Saturday, July 27, 2013

July net worth update

It's easier to call these "net worth updates" even though I only really care about income-producing assets. I have a goal to have $100k in income-producing assets as soon as possible. I'm making progress toward my goal mostly by relying on the Mustachian habits I've already cultivated.

After paying off my student loans I've found that spending money is a bit easier. For example, I spent $55 on 5 video games during the Steam summer sale. I even bought a MacBook Air last month, after not having a laptop for four years. Even so I've been accumulating cash and deploying it to productive uses: debt paydown and Lending Club notes. I've found it's possible to buy nice things you want and still live well below your means.

Here are the totals, along with the difference from my last update (June 16th):

  • 401k - $24,512.59 (+$1,751.79)
  • Lending Club - $2,086.53 (+522.23)
  • Schwab - $1,544.63 (+$56.62)
  • I-bonds - $400 (no change)
  • Total - $28,543.76 (+$2,326.65)
My 401k has been doing well because of the recent strength in the markets. Around $1000 of that gain was new contributions (plus employer match). The rest was appreciation.

I added $500 to Lending Club, and the other $22.23 was interest.

My Schwab account still has 100 shares of Corning (GLW). Once I have around $2k in extra cash I plan on finding another company to invest in. Until then my Schwab account value will vary according to Corning's stock price.

I didn't buy more I-bonds last month. This was because my Treasury Direct account was locked, so my automatic purchase didn't go through. I'm going to continue investing in I-bonds as an emergency fund, even though the interest rate is low and getting lower. It's a stable store of value that can't decrease in real terms, and the fact that it's not in my savings account means I'll respect it as a rainy day fund.

The over $2k increase from last month is an awesome number, considering I didn't invest much of my after-tax income at all. I used a lot of cash to pay off my credit cards: I want to improve my credit score so I can qualify for a Home Equity Line of Credit (HELOC) and then hopefully never use my credit again. I paid off my MacBook purchase as soon as it hit my card (~$1,400), and got my 0% card down to around a $3,500 balance — take that, credit utilization!

A few months ago I lent $5k to a family member as a sort of cash-flow loan. When I got paid back, I used it on my credit cards. This means that, while I'm not building my 'stash as quickly as I could be, I don't have to worry as much about when the 0% offer will run out next March. Buying productive assets and paying down debt are both really fantastic options.

What have I been up to?

I haven't been posting as much as I'd like, but I've still been busy. I've just been busy with non-financial endeavors. It's pretty great how frugal habits compound over time, to the point where even when I'm not actively trying, I'm still maintaining a high savings rate.

I'm trying to approach the early retirement lifestyle before I'm actually retired. I'm cultivating hobbies like home brewing and open source programming. I'm reading more. I spend more time outside, going on long walks with the dogs and my girlfriend.

Yup, life is pretty good. And I'm still on track to meet my financial goals. I think I could be moving toward them more quickly, but I'm happy spending more time on other pursuits. I know that the pendulum will swing the other way at some point in the future. Then I'll spend my time learning about value investing, home energy efficiency, improving my frugality.

Everything in its own time.