MedSaver's Journal

Where are you and where are you going?
DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: MedSaver's Journal

Post by DutchGirl »

A steady climb to prosperity; you guys are doing well.

Less of an increase this month, probably due to the markets and not to setting aside less?

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

DutchGirl wrote:
Fri Oct 30, 2020 4:36 am
A steady climb to prosperity; you guys are doing well.

Less of an increase this month, probably due to the markets and not to setting aside less?
The last week was bad for stocks. We are actually saving more than we have in the recent past because of COVID-19 travel restrictions and no student loans.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

November 2020 Update

Assets:

IRA/Brokerage/403b/457/cash: $1,600,625

Net:$1,600,625

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: MedSaver's Journal

Post by DutchGirl »

MedSaver wrote:
Fri Jan 15, 2016 1:42 am
So the purpose of this journal is to keep me honest and on track with early retirement. Our goal is liquid assets of $3-4 million. This would let us comfortably withdraw about $100,000/year indefinitely. When my fiancee and I reach our goal we will probably continue to work in some capacity.
I looked back at the beginning of your journal, almost five years ago now. So given that the first million is the hardest and that you've now gone over $1.5 million and that that was 40-50% of your goal... you are likely over halfway there now timewise. How does that feel? Still wanting to keep working, too?

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

Annual Update

Another year down. How did we do?

MedSaver gross W2 income 2020: $532,499 (2019: $395,000), up 35%.
Net income 2020: $312,696 (2019: $234,946), up 33%.
Monthly net: $26,059

Mrs. MedSaver gross W2 income 2020: $160,713 (2019: $148,450), up 8%.
Net income 2020: $21,960 (2019: $102,493)
Monthly net: $1,830

A surprisingly good year for salaries despite the whole pandemic thing. For a while there in winter, it looked like we would have significant pay cuts. Mrs. Medsaver take home pay decreased significantly because of increased deferrals into tax-advantaged retirement accounts.

Spending breakdown (monthly):
Food: $1000 (down from $1250)
Rent: $2450 (up from $2200)
Insurance: $900 (no change)
Student loans (both): $3880 (previously $4830) - paid off in October
Utilities: $200 (up from $180)
Gas: $250 (previously $390) - dropped because no leisure travel
Internet: $85 (previously $55)
Cleaning service: $150 (previously $90), increased frequency since we are home a lot more
Cell phone: $140 (previously $130)
Travel: $280 (previously $2500) - literally $0 spent on travel in the last 10 months
Other: $5900 (previously $8109)

Total monthly 2019: $13,500 (previously $19,890)

Saved a lot on travel and didn't buy a car this year...However, we did start the process of buying a house, which is supposed to close sometime in February. Current details are below.

Liabilities: $0

Assets:
IRA/Brokerage/403b/457/cash: $1,725,136 (Jan 2020 $1,202,144)
"Earnest money"/partial home down payment: $61,000

I'll add details of mortgage, down payment, sunk costs and home equity after we close.

The software we use to track our accounts has recently had some problems with reporting dividends so I don't have that exact number, but I think it was over $20k. I'll update this after we get the 1099-DIV forms in a few months.

Net Assets: $1,786,136 (Jan 2020 $1,160,166), which is + $52,165/month (previously $39,289/month)
Last edited by MedSaver on Thu Dec 31, 2020 6:33 pm, edited 1 time in total.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

DutchGirl wrote:
Wed Dec 23, 2020 9:31 am
I looked back at the beginning of your journal, almost five years ago now. So given that the first million is the hardest and that you've now gone over $1.5 million and that that was 40-50% of your goal... you are likely over halfway there now timewise. How does that feel? Still wanting to keep working, too?
I'm glad I started this journal when I did. It makes it easier to reflect on how far we have come. I realize now that changing jobs was one of the best things I've ever done and I timed it perfectly (just before pandemic). To my colleagues and friends, I'm sure it seemed like a lateral move, but the new location, pay, hours, workload and time off are WAY better than the old job. The only downsides are that benefits are slightly less generous and the commute is longer (20 min vs 12 min). Honestly, the amount of money we make is borderline obscene. One thing I think about a lot is how my old job was so bad it makes me very grateful for where I am now. I used to complain to my wife about work, but I haven't complained about a single thing with the new one. My coworkers get stressed out sometimes and ask me how I feel and I always say I'm really lucky to be here. I'm sure they think I'm a little nuts and an extreme optimist, but the reality is I just have some perspective. Anyways, if things stay like this, I wouldn't mind continuing on even after we reach our initial goal. Ideally, I'd like to end up going to half time, which in reality would be working only 8-9 days per month on average. But we will just have to see what happens in a few years.

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: MedSaver's Journal

Post by DutchGirl »

I'm glad to read that you like your current work so much better. And your future lifestyle sounds wonderful too - going part time like that with working 2-3 days per week and lots of free time in between.

Are you now and then checking how your future house is coming along? I'm not sure whether the building company allows visitors, or maybe has certain days where you can check the progress? February is right around the corner, so hopefully you'll be able to live inside your new house soon.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

January 2021 Update

Assets:

IRA/Brokerage/403b/457/cash: $1,685,777
Estimated home value: $945,000

Liabilities:
Mortgage: $712,422 @ 2.75% fixed

Net:$1,918,355

Edit: Reflects estimated home value rather than equity
Last edited by MedSaver on Sat Feb 27, 2021 1:39 am, edited 1 time in total.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

DutchGirl wrote:
Tue Jan 05, 2021 4:31 pm
I'm glad to read that you like your current work so much better. And your future lifestyle sounds wonderful too - going part time like that with working 2-3 days per week and lots of free time in between.

