Net Worth Report #1- Baseline

This is my first net worth monthly post. I had mention in the post about putting it all together that I had never tracked or officially calculated our net worth. Well here it is Net Worth Update #1.

Net worth progress:

Total – Retirement $368,906 Total – Installment $0
Total – Liquid $24,928 Total – Transacting $3,973
Total – Investments $232,957 Total – Revolving $0
Total – Physical $92,002 Total – Physical $226,215
Total Assets $718,793 Total Debts $230,188
Net Worth Apr ’17 $488,604
      Monthly Change Start Date
      Change Since Apr $0

There we have it, a net worth of $488,604, almost half way to our goal of $1,000,000. I am excited to continue tracking and update this going forward. A quick break down of what we are looking here. Net worth = AssetsLiabilities. In short, everything you own minus everything you owe.

Assets:

Retirement – 401K, 401B, and a Roth IRA account

Liquid – Checking/Savings Accounts

Investment – Stocks

Physical – House and car

Liabilities (Debt):

Transacting: Credit Card (paid in Full Monthly)

Physical: Mortgage and Truck Payment

Note: I am using Zillow for the estimated value of our home as it is the closest/most realistic value I can get on a monthly basis.

A couple of interesting things I found when putting this together. In the past, when I was doing a quick estimate, I would forget to include the 401B or the Roth account, it’s just that these accounts were not as big as the 401K account, so my focus would shift to that account only. Bam! Instant increase in net worth. I would also always guess at the worth of my house, I was guessing that it was higher than it actually is. Gong! Instant decrease in net worth.

Well this has established a baseline for going forward. I am happy where we currently are, but have to continue to be aggressive to hit our 2017 goal.

Taking Lunch to Work

Anyone looking for an easy way to start saving for financial independence or early retirement? My current employer has a cafeteria on site, it makes it so convenient for everyone to buy lunch, but I think this is one of the biggest wastes of money. Ever since my first “real” summer job, I have been taking my lunch to work. I could never imagine buying lunch daily, but I see people do it every day.

I have never added up how much can be saved by bring lunch to work. Let’s give it a whirl. In my 15-year career, which would equate to roughly 3,375 working days, I can say I have bought a lunch around 30 times or .9% of the time. Based on current prices in the café, I would say the average lunch costs $6.35. If I had bought lunch every day over the course of my career I would have spent $21,431.25. Holy smokes, that’s a chunk of change. I am so glad I have only spent $190.50 and a new $8 lunch box every couple of years.

Imagine if both my wife and I bought lunch over the course of a full working career. For this, I am saying a career is 42 years at an average of 225 working days per year for a total of 9450 days. Using the same $6.35 cost of lunch, this would equal $60,007.50 per spouse or $120,015 for us both. Over $120,000 spent on lunch, $120,000! If this money was saved and invested with a 5% return we would have roughly $210,000 at the end of 42 years, all by taking our lunch to work. I can defiantly say I will happily continue to bring my lunch to work in exchange for this kind of savings.

Putting it all together

I have been tracking our monthly bills and expenses since 2008, but it wasn’t until just a few years ago that I really took a hard look at our finances. We had debit like the majority of people do.  There was a mortgage ($1800), car payment ($315), truck payment ($450), undergraduate loan ($220), and a graduate loan ($270). This was over $3,000 a month is debt alone. If you add on top the monthly bills of cable, electric, cell phones, daycare, trash pickup, water, and insurances and so on you get another $1,400-$1,700 a month in bills. We still have to account for food, gas, beer, eating out and misc spending, yet another $1,400 a month. A total of $5,800+ a month!!! Wow! And I thought we were doing well. I was paying the credit cards monthly, was saving (401K), I was living the dream, just like everyone else. I was doing exactly what the world was telling us to do.

We took immediate action and cut cable and eating out from our lives. We reduced misc.  spending to almost nothing. Next came the snowball debt pay down which happened over the course of a couple of years. The truck payment ended and the $450 was used to pay down additional debt. Next, the undergrad loan was paid off.  This increased our addition money to pay down debt to $670. There was a constant need to resist the urge to spend that money. Eventually, my daughter entered school and the daycare money was added to the additional pay down money. Soon the car and graduate loan were paid off! Yes! The only remaining debt was the mortgage which allowed our savings to grow rapidly over the course of the last couple of years.

That said, I have never tracked our net worth on an official basis. I would occasionally do some quick math to get an estimate, but starting this month I will be tracking our net worth monthly and reporting on it. I will be using a tracking sheet that can be found on thousandaire’s website. You can find the same sheet by going to http://www.thousandaire.com/downloads/ and clicking the net worth tracking link under spreadsheets. The sheet is pretty straight forward with instructions included in the sheet. Keep an eye out for the first Net Worth Report later this month.

Backyard Chickens

I forgot to mention in my about me page that we have chickens. We have had them for about 6 years now and currently have 5 Rhode Island reds. We lost one last fall from a predator attack. This is actually our 3rd set of chickens over the years. All of them have been lost to predator attacks, but lessons have been learned from each loss. The chicken coop has been modified over the years to help eliminate the chance of any additional attacks on the chickens.  I will write more about the coop setup in the future, but today I wanted to discuss the cost of store bought eggs verse our fresh eggs. If we eliminate the “startup” cost of the chickens, which would include purchasing them and building the coop, and focus on the straight cost of buying and feeding the chickens. Our “ladies”, as we like to call them, are giving us ~4 eggs a day, 28/week, 112/month or roughly 9 dozen a month. The cost to feed the ladies on a monthly basis in $12.50, which would equate to $.11/egg. Store bought eggs cost $1.69/dozen which comes out to $.14/egg. If you want to buy cage free eggs the price jumps up to $2.99/dozen or $.25/egg. Doing some quick math this comes out to a $40/year savings over store bought or $188/year savings verse buying cage free eggs. Not a huge savings, but there is nothing like fresh eggs. Plus, we have 5 beautiful chickens that give us some entertainment as well. Feel free to pass along any egg related recipes, we are always looking for new ways to cook eggs.

Here we go…

Yup, it’s happening. I’m entering the world of blogging about the trending topic of financial independence. Before I dive into all the details, let me tell you I have zero experience in the web, web page development or the blogging world. That said, I apologize now for the mistakes that I will be making along the way and thank you for the understanding and support as well. I also look forward to your help and suggestions.

I have been reading about FI and early retirement for years now. Having followed many of the sites listed in the Blogs I read page for years, I wanted to start sharing my experience and possibly help others along the way. We are not just beginning our journey; we are underway, but still have a way to go. That is where this site will come in to play. I will soon be posting where we are today, our plans moving forward and the path to get there. Thanks again for stopping by, welcoming us, and I look forward to sharing the journey.