Monday, November 25, 2019

October 2019 Net Worth Update - Millionaire Edition

For a while now, I've been wondering what would happen first, paying off our home or reaching millionaire status. Well, now we know. We haven't quite paid off the mortgage, but have now reached millionaire status! 




Right at the end of the month, our net worth crept barely over the $1M threshold to end at $1,002,357. This doesn't really change anything in terms of how we live our lives, but it was a fun milestone to reach. 

CASH / INVESTMENTS

We're continuing to build up our cash in anticipating of a big property tax bill due next month. Once that's behind us it will hover for a bit until we pay off the house a few months from now. 

The market continues to rally even with signs of weakness in the economy and we continue riding the wave. Through October, the S&P 500 is up more than 21%, and 2% just just in October.  

Now that all the major brokerage firms are also offering $0 for trades, I've begun the process of selling my positions at Robinhood and moving the funds to a new trading account I opened at the same firm that holds our much larger accounts. I'll have this done by year end so I don't have to worry about getting another 1099 from Robinhood in 2021 since they are always the last of my 1099's to be issued.

Our household rule is that I keep ~1% of our portfolio in a trading account where I have free reign to make more speculative investments, but that percentage has declined as our larger accounts have grown and we haven't been making additional contributions to the trading account. I previously held it at Robinhood because the trades I've made have been relatively small (under $1,000), so $5-8 commissions were prohibitive. Post house payoff, we'll likely beef this balance up more.

HOUSE/MORTGAGE

Between our extra large mortgage payment and minimal home price appreciation, we added about $5k to our net worth between our house and mortgage. Although we're getting very close to being able to pay off the house by draining our cash, we're planning to wait just a little longer so we can keep our cash reserves still over $20k at all times. 

Without a mortgage our need for an emergency fund will actually go down but we are planning to stay at $20k since we also will need extra cash to cover some big home renovation projects that will be starting in the Spring.

2 comments:

  1. Congrats on reaching millionaire status! I'm jealous as I'm ~$200K away.
    -max

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  2. Thanks Max - they say the first million is the hardest, right? I was shocked at how quick we got that last $200k though, you'll be there before you know it.

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