Our Net Worth as of 12/31/2017

Happy New Year! Another quarter-end, I can’t believe how fast time flies! And we all know what that means, right? Net Worth updates across the Financial Independence blogosphere! For us, this is a special NW update because it’s the last one before we both give notice at work in two months! And the last NW update before our apartment goes on the market! In other words, this better looks good, otherwise, we might get cold feet, also known as One More Year Syndrome. Soooo, where do we stand financially? Here are the numbers…

Our Net North at year-end came in just below three and a quarter million USD, that’s a gain of about $185k, or 6% in the quarter:

NW update 2017 Q4 Table1
Our Net Worth in Q3/Q4 2017.

Let’s dig some more into the details:

  • Credit Card debt went up. We recently got a new credit card with a 0% teaser rate for 12 months, 20,000 travel reward points, no annual fee and no foreign transaction fee (BofA Travel Rewards Card).
  • Our investments benefited from the strong equity performance. Everything equity-related went up roughly in sync with the S&P500 return (6.1% price return, 6.6% with dividends).
  • Fortunately, our home value has stabilized again and even went up a bit after the drop in Q3. This is the Zillow estimate ex 8% transaction cost minus the mortgage and HELOC. I’d still take it with a grain of salt because some of the recent sales in our building deviated from their respective Zillow estimates by five-figures! Both up and down!
  • The 401(k) grew a bit faster than the market return, obviously because of our contributions. In addition to my own contributions ($18k/year) and the company match I also made supplemental after-tax contributions that will be transferred into a Roth once I leave the company.
  • Little Miss ERN is happy to know that at the tender age of 4, she already has $30k in college savings! I still count that as our net worth because this account could potentially serve as a last-resort cash reserve in case our retirement finances were to blow up!
  • We got a nice surprise in our private equity portfolio. In late 2014 we made a small angel investment in a startup. At $30k it was small enough that a total loss would not derail our plans. Remember, some folks lose $30k during a lunch break! But the company has done pretty well and now brought a pretty well-known investor on board. Our (non-traded) shares were valued at $44k in the most recent round of financing. I know, the accountants here might not like booking an unrealized profit like that. But I’m conservative with my estimates everywhere else, so let me have fun with this investment!
  • The options trading strategy keeps chugging along pretty nicely. The actual return on the investment was 4.5% during the quarter (+21% for the year!) but we transferred some money to the private equity real estate portfolio to satisfy a capital call in one of the real estate funds.

Where do we go from here?

Hopefully without jinxing anything, let’s move up the Q1 2018 target to $3.35m, $100k above the 12/31/2017 figure (and $150k higher than the 3/31/2018 target from the previous quarterly net worth update):

NW update 2017 Q4 Table2
Our plan for the next three months: Grow our net worth to $3.35m.
  • The $100k jump includes the annual bonus to be paid out in Q1. I hope that I’ll get a little bit more than that, but just to be on the safe side, let’s low-ball the bonus a little bit.
  • We like to keep a bit more of a cash reserve in the checking account to be prepared for unforeseen expenses so we will probably keep some of the bonus money in the checking account.
  • We will utilize the 0% rate (until 12/2018) on our new credit card. Yup, that’s right, we will live off a credit card for a while because we have to front-load our 401k contributions during the first three months. Get a life, Dave Ramsey, we actually like debt and leverage in small doses!!! It’s to make sure we get the maximum $18,500 pre-tax contribution and $16,000 supplemental (after-tax) contribution before I quit!
  • A fresh $11k contribution goes to our IRAs.
  • The private equity funds will probably generate more income than $3,930, but I assume that the excess cash flow is deposited in the Options Trading Account.
  • I assume that our apartment would not have sold by quarter-end. If we do sell the unit faster than I expect, the bulk of the proceeds will move into the options trading account. Also, I’m rounding down the value again, just to be on the safe side. That Zillow number has been bouncing up and down too much, so I like to play it safe here.

In any case, it looks like we’re on track to move from FI to FIRE pretty soon. Well, we better be on track because in multiple ways we’ve already handcuffed ourselves to the idea of early retirement. Most importantly, we already started with some pretty elaborate travel planning for 2018:

  • A two-week trip in April, attending the Virginia CampFI and visiting family in the area.
  • A three-month trip to Europe in the Summer.
  • Swinging by FinCon in Orlando (not Tampa, sorry for the typo earlier!) in late September! For the first time ever, yay!
  • A two-month trip to Asia and Australia/New Zealand in the fall/winter.

