Welcome to the second TVM Financial Update of 2023.
The purpose of these quarterly financial updates is to crunch the numbers, visualize the data and share our progress towards becoming financially independent.
Let’s dive in!
Life Update
In the last 90 days…
Parenting has become a lot more fun. I’m not going to lie, the first year of raising a kid is tough, like really tough. While being parents has been the hardest thing we have ever done, it is also the most rewarding. I know it’s cliche, but they really do grow up so fast… I about lost it the other day when we got them new shoes and they gave us the biggest smile while stomping around. We are learning to treasure every moment <3
We went on our first vacation in what feels like forever. Mrs. TVM & I took our first vacation in about 1.5 years. We had our parents watch the TVM Pup & Baby and spent 4 days in our favorite place on earth: The Florida Keys. Between the beer, amazing food, kayaking and just total relaxation… we recharged our parenting batteries!
Mango season has been in full swing π Not only have we enjoyed approximately 34 mangos off our own trees (~30 pounds), but we also went down to West Palm Beach and got 10 more pounds! Mango season is my favorite time of the summer and it’s just been a blast enjoying fresh fruit everyday π
Now on to the dinero.
Financial Update
A quick note: Nothing on this site should ever be considered advice, research or an invitation to buy or sell securities, please see my βTerms & Conditionsβ page for a full disclaimer.
Progress to Financial Independence
From Q1 2023 to Q2 2023, our % FI increased 1.2% from 13.7% to 14.9%.
As a reminder, our % FI is a function of two variables:
- Our average monthly spending
- The total balance of our FI Assets
From a spending perspective, the last three months have been pretty vanilla. While there were a few large expenses here and there… spending has really mellowed out with us not doing any major house projects this year.
From a FI Assets perspective, we’ve been dollar-cost averaging as usual. Furthermore, we are at that the point where we are starting to see the crest of the “snowball” as compound interest continues to do it’s thing.
With that being said, letβs take a look at our FI Assets in more detail.
Asset Breakdown
The above table is a breakdown of our current FI Assets.
Looking at our 401(k), a whopping 74% of Q2’s growth can be attributed to positive investment returns while the other 26% came from our dollar-cost averaging strategy. What’s crazy is that this is a complete 180 from Q1 where 72% of the growth came from automated contributions while the other 28% is from positive investment returns. Compound interest is fun π
From a pure percentage growth perspective, our HSA is continuing to lead the charge. However, unlike the much larger 401(k), 54% of Q3’s growth was from pure savings while the remaining 46% came from positive investment returns. It’s always exciting to see that the compound growth is getting close to earning just as much as brute force savings… π
After 6 months, our Roth IRA finally turned green! It’s not by much… but hey, green is green! As I have mentioned in previous updates, this is lackluster growth is most likely due to the rising interest rate environmentβs impact on REITs. And as I’ve also said before, we will be liquidating this position and going the ole VTSAX route. I need to stop being so lazy and just do it π
Savings Rate
Our 2023 savings rate is currently at 30%.
Given that our Q1 2023 savings rate was 25%, we are happy to see that we are now aligned with our 2023 target! While we do have some big expenses on the horizon in Q3 (6 month auto. insurance premiums, contribution to our child’s UGMA account, etc.) I am hoping that we can maintain or even exceed our current savings rate.
With that being said, if we do any crazy spending, it will be the “good kind” in the form of trying to make a significant dent in the personal loan that we took out for our AC. We would LOVE to get rid of this loan by the end of the year…
Speaking of spending…
Monthly Expenses
Letβs take a look at our Expense Sankey, aka Mrs. TVMβs favorite data visualization.
The above graphic visualizes how our monthly expenses rank month over month. The percentages in the individual bubbles represent our % spending for each category for that month.
Here are some of the major spending highlights from this quarter:
- April
- Household: We had a small spike in spending from a semi-annual AC tuneup.
- Month-to-Month Discretional: While I love personal finance, I hate doing my own taxes… so we paid a CPA to help us with that this year π The other blip in spending in this category was for this website; I am on an annual hosting payment plan, so that had to paid to keep the lights on around here π
- May
- Healthcare: We paid some lingering medical bills from a procedure that I had done back in March.
- Household: We made an extra payment on our AC loan. We also bought fresh supplies for this upcoming hurricane season.
- Month-to-Month Discretional: Mrs. TVM and her family went to Universal Studios π We also had some custom metal work done for a ‘pinterest-inspired’ idea that we’ve wanted to have made for our house for a long time.
- June
- Personal Hygiene & Clothing: After two years of $17 Walmart glasses, I got me a fresh/nicer set of glasses π
- Household: We made an extra payment on our AC loan. I also got some materials for some landscaping projects that I wanted to make some progress on (fresh mulch, new lawn mower blades, etc.).
- Month-to-Month Discretional: We did a day trip to West Palm Beach and got 10 pounds of mangos for Father’s Day π I also had some costs associated with paperwork/domain registration for a business that I’m starting up.
Home Value vs. Mortgage Balance
From Q1 2023 to Q2 2023, our home value increased 1.6%.
As I have mentioned in previous updates, 2022 was the “Year of the Money Pit.” In fact, I just published a case study documenting all the money that we have poured into our house.
As a result, we have more or less frozen the ‘house projects’ budget until our AC loan is paid off… which is fine by us π
Final Thoughts
From a life & financial perspective, this spring/summer has been fairly solid.
Financially, I believe the lack of hemorrhaging house projects has lowered the financial stress associated with whether or not we are able to hit our other financial goals. Personally, this has helped us focus our energy instead on being more present.
Thank you for reading! π
_
Full Disclosure: Nothing on this site should ever be considered advice, research or an invitation to buy or sell securities, please see my βTerms & Conditionsβ page for a full disclaimer.