Are you now and then checking how your future house is coming along? I'm not sure whether the building company allows visitors, or maybe has certain days where you can check the progress? February is right around the corner, so hopefully you'll be able to live inside your new house soon.
The home is done. We are currently in escrow purgatory and will be moving in a few weeks.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: MedSaver's Journal

Post by thedollar »

@MedSaver

Did I miss something? How come your net assets dropped so much this month?

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: MedSaver's Journal

Post by DutchGirl »

It seems MedSaver is not counting the value of the house?

So MedSaver has taken on a new liability (the mortgage), but on the asset-side is just counting the house equity instead of the full value of the house.

Personally I would use a fair or low estimate of the house's value on the asset side of things (and have the mortgage taken into account as a liability). If you do that using MedSaver's numbers, you see that MedSaver is still doing fine.

However, some people do keep their house out of their "assets", often because they plan to live in the house forever, and thus its value doesn't matter as much. And maybe then they think for example: when I retire, I've paid off my mortgage. My remaining housing costs will just be $5k/year (repairs, maintenance and local taxes), and thus my total expenses will be $5k plus say $15k for other costs of living. Then in their plan they would for example need a paid-off house plus 25 times $20k for their total annual expenses.

biaggio
Posts: 35
Joined: Sun Apr 23, 2017 5:31 am

Re: MedSaver's Journal

Post by biaggio »

Exceptional progress. Roughly how are your assets distributed among IRA/Brokerage/403b/457/cash percentage wise?

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

February 2021 Update

Assets:

IRA/Brokerage/403b/457/cash: $1,720,866
Estimated Home Worth: $973,000

Liabilities:
Mortgage: $710,900 @ 2.75% fixed

Net:$1,982,966

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

DutchGirl wrote:
Tue Feb 02, 2021 2:29 pm
It seems MedSaver is not counting the value of the house?

So MedSaver has taken on a new liability (the mortgage), but on the asset-side is just counting the house equity instead of the full value of the house.

Personally I would use a fair or low estimate of the house's value on the asset side of things (and have the mortgage taken into account as a liability). If you do that using MedSaver's numbers, you see that MedSaver is still doing fine.

However, some people do keep their house out of their "assets", often because they plan to live in the house forever, and thus its value doesn't matter as much. And maybe then they think for example: when I retire, I've paid off my mortgage. My remaining housing costs will just be $5k/year (repairs, maintenance and local taxes), and thus my total expenses will be $5k plus say $15k for other costs of living. Then in their plan they would for example need a paid-off house plus 25 times $20k for their total annual expenses.
There are several schools of thought, but I have decided to include an estimate of the house in "Assets". It jibes better with the past numbers and it no longer looks like we went on a $700,000 spending spree. We are using the Zestimate value, which while it has its problems, is probably within a few percent of the actual value for our property because there are numerous comps which have recently sold. While we never practice market timing, a confluence of events have made the home a good buy so far (we went under contract in May and got some incentives from the builder because there was much uncertainty regarding Covid, we locked a mortgage rate in January very near the bottom, the housing market in our area has rocketed after we went under contract and comparable homes are selling near a million dollars if you can even secure one from an increasingly long wait list).
Last edited by MedSaver on Sat Feb 27, 2021 12:03 am, edited 1 time in total.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

biaggio wrote:
Tue Feb 02, 2021 3:00 pm
Exceptional progress. Roughly how are your assets distributed among IRA/Brokerage/403b/457/cash percentage wise?
Interesting question. The percentages are not something we track because we don't really have a choice in the matter. We max all available tax-advantaged accounts and put the rest into taxable. Made me do a little math, but excluding home equity, it roughly breaks down as:
17% Roth IRA, 13% 401k, 31% taxable, 4% cash, 31% 403b/457, 4% pension.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

March 2021 Update

Assets:

IRA/Brokerage/403b/457/cash: $1,758,276
Estimated Home Worth: $971,000

Liabilities:
Mortgage: $710,725 @ 2.75% fixed

Net:$2,017,551

edit: I messed up assets.
Last edited by MedSaver on Wed Mar 31, 2021 5:20 pm, edited 1 time in total.

Scott 2
Posts: 2824
Joined: Sun Feb 12, 2012 10:34 pm

Re: MedSaver's Journal

Post by Scott 2 »

Multimillionaire, congrats!

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: MedSaver's Journal

Post by thedollar »

Congrats, amazing progress from negative NW just a few years ago and now 2+ m !

How about spending inflation? Probably you already reached FI escape velocity

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

April 2021 Update

Assets:

IRA/Brokerage/403b/457/cash: $1,859,685
Estimated Home Worth: $1,002,000

Liabilities:
Mortgage: $709,870 @ 2.75% fixed

Net:$2,151,815

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

thedollar wrote:
Thu Apr 01, 2021 9:02 am
Congrats, amazing progress from negative NW just a few years ago and now 2+ m !

How about spending inflation? Probably you already reached FI escape velocity
Hi. Thanks.

Our spending has definitely increased from say 5 years ago (check out my first post), but only by about 30%, which is far below our increase in salary over that time. Our student loan payments have essentially been replaced by the mortgage payment.

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