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Year End Status: 2017

It’s time to officially wrap up 2017 with our very first year end financial status.  Let’s see how we did in 2017!
First, let’s look at our spending by category for the year:
Our target spending was $39,000 and we ended up within 5% of that with $40,659.  Not too shabby.
Now let’s break that out by category to see what we spend all of the hard earned money on:
  1. Taxes:  Boooooo property taxes!  This line item is almost a fourth of our total spending for the year.  As long as we own a house we have zero control over how much we spend on this category.  With the changes to the tax code in 2018, owning a house in a state with moderate to high income tax, like ours, is going to feel a lot worse.  We plan on only having to pay property taxes for one more full year.  Transitioning to boat life means we get rid of this when we sell everything. We can’t wait to write that article.
  2. Food and Dining:  This one is a little more interesting because we have some optional spending.  Restaurants make up the biggest portion of spending.  We went out to restaurants 162 times in 2017 with an average cost of about $21.00.  This feels like a lot of visits with an average of 3 times a week.  $21.00 per visit doesn’t seem so bad since the vast majority of these were for both of us combined.  Definitely something we could work on if we had the will to do so.  For now, we are okay with freezing that spending.We had 59 visits to the grocery store with an average spend of $50.00 per visit.  We do really well here because we stick to store brands when that is an option, buy on sale and never buy more than we really need to limit waste.Finally the rest is money we spent on work lunches which we also have done really well on. Food is a bit pricey where FI Girl works, so she tries to bring snacks and lunch when she can.

    With that said, we spent a combined total of about $1,434 on this category for 2 people.

  3. Shopping:  Most of this category is dedicated to “hobbies” which is really continuing education classes and their related costs.  It’s a big chunk of spending and is definitely optional.  It’ll be pretty hard to spend like this on this category when we start traveling so we probably only have one more year of this at most. (FI Girl holds back the tears)
  4. Auto and Transport:  Parking makes up the biggest portion of this spending category.  FI Girl has limited options for getting to work and has tried them all.  The best of the terrible options involves parking in a garage for a total of $2,761 last year.  She was able to telecommute more this year to lower the cost somewhat so this is actually lighter than it could have been.  We did well on gas station trips and thanks to our fuel efficient vehicles we only spent $1,400 for the year between two cars.  The rest went towards oil changes / tires, brakes and local/state taxes.
  5. Utilities:  Heating oil is so annoying. Just saying. Fortunately, the price of heating oil has been lower the last couple years so that has helped us save a bit. To stretch our money further, we also conserve fuel by keeping our house at a cool 60 degrees Fahrenheit in the winter. (Brrrr!)  So overall not too bad for a large house.  The rest of the costs aren’t too exciting with electricity, water and internet rounding out this category.
  6. Vacation:  We spent $2,500 between the two of us on a 14 day transatlantic cruise and followed it up with three days in Barcelona before flying home. This works out to under $150 dollars a day which also happens to be our spend target for our future early retirement plans.  In order to do this we stuck to our value cruising rules.
  7. The rest (other):  It all adds up to under $3,000 and spans things like gifts, hair/makeup, doctor visits, Netflix and house repairs.

Overall, even though we went 5% over our target spending of $39,000, we are not too concerned.  We didn’t go into debt because of that extra 5% spending. It’s essentially a rounding error when compared to how much we saved last year and how much our investments returned. 

Even December was another monster month for our savings / investments:

We almost tripled our savings / investments target in December!!!  If you have been following our monthly statuses, this has been a trend nearly every month

At the beginning of the year we were depending on a high savings rate to get to our goal.  We were simply hoping that the market would be FLAT.  Instead S&P is up nearly 22%.  Personally, I’m hoping the reduction to Corporate taxes locks in most of these gains but in order for that to happen, we need to see companies do stock buy-backs and raise dividends.
Of course we are also approaching the longest bull run in history and we could simply be in a big fat bubble.  Saying that “this time is different” is usually a statement doomed to failure.
Right now feels good though, so let’s look at how much we gained for the year and how we earned it:

 Well……  that’s just ridiculous.  Our net worth increased by nearly $450k in one year. I had to check and recheck multiple times because I just didn’t believe it.

While our property increased by a disappointing 2.6%, our investments are way up for the year all around.  This is another reason why we still consider buying instead of renting to be our biggest financial mistake to date.

Just before year end, we hit another major milestone. One we were not expecting to hit in 2017. In December we hit the $2.1 million mark! Because these numbers didn’t feel real, I had to dig deeper to figure out just how much of this growth was influenced by the market versus our actions:

Based on the above chart, you can see that just our savings alone increased our net worth growth by a healthy $178K which is about 40% of our total net worth increase. This included our contributions to our 401K and Roth accounts. Our savings target for the year was $175K so this more than makes up for missing our spending target.
Our early retirement planning has been ultra conservative as we were only hoping for (and expecting) a flat market.  Growing our assets by $272K is more than a nice surprise and does significantly accelerate our FIRE date.  If you were invested this year it would have been hard to go wrong. (Again…a nice surprise. No crystal ball here)
So where does that leave us for our 2018 plans?  Even if the market goes down, we anticipate making 2018 the last full year worked in the corporate cube farm.  Our theoretical passive income (assuming 2.5% withdrawals) increased from 42K to 53K per year.  Our Boat Life plan needs 55K per year so we should be there between mid to late 2018.  Should be an exciting year!
And with that said, we are officially done with 2017.

We wish you all a very happy, healthy and successful 2018! Happy New Year!

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