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Archive for January, 2020

January 2020 retirement goal update

February 1st, 2020 at 05:21 am

Goal: $784,772 by March 2024

Current retirement balance: $542,038

December 2019 balance: $541,036

Progress since last update: $1,002

Still needed: $242,734

This interim goal is based on getting my and NT's retirement to 4x our salaries (currently $75,120 and $64,118) by the time we turn 50 and AS's retirement values to 3x her annual income ($75,940 in 2018) by the time she turns 45.
$75,120 x 4 = $300,480
$64,118 x 4 = $256,472
$75,940 x 3 = $227,820

It will shift anytime our salary/annual income changes. (The only exception is I won't lower AS's if she has a lower-income year, because her income fluctuates. So I'm keeping it at the 2018 level because her 2019 income was a little less.)

There are 50 months to go before March 2024, so that means we need to gain $4855 per month on average to meet our goal.

The ultimate goal we're working toward is 8x our annual income by the time we retire at 65.

January 2020 net worth

February 1st, 2020 at 05:01 am

NT's UK pensions:
AV: 22,397 pounds ($27,996)
SW: 29,047 pounds ($36,309)
FL: 6,462 pounds ($8,078)
NT's 401(k): $87,170
NT's Roth IRA: $42,969
AS's trad. IRA: $21,755
AS's Roth IRA: $64,813
AS's SEP IRA: $42,998
CJ's 401(k): $162,413
CJ's Roth IRA: $47,537
NT's flat: $212,500 (200,000 pounds value x1.25 -15%)
CJ/NT/AS house: $427,281 ($454,554 value -6%)
TOTAL ASSETS: $1,181,819

US Mortgage $373,430
Loan from friends (duplex) $9,000
UK Mortgage 1 $29,056
UK Mortgage 2 $6,125
UK Mortgage 3 $6,450
TOTAL DEBT $424,061

Current Estimated Net Worth: $757,758

December 2019 estimate: $755,732

Change in net worth: +$2,026

Summary: After a couple big months, gaining $2K doesn't seem like much, but given all the uncertainty out there, I'll take it of course!

Notes on the numbers above: House value estimates are approximate. (I do have my eye on a comparable listing for the UK flat, but it's been on the market a long time.) UK pension values updated about once a year. UK asset values and debt amounts are calculated figuring $1.25 for every British pound.

What to do if we sell our rental property?

January 24th, 2020 at 07:12 pm

Advice, thoughts, opinions and experiences welcomed on this one!

First, the situation:

We're finally going to try and sell the UK flat this year. Now that Brexit details are becoming more concrete, we're hoping people will be less spooked and homes will move faster.

We'll probably list it in the spring, when the current tenants' lease is nearly up. It might be listed for 215K pounds but could sell for about 200K. We think management and real estate agent will take 3% of the sale price. We'll still owe about 32K in mortgages that will need to be paid off. We will likely owe about 35K in capital gains tax (the property appreciated in value quite a bit from when NT bought it).

So that takes us to:
A profit of 127K pounds maybe?

That's approximately $160,000 in U.S. dollars.

Assuming we sell and we have $160K at our disposal, I can think of many uses for the money, but here are the two I keep returning to:

1. Pay down our mortgage on our home. Key factors:
- We currently owe about $370K
- We bought for $465K in 2014 and haven't had it assessed since then
- Our payments to principal, interest and mortgage insurance come to about $2100 per month
- We're 5 years into a 30 year mortgage, so we're looking at 25 more years if we continued to pay the minimum.
- We're looking at financing $40K of our upcoming kitchen renovation. We may explore a mortgage refi (for a lower rate or possibly for a 15-year term) once the kitchen is done and the home is assessed

2. Use the money for a down payment on a rental property closer to home. Key factors:
- The UK rental brings in about $500 per month, and we save most of that money for longer-term things (EF, renovations, etc.)
- The idea of having income generated outside of our full-time employment is very attractive for a number of obvious reasons.
- If we bought in our immediate neighborhood, condos start around $200K, single-family homes around $250K, and duplexes/triplexes around $500K. There are of course cheaper neighborhoods in the city.

So that's where I am. If you had to vote, which do you think would contribute more to overall financial security/independence?
A. paying down our mortgage
B. purchasing a rental property
C. you need professional help--go talk to a financial adviser already!

January 2020 debt payments

January 24th, 2020 at 06:25 pm

This post is very late, because we couldn't get into NT's UK account for a couple of weeks, and then I just got busy and distracted!

