I’m assuming if you are viewing this site, you probably have a pretty good idea about why we are tracking our net worth. For us, it’s all about being on a path to financial independence. I’m very interested in getting to the day that I wake up in the morning and have full control over what I do all day long. At this point, we both have to wake up and go to work Monday through Friday. While we don’t hate our jobs and really like the income they provide, it would be amazing to just sit on the couch all day watching Oprah reruns. Either that, or we’d go out and pursue other interests or volunteer in ways that are meaningful to us.
I remember when we were first married. We were both making decent money for being right out of college ($60K total) but we didn’t have any money saved up. Zero retirement, zero savings and we were spending it as fast as we earned it. (We’ve been married about 17 years) We both had car loans and had our first mortgage. At the time, I thought we were pretty savvy because we had paid off our student loans and credit card balances that had built up during college (back then the balances, on average, weren’t nearly as high as they are today). Little did I know how much smarter we could have been back then. If we’d done a better job of spending less than we made and investing the difference we would have hit the million dollar milestone long before now. All in all, I’d have to say we don’t have any regrets. We’ve had a lot of fun over the years and have done much better over the last decade, striking a balance between living for today and saving for tomorrow.
When we initially started saving it felt like more of a dreaded task than it does today. Early on, the balances were very low and didn’t seem to get larger very quickly. Back then we weren’t even bothering to track the balances to see how they changed over time. Every time I checked the my retirement account, I’d see a tiny increase in the balance. We weren’t saving nearly as much back then which made it even harder to see the account balance climb. As the years went on, it got more and more exciting. The first big milestone that I still remember was when our net worth hit $50,000. That was more money than I’d ever had in my life and it almost didn’t seem real. When we hit the $100,000 milestone it really started to sink in that it was possible to amass real wealth. At that point, it also started to become much more obvious how the decisions we were making could drastically impact our overall net worth. Should we buy a new car? Not if we wanted to keep seeing the number go up. The depreciation hit you take on a new car would instantly show up in our tracking spreadsheet. When we’d buy a new TV, our savings account number went down in real time. We have never tracked consumer assets like TV’s, computers etc in our net worth so it sometimes felt like just throwing money away when we’d make those purchases because we’d see our account balances decrease. While it didn’t cause us to just stop buying things altogether, it did make us pause to decide if it was something we really needed or wanted.
So, for us, tracking our net worth has always been about helping drive us to make better financial decisions. Someone once told me that only things that are measured can be improved. If you don’t know how much money you have, or how much debt you have, you certainly won’t know whether you are on a path to financial independence.
We might as well kick things off with the NUMBER! As of today, our net worth is:
I didn’t write down the date that we finally passed the $1M threshold but I believe it was about March of this year. Needless to say, we were very excited to hit this milestone. I told my wife that we’d go out to dinner to celebrate. We finally did that last weekend, although it was a combined celebration of date night/$1M threshold.
I realize that the number, without some background is really kind of boring. So, here are some basics that we’ll go in to in more depth in other posts:
43 year old male
42 year old female
One 12 year old child
Both have college degrees
Both employed with combined income of $174,000
We have been saving since about 2001, although not aggressively back then
As of a couple years ago, we both save the maximum allowed in our 401k’s
We contribute to 1 ROTH IRA (Yes, we should be doing two before we earn over the limit)
We save $400 a month in a 529 plan for our child (Currently $46K)
We finally have a std brokerage account for after tax funds
We have 2 homes (1 paid off, 1 with a $226K mortgage)
Our only debt is the one mortgage. We have zero consumer debt, no car loans etc
So that’s a bit of background to go with the number. I’ll post more details about the various aspects of our assets in the future. I will also post monthly updates about our net worth in the future. If you have any questions about what we are doing, make sure and leave a comment.