Here’s a bit of a catchup post. So I can compare year over year, I wanted to put together the year-end numbers.
We had a relatively uneventful fourth quarter. Financially, that is. It was chock full of family goings-on… mainly good stuff. A successful surgery, holiday events, new nephew, time with kids , etc. During all this, we increased our net worth by almost $100k to $3.5M. Percentage-wise, that’s about 3%.
We straightened out our finances previous to this last quarter by selling two houses. So no big dispositions in Q4. We’ve let our expenses grow a bit, or the net worth increase might have been more. But I have a hard time in justifying an expense lockdown to create a 3.1% rather than 3% increase. So I’m ok with where we came in.
Investment Assets (net worth less primary residence) stood at $2.9M on Dec 31. Our loose goal for financial independence inflated from $2.5M to $4M. So we’re gaining toward our new finish line. I think we’re still about a year out. I said that last quarter. I don’t know if I recommend believing me anymore. My crystal ball doesn’t seem terribly clear.
We capitalized no projects at work. Meh. First time in a while for this. We’re still progressing on some deals, but closing financing is taking longer. Capital flow has slowed a good bit across most of the real estate market nationwide. I wonder if we’re nearing the end of the cycle, or another blip.
Here are the variances from last quarter’s net worth, followed by a table of all the assets/liabilities:
Cash on Hand ($81k: $46k increase) Things looked pretty boring, but in an good way. We constantly built up our cash amount throughout the quarter. Mainly from saving operating distributions from stable projects. That’s exciting to me – building up somewhat passive annuity-type revenues.
Stocks/Bonds ($999k: $28k increase) We added to 401ks, and the market helped a bit. I guess the market didn’t implode when Trump won. Seems like assets are valued on the high side. Since I’m terrible at market timing (like almost everyone else!), we’ll just stick to our allocation strategy.
Rental House ($161k: $20k increase) Being end of year, I’ve counted some of the value appreciation that’s been going on in this neighborhood. I could probably sell the lot to a new-home builder at this price. And I think (?) there’s a little more value in that house than just as a lot.
Commercial Real Estate ($1.67M: Flat) Like I mentioned above, the capital side has been a little slower. Since future-me is writing this update, I can tell you the first half of 2017 is continued slowness on new projects, but some refinances of stabilized assets that closed will give a little lift in 2017.
Our Primary Residence ($616k: Flat) Nothing on the house right now. We’re still enjoying it. Some cap ex for maintenance and upgrades coming in early 2017.
|Net Worth||Subtotal||Total||Comments / Change from Q3|
|Cash/Short Term||$81,511 ||Up $46,000|
|Bank 1||$45,500 |
|Bank 2||$41,011 |
|Stocks/Bonds|| $998,937 ||Up $28,000
|401k 1|| $215,000 |
|401k 2|| $42,755 |
|IRA 1|| $88,660 |
|Roth IRA 1|| $58,235 |
|Roth IRA 2|| $49,586 |
|529 Plan 1|| $81,539 |
|529 Plan 2|| $72,666 |
|Taxable Account|| $318,833 |
|Charitable Trust|| $66,000 |
|Rental House||$161,000||Up $20,000
|House Debt||($149,000)||48% LTV|
|Commercial Real Estate||$1,668,500 ||Flat
|Property 9||$85,000||New Construction: Hotel|
|Property 10||$10,000||Land: Apartments|
|Property 11||$10,000||Land: Apartments|
|Property 12||$10,000||Land: Office/Apts|
|Net Investment Assets||$2,915,948 ||Up $94,000
|Primary Residence||$616,376 ||Flat
|New Home Value||$616,376|
|New Home Debt||$0|
|Total Net Worth||$3,526,324 ||Up $94,000|
Forward looking guidance is easy. The next half year after this update is almost done. We’ll continue doing fine, with only small fireworks in our financial world. Generally positive, some home improvements, investment growth, and spending gets under control. A good bonus to be eaten up by higher than expected taxes. I’ll do another update in July for Q1 & Q2.
I’ve gotten past most of any frustrations I had with pushing our savings goal back to $4m. It took me awhile, but I remembered that money isn’t the goal anyway. And maybe more pertinent for me, “the goal” isn’t the goal either. Meaning, the goal shouldn’t become an idol unto itself. I don’t need to save a certain amount just for achievement’s sake.
Most importantly: What is the reason for the goal? Answer: I want to enjoy life more freely and have stronger relationships.
I want to do this both short and long term. So keep saving towards long term goals & life flexibility, while also enjoy today’s moments!
Remembering this concept has put work in a better perspective to me, and I’m better and happier at my job (and home). I’m a little less antsy to get to full retirement. And being more thoughtful as to what ER will look like for me. Hopefully my own personal version of it is still upcoming soon!