The Hoard: June 2016

The Dragon's Hoard

Every good dragon has a hoard.  You know.  The collection of gold, jewels, and other valuables that the dragon guards in his or her cave.  For me, The Hoard is what I call my assets.  The collection of stocks, bonds, and other income producing assets that Mrs. Dragon and I have collected thus far.

Mythological fire breathers have to protect their hoard from knights seeking glory, wizards wanting power, etc.  Real-world FIRE breathers have more mundane, but very real dangers to their own hoards: the tax man, the cable company, lifestyle inflation, high-fee brokers, and many more.

This is one post in a series that documents my progress towards financial independence.

You might recall that I don’t include our primary residence in the assets (it doesn’t produce income) and I don’t include our primary mortgage against the assets.  If we had a rental house, I would include it in both parts of the equation, but I’ll address the primary residence in a separate category.

I do not differentiate between tax-advantaged accounts and taxable ones in the number for The Hoard.  Assets are assets.

We use the excellent (and free!) service Personal Capital to keep track of how The Hoard is coming along.  It lets you view all your accounts on a single homepage for a convenient snapshot of your financial life.  It is a top-notch service.  Highly recommended.

Mrs. Dragon and I want $600,000 in liquid assets and a paid-off house to consider ourselves financially independent. We’re hoping to accomplish this by February of 2025.

How are we currently doing?

The current market value of the hoard is $161,997 (vs $161,935 last month).  This is about 27.0% of our $600,000 goal.

Primary residence: The mortgage is $94,396  (vs $94,647 last month), which means it’s about 3.68% paid off.

Not much progress since last month, mostly due to a large down-swing in the markets because of the UK’s decision to leave the EU (#Brexit).  The Hoard was above $172k at one point, but has since tumbled quite a bit.

That’s life in the markets! Some months are up and some months are down.  We just continue to invest every month. I’m hoping things don’t rebound this week since we get paid on the first of each month.  That way our automatic purchases will be at the new discounted prices!

We have family in town so I’m going to keep this short and sweet.  We’re expecting Baby Dragon any day now, so I haven’t really been thinking too much about our investments.

Hopefully you’re enjoying the warm weather and making time for friends and family this summer!

What are your thoughts on Brexit? Is it affecting how you view your investments?

Expenses: May 2016

ExpensesExpense report!  Since I’m a total voyeur for finance, these types of details are exactly the kind that I love to read on other people’s blogs.

Don’t get me wrong though, these numbers are primarily written for me and Mrs. Dragon.  Every good FIRE breather knows that to be successful, you have to track your expenses. You have to track them like a democrat tracks superdelegates.

How else will you know when your Hoard is big enough?

Without further ado, here are the numbers for May (rounded to the nearest dollar):

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The Hoard: May 2016

The Dragon's Hoard

Every good dragon has a hoard.  You know.  The collection of gold, jewels, and other valuables that the dragon guards in his or her cave.  For me, The Hoard is what I call my assets.  The collection of stocks, bonds, and other income producing assets that Mrs. Dragon and I have collected thus far.

Mythological fire breathers have to protect their hoard from knights seeking glory, wizards wanting power, etc.  Real-world FIRE breathers have more mundane, but very real dangers to their own hoards: the tax man, the cable company, lifestyle inflation, high-fee brokers, and many more.

This is one post in a series that documents my progress towards financial independence.

You might recall that I don’t include our primary residence in the assets (it doesn’t produce income) and I don’t include our primary mortgage against the assets.  If we had a rental house, I would include it in both parts of the equation, but I’ll address the primary residence in a separate category.

I do not differentiate between tax-advantaged accounts and taxable ones in the number for The Hoard.  Assets are assets.

We use the excellent (and free!) service Personal Capital to keep track of how The Hoard is coming along.  It lets you view all your accounts on a single homepage for a convenient snapshot of your financial life.  It is a top-notch service.  Highly recommended.

Mrs. Dragon and I want $600,000 in liquid assets and a paid-off house to consider ourselves financially independent. We’re hoping to accomplish this by February of 2025.

How are we currently doing?

The market value of the hoard in mid-May was $161,935 (vs $158,175 last month).  This is about 27.0% of our $600,000 goal.

Primary residence: The mortgage is $94,647  (vs $94,898 last month), which means it’s about 3.42% paid off.

