2017 Net Worth

From Houses to Home 

We closed on the new house just a few days after the New Year holiday. We couldn’t wait to move in so we actually moved right after we signed the paper that day 🙂 . The dogs are happy with the new place and are transitioning well. Our chickens seem to enjoy the shady backyard as well. The new house gives us more space. The location is perfect. We now have less commute time to work, school, and grocery stores compared to the old house. Everything is within 10 minutes of our home. By living closer to everything, it definitely saves us on the fuel cost and time.

We love our new house but we also miss the old one. Here’s to our fifth year on FI journey…

INCOME

Mr. 50 and I received a small percentage of the cost of living increase adjustment to our salaries from our employers. I did some side hustlings. We sold and donated a TON of stuff this year. Our old house was sold in the Summer. We didn’t get much profit from it. However, we were glad that we finally have one house we can call home 🙂 . Here is a break up of our 2017 income sources broken down by percentage of our total income (after taxes and all deductions):

A break-up of our income source in 2017 by a percentage of total income.

1. A non-paycheck earning represents a little over 1/4 of our total income. We donated a TON of clothes and baby items when we moved to the new house. We also sold a TON of furniture, toys, clothes, etc. Selling no-longer-needed stuff and unused household items represented a little over 10% of our total income! My oh my…we had this much stuff?!?
2. I did a couple of photography shootings in my spare time. I also earned a good chunk from selling my artwork at Etsy. It was a pretty good year for my Etsy shop considering I didn’t spend time on new painting at all this year. I earned a lot more than I did in 2016. Together, these side hustlings brought in almost 3% of our total income.
3. We didn’t get much profit from selling the old house. A third of the proceeds went to an agent commission and fees. We should have listed the house ourselves knowing that the market in the area was hot. At the same time, we didn’t want to take any chances.
4. Mr. 50 got a work promotion in Fall last year. His new position comes with a work performance evaluation. So there’s an extra income potential from a bonus. Kudos to Mr. 50 who received a good rating first year of working in his new role. I also got a bonus from an outstanding rating at my job. We saved our bonus money in an online saving account which will be used for 50 junior’s school tuition next year.
5. We received a refund check from an insurance company. It was the unused/uninsured portion of the hazard insurance policy from the old house.
6. I’m proud to say that we have an investment income! Though it was so little I was so thrilled!
7. We exclusively use a credit card for everyday expenses now. It earns cash back. This year we took a full advantage of it. I’m happy to earn a little money back from every purchase like groceries and gas.
8. We also started using Ebates in late 2016. You can use it to shop online or in-store like you normally would. Joining is free and it is super easy to use. I received my first pay-out in the Spring of this year. I didn’t realize that earning cash back from Ebates was so easy. If you sign up through my referral link, you’ll receive $10 when you make your first eligible purchase. My mind was blown away! I’d been missing out all along! We’d left easy money on the table.

EXPENSES

The down payment and the closing cost of the house were the biggest expense this year besides the mortgages. We also spent a good chunk of money on the old house to get it ready for listing. We had a nice break during our vacation in Florida this Summer. It came at a costly expense but it was all worth it. It reminded me of how important spending time with family really is.  This year has been good for us financially besides a hefty repair cost of our new house. Here is a break up of our 2017 expenses in a percentage of total income (paychecks + other incomes):

A break-up of our annual expense in 2017, in the percentage of our take-home income

1. 1. A total of almost 57% went to housing-related expenses (mortgages, cost of purchasing a new home, home repair and maintenance) this year. A total of just under 25% went to 2 mortgages (old houses and the new one). We’ve been paying extra on the new house every month. I want to pay it off as soon as we can. A future post “Pay off your mortgage early or invest extra money?“
   2. It appears that our total cost of living was still pretty darn low (food, light, water, and the like). Majority of our expenses was mortgaging. Keep in mind that the number included the 2 mortgages (our old house was just sold in Summer 2017). Are we house poor? By definition, we are not. A future post “How to tell if you are house poor“. Nonetheless, home ownership does take away a lot of our money.
   3.  50 junior school tuition, lessons, and after-school care expenses were just under 9% of the total income.
   4. We only saved about 11% outside of work this year. It was actually less than last year. I’m quite disappointed. The cost of repairing the new house significantly impacted our savings rate.

1. I didn’t realize that we spent a TON on shopping (General Merchandise at 3.75% of our total income) until I started using Personal Capital in the Fall of 2016. We spent more money shopping than we paid our utilities (light, gas, water, internet, and cell phone)! Holly sh…! This needs to change.
2. Our cost of transportation (gas money and car maintenance) was significantly less than the amount we spent in 2016. I believe these due to the fact that our new house is close to everything we want & need (work, school, library, stores, etc.)

