Our cash balance continues to creep up, and we should see some big gains in the coming months with annual bonuses and tax refunds. Throughout the year we had been trying to keep our balance close to $20k, and would throw anything extra towards the mortgage as an additional method of forced savings. Going forward into 2017, we'll continue to pay extra on the house but have set a higher target for cash savings before going crazy on the mortgage again.
The market was good to us this month and really was the deciding factor between whether we met our net worth goal or not. Our portfolio grew by $9k, or 2.8%, which includes our contributions. For the year, including employer contributions, we added $27,290 to our investment accounts and had market gains of $33,875, just under 13%. Most of our investments are in S&P500 index funds, with some allocation to international. Throughout the year I dabble with speculative investments, including leveraged ETFs and Options, but limit those trades to under 1% of our investible assets. Those trades did better than our overall portfolio, but not by much.
Your guess is as good as mine as to why our cars went up in value this month. They are both at the point where they really don't have much left to depreciate but they are worth more to me than what I could sell them for. For this reason, we recently took full coverage off of my car to save ~$200/year since whatever we get from an insurance settlement wouldn't be very much and we have the money to buy another car without any insurance settlement. We are saving for a new vehicle to replace mine but are hoping it lasts for a while still. I say that I'd like to drive it into the ground, but in reality will likely replace it before it actually dies on me. If I truly drove it into the ground I would be desperate when buying a replacement and could end up overpaying. By buying when I don't truly need the car I maintain some leverage since I can more easily walk away from something that isn't exactly what I'm looking for at the right price.
Just like every month since we bought our house, we paid extra on our mortgage this month. We'll continue to pay extra even as we build up our cash savings, but only $600-$700 extra and not $1,500-$2,500 extra like we've done several months this year.
According to Zillow, our house went up in value by $14k or 3% this year. What this doesn't take into consideration is that we spent $9,000 in home repairs, maintenance, and upgrades this year, so really our appreciation was less than $5,000. Had we not done most of the work ourselves in these projects, we easily could have spent an additional $5,000.
Home projects we tackled in 2016 included:
- Painting the exterior of the house (we still have some trim to paint but it is mostly done and we already have the materials – I estimate that we are saving over $5,000 doing this ourselves)
- Removed 17 trees (professionally – not worth the risk of dropping a tree through the roof doing it myself)
- Painted our study/library
- Replaced kitchen and bathroom cabinet hardware
- Sanded and repainted my grill that was rusting
- Repaired an HVAC air handler that had been malfunctioning
- Had a company mudjack our driveway and walkways that had settled by several inches over the years (this was really neat to see and was sooo much cheaper than replacing our driveway)BEFORE MUDJACKINGAFTER MUDJACKING – notice how much higher the walkway isWhat is Mudjacking?
We are in the preliminary stages of planning 2017, but potential home projects include:
- Kitchen modifications (change out tile backsplash and replace windows)
- Some new kitchen appliances
- Fence in the back yard
- Replace our deck with a ground level patio
- Remodeling our master bathroom
Whatever we end up doing, we likely won't spend as much in 2017 as we did in 2016.
2016 was also an expensive year for us in travel. We spent a lot, but got a lot of bang for our buck. We took a beach trip early in the year and used hotel points to stay free at the Residence Inn (the best hotel for travelling with kids IMO). We also went to Washington DC for the 4th of July and used the last of our hotel points to make that trip nearly free. Our big trip for the year was a week in London with our kids which we enjoyed a lot. We saved there by staying in an Airbnb and using the apartment kitchen to prepare many meals. In 2017 we are thinking we may not take any big international trips, but will possibly rent a beach house for a week since we have another baby coming soon and aren't sure we want to fly 8+ hours with a newborn (even though our 20 month old did really well flying to London).
Just as in 2016, we are working on some financial goals for 2017 and will share them here when they are finalized. I'm thrilled that we achieved our 2016 goal, but can't let that change anything since we are still less than half way towards our ultimate goal of complete financial independence and early retirement. We've come a long way, and tracking our progress is motivating and gives reassurance that we're on track. I look forward to 2017 and everything it brings.