What’s that chill in the air?
Is it the start of Fall? Is it another monthly net worth update from MyMoneyWizard.com? Is it both?
IT IS BOTH!
In case you don’t already know, every month I share all my progress towards a nearly $1 million portfolio and an early retirement by age 37. Since money tends to be a pretty taboo subject IRL, I hope that by sharing all my details here, you just might find something helpful towards your own situation.
Whenever I write these updates, I follow my typical process.
I take a seat in The Money Wizard home office, desk chair at my back and keyboard at my hand. Then, I partake in what’s become my monthly tradition – thinking back on the past thirty days and asking myself whether fellow money wizards will find any of this stuff interesting.
I typically axe the boring bits, make note of anything money related, and give preference to anything I remembered to document with my camera phone.
But this month, I sat down at the desk only to be met with a roadblock. I couldn’t remember anything I did!
“Damn, I must have had a boring month…” I worried, partly out of concern for a boring update and mostly out of concern for my boring self.
I started combing through the credit card statements, hoping a paper trail would jog my memory.
3 minutes into the credit card statement, I’d pieced together the following highlights from the last 30 days of haziness:
- Went up north over Labor Day with friends and family, for the last cabin trip of the year.
- Spent one horrific Sunday sanding and repainting a large part of the house’s siding, then invited friends over for a BBQ to celebrate the death of a dreaded chore.
- Saw the mega-hyped Broadway musical Hamilton when it came to town.
- Bought an annual State Park Pass and went on a new 6-mile hike one beautiful Saturday.
- Joined thousands of other cyclists for a 30-mile bike rally through the closed down streets of Saint Paul, Minnesota.
- Went to my first Oktoberfest of the fall season.
- Had three separate Friday night dinner and drink date nights with Lady Money Wizard, checking out everything from the new hipster burger place down the street to city’s best Ecuadorian dive.
And I’d forgotten it all!
Luckily, along with the credit card statement, I had a few pics to remind myself:
I’d recently read about the interesting concept of human memory and the passing of time. The idea, as the article stated, was that we tend to remember new experiences better than our usual routines.
We all know this to be true. We remember the first time we visited Costa Rica in crystal clarity. But our morning commute? No matter how many hundreds of times we drive it, it all turns into one singular blur of a memory.
The key then, is continually seeking out new experiences. At least that’s what the article suggests. This should keep our memory sharp, and also make us more aware of the passing of time.
So, as I sit here struggling to write about the last 30 days that passed without a moment’s notice or a single memory, I offer an interesting counterpoint to that theory.
Maybe you can get too many new experiences, giving yourself both time and memory overload?
Either that, or I just have a terrible memory…
Net Worth Update: September 2018
As always, the details!
Cash: $17,821 (+$363)
If you’ll remember from last month, I fronted the bill for a 10-person ski condo later this winter. As you can imagine, 10-person ski condos aren’t cheap, so when I paid off the inflated credit card bill, my cash balance didn’t increase like it had during the previous months.
I’m still hoping to have enough saved up for a ~20% down payment on my first investment property by late winter to early spring. I’m feeling more confident about this, because around here at least, the real estate market seems to have cooled off noticeably.
Brokerage: $122,294 (+$754)
Finally, a more normal month in the stock market. We saw over 3% growth in the market for the past few months, and obviously, 36% annual returns isn’t something any investor not-named Bernie Madoff should expect.
September did its best to bring annual returns back down to normal, with a whopping 0.62% growth on the month.
During the month, I didn’t make any contributions to the after tax brokerage, instead continuing to save cash for a rental. So, my breakdown remains:
- 50% in Vanguard’s Total Stock Market 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): $110,299 (+$776)
It seems like just yesterday that I was eagerly anticipating the day my 401k crossed 6 figures.
And it sort of was! Back in June, my 401k balance crossed $100,000. Now, just three updates later, it’s rocking another $10,000 for good measure. Thanks, tax advantages and compound interest!
My 401k acted almost identical to the brokerage account this month, although the breakdown of index funds is slightly different:
- 50% in Large Cap US Stocks
- 35% in Small Cap US Stocks
- 15% in International Stocks
Roth IRA: $24,346 ($658)
My Roth IRA is invested entirely into Vanguard’s REIT index fund, which declined slightly in September. Maybe the rest of the country’s real estate market is cooling off like Minnesota’s?
On the plus, I’ll get to celebrate passing $25,000 soon… for the second time. Haha! Some milestones are better as one time deals.
Rent Payable: $765 ($6)
My half of the mortgage, utilities, and anticipated home maintenance. (We allot 2% of the home’s value to expected maintenance each year, or $300 per month. This lets us pay for any miscellaneous house expenses, stress free.)
Credit Cards Payable: $2,245 ($1,566)
I’ve gotta include this category for accuracy, but it’s subject to quite a bit of inaccuracy thanks to the usual reimbursable work expenses, bill cutoff dates, fronting ski trip money for a massive group last month, etc.
