Author Topic: Six months of MMM = WOW!!  (Read 6709 times)

startingsmall

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Six months of MMM = WOW!!
« on: December 27, 2015, 04:16:41 PM »
Six months ago (a couple of months after discovering MMM), I started tracking our net worth with a very basic spreadsheet that includes  everything except our home value. (Yes, we plan to downsize in the future and therefore I guess the equity is an asset... but I can't decide how to assign an accurate value to the house so I just leave it out.)

Two disclaimers:
a) We aren't super-high earners. Our combined income is $120k/yr.
b) My husband is still not on-board with MMM and I personally am not at all extreme about it, so we've only made very small changes to our lifestyle. We still eat out too much, still have a car payment on my car, and have way more house than we need. But we're maxing my 401(k) & HSA (well, we didn't this year because I started a new job mid-year, but since becoming eligible for both my withdrawals are set at an amount that ensures I'll max both next year), we're almost maxing my Roth, we cut cable for Netflix,s and we've looked for other small changes with minimal QOL impacts.

On July 1st, 2015, our total net worth was $107,045.... which, at a 4% SWR, would yield a monthly income of $357/mo. (Yes, I track that number, because it somehow seems more 'real' to me than the total balance.)

As of today (almost January 1st, 2016... I entered my preliminary numbers a few days early because I'm impatient!), our net worth is $142,805... or $476/mo!!

Up by almost $36k (33%) in just 6 months, even in a crappy market?! I realize that there are many people here who watch their accounts go up by far more than that, but I am psyched.

If we can do this with only half-assed badassity, imagine what we could accomplish if we ever really get serious?! And even if we just stay at the current state, it looks like my dreams of being able to cut back to PT work in a few years to spend more time with young kiddos (we have a 3 year old now and are trying for #2) are more feasible than I imagined.

So exciting to see such progress... and since I know my husband won't be too impressed, I had to share here!! 


Malaysia41

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Re: Six months of MMM = WOW!!
« Reply #1 on: December 27, 2015, 04:29:10 PM »
congratulations!  Awareness and taking small, deliberate steps is how you do it.

Have you shared your 'real' numbers with your husband?  I too like thinking in terms of the monthly income from assets to make it feel more real.

My sister is not a mustachian.  The one comment I made that got through to her was similar to your 'real' number:

Quote
You need $3000 in investments to provide $10 income per month.

She obsessed on that math for a few days.  It makes a stupid $10 purchase feel a lot more wasteful. She still buys stupid stuff, in my opinion, but she's just a little bit more aware now.

Good luck and again, congratulations.

Zamboni

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Re: Six months of MMM = WOW!!
« Reply #2 on: December 27, 2015, 04:50:01 PM »
Congrats! It is fun to track these things.

Quote
monthly income of $357/mo. (Yes, I track that number, because it somehow seems more 'real' to me than the total balance.)

That's what I track as well. I graph it along with my monthly spending a la the classic book Your Money or Your Life. Someday those lines will cross, and then we'll know we're done.

Travis

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Re: Six months of MMM = WOW!!
« Reply #3 on: December 27, 2015, 05:11:14 PM »
Congrats! It is fun to track these things.

Quote
monthly income of $357/mo. (Yes, I track that number, because it somehow seems more 'real' to me than the total balance.)

That's what I track as well. I graph it along with my monthly spending a la the classic book Your Money or Your Life. Someday those lines will cross, and then we'll know we're done.

I use the Madfientist calculators to get this number. I get my FIRE date from several sources (give or take several months), but Madfientist is the only one of my tools that calculates my FIRE income.

Lski'stash

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Re: Six months of MMM = WOW!!
« Reply #4 on: December 27, 2015, 05:19:20 PM »
Congrats! I like how you keep track of your monthly 4% number. it definitely puts an added perspectiv on things.

Have you tried using the Zillow estimate of your home to get the equity value? Zillow is pretty accurate in my area, at least.

startingsmall

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Re: Six months of MMM = WOW!!
« Reply #5 on: December 27, 2015, 05:35:43 PM »
I just have an Excel column that calculates NetWorth*0.04/12... nothing fancy, but since adding it a couple of months ago I've found that the whole thing seems much more real!

I've considered using Zillow, but I'm not sure how accurate it is because I'm in a rural area with few recent sales for comparison.
We paid $228k three years ago, tax value is $226k, and Zillow currently says $238k but has ranged anywhere from $225k-260k in the last 6 months or so. I think the low number of sales in our area (and most of those sales are smaller/cheaper homes) makes it hard for Zillow to create a good estimate.

arebelspy

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Re: Six months of MMM = WOW!!
« Reply #6 on: December 28, 2015, 04:29:56 AM »
Well done!  It's great to see progress.  Keep it up!  :)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
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startingsmall

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Re: Six months of MMM = WOW!!
« Reply #7 on: December 28, 2015, 06:12:46 AM »
When I started this little experiment six months ago, my goal was to save $35k/yr. I thought that sounded amazing and absurd and like a reach goal, but I hoped that we could do it.

Given that my money is in several different accounts, some of which I have not contributed to at all this year, I can see that none of that increase is in market gains... my untouched accounts are down 6% from six months ago. And yet I somehow have $36k more than I did six months ago. Yes, a little bit of that is my husband's work bonus and a larger bit is gift money that we receive every Christmas from my parents, but even without those things we still apparently set aside >$30k of our own money in the last six months! Could we really be on track to save $60k/yr, or half our income? Mind blown.

As I mentioned, my husband has no intention of FIREing anytime soon and I'm more interested in a gradual cutback (decrease to PT) that a race to FIRE, but it looks like those goals may be more attainable than I realized! WOOT WOOT!

(Yes, I'm still ridiculously excited about this today. Sorry. Bear with me.)

Arktinkerer

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Re: Six months of MMM = WOW!!
« Reply #8 on: December 28, 2015, 11:15:59 AM »
It is very reasonable to not include your home in your net worth calculations.  Some planners try and get people to include vehicles, guns, boats etc. so their clients feel rich.  While there is some truth to that, being conservative and only thinking about performing assets is a more reasonable way to look at it.  While you could sell the house, counting on it when you have not sold it and don't have a deliberate plan to do so would, in my opinion, be a foolish way of thinking about it.  I'd rather think of selling my home when I downsize as a financial bonus on top of reducing expenses.  Until then, I view it as the place I live and maintain.  I care for it well because not doing so will cost me more money in the long run.  I have other property (a family farm) where I would only sell as a last resort.  Higher values on it are a problem (taxes) not a reason for celebration.

Ed Mills

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Re: Six months of MMM = WOW!!
« Reply #9 on: January 03, 2016, 05:34:46 PM »
Nicely done Startingsmall.  A 33% increase in 6 months is flat-out awesome...these kinds of post fire me up!  Let's meet up at the trillionaire mark and party like millionaires.  Ed
« Last Edit: January 13, 2016, 03:55:27 AM by Ed Mills »

Rosy

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Re: Six months of MMM = WOW!!
« Reply #10 on: January 04, 2016, 11:04:15 AM »
Yup - this forum does wonders for your financial well being. We all benefit from the inspiration and support - good going, those numbers are impressive.

amyj05

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Re: Six months of MMM = WOW!!
« Reply #11 on: January 04, 2016, 02:56:32 PM »
Way to go! That is very impressive!

elaine amj

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Re: Six months of MMM = WOW!!
« Reply #12 on: January 04, 2016, 03:01:26 PM »
That's awesome!!! You are absolutely rocking it!!!

As for the house - I don't count mine as FIRE money.

I do have a separate "total net worth" figure that does add in the house, which I value conservatively.