225,743, with the equity is $439,400. Thanks! 39yo in Austin…
The house is technically all in the gfs name, so I’m not including it unless we eventually combine finances.
In any case, I don’t see a huge value in adding it to these updates. IMO the big benefit of these is tracking my progress towards a number that will let me walk away from mandatory work. Home equity itself doesn’t really get me any closer to that goal.
But having no house payment would, right?
Definitely! But I view the big benefit there as expense reduction rather than asset building.
Hi – Really enjoy the blog. Just wondering why you haven’t included the value of your house as part of your net worth (subtracting the mortgage obviously).
I would like to know the reasoning behind this as well. In my opinion true financial independence is reached by paying off the family home.
I saw your article on CNBC, congrats on your success! Anyway, the article led me here and I found your update posts really informative, thanks! Your updates got me wondering how much my family actually has since for some reason I had never actually added it all up before. We were pleasantly surprised to find that we are sitting at ~$280,000. I am 32 so a little older than you, but this has given me hope that we are on the right track.
Nothing to sneeze at. Congrats!
Hi there,
I have been following your blog for some time and there is one thing that annoys me :D.
You say that you would like to retire my 37 but does this mean that you are planning to not marry nor have children as your annual costs would rise exponentially if you did which might mean that you would not be able to save enough for your children’s education and for you and your to-be wife’s retirement.
Sorry if this a bit confusing!
It’s impossible to completely plan for the unknown, but I am planning on marrying and having children. I’ve built an extra $8,000 per year or so into the “bare bones” early retirement budget and also assumed I’d never get a raise from age 26 to 37. That’s already proven ultra conservative since I’m already making over $10,000/yr more than I ever planned on.
Costs rising exponentially might be a little bit of an exaggeration. 😉 Lady Money Wizard works and supports herself at a job she loves, and the USDA says it costs $14,000 a year to raise a kid. Given that financial “experts” also say it costs $50,000 a year to live comfortably and I’m doing it on ~$20K, I’m sure there’s some wiggle room in that kid budget. Maybe I’m totally wrong though.
Hi Money Wizard,
Been really enjoying your monthly net worth updates but one thing is really bugging me. I have a 401K with a very similar balance to you however my monthly gains are NOT WHERE NEAR what yours are, your gain for the month of July is what I have done for the entire 2018 (speaking gains, not contributions). I’m in a fidelity 401K with a majority of the balance in the “Life Path Index fund 2045”. Any recommendations here, I think I may need to make some adjustments as I’m not getting near the returns you are with an almost identical balance (mine is slightly hight TBH). Thx
From a quick glance, it looks like the main difference is that I’ve got 30% small cap exposure while your Life Path fund has less than 5%. Must have been a good month for small caps? Not sure, although you could always get the last laugh during a correction.
My 401k is invested pretty aggressively, with 50% of exposure between international and small caps. Target dates are typically invested more conservatively and get less risky the closer you get to the date.
Is there a reason you don’t include your home equity in your net worth calculation?
Scroll up for the previous comments.
Hi there moneywozard,
I’m a baby on here and my fiancé and I are starting ( emphasis on starting ) on the journey to saving for early retirement. He makes 100k a year and I ( graduating soon, so hoping to get a better career pay) make about 37-ish a year.
We bring home about $8000 a month.
If you were given our situation, how would you manage this ? ( renting is 1500/month).
Really hope to read from you.
Sincerely ,
Your newest biggest reader !
Now that’s what I’m talking about! One of the best personal finance blogs out there. The only thing that bothers me is that you say you split the house payments with your girlfriend. Please tell me that your girlfriend makes the same income you do or that the house payment is split according to the percentage of income earned. If neither of these are true… shame on you.
Congrats on the quarter mil! I really enjoy reading your work and it is motivating me to save and grow my net worth the same way.
I wanted to see if you had an opinion on purchasing Vanguard ETFs through a Robinhood Trading account rather than opening a Vanguard account. Any advantages to having a Vanguard account other than being able to invest in the VTSAX fund? Any benefit to investing in VTSAX rather than just investing in the VTI or VOO ETFs through Robinhood. I’m just starting out so trying to learn the ropes.
Thanks!
Quick question for you Money Wizard, what are your thoughts on jlcollins decision is move away from REITS (specifically VGSLX). You had mentioned with your house purchase you might reallocate the money into a different fund. I was just curious of your opinion.
Cheers,
G Man
(Article)
https://jlcollinsnh.com/2014/05/27/stocks-part-xxii-stepping-away-from-reits/