Which is why I also record every dollar spent during the month!
Total September Spending: $2,280
A little more than I’d like to see. Let’s take a look where it went.
Groceries: $126
I shouldn’t be too quick to celebrate. This is mostly a little lower than usual thanks to the next category…
Dining Out: $414
WHOOPS.
In the constant battle against dining out, I got a little carried away this month…
Entertainment: $347
Same here…
Major culprits in entertainment spending included the cabin trip, entry fees for the bike rally, pre-paid concert tickets for a show in October, and quite a few drinks out.
The overpriced bar drinks might be the spending that seems a little wasteful to me, but in general I don’t sweat this category too much. Even the largest entertainment budget won’t make a dent compared to The Big Three, and the life experiences are usually worth the cost.
Materialistic: $152
You see, I spent $40 on a Playstation 3. Then, compound spending kicked in, and I found myself dropping another $90 for a new 43″ HDTV on Craigslist. And when I got the TV home, of course I needed a new $20 TV mount, too.
Hey, didn’t I write a post about that phenomenon? Hmmm…
House Expenses: $158
The only thing better than a wet basement is the $160 bill for a new dehumidifier…
Vehicle Expenses: $85
The ‘ole (new) Mazda 3 is due for an oil change, but the only expense this month was $85 for car insurance.
Speaking of which, how does my car keep getting older but my insurance bill keep getting higher?
#ThanksMinnesota
Other: $142
Meds for the dog and a couple of random expenses that I couldn’t decide where to put.
Final Thoughts
Not a great month, not a terrible month.
On the whole, I’m probably on pace to spend more money this year than I ever have in my life. Time for a #NoSpendOctober?
Readers, how was your September? Anyone down for a No Spend October? (Excluding Halloween candy, of course…)
PS – Interested in tracking your own Net Worth? Personal Capital will track it for you automatically, for free.
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Not a bad month. I always say any positive movement in overall net worth is a good thing. It could always be worse!
Man, I’d LOVE to pay $85 a month for car insurance. Mine is up for renewal this month and I’ve been looking around. My renewal bill with the current company is around $850 (for 6 months, so that’s a little north of $140/mo) and that seems to be the lowest I can find for equal coverage. Maybe it’s time to play around with the deductibles and/or coverage levels to see what’s worth the risk and what isn’t…
Always look forward to these posts! Thanks.
What kind of car? The Mazda was cheap, which definitely helps the monthly bill.
Kia Optima. I also live in a state notorious for high insurance/taxes (everything 🙂 ) so I’m sure that’s a big part of the difference as well.
I would kill to pay 140 a month in insurance! Mine is over 300, a few to many speeding tickets and an expensive city like Toronto is a bad combo.
One thought to try is GEICO. Historically ,for me, it has been the cheapest (less than $60/month for a 2017 Kia Niro). GEICO being very reliable and quite cheap anyway, I combine that with owning 1 share of Berkshire Hathaway ($215 for B shares bought commission free with Robinhood), which gets me an add’l 8% off the bill.
True, I have GEICO as well and found them to be $20+ per month cheaper than the next closest competitor. Some other companies estimates were outrageous… literally 2x as much for nearly identical coverage.
This fits with what I’m seeing as well. I’m considering switching to GEICO but I’m worried about them offering a low ball rate to hook me in and then jacking it up when it comes time to renew. How has your experience been with them?
Mine went up $4 a month at renewal. Been with them for over 2 years now and I’m happy.
I love GEICO. Never had any issues with a claim or anything. Plus their app is really good as well.
Money Wizard,
Another great post, I love your site and have recommended it to about every friend I have!
I have few questions for you…
1) do you have any books to recommend? (simple path to wealth, millionaire next door)
2) when did you really start to notice the compounding interest working?
3) Where’s one place you’ve always wanted to visit but haven’t yet?
Keep up the amazing work!
Your fan,
G Man
Thanks G Man!
1) I posted about my favorite beginner books here. One day I’ll make a new list for books I read after $100k.
2) I feel like around $200K the net worth started increasing way faster than I was used to.
3) Tons! Lots of ski mountains that I’m slowly crossing off the list. (Big Sky and Jackson Hole or Alta/Snowbird this winter) Yosemite, Hawaii, Montreal, and tons of places in Europe are all on the immediate bucket list.
I would agree with money wizard, you really start to notice compounding around 200k. I just looked at my net worth tracker and i have accumulated significantly more so far this year than I did in 12 months last year.
“Then, I partake in what’s become my monthly tradition – thinking back on the past thirty days and asking myself whether fellow money wizards will find any of this stuff interesting.” – Always interesting Money wizard! Thanks for giving us the deep dive into your finances.