Since all of that is probably not quite consistent with a 9-5 corporate job and we already booked most of the airfares and made substantial down payments on several cruises we are about as committed as we can get! Stay tuned for updates in the next three months!

I hope everybody else had a profitable Q4! Best of luck in 2018 and please share your comments below!

44 thoughts on “Our Net Worth as of 12/31/2017

  1. It’s really cool to see how you are leveraging debt to meet other goals and taking full advantage. I also just got a 0% credit card as backup while I tuck extra into my Roth IRA. 🙂 Good luck with the apartment sale!

  2. Had a WordPress error so will try again with (luckily saved) comment….

    Nice, nice progress indeed. :>)

    Our NW rose 22% over 2017, an average of 5.5% per quarter. Our savings rate and our International funds were the star performers. Regarding international, VEMAX and FPMAX at 31, 37% respectively. Bond funds in our 401K’s – JCBUX and AGG like fund (not surprising) were the laggards. Our REIT funds (VGSLX and a non-traded REIT) were also laggards at just under 5% each. Still, can’t complain too much at a 5% “laggard” though, can you?!

    We also face some relatively minor cash-flow challenges in January since we front-loaded both our 401K’s and have some outflow for cosmetic stuff to prep the home for sale. My bonus (March) and some stock options vesting (Feb) will be timely in that regard.

    Still not nailed down when I quit but it is looking more and more that it will be prior to July 3 (my original planned date). Could be as early as mid May, depending a bit on speed of house sale. Agreed, Zillow is LOL to plan anything around. Two separate realtors value our home at just south of $600K. Let’s see where we land with that one. Mrs. PIE will continue to work until early June to ensure she is eligible for her bonus, paid out at end of July.

    Travel plans sound fantastic. Are you cruising in the EU or hopping by land from country to country?

    If you are ever in the NE corridor on your travels, give us a holler. Cheers!

    1. Hi Dr. PIE!
      Nice! Very impressive gains in PIE-land, too! Financial markets were very kind to everybody indeed, when 5% is considered a laggard!

      Very much a first-world problem: sitting on millions but complaining about our cash flow problems 🙂 But it’s nothing we can’t solve with a HELOC and/or 0% credit cards. I’m lucky to get my bonus in February, so it’s a short stretch of living on the edge!

      Travel planning is almost as much fun as the actual travel itself! We booked multiple cruises already including a trans-Atlantic from Europe to Florida in the Fall. 16 days of cruising, the ultimate slow-travel! Landing in Tampa a week before FinCon, that sounded too good to pass on!


  3. Hey big ERN, congrats on the progress as well as the upcoming “giving notice at work”. Exciting times! When I gave my notice at work I was a complete wreck emotionally and was scared out of my mind ha ha.

    8 years later I’m still enjoying the FI life largely due to options trading. When I start my new site in a few days I’ll look forward to sharing a few of your post. The risk adjusted returns I’m getting with options is nothing short of amazing. Or as one critic said, it’s “dumb luck”, but I AM enjoying my dumb luck 🙂

    1. Ha, I’m glad it worked out so well for you. Looking forward to your blog. Please leave a link here so we can all find you!
      Totally agree: selling vol through options trading has been a good strategy recently: Annualized return of 21% with risk 10. First time ever in the double-digits!

    2. Hello Travis. I’m looking forward to seeing your options trading strategies. Please share the link or a video.

  4. Great NW, Big ERN! Oh, and I somehow was under an impression that the other half doesn’t work, but now I read that you’re BOTH giving notices. Will you both do on the same day?
    Once you quit, will you also disclose who you’re or at least what exactly professions your wife and you have? I’d be curious. I think a couple of other bloggers are planning to do the same but now I forgot which ones LOL.

    I’ll be interested in hearing all the details of your travels. It will be fun!

    1. Oh, my wife just works part-time. I’m not even sure she has to give “notice” because she works for a temp agency in nursing. I’m in finance obviously and we will reveal some more biographical info on March 12. Stay tuned!!! 🙂

  5. Great post! This is so motivating to someone on the earlier part of their FI journey.

  6. Congrats on a very good net worth, big ERN. Your NW numbers indicate you are a bit ahead of me, but not by much 🙂 More importantly, I am excited for you about the RE part of FIRE in 2018 for you! All your travel plans sound great, especially the slow cruise. Once you are in Asia, do drop me a note. Would love to meet you if schedules can match. Not sure about FinCon 2018, but I would love to attend it as well. All the best for a great year and a fulfilling early retirement ahead!

