Freed by 50

Is it over? Can we call 2020 complete now?

Every month, right after I get paid on the 15th, I enter all of my account information into my net worth spreadsheet. I’ve been doing this for about a year and a half despite my belief that net worth isn’t a great indicator of financial shape. Today I made my last entry for 2020 and despite some pretty high credit card bills (from a renovation I’ll go over later), I finished 2020 way ahead of where I started. Lets get to the particulars…

My House

As we had planned for two years, our kitchen renovation started in late February. In fact, I ripped out my own kitchen just days before they locked down the whole country. Joy! Despite numerous setbacks and pauses, our kitchen was fully renovated and cost around $50k. This was fully budgeted for years, and a huge upgrade to our living and working space.

I’m also finally done replacing windows! Last year we decided to replace all the windows on the front of our house after I discovered the wind could blow out a lit candle through a closed window. This year we decided to do the back of the house after discovering two of the windows were rotten to the point that opening them would be hazardous. Total cost: $12k including a sliding door. I put this all on a credit card for the points and just paid it off a month later.

As listed in my goals for 2020, I finally sent a $30k lump sum payment to my mortgage, bringing it down to 17 years and right in line with the time my last kid will graduate high school. Speaking of my last kid…

My Family

In November we added another mouth to feed. Our third and final child was born and we couldn’t be happier (or more tired). That’s three babies since I started this blog! As with the other kids, he started getting an allowance right after we knew he was coming and I’m saving it all in an S&P fund. We also found out he was coming right after ripping out the kitchen and getting locked down. It was a fun time for everyone!

The Back Door Play

In September, my company opened up the ability to do in plan Roth conversions, or a Mega Back Door Roth!!! This coincided nicely with me reaching the 401k limit for 2020, and I tentatively dipped my toe into the plan by contributing the same amount that would have gone to regular 401k.

As of this next pay period, though, I’ll be contributing 21% of my after tax paycheck to this, which will max out my contribution of $35,500 after the $2,000 401k match I get from my employer. In order to fund this, I’ll be stashing my 2021 ESPP payouts in my checking account, as there will be a paycheck shortfall after 21% goes to the Roth conversion, 15% to the ESPP, and 13% to the 401k.

Net Worth

I think of net worth like weighing yourself once a month. It’s a great way to keep track of progress, but a terrible gauge of whether or not you’re in good shape. I say that as someone that’s lost 9 pounds since September and don’t feel any healthier. That said, I’ve been diligently tracking my own net worth for about 18 months and overall it’s been a good exercise.

I invested heavily into the stock market crash in March of this year, dumping two quarters worth of bonus and RSUs into the market as it plummeted. Thanks in large part to that, and front loading my 401k by jacking up my contributions for the early part of the year, I saw a sizeable increase in net worth this year. 30.51% increase to be exact. Also thanks to the mass exodus from New York City driving up home prices in my area, I’ve seen a decent increase in the value of my home, but I don’t love the idea of counting on equity, so I track my home price at a much lower number than what would be considered current market value. In the end, I saw a $233k net worth increase. To me, this number was shocking.

2020 Overall

I had a baby, completed two major renovations on my house, pocketed close to a quarter million dollars, and lost some weight. On paper 2020 was pretty damn good to me! There have been some drawbacks that aren’t as tangible, though. Even without social media I’ve discovered I don’t really like the way many people around me react to crisis. I also discovered I know a lot of people that are incapable of making decisions for themselves. This has put a strain on many of my relationships and made me wish I was surrounded by people who were a little more capable of critical thought, and made of stronger stuff.

My daughter started preschool this year and although she took to “mask culture” just fine, I don’t want her thinking this is in any way normal. I don’t want any of my kids thinking anything from 2020 is normal.