The State of the Bear Cave – October 2016
We’ve been going at this whole blogging thing for about a month now. You’ve seen The Plan that Mrs. Grizzly and I cooked up at the beginning of the year. We’ve outlined a few ways in which we’re executing (we have a ton more!). But now it’s time to dive in and see how we’re doing, so we bring you the State of the Bear Cave. We’ll show the current state of our finances and detail out our spending for the last month. And we’ll take a gander at how we’re currently doing on our own financial independence tracker. We plan on doing these at the beginning of every month from here on out. This one is a bit delayed – we had to get at least a few other posts up!
State of the Bear Cave
You can find the link to our current tracker here (you’ll have to login).
The state of the bear cave is strong, and we are doing well executing our plan. Our investable net worth continues to tick up slowly every month. But the real movement has been in our target net worth – the amount we need to support our lifestyle without working. That has plummeted as we cut back our spending. As a result, target years to retirement has fallen from a high of 13.3 on January 1st to 5.6 now. We still need to bring it down further, but the movement is a huge step in the right direction.
We’ve seen a steady climb in our invested assets to $580k as of Oct 1, up from $390 at the beginning of our plan. This is a result of both increased saving and some pretty decent returns in the market this year. After a rough start in January due to some crazy swings in the markets caused by China worries and oil price troubles, all our investments have delivered solid returns.
We finished paying off our student loans in April. This was HUGE and a topic for another post. We started out a few years ago at almost $250k in debt from our combined grad schools. Seeing this finally hit zero was a huge relief, and it brought the balance of our debt outside of the mortgage to zero.
Our house has appreciated by about $50k according to Zillow. I’m reluctant to trust the movements of Bay Area housing prices and I only incorporate these movements if I think they’re going to stick. I think this will and I’m still showing a much lower number than Zillow currently reports. Our mortgage continues to tick down as well, but the rate is only 3.25% so we’re in no hurry to pay it off.
We continue to make a ton of money, no hiding that. And Mrs. Grizzly and I both got raises halfway through the year. Additionally, I got a bonus in February and some stock options vested throughout the year. We have pulled in $260k after tax this year and are set to hit $300 by year end.
This is the big drop and the primary shift in our years to retirement calculation. We’ve gone from spending almost $12k in January to $7k in September – a 40% decrease. This is where all those changes came from:
|Mortgage Interest||$2,500||$2,467||-$33||Nothing we can do now, but the plan is to move!|
|Student Loan Interest||$400||$0||-$400||Gone!|
|Homeowners Insurance||$900||$300||-$600||Buy less insurance!|
|Property Tax||$1,000||$1,000||$0||Nothing we can do now, but the plan is to move!|
|Groceries||$1,088||$550||-$538||Do things like bake bread and go to costco|
|Restaurants||$664||$60||-$604||Stop eating out!|
|Clothing/Dry Cleaning||$513||$100||-$413||Don’t buy clothes you don’t need|
|Gifts||$443||$0||-$443||Stop buying so many gifts|
|Auto Insurance||$153||$50||-$103||Buy less insurance!|
|Gas/Auto Maintenance||$120||$60||-$60||I got a bike|
|Cable||$150||$0||-$150||Got rid of it|
|Cleaning Service/Lawn Care||$230||$230||$0|
|Other||$989||$183||-$806||Just buying less random stuff|
So that’s it. The state of the bear cave as of October 2016. We’ve brought our years to retirement down by almost 60% already. The primary driver of the change was reducing our expenses, which shows just how powerful this lever is. Far more powerful than the income gains we made this year. With the additional changes we have projected (e.g., downsizing our house, cutting our cell phone bill) we are on track to clear our target of Baby Bears third birthday.