Yearly Update – From 2012 – 2016 (+$239,334.00)

I’ve found the best way to keep me motivated on anything growth related is to track my progress. Whether that’s how much my bench press is increasing, how far I can run, or my finances. I began tracking my assets and debts from shortly after I graduated college in 2011. I’ve loved having this information and finally decided to document our journey on this blog. I have no idea how people are going to react when we are completely transparent with the world on our finances, but I feel like there’s a lot that can be learned from seeing someone else’s journey. We’ve made mistakes along the way, but one thing we’ve done fairly well is spending less than we make and investing the excess.

I was trying to think of the best way to present this data since it spans several years, and ultimately decided on making a single post encompassing from 2012 to 2016. It’s been really fun to look back on all of our previous net worth statements and be reminded of how much progress we’ve made. It’s incredible to think how much we’ve gained by saving and investing with each paycheck. The numbers really add up! I’m going to try to give an overview of each year but I have a hard time remembering last week these days, much less 5 years ago!

January 1st, 2012 – December 31st, 2012:

We graduated college in August, 2011, and entered the workforce within that next month. This period was my starting ground. I was worth practically nothing at the time, and I’m very thankful for that (having a hundred thousand dollars in student loans isn’t that uncommon)! In total, I came out of college with only about $13,000 in student loans and could pay off the majority of that within a year of graduation. This is mostly due to very low expenses thanks to my parents keeping my bedroom intact. I was only making $30,000 a year at the time and a good majority of each paycheck went to getting rid of this debt.

Later that year in August, my wife and I got married. I remember her being worried about getting married to someone with student debt to their name, even though it was only around $5,000 at the time. It’s funny to look back on that number now and realize that isn’t that much money.

I got very lucky to get a spouse that is frugal and smart with money. I can’t stress how important this is when your end goal is financial freedom. Both of our parents had instilled a few solid principles in us that blazed our financial trail going forward.

• Live below your means
• Save the excess
• Invest the savings to earn more

Shortly after we got married, we purchased our first home for $147,000. We thought at the time we overpaid for it, but in just a few short years we sold that house for almost $50,000 more. No, neither of us were real estate geniuses, we just got lucky.

In summary, 2012 was a defining year to starting our journey on the right path. We started January 1st at $370.91 and ended December 31st at $39,124.47. This led to a net worth increase of $38,753.56.

January 1st, 2013 – December 31st, 2013:

Our net worth grew quite a bit this year (+$75,933.39)! We were both working jobs at the time and were saving every penny my wife made. We had made a plan that if we were to have kids, my wife would stay at home, and this meant we needed to start living like we didn’t have her income.

We found out my wife was pregnant this year and in October found out he was a boy!

With a child on the way we knew my wife would be staying at home and making sure our finances were in order was priority #1 for me. I had all kinds of questions about how much kids would cost, and some point I plan to calculate what this number really looks like. Not having to worry about my wife’s income (since we were just saving all of hers) really took the stress off her quitting her job. We had calculated out how much she would make after daycare if she did decide to continue working, and that number was astonishing; around $2.00 an hour. The choice was obvious, we can make it work.

In summary, 2013 was a great year on our finances and really gave us a head start on the investing game. We went from a net worth of $42,700.88 to $118,634.27 for a total net worth gain of $75,933.39!

January 1st, 2014 – December 31st, 2014:

2014 was an amazing year for us as we welcomed our first child into the world. Here’s a picture of him sleeping cozily!

But having your first child was also a huge lifestyle change for us. The freedom to go and do what we wanted, when we wanted, was now gone. On top of that, this was our first transition to solely one income. My wife left her job at the end of January and she hasn’t looked back since. Our ability to save was drastically reduced, meaning we needed to focus on really utilizing our tax-advantaged accounts.

I was able to nearly max out my 401k (+$21,154.65) which was the main driving factor for our increase in net worth. Besides the 401k, there really wasn’t a lot of additional savings. We were focused on trying to make a one-income family work, and increasing our net worth by $46,060.85 isn’t the worst thing to gain in a year.

January 1st, 2015 – December 31st, 2016:

This period covers two years. I wish I had more data, but around this time I wasn’t keeping up finances as well as I should have. We were busy with one child, and had another child on the way. Life was soon to get very crazy.

The real estate market in the Dallas Fort-Worth area starting to shoot up dramatically. Our home value had increased from $147,000 to almost $200,00 in two years. Our home at the time only had about 1500 square feet, and we were really wanting some more space. We decided to call our realtor to get a gauge on the market and decide if we should sell.

The plan was: Buy a home and be able to put 20% down without increases our monthly cost. Our total home costs at the time were about $16,000 a year and my goal was to keep it at that. Our max budget for the home was $250,000, with an ideal price around $215,000 – $225,000.

We ended up falling in love with a property well over our budget and didn’t take the time to sit down and see how much this would impact our bottom line. We got carried away. We purchased over twice the size of our previous home and increased our costs by $10,000 a year. This quickly slowed our savings big time. It also took a huge chunk of our brokerage account, dropping the amount from $36,500 down to $12,500 over the two years.

Looking back on this purchase, I would have certainly stayed within our max budget and pocketed the savings. We love the area and the home, so it’s hard to quantify the purchase in a purely financial way.

Shortly after moving, we found out we were expected our second child. We were so excited, but also a little apprehensive. This also came with extra costs, such as a new stroller to hold both kids, new car seats, more furniture, the whole nine yards. There’s no doubt all these extra costs would take a toll on our savings.

In July, our second boy was born! Our world got a lot more hectic, and more fun.

During this time, I really lost my discipline and desire to focus on our finances. Life had gotten crazy, and all these news expenses created an apathetic stance towards growing our net worth. It hasn’t been until recently that I realized how much joy and excitement focusing on financial freedom brings to me. We’re in this for the long haul!

In summary, from 2015 to 2016 we went from $174,062.35 to $239,714.91. A increase in net worth of $65,652.56.

Recap:

This was a long post, and a high-level summary of the first four years of our journey to financial freedom. It has certainly had some ups in downs (lots more ups!) and we’ve really grown our net worth in the process. It’s amazing to look back and see the progress that we’ve made.

In total, we’ve gained $239,344 to our net worth over these four years. That’s really an amazing accomplishment for us, and we’re excited to see how we will grow from here!