Net worth progression from December 2017 to March 2019

Once a month I share a financial update.

Related: Financial Update #11 - February 2019

I do this as it’s motivational to see the progress other people are making on their financial goals and, hopefully, to provide some motivation for others as well.

I shared my first net worth update back in April 2018 and have been sharing monthly updates since.

Income & Expenses

Income

My 9-5 job income listed below is the sum of my post-tax salary plus my 401k and HSA contributions. Any side hustle income is pre-tax since it’s hard to calculate what I’ll end up paying on this until tax season.

9-5 Job Income
Software Engineer$8,013
Side Hustle Income
Medium$114
Total Monthly Income$8,127

Expenses

ExpenseAmount
Rent$865
Car Insurance$50
Miscellaneous$27
Internet$20
Total$962

Based on the above, I saved about 88% of my total income in March –– which, as I’ll talk about below, is a damn lie.

Net Worth

Here is a summary of my account balances as of April 2, 2019:

Cash Reserves
Savings Account$16,171   (+$5,024)
Checking Account$6,273     (-$67)
Total Cash Reserves$22,444   (+$4,957)
  
Tax Advantaged Accounts
401k$37,585  (+$2,110)
HSA$3,504    (+$353)
Roth IRA$5,495    (+$103)
Total Tax Advantaged$46,584  (+$2,566)
  
Non-Tax Advantaged Accounts
VTSAX$60,962  (+$2,157)
Brokerage Account$3,628    (+$284)
Total Non-Tax Advantaged$64,590  (+$2,441)
  
Net Worth$133,618   (+$9,964)

Here’s a look at my net worth progression since I started tracking it back in December of 2017:

Net worth progression from December 2017 to March 2019

Recap

From February to March my net worth increased by $9,964, an ~8% increase since last month.

Much of this increase was due to another good month for the stock market. VTSAX shares started March around $70 and ended around $71.20:

Chart showing stock price of VTSAX during March 2019

Most of my money is tied up in VTSAX, which tracks the market as a whole, so as the market kept climbing so did my net worth.

Some other notes for March:

1. My savings rate of 88% for March is a lie

Sammy and I paid off the rest of our used Kia Soul in February (our previous car was totaled) and since I lent her some money to cover her half of the car buying costs (we now co-own a car, which is a bit crazy) to avoid paying interest on the loan, she covered groceries and some miscellaneous outings to make up the difference.

The lying savings rate aside, if I had to estimate what my current “lifestyle” costs per month, I’d say somewhere around $1,500 –– around $900 for rent, $200 for groceries, $100 for car upkeep and Internet, and $300 for our traveling fund.

2. I opened a savings account with Ally

Just yesterday I moved my savings account from Capital One to Ally. Ally is currently offering 2.2% interest on their savings account while Capital One offers 2% (Capital One also has a $10,000 minimum to be eligible for this rate, while Ally has none.)

I made the move more out of the principle of the thing than anything else. The .2% interest won’t make a huge difference for the amount I currently have saved, but it took me five minutes to open the account at Ally and transfer the money, so I did it.

After making the switch I became curious about what difference the .2% would make. Say you started with $10,000 to which you added an extra $2,000 at the end of each year, what would the difference be between the 2.2% interest account and the 2% account after 10 years? After 20?

Chart showing stock price of VTSAX during March 2019

Though hard to see from the graph, after 10 years, the account with 2% interest would be at $34,089.39 and the account with 2.2% interest would be at $34,531.84, a difference of $442.45.

After 20 years, the account with 2% interest would be at $63,454.21 and the account with 2.2% interest would be at $65,027.56, a difference of $1,573.35.

And, if you’re just dying to know, after 40 years, the account with 2% interest would be at $142,884.36 and the account with 2.2% interest would be at $150,062.66, a difference of $7,178.29.

A small difference can have a big impact in the long run when we’re talking about compound interest.

3. A few extra bucks courtesy of Medium

I also made a few extra bucks in March through my posts on Medium. It’s a far cry from that glorious high of $847 in August of last year, but I’m not complaining. I do plan to get back to Medium some time in 2019, but work and some side projects have kept me busy.

Where Did My Money Go?

I haven’t made any investments since January. I’ve been padding my savings instead and will keep doing so for the time being.

I did, however, make my regular monthly 401k and HSA contributions, adding $1,733 and $245 respectively.

Where I’m Headed

March was a relaxing month. We didn’t do much except enjoy the arrival of spring. In April we’ll be going to Colorado for a few days to meet up with some friends, so we’re looking forward to that.

As far as net worth goes, with some help from the stock market, I should have the $200k mark within sight by the end of 2019.

Regardless, the plan remains the same: keep a high savings rate, plug all I can into VTSAX, and continue to chip away at the 401k limit.

Thanks for reading and if you have any questions or comments, you can reach me at ziadig@gmail.com.