The Hoard: January 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 $123,178 (vs last month’s $122,460).  This is about 20.5% of our $600,000 goal.

Primary residence: The mortgage is $95,660  (vs last month’s $95,924), which means it’s about 2.39% paid off.

The stock market has been taking a dive since the beginning of the year (down about 8% so far), so we did pretty well just to break even from last month. However, since we are still accumulating assets, I’m all for a market correction. That just means we get to buy stocks at lower prices this year.  Since we were going to be buying them anyway, that’s a pretty sweet deal.

It’s sort of funny to look around at financial blogs right now (or the financial independence subreddit) and see people talking about what to do during a market downturn.  It’s pretty simple: do what you were going to do anyway.

The thing is, your investment strategy should be based on your own personal risk-tolerance.  If you can’t stomach seeing stocks lose 10% (or even +30%) then you shouldn’t be holding a lot of stocks.

Remember that you are investing for the long-haul.

As for us, we continue to invest heavily versus paying down the mortgage.  I don’t really see that changing anytime soon.

As a side note, I’m planning to do some 2015 recap posts soon.  I can’t wait to see what we spent in total for 2015, and how our net worth changed over the past year.

How do you think we are doing? Are we on track to make FI by Feb 2025?

 

 

Expenses: December 2015

Expenses

Expense 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 an overachiever tracks their New Year’s resolutions.

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

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

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