This post is a little late, because we have been super busy lately, so I’ll keep it short and sweet.  Another solid month of progress here.  Our investments are pretty much on autopilot, so things just keep going smoothly.

But Mr. Market is a moody S.O.B. so you never know when a sudden spike or drop will come along.  However, we’re mentally prepared for when they inevitably do come.  For now, we’re just enjoying the relatively smooth sailing.

Expenses: April 2016

ExpensesExpense report!  Since I’m a total voyeur for finance, these types of details are exactly the kind that I love to read on other people’s blogs.

Don’t get me wrong though, these numbers are primarily written for me and Mrs. Dragon.  Every good FIRE breather knows that to be successful, you have to track your expenses. You have to track them like a Michael Phelps tracks his gold medals (the Olympics are this summer, woo!).

How else will you know when your Hoard is big enough?

Without further ado, here are the numbers for April (rounded to the nearest dollar):

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The Hoard: April 2016

The Dragon's Hoard

Every good dragon has a hoard.  You know.  The collection of gold, jewels, and other valuables that the dragon guards in his or her cave.  For me, The Hoard is what I call my assets.  The collection of stocks, bonds, and other income producing assets that Mrs. Dragon and I have collected thus far.

Mythological fire breathers have to protect their hoard from knights seeking glory, wizards wanting power, etc.  Real-world FIRE breathers have more mundane, but very real dangers to their own hoards: the tax man, the cable company, lifestyle inflation, high-fee brokers, and many more.

This is one post in a series that documents my progress towards financial independence.

You might recall that I don’t include our primary residence in the assets (it doesn’t produce income) and I don’t include our primary mortgage against the assets.  If we had a rental house, I would include it in both parts of the equation, but I’ll address the primary residence in a separate category.

I do not differentiate between tax-advantaged accounts and taxable ones in the number for The Hoard.  Assets are assets.

We use the excellent (and free!) service Personal Capital to keep track of how The Hoard is coming along.  It lets you view all your accounts on a single homepage for a convenient snapshot of your financial life.  It is a top-notch service.  Highly recommended.

Mrs. Dragon and I want $600,000 in liquid assets and a paid-off house to consider ourselves financially independent. We’re hoping to accomplish this by February of 2025.

How are we currently doing?

The current market value of the hoard is $158,175 (vs $146,901 last month).  This is about 26.4% of our $600,000 goal.

Primary residence: The mortgage is $94,898  (vs $95,147 last month), which means it’s about 3.17% paid off.

Another spectacular month.  I continue to be amazed every time I write one of these posts. Our investments are automated so the money goes to work without any help from us.  That means I don’t see the bottom line very much throughout the month.

An increase of $11,000+ is certainly welcome any time!  Of course, we had a little help from Mr. Market.  According to Personal Capital, our investments earned 2.2% since the last update.  Because our nest egg keeps growing that 2.2% is actually a decent chunk of change now!

The breakdown on this increase is approximately as follows:

$6200 – payroll deduction straight to retirement accounts (including employer match)

$750 – side hustle income

$3200 – investment gains

The rest – take home pay sitting in checking/savings accounts

As you can see, we never even saw most of that money. I cannot overstate the importance of automating your finances as much as possible. It makes it so much easier to keep your spending in check if the money never hits your account.

Naturally, you can take months like this with a big fat grain of salt.  The market happens to be up right now, but there will be plenty of months when it is down. The important thing is that the general trajectory of your net worth is upward!

After recently realizing that we hit a 76% saving’s rate last year, I’m feeling pretty good about our finances right now.  Some months it certainly seems like we are being spendy, but the numbers here on the blog tell me we are doing just fine.

How was last month for you?  Do you think we are on track for our FI goals by Feb 2025?

 

 

 

 

2015 Taxes and Savings Rate

IRSI have completed our 2015 tax return so, armed with the exact amount of tax we paid for 2015, I’m now ready to calculate our savings rate for the year.

Let me just start by saying we did a damn good job being tax efficient this year.  Our effective income tax rate wasn’t even a mere 3% despite having a joint income of almost $150k (with employer retirement matching).

Here’s the breakdown on our taxes (most numbers rounded for security/anonymity):

Gross income: $140,800 + $8,600 employer matching

IRS income: $69,000

Adjustments: $11,000 (traditional IRA contributions)

AGI: $58,000

Standard deduction and two personal exemptions: $20,600

Taxable income: $37,400

Tax owed: $4,600

Saver’s credit: $400

Total income tax: $4,200

Using the rounded numbers above we had a 2.8% effective tax rate for federal income tax.  You might be asking yourself, “How in the unholy name of hell did they pull that off?!?”  Don’t worry, dear reader, the details are below.

