On the path to financial independence: June 2017

Another month has whooshed by bringing us that much closer to our FIRE date. For those of you trudging through the years of accumulation, wishing that you could make them go by faster, here is my advice to you: have a child. Time has accelerated ever since Toddler BITA has come into being. We blink, and we are all a month older, though not always wiser.

June brought with it a heat wave. We had a couple of streaks of over-95 degree days. So the AC was used this month, and we’ll groan over the electric bill next month. We don’t use the AC to get down to a comfy 72 though. We set it to a robust 84. Move over Marcus Aurelius, the BITAs are the new sweaty Stoics in town. The hot weather meant that our pool was open for business. Fuzzy BITA especially appreciates a swim on an unreasonably warm day.

We picnicked at a park by our house. We intended to eat hot dogs for lunch, and so went armed with sausages for Mr. BITA to grill at the park. When we got there we realized that we had brought everything we needed for a picnic except for utensils for grilling. Mr. BITA powered through with his bare hands and a plastic fork, and saved the day.

Other June entertainments included a free concert at a park (featuring an orchestra performance, and a magician), visits to the library, dinner with friends, a barbecue with other friends and a visit to the beach.

A gorgeous day at a beach in Santa Cruz

 

Toddler BITA has been going to a dance class. The dance company put on a musical this month. It was an elaborate affair – they booked a concert hall, costumes were involved and over the course of the two hour performance they put around 450 kids on stage.

The performance was a money making machine for the dance company. The offered adoring parents the following services: roses to buy for the performers, a pop-up store at the venue selling Disney toys, the option to pre-order a DVD of the performance for $25 (the BluRay version was $35), the option to have photos taken with your darling performer at a photo studio a week before the event, the ability to buy a spot for a ‘dedication’ in the programme (a picture of your talented dancer and a message from you to him or her). The list went on and on. I confess that we are not particularly adoring – we purchased none of the above. We applauded with gusto, and rewarded her with 7 M&Ms to eat in the car on the way home. She was thrilled and saved three for later. I was so proud.

 

We received one of the many gifts of home ownership in June. One morning as I reached into our pantry, my hand, horror of horrors, realized that there was a pool of water on the shelf. We evacuated the pantry and eventually determined that the leak resulted from the bathroom upstairs – the wall behind the pantry downstairs is the same wall as the water wall of the bathroom above it. A hundred curses. We have two bathrooms, so we have all decamped to the other one. We haven’t had a plumber in yet, so more about the finances of this situation will be forthcoming in July.

June also saw Mr. BITA grow a year older. He is a coffee fanatic, and for his birthday I got him a Yama Glass 5 Cup Stovetop Coffee Siphon. Here he is brewing a cup with his new equipment that looks like it belongs in a lab. He is thrilled with it, and claims it makes the best cup of coffee he has ever had.

Our garden had some new flowers on display, and our fruit trees were bountiful. We have a surplus of oranges. Our grapefruit tree produces fruit at a much more measured pace.

And speaking of bounty, on to the numbers.

 

Adding Cash to the Financial Independence Stash

This month we added $29,930.31 to our Stash.

  • Mr. BITA’s 401k was maxed out in January, so that is why you only see contributions to my 401k and my company match. This month I maxed out my 401k. My employer will keep making contributions to ‘true-up’ my account till the end of this year.
  • As is usual, we shoveled more cash through Mr. BITA’s mega backdoor Roth.
  • What the chart below does not show is that we funded both our backdoor Roth IRAs ($11,000 worth) this month. We sold some of our company stock to fund the IRAs, so it wasn’t really new money, and therefore does not show up here.
  • We also paid a chunk of estimated taxes for 2017. We will make another one or two tax payments before the year is done.

On the path to financial independence june 2017

While we did a good job of growing the Stash, the market didn’t treat us too kindly. We lost $3518.84 in June. The growth of our taxable and retirement accounts was overshadowed by the losses sustained by our individual holdings. I’m not quite complaining – our individual holdings have treated us really well over the last year or so (e.g. this month’s loss is less than last month’s gain). This is the downside of holding a single (or two in this case) stock – volatility. We are no longer adding to our individual stockpile though – these days we sell as soon as we get a stock grant and convert our RSUs to nice diversified index funds. The stockpile is a remnant of the past, and selling these old stocks would cost us a pretty penny in capital gains, so I’m hoping to hold on to them until I retire and then convert them over to VTSAX.

On the path to financial independence june 2017

The Financial Independence Plan vs. Reality

Our plan for 2017 calls for us to add a total of $160,000 to our stash this year. How are we doing so far?

