Each month, I share a net worth update for the Brewing FIRE household. This brief summary of our financial standing serves as a progress report on our journey to financial independence.
In addition to giving a snapshot of our net worth, I will take a brief look at our spending, saving, and investing activity for the month.
September 2020 Net Worth
We use Personal Capital to track our net worth. Personal Capital makes it easy to track all of our banking accounts, investing accounts, credit cards and loans all in one place. Personal Capital also has numerous other functions for analyzing your investment holdings, asset allocation and performance, as well as some great retirement planning tools.
September – Man Plans, and God Laughs
To say “We didn’t expect 2020 to go this way” might be the understatement of the century. And come November, and guaranteed election chaos that will ensue, the worst may be yet to come.
As I’ve reiterated numerous times, I am immensely fortunate that our family has remained healthy, employed, and as close to normal as possible during these times. But it’s still disappointing to confront the reality that we won’t get to participate in the normal activities we look forward to every year.
We were forced to cancel our yearly Pizza Truck Party (described here), for obvious reasons. I always look forward to this event, because I get to catch up with roughly 100 of my family, friends, and favorite people. Having this date on the calendar guarantees that, at least for a few hours every year, we’ll make sure to connect with those that matter. It’ll have to wait at least another year.
Also, many of the other local fall festivities that we normally participate in have been cancelled. New England has a multitude of fairs, exhibits, and harvests this time of year, most of which will not take place. We were able to go apple/pumpkin picking, however, as you can see above.
Stuck in Neutral / Silver Linings
Maybe the most frustrating plan that has been at least partially thwarted by Covid is our expected move / Coast FIRE. Recently I’ve mentioned that we are almost assuredly planning to sell our house and move south, pending Mrs. BF finding a new job in our target destination (VA).
As it turns out, this hasn’t been as easy as we thought. Although her services are in high demand (she’s a Physician Assistant), she’s yet to land a job in her desired hospital system. This is probably some combination of her being a ‘remote candidate’ in need of relocation, and possibly the fact that Virginia doesn’t seem to employee as many PAs as Connecticut does. So, as we wait for good news from a hiring manager, we continue to remain in our current situation and bide our time.
To be honest, I’m OK with the delay. I’m taking the time to enjoy the present, spend time with loved ones when possible, and mentally prepare for a new chapter. Also, it gives us more time to save and contribute to our investments before we accept a massive drop in income associated with the move.
When I was originally projecting our timeline to Coast FIRE, I estimated that it would be best to wait at least until Spring of 2021. This would give us the opportunity to max out our 2019 contributions, and possibly front-load all of my 2021 retirement investments before quitting. In the end, Spring of 2021 might still be when we make our move. We’ll have to wait and see.
Month-Over-Month Comparison
Despite a September dip in the markets (a dire, terror-filled plunge according to CNBC), we managed to keep our second comma this month. One interesting observation: I failed to notice the point where market gyrations began to significantly outweigh our monthly contributions as the main impact on our net worth. In other words, our returns on capital matter way more than our contributions at this point, which means we’re officially on autopilot and compound returns are steering the ship. This probably happened a year or so ago.
Spending and Not Spending
| Category | Spending | Comment |
| Mortgage | $1,221 | |
| Utilities | $204 | |
| Home Maintenance | $723 | lawn care, plumber, etc… |
| Student Loan | $0 | |
| Car Insurance | $340 | 6-month premium |
| Transportation | $111 | |
| Childcare | $1,845 | Pre-K “discount” |
| Medical | $0 | |
| Groceries | $558 | |
| Restaurants | $234 | (take-out) |
| Shopping / Misc. | $307 | |
| Discretionary | $166 | |
| Subscriptions | $173 | Audible credits |
| Travel | $95 | Chase annual fee |
| Total | $5,877 |
Home Maintenance: we continue to make repairs and improvements to the house in preparation for a potential sale. I had a plumber replace a defective spigot, since I’m still too chicken shit to do my own plumbing. We painted the front door (charcoal sells!) and added fresh mulch around the garden and patio. Also, we paid our neighbor for approximately 3 months of lawn mowing. Totally worth it.
Car Insurance: In 2010, I paid $860 for a 6 month car insurance premium. Now, Mrs. BF and I combined pay $340 for 6 months of insurance on newer vehicles with better coverage. Did my driving ability improve 80% over the past decade? My eyesight and reflexes certainly haven’t.
Subscriptions: I signed up for a year’s worth of credits from Audible. Using the various 2-for-1 deals, and taking advantage of free reads, I’ll probably get ~20 audiobooks from the $100 spent. I still consume the majority of my books free from the library, but this helps get access to the few titles that are unavailable elsewhere for whatever reason.
Income and Investing
Mrs. BF received the $300 signup bonus for her Chase checking account this month. In total, we’ve earned $1,600 in bank signup bonuses in 2020, the first year we employed this technique. Not bad. I think we’ll probably slow down with the bank account churn, but I’ll probably target about $1,000 worth of bonuses per year, because, why not?
We also had some other sources of income, including a $424 “lost check” originally issued in 2017 from our bank (no idea), and about $3,000 of FSA reimbursement for childcare. Also, of course, we collected rent on the Basement Bungalow. We’ve achieved the milestone of keeping a tenant for 2 straight months during Covid!
I’m also super excited to announce that I executed my very first Mega Backdoor Roth conversion! After begging my employer to allow after-tax 401k contributions and in-plan Roth rollovers for years, they finally granted us the option starting this month. Assuming I stay employed through the end of the year, I’m planning on contributing and converting about $10,000 before 2020 ends.
Not much on the investing front, though our cash balance is getting a bit higher than my target. I’ll probably do some more investing in October.
That concludes the September report. How was your month? How many of your September plans were ruined? Let me know in the comments.
sucks you can’t hit the festival circuit this year, especially with young kids. that job in virginia will come through eventually i’m sure. y’all trying to go near richmond? with regard to the portfolio gains doing the heavy lifting after a crossover point our gains for the year are more than double our best earning year when we had 2 middle class full time w-2 jobs. it’s crazy and takes some getting used to. i can’t believe we pay around twice your car insurance rate for out 6 and 8 year old cars. i gotta look into that.
Yes, targeting Richmond. I guess I just didn’t notice that our portfolio returns are much larger than our savings; probably because our net worth doubled in the past 3 years. Yeah man, get some car insurance quotes! They really stick it to you when you stop paying attention to your premiums. I really despise industries that, by default, keep raising your rates unless you complain or switch.
It is an interesting transition when you cross over that arbitrary line where your contributions become miniscule compared to what is happening with the portfolio…. I feel like I keep plowing money in and it barley moves the needle at this point…
Nominal market gyrations month over month can trend up or down what I make in a year… It’s so strange as you keep moving along with the plan but then for past 3 months you have lost more than you made to 2 years… Then 2 weeks later you’re back up more than you made in 3 years…
I’m still figuring out how to deal with those swings…
Yeah, it’s pretty crazy. I still remember investing in the market in 2008-2009, which was very early on in my career. There was a period of time where it seemed like every contribution I made was just swallowed by a dropping market. It was like throwing money into the abyss. But then, things began to recover, and I had some really nice gains because I had been investing the whole time. It’s not fun to live through, but it works!
It is a little terrifying to no longer have “control” over your net worth, in that your income and spending habits are far less important in the number than investment returns. Unless you churn a lot of new bank accounts (I’m going to have to look into that)!
This is true. It’s also liberating, in a way. I feel like we’ve ‘already done the heavy lifting,’ and now we can sit back and watch our investments do their thing.