2016 Net Worth
What a difference a year makes
We took a break from baking. Mr. 50 received a job promotion. 50 junior is attending school. We’ve been living debt-free! We reached a positive net worth! And, we put an offer on a new house!?!
We terminated our business LLC. The cake side hustle was short-lived. However, we’re a lot happier as a family with the extra time we had together. Doing a side cake business had taught me a great deal about life. Not only did I grow as an entrepreneur, but I also grew as a person. Hard work paid off, Mr. 50 received a job promotion. 50 junior started his real schooling this past Fall at a private school. And we are moving to a new house in a couple of days, my oh my! Here is to our fourth year of FI journey…
Read our background stories about a side cake business here:
Expenses
Here is a break up of our 2016 expenses in the percentage of our take-home pay:
- 25% mortgages
- 21% saving for a down payment on a new house
- 13% daycare and private school tuition & fees
- 11% saving
- 7% car payment
- 5% clothing and shoes
- 4% home maintenance
- 3% general merchandise
- 3% utilities
- 3% home phone, mobile phones, and internet service
- 3% groceries
- 2% gasoline
Note: Our retirement savings weren’t included in the expense break up…oops! I’ll remember to put our retirement savings next year. 😉
- Our NY house has been renting for about 2 years. And here is the most exciting part. We received an offer on our NY house! Our property manager informed me that somebody wanted to buy our rental – how exciting!
- It appears that our total cost of living was pretty darn low (food, light, and water). Majority of our expenses was the mortgages. Are we house poor? By definition, we are not. However, I felt like we are. Nonetheless, home ownership does take away our income. Not to mention, a total of 21% was saving for a down payment for a new house. The daycare and school tuition came in the third. We only saved a total of 11% to our saving accounts this year (this number didn’t include retirement savings).
- Our savings rate should increase next year as the car loan was paid off.
Saving and Investing
- I got an outstanding rating at my job! So I got a bonus. I was so proud to say that every penny of the bonus went straight to our car loan. My employer matches dollar-to-dollar for the first 3% and half a dollar for the next 2%. I lowered my contribution this year as we wanted to save up for a down payment on the new house. A total of $9,605 went to a tax-deferred retirement account.
- Mr. 50 continued maxing out his retirement account. He also got promoted! This increased our household income significantly. I can see light at the end of our FI journey, for real! Increase in saving and spending less!
- I increased 50 junior’s college saving contribution from $100 to $200 monthly.
- We continued doing the automatic saving transfer to on our regular saving account at $250 monthly. This account serves as our emergency fund.
- We also continued doing the automatic saving transfer to our online saving account at $100 monthly.
Net Worth
- Liabilities
- The balance on the current house was $107,900 and NY house was $0 (it was sold in the spring)!
- We owed $0 on credit cards. I meant we’ve been paying off a balance in full each month for the whole year. Keep it up! It felt incredibly great not owing to any credit card debt!
- Mr. 50 car loan was gone. We finally paid it off in the summer of this year. Hooray! It took us a total of 22 months to pay it off, to be exact.
- Thank goodness, Mr. 50 and I never had student loans. A future post “How I went to graduate school debt free”.
Liabilities totaled at $107,900
- Asset
- My retirement balance was $63,205.
- Mr. 50’s retirement balance was $20,262.
- 50 junior college saving account balance was $5,789.
- The online saving account balance was $26,788.
- The regular saving account balance was $28,567.
- Checking account balance at the end of the year was $981.
- My car was worth $4,740.
- Mr. 50’s car was worth $27,300.
Asset totaled at $177,632
-
2016 Net Worth $69,732
What I learned and what I want to accomplish next year
- First of all, I don’t count equity of our homes as part of our net worth (yet). It is harder to convert into cash and its value fluctuates by the market. The term is irrelevant to us right now. I’ll put the value of our primary residence as soon as we really own it (when we pay it off). I know, I am very conservative here when it comes to putting home equity into the net worth.
- A new house will give us more space (my sister’s family will be living with us in the near future) and less commute time to work and to 50 junior’s school.
- Our debt went down $241,990! The majority of our debt payoff amount was actually the sell of our NY house. After agent and attorney fees, we didn’t make any profit from it. However, we were glad that we are done with this house. Right now, we feel like we can now move forward with our financial life.
- Our net worth went up $204,586 this year. Again, this was because we sold our NY house. We got rid of a non-profitable rental, basically.
- At the end of the year, we had about $56,336 in cash. It was significantly way more than we had a year ago. We’ll be using the majority of this chunk for a down payment for a new house. I’m hoping to get our current house sold by the Summer of next year. Our neighbor’s house was sold within 2 days after being on the market. I have high hopes 🙂
- I didn’t max out my 401(k) this year. This made me felt financially insecure as I’d been maxing it out since I started my new career. So I hope, next year, I’d be back on it.
- Next year, I’ll start tracking our household expenses and budgeting for more detail. I also want to calculate our savings rate (I’ll include our retirement numbers). This way I’ll know exactly where we spend the most on, where we can cut back, and where we stand (as far as the saving rate goes) and in turn improve our chance of success!
Our fourth year of FI journey has passed.
We are finally in the positive net worth zone. Are you with us?
What would you do differently if you were us? Are we on the right track?
We are buying a bigger house. Did we make the right decision?
