Greetings millionaires, with half the year gone already, it’s time for a mid-year report. We’re currently visiting family in Tifton, Georgia, and we’ll soon be taking a trip to Chattanooga to visit more relatives. So far, the highlight of the summer has been the completion of Eduardito’s 5th-grade homeschooling program. What a relief! He and my wife have spent a ton of time completing A Beka Academy‘s rigorous curriculum. It’s official, our boy is moving on to the sixth grade.
It’s now been over a year since we left our teaching jobs in Douglas, Georgia. When we left in May of 2016, our net worth was around $933k. Thanks to our last three paychecks (for June, July and August) and a rising stock market, our net worth passed the 7-figure mark in September. While becoming a member of the Two-Comma Club was a good feeling, it didn’t lead to any dramatic lifestyle changes. No new cars, clothes, or lovers for me (nor for Edwina as far as I can tell).
Actually, our lifestyle went in the other direction when we got rid of two formerly reliable, used cars. After twelve years, they were becoming less and less reliable, so we signed the Volvo over to a nephew (a tinkerer) and we donated the Mitsubishi to charity. (I’m getting a little misty-eyed just think about those old, weathered beauties.) As a result, the Mills family is homeless, jobless, and, gulp…the horror, carless in America. To most of my countrymen that represents the Triple Crown of Lame Loserdom, but it suits us just fine for now. (Did I mention that we gave our last TV away last May? For the record, it was an old-school, CRT idiot box. So, we’re TV-less too!)
Last September, after our last paychecks hit our bank account, we declared ourselves FIRE’d. We knew that we could live our frugal lifestyle in many locales Stateside and abroad, but I had one main concern: How would our FIRE’d status affect our net worth? Without a paycheck we wouldn’t be adding to our pile of money. Instead, we would actually be drawing from the pile! Oh no, would our stache be devoured in 6-12 months by a slumping stock market, high living, and unexpected expenses? Would our shrinking net worth then send us scrambling to line up new jobs with any school districts willing to employ such broke, middle-aged losers? Let’s take a look at 2017 thus far…
Net Worth Update
So far, 2017 has been good for our bottom line. Obviously, the strong stock market has helped our investments grow (over $50k since January 1st, see below). At the same time, our frugal living has kept our spending low and our lifestyle high. As you can see from the picture below, our net worth has grown to close to $1.1 million since last year. (However, be aware that our net worth figure includes $30k of travel rewards benefits: 3 million MURP$ valued at 1¢ each.) Here’s what our net worth looks like:
Since January 1st, our net worth is up a solid $51,731 due to a rising stock market. This year we’ve contributed less than $3k to our portfolio ($2,000 to Eduardito’s ESA and $600 to a mutual fund), so there’s no denying the power of the 2017 stock market.
Earlier in the year I took a look at our portfolio allocation, and I was not happy to see that we had almost 30% of our money in cash. The biggest problem was that we still had not invested our savings from our last job; that money was lying dormant in a cash position. In March, I began moving money from cash into Vanguard’s VTSAX, and by April I had lowered our cash position to 15%. Our cash position is still higher than most investors because 1.) we take 72t distributions from our IRAs and 2.) we have 457 funds that we used for living expenses as needed. Our current allocation is roughly 80% stocks, 16% cash, and 4% other.
After re-reading Jim Collins’ Stock Series, I decided to simplify our portfolio by making VTSAX our main holding. We love its low fees (4 basis points), vast diversification, and KISS-friendly investing.
Here’s a look at the funds that make up our portfolio. No surprises here. VTSAX is by far our main holding along with a few other Vanguard Total Stock Market options (VTSMX and VTI).
That’s the current state of our net worth and its underlying portfolio. Pretty boring, huh? The good news for us over the last 12 months is that we’ve been able to stop working AND watch our net worth grow. Justin at Root of Good experienced a similar situation, except that his net worth mushroomed.
2017 Accomplishments and Goals
- We fully funded our son’s Coverdell ESA account at Vanguard with $2,000 of travel rewards bonuses.
- We’ve still managed to invest $100 a month into our taxable accounts. After years of saving $80k+, I’m almost blushing as I cite such puny savings numbers, but hey…we’re living on a fixed income here!
- After becoming permanent residents of Mexico in November of 2016, we spent April and May in Merida, Mexico. Our main purpose of the trip was to choose Eduardito’s school for the 2017-18 school year. After visiting various schools, we found a school that we all liked and registered him for next year. We also signed a lease on a nice 2-bedroom, 2-bathroom apartment for the upcoming year.
- Our main focus for the remainder of 2017 will be to help our son have a successful school year. He’s a little nervous about going to a new school, making new friends, and learning a whole other language and culture. He certainly has a big year coming up…6th grade in Mexico. Edwina plans on learning some Spanish herself, so that will be her project.
- I’m going to use my time in Mexico to write an occasional blog post, maybe work on my mythical book, and hone my 6-pack abs. Stay tuned…wait, I almost forgot to mention my biggest project of the year. Since July of 2016 I have jogged EVER SINGLE DAY without missing even one day. Next week I will complete jog #365, so I’m very excited about accomplishing my goal of jogging every day for an entire year.
- Finally, going forward we plan on letting our portfolio and savings continue to do our “heavy financial lifting.” We do not have any plans to go back to work. While we sometimes miss the thrill of saving $13,260 a month, we’re enjoying our FIRE’d status.
Okay, I hope everyone is having a great summer and Happy 4th of July!
Yours in FIRE’d Frugality,
P.S. If you like my net worth and portfolio information in the pictures above, you can sign up for a Personal Capital account and plug in your own numbers. If you don’t mind, please click through the affiliate link in the “Useful Resources” section below. That way, I can earn a small commission (at no cost to you). Thanks in advance to those using the link below.
|Health Savings Account: We use Elements Financial to access commission-free, low-cost Vanguard ETFs at TD Ameritrade.