I indicated early on that my household was closing in on a milestone.
Well, this happened a week into October! For clarification purposes, I count milestones by 100k increases. This allows the commemorating event to likely only come once a year. It makes it all the more exciting when it happens.
I was contemplating how I would write about this milestone without giving out the actual total amount of the balances. As I mentioned in my monthly financial reviews, the reveal of actual balances may come with time, but I’m certainly not there yet. I decided that documenting it as another increase in 100k would have the same effect.
If you follow my blog, you may know that I have been out of work for the past year. My husband and I were a dual-income household for 11+ years, starting in our early 20’s. Once we grew into our careers, one salary paid the month-to-month bills. The other salary was applied to saving, investing, and one-off expenses.
With my prolonged work absence, I wasn’t sure that a milestone would occur in 2017. As the months progressed throughout this year, as an investor, I gathered that this was going to be a record-breaking year in terms of the markets.
As a result, in early October, my household hit our next 100k increase in net worth.
I was awestruck as to how my money was working for me in spite of the lackluster 401k, IRA, and taxable contributions for the year – which is the premise behind why this blog is named Full-Time Dollars.
What’s Included In My Net Worth Calculation
To give you more of an understanding as to what is included in the net worth balances – I include almost everything.
I am counting market investments and savings. I am not including a State pension, home equity, and mortgage liability. It may go without saying but I don’t include the value of my cars either.
Here are some reasons why:
Since I cannot freely access the pension or the home equity at this point, I don’t count the balances as increases for purposes of calculating the 100k increases.
The pension is not in our possession.
Since I am not able to decide how that money is invested, currently it sits in the State’s investments as part of a workplace retirement savings plan. It includes monthly fixed contributions taken from each paycheck. There is a vested option at 5-years, and that has already been met. The plan is that once Mr. FTD leaves his employer, the funds plus applicable interest will be rolled into an IRA to be invested at that point. Once this occurs, I will begin counting this asset toward net worth, resulting in a one-time jump.
The home equity is not included because I cannot readily liquidate it for cash.
Furthermore, I have to live somewhere so this provides a buffer for when it’s time to sell and use the equity for either a down payment on a new home or rent. Additionally, I don’t include the liability as a reduction in net worth either.
Long story short, I like to keep my home separate in the calculations because it makes it much clearer for me on what I actually have to work with in terms of retirement assets. This is a personal preference.
Lastly, my mortgage balance is my only recurring liability, so other than credit card balances that get paid in full each month, I don’t have any other debt to consider in this net worth calculation.
Please note the net worth purists will say that I am calculating my net worth incorrectly. I am sharing how I approach it.
What We Did To Celebrate
I mentioned previously, the importance of setting goals in order to meet short-term and long-term objectives.
I also concluded that one of the first things to do when goals were achieved, or in this case with 100k milestones, would be to celebrate! So, in honor of hitting the next 100k, my husband and I celebrated – a tad bit early.
Related article: Set Goals The Right Way And Succeed Every Time
No, we didn’t have a party or go wild, but I do think it is important to recognize the accomplishment for what it is. For this particular achievement, to celebrate, we dined in at a café that had sent me a birthday discount. We don’t dine out as much as we used to, so this was a low-key way to celebrate. Ahhh, the simple pleasures in life. I’m going to save the champagne for a different 100k achievement down the line. That’s not coming anytime soon though, so I can start saving for the quality bubbly now.
Timeline On Hitting The Next 100k
I have been an investor since 2007, and during that time I have experienced the ups and downs of the market.
Here’s what I DON’T DO:
- time the market
- invest in a speculative manner
- pay exorbitant fees
- sell low in a down market
- make decisions based on fads
I plan on hitting the next 100k how I have done it in the past.
Invest in low-fee index funds and do it with the amount of cash I have available. Also, considering cash that I am comfortable parting with for a while. The reason I note this last part is due to the fact that I am a buy and hold investor. I’m not in the market for 1, 2, 3, 4, 5 years to save up for a car or a down payment. I’m invested in the stock market until I need the money for retirement purposes.
Additionally, if you follow my financial reviews I post at the beginning of each month, you will notice that I barely contributed to any funds this year. Market appreciation surpassed my usual 40k-50k contributions “all in”. This “not contributing” thing is all new to me since my temporary departure from work.
Related article: Latest Month-End Financial Review
That being said, depending on the market and contributions, the plan is to hit the next 100k by November 2018.
This applies a conservative growth rate along with finding my next full-time position. Once I am gainfully employed, I am applying a large chunk to investments, just as I did before.
The Future Is As Bright As You Make It
I am a big believer that you can make your path in life as bright as you want it. It can be as bright as a damn sunbeam.
For anyone out there that is wondering how they can start building wealth, know that you can achieve it – if you work for it. I literally started with just my clothes and sentimental items from my parent’s house. Ever since then, Mr. FTD and I have worked to better ourselves. An excess of money is not the end goal, it’s just the fallback plan to allow Mr. FTD and me to live life on our terms.
If I could offer one slice of advice, it would be to stay motivated in any endeavor that you want to accomplish and keep moving forward.
There are people who make things happen, there are people who watch things happen and there are people who wonder what happened. To be successful, we have to be people who make things happen. – Jim Lovell
You can only change your life if you are willing, and it all starts with making short-term and long-term goals. I will be releasing an article in the near future that will give you a basic blueprint to determine your action plan.
Until then, I hope you enjoyed learning more about my household’s achievements and a review of the current progress. Thanks for tuning in!
Read more about my mission HERE.
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Did you hit any new milestones this year? Do you plan on hitting a milestone by eoy? Please share below!
Original photo credit: Pixabay