SAVING AND INVESTING

1. Mr. 50 and I got bonuses. We saved this money in an online saving account which will be used for 50 junior’s school tuition.
2. I was surprised (and sad) to learn that I didn’t max out my retirement this year. The IRS contribution limit for 2017 was $18,000. I must have missed the calculation earlier in the year (when I did the paperwork). A total of $9,795 went to a tax-deferred and $6,000 to a Roth retirement account, respectively. My employer matches dollar-to-dollar for the first 3% and half a dollar for the next 2%.
3. Mr. 50 continued maxing out his retirement account. He receives a little matching contribution from his employer.
4. I increased 50 junior’s college saving contribution from $200 to $300 monthly in Winter.
5. We continued doing the automatic saving transfer to on our regular saving account at $250 monthly. This account serves as our emergency fund.
6. I increased the automatic saving transfer to our online saving account at $500 monthly in the Fall.
7. And this was the most exciting part, I opened a brokerage account with Vanguard (I highly recommend Vanguard because they have the lowest fees. They are owned by customers, not by shareholders)! This account is intended to bridge the income gap before our retirement money + pension kicks in if we decide to retire early.

2017 Total Savings Rate = 46.15%

Here is how I calculate our total savings rate:

Savings Rate = [(Total Savings Amount + Employer Matching Contribution)/Total Income + Employer Matching Contribution] x 100

Total Savings Amount = contributions to Employer-sponsored Retirement plans, contribution to College Saving account, contribution to Investment account, contribution to Saving accounts, and the Principal amount we paid the mortgage

Employer Matching Contribution = The matching money that we receive from employers

Total Income = Take home pay from our paychecks + Extra money we earned from the non-paycheck income

Take home pay = Gross income – Taxes and Deductions

NET WORTH

• Liabilities

1. The principal balance of the new house was $392,224. This is the only debt we have 🙂

Liabilities totaled at $392,224

• Asset

1. My retirement balance was $99,408
2. Mr. 50’s retirement balance was $35,203
3. The brokerage account balance was $10,267
4. The online saving account balance was $20,884
5. 50 junior’s college saving plan balance was $8,975
6. The regular saving account balance was $3,001
7. Checking account balance was $764
8. My car was worth $3,127
9. Mr. 50’s car was worth $19,121

Asset totaled at $200,750

• 2017 Net Worth: Asset – Liabilities = $ -191,474

We finally have one house that we call home.

What I learned and what I want to accomplish next year

1. I stumbled upon Personal Capital last year while surfing the internet. I later signed up for an account in the Fall. It’s a web-based financial account aggregator. This tool helps me with budgeting, managing our financial portfolio, tracking our net worth, analyzing investment fees & performance, and planning our retirement all in one place. It’s super easy to use. I am very happy with this new tool. The only regret I had was that I didn’t sign up sooner.
2. I saw Ebates commercial a zillion years ago through a TV commercial but I never cared to try or was too afraid to try. This time, I gave myself a try. I’m glad I did! It was so super easy to use. After you sign up, you just find the store on ebates.com, click “Shop Now” and shop like you normally would on the store site. You can also earn cash back shopping through in-store purchases (with participating stores). Instead of going to the Ebates website and find the store there, you just need to install the Ebates app on your smartphone (to get the QR code on your phone when you shop) and set it up for in-store purchasing and then shop like normal. After you make an eligible purchase, you’ll earn cash back and Ebates will send you a check or PayPal payment quarterly. Do you shop online? Do you shop in-store? If you do, it’s time to earn easy money for your purchases. Don’t leave money on the table. Here is my referral link, you’ll receive $10 when you sign up and make your first eligible purchase.    
3. The new house gives us more space (my sister’s family will be living with us in the near future)  and less commute time to our work and to 50 junior’s school
4. Our debt went up because of the new house. I want to pay it off sooner than later though. A future post “Pay off your mortgage early or invest extra money?“
5. Our net worth went down $261,206 this year. We were in the positive net worth zone last year. Again, this is because of the new house.
6. We managed to have our old house sold in late Summer. I know it was kind of late getting our old house sold since we bought the new one during the new year week. The ideal situation would be that we sell our old house (went under contract) first before we buy the new one (put in an offer/under contract with a condition). The fact that we have chickens and this complicates the process a little bit. We had a hard time finding a house that worked for us. It wasn’t easy for us to find a farmhouse within our price range or a non-farmhouse house that allows chickens. Most houses in the area that we want to live in are in a subdivision with HOA/covenants or a million+ dollar farmhouses that come with 100+ acres. We then discovered this house and thought we should move forward right away (we actually planned to buy a new house in the Fall). And we did. It took us about 3 months to build a new chicken coop at the new house and took us another 3 months to fix up the old place (mostly by ourselves and some by a contractor). Luckily, the old house went under contract the first day of showing. It took another 2 months to close though.
7. Since I didn’t max out my retirement this year, I need to pay more attention when I calculate my contribution deduction next year.
8. By looking at our numbers, there are a couple of things I want to accomplish next year:

• Decrease the “General Merchandise” or shopping number. I want to see this number to be lower than the “Utilities” number. Let’s put this amount to where it should be. It should be in our investing account! Buying stuff gets us nowhere.
• Increase the “Saving and Investing outside of work” number. It’s ought to increase next year as a large portion of our money went to the “Down payment and Closing cost” and, hey…home repairs too. This number is quite important, actually… A large portion of  “Saving and Investing outside of work” number goes to our brokerage account which will serve us as a source of income in case we decide to retire early.
• I don’t anticipate any more of the home repair. Knock on wood… So our savings rate should increase next year. I would like to see our “2018 Total Savings Rate” to be at least 50%.

Our fifth year of FI journey has passed. We finally have one house we call home.

Did we make a mistake of buying a bigger house?

What would you do differently if you were us? I love to hear it from you.