The Hoard: June 2015

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.

How are we currently doing?

The current market value of the hoard is $61,435.  This is about 10.2% of our $600,000 goal.

Primary residence: The mortgage is $97,486, which means it’s about 0.5% paid off.

Hell yeah! We’ve got over 10% of our goal in liquid assets!  That’s pretty exciting.  Reaching $600,000 is going to take quite a bit of time, but at least at the beginning you basically hit new milestones all the time.  The most important thing about these numbers is that they are both moving in the right direction.

The mortgage balance is still really high because we just took out the loan in March. We’ve been paying an extra $105 in principal every month, but right now our focus is on building the liquid assets.

In general, if you have a good mortgage rate (ie sub 4%), then I think it’s generally best to focus on your investments rather than aggressively pay off your mortgage.  I’m planning a post soon where I talk about this decision and why I think it makes sense for us. But whatever keeps you motivated is the right choice for you.  Just make sure your money is working for you either by paying off debt or investing.

I expect a big boost to The Hoard in July.  Mrs. Dragon and I got an opportunity at work which basically boils down to working 1.5 times the number of hours for 2 times the pay for the month of July.  The math on that works out very well and, since we don’t have any kids yet, we decided to jump on the opportunity.

This means our income in July is basically going to double and all that extra money is being diverted to our tax-advantaged accounts.  We already filed the form with HR.

Do you think we are on track for FIRE by February 2025?  How is your own progress coming?

Simple vs Easy
Expenses: June 2015

5 thoughts on “The Hoard: June 2015

  1. Congratulations, this is very exciting progress.
    My husband and I paid off our mortgage last year. I would usually agree that if you have a low mortgage rate, it makes more sense to focus on investments but we actually found that we put more money towards the mortgage than we would have saved because we became so motivated by demolishing the debt. My husband built a spreadsheet in excel that tracked all our lumpsums and showed us remaining balance. It was incredibly motivating!

    • Hi Jess,

      That’s a really great point. Whatever motivates you personally to save the most money is definitely the best option. I actually have a post on the way that discusses all the reasons why we choose to fund investments versus paying off the mortgage early, but for some people getting rid of debt really lights a fire in them. Either way is good as long as you are saving money in the form of investments or paying off debt. Thanks for stopping by!

      Best,
      TBD

  2. Hey TBD,

    I see that in May you guys had just shy of $56k, and now you guys are over $61k. With over a $5k increase in your hoard, how long are you guys looking to reach your goal of $600K + a paid off house?

    Keep up the amazing progress!

    USSFI

    • Hey USSFI,

      Our goal right now is to meet both goals by February 2025. If the market plays along, then we could reach both goals a bit sooner than that. Of course, some months will be better than others but, in our current situation, saving $5k/month should be pretty common.

      Thanks for the motivation, and keep up your good work as well! Building The Hoard and Staying The Course. All part of the game.

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