Regarding #nospendoctober, I’ve been thinking about stringing together some weekly or monthly financial challenges. What would a no-spend challenge look like? Have you seen this done before? Can we put together a Facebook group and do it? (Maybe another month though because I’m writing this from Germany and a lot of Oktoberfest beer is right around the corner)
There’s always the Money Wizard Facebook page! I’d really like to build that into more of a supportive community, rather than me just posting article updates. Don’t be afraid to stop by and say Hi!
https://www.facebook.com/MyMoneyWizard/
I had a No Spend March back in, as the name implies, March. Outside of rent and an unavoidable vet visit, I spent about $300 for the whole month. I wrote about it here.
Nice update! I too find myself combing through credit card statements and pictures I took on my phone to figure out what I’ve done in the past month for my updates haha. It’s funny how the memory works even when you are doing fun, new things!
Haha, glad I’m not alone in forgetting so much!
I wish I could do a no spend October but my daughter is going to homecoming…need I say more? I guess I could not spend on myself but then that would make a normal month. Ha!
I love reading your blogs. Keep up the good work!
Haha, thanks Darla!
Hey money wizard. Thank you for all you do man , I encountered your web site like 2-3 months ago but just lately I have really started to follow you and read your material. Question, actually I few. I’m a government worker so I have a “401k” , right now I have set up to a 2050 retirement fund. What do you think about that? Should I leave it there ? Or pursue your 3 fund strategy, which I could do in the same account?
Keep in mid that I also have a ROTH IRA and I use different vanguards index funds to cover myself in domestic and international stocks as well as some bonds.
Also, I do my 401K ROTH but planning on switching it to a traditional one to max it out , gain the tax advtabges , and invest those tax returns in my Roth IRA.
Please let me know what do you think. Thank you so much.
Glad you like the site!
Target Retirement funds are similar to the 3 fund portfolio strategy, they just automatically adjust their allocations over time. Vanguard’s Target Funds literally invest in the same funds I talk about in my 3 fund portfolio post, although they do add a little bit of international bonds. The negative is a slightly higher expense ratio and a lack of flexibility. For casual investors who want a hands off approach, they’re a decent choice.
Good stuff. It’s okay to enjoy yourself every now and then. You are doing great with your overall net worth goals. Do you have a position in precious metals? Perhaps owning some gold or silver would be a nice protection against any stock market corrections. Also, silver is extremely cheap as well compared to gold. The historical ratio is out of balance, making silver is a great buying opportunity.
Thanks!
I’m not sold on gold as an investment. The inflation adjusted returns are abysmal. If I wanted to be cautious, I’d probably go with bonds instead.
Nice info!!
The dining out is a whopper. Sometimes after you get the bill, you’re thinking…man that was a quick $100.00. That is my one area of weakness. Otherwise, I have an older car and keep my head on straight when it comes to material things!
Yeah, $400 on dining out is definitely one of my most out of control months ever.
Nice net worth update MoneyWiz! You’re net worth just keeps growing! Good job!
In regards to memory: The human memory is a funny thing. I can say with certainty that time seems to speed up once you grow older. Maybe it’s because I’ve seen and done so much already. 😉
There’s also the fact that the same chunk of time becomes a relatively shorter amount of time to you as you get older. (i.e. 5 years to a 5 year old is 100% of their life, whereas 5 years to a 50 year old is just 10% of their memory.) In that way, time literally speeds up as we get older. Something I’ve wanted to write a post about for a while.
Is the $1m net worth target in today’s dollars (which would mean the nominal amount needed at 37 would be higher due to the effect of inflation) or is it a nominal dollar target. I suspect it’s a nominal target but I see no harm in the ‘let’s get to $1m and think about it then’ approach either.
HH
PS $90 for a 43″ TV seems like a good buy – or have we reached an age where people wouldn’t be caught dead with anything less than 85″ 😛
The original target when I started this blog was $750,000 of 2016 dollars. I informally adjusted it to “nearly 1 million” to account for some nominal increase.
It’s very much a “let’s get near there and think about it” approach. 🙂
Money Wizard,
one of the items you mentioned above is that your saving up for a down payment on a potential rental home. I’m curious how you’re planning to finance that, and if you’re planning to write a post detailing the various options that are out there and why you may choose one over another? As someone who is also saving for a down payment on a potential rental, I’m very interested to hear your thoughts on it!
Love your blog! Quick question about Personal Capital–is there any way to display your Vanguard accounts without factoring in the contributions you made? In other words, is there any view where you can see just the growth in your portfolio due to market gains and reinvesting dividends?
Great update mymoneywizard
Congratulations on the incredible net worth. I especially love the monthly breakdowns. They are of incredible benefit and the illustrations help tremendously. How long did it take you to save up to that 270k mark?
Do you have a post detailing the set up of your brokerage account (i.e. how to go about setting one up and should you go through a financial agency to do so?)
Loving the blog posts, such a rich source of information and provided in an easy to digest, matter of fact writing style. Kudos!
Thanks! You’ll probably find these useful:
https://mymoneywizard.com/5-reasons-vanguard-funds-best/
https://mymoneywizard.com/how-to-choose-a-vanguard-index-fund/
https://mymoneywizard.com/3-fund-portfolio/