At the end of every quarter, I’m hoping to share a snapshot of my current finances. This includes what I’m invested in, their values the change over time – all that good stuff. This is my first report, so if there’s something missing that would be interesting, feel free to ask!
There are things I’m intentionally not sharing. Since I don’t blog anonymously, sharing my income is something I’ve decided not to do. I will, however, share my savings rate, and probably mention my spending at some point. A clever sleuth could probably piece things together – but at least you’d have to work for it.
Account Value Over Time
Let’s get right into it! On October 1, 2017, the total value of my investments was up to $1,088,008.50, up 26.37% in the last 12 months! That includes investment gains plus new savings – so that doesn’t mean the market is returning that much (but I can dream, right?).
If things go well, I’m on pace to double total investment value in about 3 years, which seems pretty unreal. About 75% of that growth can be attributed to a really good run of the market. The other 25% is dollar cost averaging a windfall from before I started tracking.
As far as my specific investments go, I’m working towards my ideal asset allocation. I could get there right now by selling funds and rebalancing, but then I’d be on the hook for capital gains taxes. Instead, I favor rebalancing by controlling what I invest in going forward.
|401k||Spartan Bond Index||$76,025.86||6.99%|
|Roth IRA||Vanguard REIT||$47,250.69||4.34%|
|Roth IRA||Vanguard Total Bond Market||$31,259.50||2.87%|
|Roth IRA||Vanguard Total Intl Bond Admiral||$30,319.33||2.79%|
|Brokerage||Vanguard Small-Cap Index||$70,478.52||6.48%|
|Brokerage||Vanguard Total Intl Stock Index||$243,702.37||22.40%|
|Brokerage||Vanguard Total Stock Market||$457,956.82||42.09%|
|Brokerage||AAPL & TSLA||$52,930.63||4.86%|
I break these down by category and compare them with my ideal allocation in order to see which areas I should invest more into in the future.
This makes it super clear that I’m crazy underinvested in bonds, overinvested in stocks and underinvested in speculative assets. I’m currently dollar cost averaging some of that cash into Bitcoin and Ethereum and investing any new earnings into bonds. One way I’ve been handling this is by changing all of my funds so that their dividends aren’t reinvested. Instead, they go to cash, and from there I invest them back into bonds.
The Small-Cap Index, AAPL and TSLA are all legacy funds. AAPL and TSLA were originally part of my 5% that I consider to be “speculative” but I’ve decided to reclassify them as general US Stocks. Small cap is a tilt in the portfolio back when I thought that was a good idea. I wouldn’t do that today – instead favoring a more simplistic three fund portfolio.
Spending & Savings
The last 3 months haven’t been kind to my savings rate. My SR over the last 3 months was 34%, but it seemed like I was spending money left and right. My goal is to get my spending down under $4k/month – which I hit sometimes. Even for that $4k, 75% of it would be going towards 3 things – home, travel, and luxuries. I’ve mentioned that I Don’t Want To Be A Landlord, but I’d also prefer to own a much cheaper & smaller house. A full half of my expenses are house related – mortgage, taxes, utilities, internet, HOA, home maintenance and home improvements. My current house was bought years before encountering minimalism and I bought more than I needed.
My largest expenses over the last quarter were:
$1,700 in food. How is this even possible? This includes a few fancy dinners out for the two of us, buying a bunch of food for the hurricane, and switching over to a shared credit card we both use for shared food expenses. September is Magical Dining Month here in Orlando, where you can get a 3-course meal for $35. Once you add a tip and some drinks, you’re spending $130 for a dinner that might normally be over $200. If you break this down per person, per month, it’s $283/person/month, which sounds a lot less bad. This amount doesn’t include Mrs. Minafi’s lunches though.
$900 in home maintenance. Between a yearly homeowners association fee, pipe splitting from the hurricane and some other things, this was much more than I expected to spend in this one. If given the option, I wouldn’t recommend buying a house with an HOA – unless it’s a condo.
$1200 in transportation. I pay for insurance 6 months ahead @ $110/mo + gas and tolls here in Orlando. Even though my car is paid off, the average yearly amount for the privilege of driving is about $223/month. I long to live in a place where I don’t need a car.