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Expenses: March 2016

ExpensesExpense report!  Since I’m a total voyeur for finance, these types of details are exactly the kind that I love to read on other people’s blogs.

Don’t get me wrong though, these numbers are primarily written for me and Mrs. Dragon.  Every good FIRE breather knows that to be successful, you have to track your expenses. You have to track them like a Villanova player tracks the game winning shot.

How else will you know when your Hoard is big enough?

Without further ado, here are the numbers for March (rounded to the nearest dollar):

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The Hoard: March 2016

The Dragon's Hoard

Every good dragon has a hoard.  You know.  The collection of gold, jewels, and other valuables that the dragon guards in his or her cave.  For me, The Hoard is what I call my assets.  The collection of stocks, bonds, and other income producing assets that Mrs. Dragon and I have collected thus far.

Mythological fire breathers have to protect their hoard from knights seeking glory, wizards wanting power, etc.  Real-world FIRE breathers have more mundane, but very real dangers to their own hoards: the tax man, the cable company, lifestyle inflation, high-fee brokers, and many more.

This is one post in a series that documents my progress towards financial independence.

You might recall that I don’t include our primary residence in the assets (it doesn’t produce income) and I don’t include our primary mortgage against the assets.  If we had a rental house, I would include it in both parts of the equation, but I’ll address the primary residence in a separate category.

I do not differentiate between tax-advantaged accounts and taxable ones in the number for The Hoard.  Assets are assets.

We use the excellent (and free!) service Personal Capital to keep track of how The Hoard is coming along.  It lets you view all your accounts on a single homepage for a convenient snapshot of your financial life.  It is a top-notch service.  Highly recommended.

Mrs. Dragon and I want $600,000 in liquid assets and a paid-off house to consider ourselves financially independent. We’re hoping to accomplish this by February of 2025.

How are we currently doing?

The current market value of the hoard is $146,901 (vs $125,424 last month).  This is about 24.5% of our $600,000 goal.

Primary residence: The mortgage is $95,147  (vs $95,397 last month), which means it’s about 2.91% paid off.

Hell. Yes. For those of us keeping score that’s a $21,477 increase since last month! Of course, we did not earn anywhere close to $24k from our jobs last month, but our money has been hard at work earning us more money. According to Personal Capital, our investments have returned 9.26% since the last update.  That’s a helluva month!

The market is really starting to take control of our progress.  That’s great news because it means we have a sizeable chunk of money invested now, but it also means that our ride is about to get a lot bumpier (that’s a word right?).

Because our net worth is now tied to market movements that means that we will gain or lose huge chunks of money depending on the mood of the market.  That’s OK with me though.  It supercharges our savings when the market is up, and provides a sale on stocks when the market is down.

Anyway, with this sudden boost we are almost at 25% of our goal!  That’s damn exciting!

We are still investing vs paying down the mortgage.  I’m not sure if my feelings on the subject will change after baby dragon gets here, but for now we are still pumping money into investments every month.

How was last month for you? Do you think we are on track to meet our goals by February 2025?

Expenses: February 2016

ExpensesExpense report!  Since I’m a total voyeur for finance, these types of details are exactly the kind that I love to read on other people’s blogs.

Don’t get me wrong though, these numbers are primarily written for me and Mrs. Dragon.  Every good FIRE breather knows that to be successful, you have to track your expenses. You have to track them like a groundhog tracks his shadow.

How else will you know when your Hoard is big enough?

Without further ado, here are the numbers for February (rounded to the nearest dollar):

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2015 Spending

ExpensesI know this post is a little late in coming, but better late than never right? Now that 2015 is in our rear view mirror it’s time to see how our spending went for the year.

We didn’t start tracking our expenses in detail until February of 2015, so I’m just going to use the average of the other 11 months to represent January.

As you know, we bought a house in 2015. I’m going to include the expenses related to getting the mortgage (things like closing costs and inspection fees), but I’m not going to include the down payment.  Since the down payment counts as equity in the house, I’m counting it more on the “investment” side of the balance sheet.

Without further ado, here are our numbers from 2015:

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