Monday, February 24, 2020

We Did It!

As of this month, we are officially MORTGAGE FREE! Our mortgage servicing company had this nice note posted the day after we wired them the final payoff but it still hasn't sunk in. 

I've been at the same company now for almost 7 years and have received progressively larger bonuses each year. Most of those years, we've taken pretty much the entire bonus and used it to pay down our mortgage. We're very fortunate to have a high income, but at the same time I also know co-workers who make as much or more than me who are nowhere near paying off their homes. 

When the direct deposit hit, I had all the information ready to get the wire transfer out and within about an hour of getting the deposit I had sent the wire to our mortgage company for the last and final payment. You could say I was a little excited. The next day, we celebrated by taking a long weekend family trip to one of our favorite spots just a few hours drive away. 

We have had a mortgage payment pretty much consistently for the past 13 years on three separate houses. We've become so accustomed to making monthly payments that it still doesn't seem real that we'll never have to make another mortgage payment. I'm really looking forward to the first paycheck I get in March that won't have to go straight towards the mortgage, maybe then it will seem real.

Saturday, February 22, 2020

January 2020 Net Worth Update

January was a fairly unremarkable month for the DIY$ household financials, but we did manage to have our net worth creep up by $2,811 to $1,019,162. Read on to see how things all shook out. 


The only somewhat concerning change in January was our cash balance dropping below $20k. I'm not super concerned since I'm getting a bonus in February that will fill it back up, and this is only because we had to make final payments towards a vacation we have planned for later in the year with the kids.


I love seeing our mortgage go down, and dropping below $20k is a fun milestone. I get paid twice a month and for several years now we have basically been using one paycheck to live on, and throwing the other paycheck entirely towards the mortgage. We are on track to have the mortgage fully paid off in February and I'm not sure what it will feel like to have an entire paycheck each month not be automatically spoken for. 


In other news, I had to make a trip to India in January for work. It was my first time to that part of the world and I really enjoyed my time there. The long flights and time away from family weren't fun but did help me complete 10 books in the month of January, starting the year well ahead of my standard goal of 52 books per year. 

The best books I read last month were:

Shoe Dog by Phil Knight. This is the story of Nike as told by the founder. It's a fascinating story, and one thing that really blew me away how many times the company teetered on the edge of insolvency despite massive annual sales growth. 

Talking to Strangers by Malcolm Gladwell. I've read every book Malcolm Gladwell has published and this one was a different topic from his other books but was still the same well crafted narrative style I enjoy. Among other things it talks about the snap judgments we make interpreting body language of strangers and how to identify internal unconscious bias, something we'd all do well to root out. 

Saturday, February 8, 2020

2019 Year End Net Worth Update

2019 was a great year for the DIY$ household finances. We had our highest income year ever (thanks to a promotion and two pay raises), saw huge gains in our portfolio, and banked a lot of our income towards paying off our mortgage. We got soooo close to paying off the house, but still need a couple of more months to get it completely paid off. 

For the month of December, our net worth went down a bit, mainly because Zillow shows the value of our home down a lot. This happened a year or so ago and quickly went back up, and I'm using the their figure to stay consistent.  

Even with a $33k reduction in home value, we still ended the year at $1,016,351

The end of the year is also a good time to take a step back to see the progress we've made over a longer time frame. 

In 2019, our net worth grew by nearly $200k, our largest annual gain ever. This is more than I earned in 2019 so it's really nice to see the impact of our investment earnings added to our regular savings. 

A few observations:
  • I know we've been putting a lot of money towards paying off the house, but seeing that it was $65k in a single year was little surprising. We'll have it completely paid off soon, and it's crazy to think that we could increase our other investments/savings at that rate once the mortgage is done.
  • Once the house is paid off, I'll be viewing our net worth slightly differently. The plan is to look at our liquid assets separately from our other assets (house, cars, etc) as we focus on the next goal of reaching $1M in liquid assets.
  • Our cash balance is creeping lower and will get even lower before it jumps back up at bonus time. I would much rather be in a position where I am waiting for a bonus to replenish my cash than to need the bonus to pay off consumer debt. When I was a financial advisor, we were paid quarterly bonuses and some co-workers would consistently rack up credit card debt each quarter, relying on their bonus to dig out of the hole they dug.
  • 2020 is off to a good start for our finances, but not without uncertainty similar to any other year. Our spending habits are mostly the same, but we do have some celebratory spending planned shortly after paying off the house. 
  • Most of what I've put on this site has been 'money stuff', and not very much 'DIY'. This year we'll be starting a pretty major DIY project at our house and I plan to document more of that.