All our mortgage payments hit in early January:
US: $763 to principal
UK1: $182
UK2: $39
UK3: $40

All in all, $1,024 went to principal this month.

Current household debt:
US Mortgage $373,430
Loan from friends (duplex) $9,000
UK Mortgage 1 $29,056
UK Mortgage 2 $6,125
UK Mortgage 3 $6,450

TOTAL DEBT $424,061

2019: CJ's year in review

January 7th, 2020 at 10:43 pm

Only now do I look to my sidebar and realize that I put a spot to track 2019 achievements as they happened! Well, that went nowhere, but I did achieve quite a bit this year, so hopefully I can remember all the highlights without having kept track.

These were my "intentions" for 2019:
- Make healthy choices.
- Deepen friendships.
- Do creative things.
- Chase pleasure.
- Build my career.
- Be flexible when life throws things at me.

I'll start with "Do creative things," because I'm most proud of the work I did in that category.

- In February, I completed one year of guitar lessons. I'm closing in on my second full year with no signs of slowing down! I'm a pretty good basic rhythm guitarist now and am working on learning more complicated stuff too.

- From February to August, I off and on helped a musician work on his bio to be used in promotional materials. It sort of went nowhere, mainly because he seemed to give up promoting himself, but I'm still proud of the work I did to try and learn a new type of writing I'd never done before.

- In June, I self-published a book I originally wrote for NaNoWriMo in 2014! I, much like my musician friend, have sort of slacked off on promoting it and haven't made back the money it took to publish it and print 50 copies. But a couple dozen people have read it and I've gotten some positive reviews (from friends and friends of friends, but still!). I started editing a few others but haven't made significant enough progress on any one manuscript to be able to say when I'll be ready to publish it. But I definitely intend to publish more books at some point! And, yes, try to market them a bit better than I did this one.

- In November, I completed NaNoWriMo for the seventh year in a row!

OK, on to "make healthy choices":

- Healthwise, I kept up pretty well on walking and daily strength training -- until about November when everything got really busy and several sicknesses passed through our household. But I did do a good job with healthy lunches the second half of the year, and overall my weight decreased around 6 or 7 lbs.

"Deepen friendships" and "chase pleasure" got somewhat intertwined (and even dovetailed with "do creative things"!) because I used going to music shows, creative writing and playing guitar as ways to hang out with existing friends and make new ones.

- I befriended people I met on Instagram through music posts, got to know musicians I went to see perform, and got closer to people I already knew because of music and/or writing. One or two friendships faltered this year, but I'm trying to see that relationships ebb and flow, so as long as I'm continuing to connect with most people, I don't need to stress out about a few friendships not becoming as close as I thought they would.

- Overall I went to 88 live music shows in 2019! This is by far a record for me. Most of them were small local shows that were free or didn't cost much, so although I did spend most of my personal fun money on shows, it wasn't nearly as expensive as it may sound! I did travel for a few of them, but that was budgeted through our vacation savings.

Similarly, "build my career" and "be flexible" dovetailed this year. My company went through several rounds of layoffs and I feel its future is far less certain, though things have stabilized somewhat in recent months. So I took the opportunity to update my resume, start making networking connections, and apply for a few jobs. I assisted AS with her freelance business too, and discussed the possibility of joining her instead of having a salaried position. I also applied for an internal promotion, so I'm currently exploring all angles. So my career hasn't necessarily moved in terms of title or salary, but I'm proud of the steps I'm taking to round out my personal brand while staying flexible to whatever may come.

That's it for my intentions! Now for the financial progress my household made in 2019.

Debt decreased from $437,178 to $425,085
Retirement values increased from $406,280 to $541,036 (taking our asset values from $1,046,061 to $1,180,817)
Overall net worth increased from $608,883 to $755,732

We paid off our credit cards in full each month and continue to be debt-free except mortgages! Not too bad for a year where saving and debt payment took a bit more of a backseat to other financial priorities (such as saving for our kitchen renovation, which is currently stalled in the planning phase, but we do have over $30K saved up for it, not reflected in our assets above).

I guess that was my year! Honestly I didn't even think about goals or intentions for the new year, we were so busy/sick/etc. the last two months of 2019. My instinct is to keep going with everything I listed above, because it's all stuff without a definite end point, and it's all things I feel have enriched my life!

There have been tons of challenges over the past year, but looking at my cumulative results, I feel happy, lucky and proud.