Net worth progression from December 2017 to August 2018

Once a month I share my net worth.

Related: Net Worth Update #4 - July 2018

I do this as it’s motivational to see the progress other bloggers 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.

Here are my numbers for August 2018:

Cash Reserves
Savings Account$11,025    (+$16)
Checking Account$2,868     (+$1,655)
Total Cash Reserves$13,893   (+$1,671)
  
Non-Tax Advantaged Accounts
VTSAX$32,917  (+$1,043)
Brokerage Account$3,942    (+$3,942)
Total Non-Tax Advantaged$36,859  (+$4,985)
  
Tax Advantaged Accounts
401k$26,242  (+$2,262)
HSA (SPTM)$1,149    (+$286)
Total Tax Advantaged$27,391  (+$2,548)
  
Net Worth$78,144  (+$9,204)

Progress

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 August 2018

Recap

From July to August my net worth increased by $9,204! That’s about a 13% increase from last month.

August was a weird month. There were some one-off events that led me to spend much more than usual. Yet the impact was fairly minimal for reasons I’ll talk about below.

What Drove The Spending Increase?

August was taken up by travel 🎉 and moving 😞.

1. Travel

At the start of the month, I traveled to Argentina with my family for 10 days. The bulk of my expense for this trip was the plane ticket (~$1,000)––everything else was fairly cheap as the exchange rate between the Argentine peso and the dollar is hovering around 30 pesos per dollar. We found a nice Airbnb for six for ~$75/night and eating out was reasonable. A coffee with two croissants (or medialunas, literally translated as half-moon, as they’re called in Argentina)––a typical Argentine breakfast––at a nice coffee shop cost about $3.70. I don’t think you can even buy day-old muffin crumbs for under $4 at Starbucks.

Typical Argentine breakfast––coffee with croissants, or medialunas as they're called in Argentina

Argentina is currently going through some turmoil as the previous president, Cristina Fernandez, is getting investigated for corruption. Fernandez and her now dead husband (who was president before her) amassed a massive fortune (upwards of $600 million) even though the only jobs they’ve held have been in government. The whole scandal would be a little funny, if it wasn’t so disgusting and enraging. Some “funny” twists in the case:

  • Fernandez is now a senator and is thus granted immunity from prosecution.
  • An ex-minister of public works during Fernandez’s presidency was arrested while trying to hide $7 million in cash at a monastery. The guy was literally throwing bags of money over the walls of a monastery.

Buenos Aires, though, was beautiful. My parents were surprised at how clean and well-maintained it was (it wasn’t like this the last time we had visited). We saw family we hadn’t been able to see in years and left wanting to return. Seeing family reminds you of what you’ve been missing.

Total cost of the trip: ~$1,500

2. Moving

Moving is always a pain in the ass. I’m currently living in a little studio (there’s just enough room for a queen bed, a desk, and a fridge. The kitchen is shared among the eight people on the floor.) Now that my girlfriend has graduated and we’re moving in together, though, we’ve found a one bedroom apartment. We’ll even have our own kitchen. Dreams really do come true.

My rent will go up slightly ($875 -> ~$900), but this new place includes a parking spot, which we’ll need since we decided to ship my car over from Florida.

There’s little need for a car in my day to day in Seattle––I take the bus to work and walk a few blocks to do groceries. But it’s hard to explore the surrounding areas without a car. The Pacific Northwest is beautiful and we want to take advantage of it. It’ll be annoying adding some extra fixed monthly costs (car insurance and the outrageous west coast gas prices), but the awesome hiking trails should make up for it.

Shipping the car ended up costing $1,300 and we also had to pay two month’s rent on the new place. The place is mostly furnished, but we still have to buy kitchen supplies along with some basics (towels, sheets, etc.) plus set up the wi-fi…it’ll probably be another $400-$600 to finish setting up.

Included in the total is some money that I hope to get back (security deposit) and some that will be “used” in the upcoming months (September rent).

Total cost of moving: ~$2,500

What Drove The Net Worth Increase?

This month’s increase is artificially inflated as I started including my HSA (Health Savings Account) and because I received some company stock from my job (listed as brokerage account above).

1. Investing the funds in my HSA

I started contributing to my HSA back in May, but hadn’t paid much attention to it. The cool thing about the HSA is that it’s tax-deductible and basically serves as an extra investment account as the funds can be invested.

My company’s HSA plan allows you to invest through Ameritrade. It’s no Vanguard, but better than nothing. I had about $1,100 to invest and I wanted to find a total market index fund like VTSAX. Most of the index funds they had available charged commissions and fees, so I ended up going with SPTM (SPDR Portfolio Total Stock Market), which was on their commission free ETF list. SPTM is basically the same as VTSAX and with a .03% expense ratio, it’ll do just fine.

2. The market is on a tear

VTSAX shares went from $70.55 to $73 in August, almost a 3.5% increase. Most of my investments are in VTSAX so I benefited from this increase.

Stock price of VTSAX in August 2018

3. Bonus at work

I received a bonus at work in the form of company stock. I’m planning on holding on to the stock for the long term.

4. Micro-gains from my savings account

The $16 of interest I made last month with my Capital One savings account is more than the ~35 cents I made through Wells Fargo in four years.

Ally and Capital One both offer terrific interest rates (Capital One has a $10,000 minimum to get their highest rate, though. Ally doesn’t.) and it’s painless to open a savings account with them.

It’s not much money, but it’s low hanging fruit that could make a small difference in the long run.

Where Did My Money Go?

Since I knew my expenses this month would be much higher than normal I didn’t make my usual contribution to VTSAX. I didn’t want to risk falling short and since the Capital One savings account has a $10,000 minimum I didn’t want to have to draw from there. I ended up over-estimating how much I’d need, but oh well.

I still put in $1,738 into my 401k and remain on track to reach the $18,500 max annual contribution limit. Everything else went into my checking account.

The percentage of cash (checking + savings) compared to my investments is still higher than I want it to be, but that’ll slowly take care of itself over the next few months as I invest more than I save.

Here’s my total asset allocation:

Net worth broken down by source (cash, stock, bond)

Where I’m Headed

The next thing on my financial to-do list is to look into opening a Roth IRA. This won’t provide any tax benefits, but will allow tax-free growth. This post from Mad Fientist does a good job explaining this.

Overall, the game plan remains unchanged: save as much as possible, max out my 401k, and put all I can into VTSAX. The goal is to surpass the $100k mark sometime before the end of 2018 (🤞).

If you have any questions or comments or just wanna chat, you can reach me at ziadig@gmail.com.