  7. Well done mate! You can be very proud of this achievement!
    But is it ok if I’m just a tiny (ok….very) bit jealous? 🙂 Don’t think we will ever hit numbers that high, as we would have exited the rat race way before we can accumulate this much money. But that’s ok for us, as long as we are happy!

      1. Healthcare costs is definitely much lower over here! But I think the rest is comparable overall. Except for taxes, those are a killer around here….

          1. It’s definitely a lot harder than in the USA, no debate there. Well actually, it’s not harder, it just takes longer. A well, onwards we march. Glad that at least the health care costs are not going to kill the FIRE dream (yet…)

  8. Agreed. I would have left the workforce long before hitting 3.5 friggin mil. Why not enjoy the youngest years you’ll ever have right now (or long ago)? Is a $100k/y lifestyle that much better than a $50k/y lifestyle if you get extra years of life with the latter?

  9. Hi ERN,

    I recently ‘discovered’ your blog after your visit with the guys over at ChooseFI. After that podcast, I began to devour your articles on SWR. I also plugged my numbers into your spreadsheets (that you so generously share) in order to determine my own SWR. The articles and supporting spreadsheets are fantastic! Until this particular post and update, I hadn’t realized that you have been sharing your net worth since last year. Also, since I’ve been focused mostly on your SWR articles, I didn’t realize that you were so close to the ‘RE’ in FIRE. I am so happy to see all of this as it gives me further confidence in my own numbers and my timeline since we share very similar circumstances and are at the same milepost in our FIRE journey.

    I’m an unmarried 49-year-old male in finance living in a high COL metro area with a high salary and a net worth slightly under yours. I’ve suffered psychologically (and benefited financially) from one-more-year syndrome since last March 31st, which was my original FIRE date. (I just read your post on OMY syndrome and it was very helpful!). I advanced one more year and have decided to pull the trigger and quit my job this spring after my company pays out the annual bonus. Like you, I am currently front-loading my 401k (with the extra $6K as I turn 50 this year) and contributing as many after-tax dollars as possible that I will rollover into a Roth after I quit. (This is the first year that the company has allowed 401k after-tax contributions and I was tempted to go OMY again just to take advantage of it…)

    Your ChooseFI podcast, your series on SWR, and your posts on OMY and this net worth update have given me a significant boost in confidence. I am pleased that I am making similar timeline and net worth decisions as you — a very smart guy a smart guy who has obviously spent a great deal of time, effort, research and calculations on this FIRE topic. I am eager to watch your progress during and after your RE date, and use them as guideposts for my journey. I have more assets in real estate than you, and no assets in options, so our growth rates will be different, but it will be fun to see how we both transition out of work and then manage through this next phase in our lives. Thank you for sharing, and best of luck with the job resignation!!!

      1. Thanks for the quick response! I don’t understand — how are you able to contribute an additional $16K if the 401(k) contribution limit for 2018 is $18.5K (both pre-tax and after-tax combined)? Is it a special workaround for “retirement” (i.e. regardless of age)?

        Sorry if this is a newb question. Please include a link to an explanation if that’s easier! Thank you in advance.

        1. That’s not true. $18,500 is the maximum for my own pre-tax plus Roth 401k combined. An additional $16,000 can go to additional pre-tax contributions. Now, that $16k may be idiosyncratic to my employer. I’m not sure that would be the same for every employer and every 401k plan.

  10. Hi ERN,
    1. Did you consider to “engineer your layoff”, Financial Samurai-style?
    2. Did you explore how much an equivalent health insurance will cost you in retirement? I wonder if that is a big new expense.

    1. Good point! Thought about that. But it was not really workable in my personal situation.

      Healthcare: I budget $1,400/month for a basic (bronze) plan. Total health expenses between 20 and 25k per year in retirement. There might be a slight tax arbitrage if I’m able to run this through a business venture and write it off as an expense.

  11. Thanks for posting. Great stuff! Curious about the Virginia CampFI you mention in for your travel during April. Is this an open FI conference or meet up? If open to the public so, I would love to know more about it. Thanks.

      1. Thanks for the info. I’m currently talking with 37th parallel and realsource.net to invest in multi-families. Like yourself, this year I’m trying to get more into real estate.

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