Tuesday, September 17, 2019

August 2019 Net Worth Update

Another new month brings another new all-time high net worth for the DIY$ household. We continue to march towards $1M mark and a paid off house, closing the month with a net worth of $960,099. 



CASH

As expected, our cash balance bumped up a bit in August. Hovering between $20-25k is our sweet spot for now. There are times when I feel it should be higher since we do spend a lot, but if we really had to live on a shoestring budget this could easily last us three months and probably as long as six months. Once we pay off the house, this amount will definitely be adequate.

I also got a raise that goes into effect in October, but we've already allocated the increase to go towards our mortgage for the next few months, so it shouldn't really impact our cash balance.


INVESTMENTS

We haven't made any changes to our investment holdings or strategy. Since the market was down, so were our accounts. Our year-to-date returns are still quite good, but even in a bull market it's good for the market to take a breather every once in a while.  

HOUSE/MORTGAGE

We're back to making extra large mortgage payments and were able to knock another $3,300 off our balance. After this month, we're now targeting complete mortgage payoff in 6 more months. If you're doing the math, 6 * $3,300 is much less than $40k, so clearly this plan does assume that the rest will come from my annual bonus.

Our home value also popped up a bit this month. One thing that I'm sure helps is that homes in our neighborhood are now consistently selling for over $500k, with several close to $600k. Our neighborhood is mid-range priced for the area and homes still are moving pretty quickly. Less expensive neighborhoods are still very much in a sellers market, but the more expensive neighborhoods nearby with homes priced between $800K and $2M have been selling a lot slower. 


We had very few home related expenses in August, but that's only because we did a lot of work ourselves with tools or materials that we already had. This month that meant breaking out the pressure washer and cleaning off the driveway. Living in a heavily wooded area contributes to needing to this every so often and it takes 10-12 hours to do it right. I'm not sure how much it would cost if we hired it out but it's a very simple and satisfying job. 


I haven't kept track of all the money we've saved by doing work ourselves, but it would easily add up to tens of thousands of dollars over the past six years in this house. 


Monday, September 16, 2019

Sage Career Advice

One of my favorite college professors was a retired investment banker. He had spent his career as an ex-pat throughout Asia and built up an 8 figure net worth before 'retiring' (to be a part-time professor) at 50. I looked up to him and occasionally went to him for career advice even after I was not taking classes from him.

While I was in my last year of college, I accepted a job to work as a financial advisor at an insurance company. My short time at that company is worthy of a separate discussion, but something from the experience has stuck with me over the years.

After I accepted the position, I went to meet with this professor to tell him the good news. He congratulated me and then had just a few questions about the job. The one that stuck with me was:
"What is the average age and tenure of the people in your office?"
Although he didn't say it, looking back I can tell that he would have steered me clear of this job had I asked him about it first. He knew several things that I didn't know at the time. First, insurance companies churn through new hires. Most people who join these companies quickly flame out once they exhaust their lists of friends and family to sell crappy annuities or high commission mutual funds to. In this regard, I also became a statistic, only lasting about 3 months before taking my licenses to a discount broker.

Second, companies need new employees to be able to continue growing. When I was hired, I was one of the only 'new' people at the office and I rarely saw people with less than a couple of years. If I was paying attention, this should have been a red flag. Naive little me was probably only thinking how cool it was to be in a grown-up job in a grown-up office (I even could order business cards if I wanted to pay for them!). What I should have asked myself was "Why weren't any of my classmates considering working here or somewhere similar?" or "How many people has my cubicle neighbor seen come and go in his 2 years here?"

My current employer hires thousands of new people each year and still has several people with 30+ years at the company. I just hit 6 years and 75% of the people hired with me into our department are still with the company.  I'm not planning on leaving anytime soon, but rest assured when that time comes, I'll have a lot of questions about the company, culture, and employee demographics before joining another company.