$1,400 in travel and gifts. Mrs. Minafi and I spent a weekend in St. Petersburg for her birthday. I grew up here, but the city is sooo different than when I was a kid. There are breweries everywhere, amazing food and a thriving nightlife. We stayed at The Vinoy (on Starwood points converted to Marriott points) and had a blast.
Here’s a full look at my spending broken down by category.
Minafi Spending by Category
|Travel & Luxuries||$6,335.00||$2,468.00||$791.00||$1,066.00|
|Education & Career||$997.22||$729.17||$702.00||$269.82|
That brings my total YTD spending to $42,762.88. At that rate, I’m on track to spend $57,000 this year. Unfortunately, our spending will be a bit higher, since we’re pre-paying $10,000 for a trip in 2018 + buying airfare for it. I’m estimating yearly spending around $67,000 all told.
A large portion of these expenses are shared between Mrs. Minafi and I. Home, entertainment, travel & luxuries, food and other contain almost all of our shared expenses. Transportation, Personal Care and Education/Career are the largest areas of difference where we both charge things on our own credit cards. We’re still in the process of joining our finances, and by 2018 these expenses may end up going up as we further join expenses and accounts.
Here’s a breakdown of what these categories include:
- Home – Mortgage, insurance, taxes, HOA, maintenance, improvements, utilities.
- Transportation – Gas, fuel, tools, AAA, maintenance, car insurance.
- Entertainment – TV, internet services, alcohol, and bars.
- Travel & Luxuries – Electronics, travel – most anything discretionary.
- Food – Groceries, restaurants, and coffee.
- Education & Career – Education items, cell phone, Minafi expenses, taxes.
- Personal Care – Medical, dental, clothes, fitness.
- Other – Gifts, pets.
I’ve written more about what’s in these categories before if you’re curious on how I came to use these.
Looking at this data, a few things stand out:
- I spend a lot on housing. This includes everything needed to live in my house – mortgage, taxes, insurance, HOA, utilities, maintenance, and improvements. There’s no question that a change here could have the biggest impact.
- Q1 Luxuries were high. We got married and went on a honeymoon at the end of Q1 through the start of Q2.
Travel will be crazy high in Q4, but I’m hoping all other categories go down.
Savings Rate Over Time
I’ve been using savings rate as a lifestyle inflation canary for the last few months, which has been much more helpful than seeing the month over month rate. We have some potentially large expenses in Q4 coming up (including a $10k trip to Vietnam, Laos, and Cambodia I paid for this week!), but I’m still hoping to get the 12-month rate over 50% by sometime next year (before that would be unrealistic).
The savings rate is based only on spending and income (job + blog + any side income + selling anything + returns).
Spending By Category
I split my spending out by category and use Google Sheets handy
SPARKLINE function to get a pulse on spending.
This made it clear that food and transportation in the last month were out of whack. Unfortunately, sparklines don’t do justice when payments are done semi-annually. I’m excited that in Q4 I finally left AT&T and moved over to MintSIM – which costs only $20/month for unlimited talk, text and 5GB of data a month.
The Road to Financial Independence
If you’re looking at the above stats (namely $1.08m savings, spending $48k/yr) then you might be wondering if that means I’m right on the edge of FI? I think with the right cuts (ahem not spending 30% of my income on travel & luxuries), I’d be there today. I track a few FI related numbers in my super-duper-spent-way-too-much-time-on-sheet.
It’s been interesting to see how I’m doing on these 3 levels. I’m in no rush to retire, so there’s currently no point on this chart that would trigger a major life change. My current SWR at my yearly budget is around 4.9% – which isn’t too shabby. When I say “my yearly budget”, it is optimistic. 2017 was a year of getting married and taking 2 honeymoons (because why not, right?), so it’s less in line with our projected spending going forward. With that budget and my investments at any given month, I can calculate what my safe withdrawal rate would be over time.
Goals for Q4
There are a few life events happening that I’ll be writing about in Q4 that could have serious impacts on finances. I’ll play it day by day for now making plans around the things I can control:
- Keep away from buying clothes. I’ve been great about this so far this year.
- Get food costs under control. There’s plenty of room there for improvement.
- Spend more time appreciating what I have! (free activities especially)
What are your goals for Q4? What are you invested in? How’s it doing?