YTD we have saved and invested: $163,710.99
YTD market growth: $98,021.83

 

In Dec 2016, when I revised our savings goal for 2017 and upped the ante from $120,000 to $160,000, I thought we were shooting for the moon. Well, we’ve landed on the moon half way through the year, and I clearly don’t know shit about forecasting our savings. Given my abject failure to set a reasonable goal, I’m not setting a new one for 2017. We’re just going to keep saving as hard as we can and see where we end up. 

As usual, I’ll end this monthly update with the Stairway to Heaven.

 

1280 days to go!

Financial independence status: Ahead of the plan.

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12 thoughts on “On the path to financial independence: June 2017”

  1. Nice one… Not setting a goal, trusting the system is what we do now. A goal men’s a target and deadline Nd reviews. That means stress. I do not want that.

    Enjoy the pool.

    1. The pool is so much fun in the hot summer months. And then the rest of the year the memory fades and I curse and grumble at how much it takes to maintain.

  2. Gahhhh, sorry about your “gift of homeownership.” We, too, awoke one day to a horrible leak that flooded our entire house in one inch of water. Surprise!! Sorry about the hot weather; you’re a hoss for setting the A/C at 84! I try to set it to 79 and Mr. Picky Pincher (the skinniest person in the house!) damn near riots lol.

    1. Oh that is SO much worse that mine. That must have cost you a pretty penny to fix.

      We have to set it to 84 now to make up for all the AC usage in the spring. Mr. BITA has bad pollen allergies and all through spring we had to keep the house tightly shut, so the only way to get cool was to turn on the AC. Now that the flowers have calmed down, we are trying to make up for those electricity bills.

  3. Question for you: It seems on average your company stock provides about 10K saving a month, and mostly single handedly beats out taxable and 401k contributions (which combined come to about 10K). I am in the bay area and my company currently doesnt do employee stock, however I have a super flexible job that I like. I am considering moving since I’ve never actually calculated the opportunity cost of not having stock. I assumed employee stock option or rsu’s added 40-50K a year to the base (which I am ok foregoing) but seeing your math is making me salivate, and see what I’m missing out on. Could you ballpark for me how much you’ve added to your base salary from your stock options in good years -say 2013 to now, yearly?

    1. RSUs, ESPPs and bonuses represent a huge chunk of change for us. I can’t give you exact numbers because we don’t divulge our salaries on the blog (at least not yet) – but I will say this: stock is a BIG factor for us. It would add years to our FIRE date if we were trying to get there just on our base salaries. Here is another way to think about it: if you consider that our combined salaries put us in federal tax bracket x, then if you add in our pre-tax stock amounts, that generally moves us to tax bracket x+1.

      Having said that, a lot of flexibility at work is worth it’s weight in gold. It is hard to put a $ amount on that kind of day to day happiness and lack of stress.

  4. Thanks for helping with the parent-guilt over not buying one.single.picture from our kids season in soccer. I love that 7 M&M’s worked. I got off with one hershey’s kiss each (that I won for liking a Facebook Page).

    Your savings rate is amazing, make that mind boggling. Keep up the great work and thanks for sharing with us.

    I’m a new follower so can you remind me what value you’re working towards?

    Sarah.

    1. You are welcome. One hershey’s kiss is pretty impressive stuff. We haven’t bought her school pictures either – they take them twice a year and charge us $25 for a _single_ hard copy – we have to pay extra for a digital copy. Daylight robbery. She has made the decision easier though recently, by pulling the most godawful faces every time they try to get a picture of her.

      Appreciate the kind words about our savings rate. In the spirit of full disclosure though: while I will not argue that the absolute amounts we save are pretty baller, as a % we are pretty average for the FIRE crowd (I mean, we’re not saving 80% or 90% of our incomes). We happen to make high salaries, and so our savings are high – it is more a function of how much we make than how awesome we are at saving.

      We want to be able to withdraw $100k a year at a 3.5% withdrawal rate.

  5. Wow! I had no idea you’ve gone super gung ho on your blogging and FIRE plans since you started commenting on my site a while ago. Well done! What is your net worth target at 2021 to be able to withdraw $100K/year at 3.5%? I’d love to read that post.

    1. Our NW target is 2.8 million. We won’t get there in 2021 though. 2021 is phase one of our plan, when I retire. We should be a goodly chunk of the way there by that time. Mr. BITA will continue to work a bit longer and get us the rest of the way there. Once I retire we will primarily be relying on investment growth to get us there – our savings rate may drop from $250k-280k/year down to around 60k/year during those years, because one option on the table is for Mr. BITA to either start working part time, or take up a different job that pays less than his current job does.

      We are open about our monthly savings on the blog – but we have not (yet) disclosed our current NW. The intelligent reader can certainly piece it together from all the breadcrumbs littered across all the posts. I know we will come around to disclosing eventually – we just aren’t there yet.

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