Net Worth Q1 2016

Since this is the first time I’m posting our net worth, I’m including every quarter since we combined finances and came up with our common goals.

As of the close of Q1 2016, our net worth is $-38,735.42.

On the plus side, this number does provide material so we have something to cry ourselves to sleep with each night.

On a real plus side, our net worth was $-97,172.34 only 18 months ago.

This rapid rate of building wealth is part of the reason why learning about personal finance is sexy.

Seeing as how this is my first Net Worth post, I will clarify a few items and offer up some additional details below.

These are my guidelines and they reflect my views on tracking my net worth.

My definition for a savings rate: contributions to investments, payments of debt & cash used to build our cash buffers. I do not include interest paid on student loans.

As I prepared this post I realized my excel file doesn’t itemize the interest paid on our student loans. This means our savings is overstated in each quarter of 2015 by a total of $11,423.08 due to my girlfriends’ student loans coming out of forbearance.

Forbearance – the real F word – is a temporary status during which a borrower is allowed to reduce or forego making regular payments without damaging their credit. That sounds like a nice break, but the catch is that interest continues to accrue. Our particular situation resulted in one student loan being in forbearance for six months and another for a full year.

Obviously this was a time when we were having our asses handed to us and it took a while to get our situation figured out.

Our 2015 savings rate ended up being 23.5% post tax. The quarterly numbers in the chart reflect higher numbers as they include interest as I mentioned above.

Our goal for 2016 is to hit a post-tax savings rate of 50%.

The most critical number I review each quarter is not the increase/decrease of net worth, but our ‘savings rate’. The savings rate is within my control whereas the value of my equity portfolio is determined by factors outside of my control.

That is basically a wrap for Q1 2016. I’ll be sure to post up a similar summary for the 1st quarter of my blog soon – hint: revenue = $0 :’(

Additional guidelines/details for anyone who is still reading at this point:

My First Guideline is that I am in a committed relationship with my girlfriend. This means ‘my net worth’ and ‘her net worth’ have been combined to form “Our Net Worth”. This is the only number most reflective of our journey to financial independence, so I will refer to our net worth in all future posts.

Being in a committed relationship where you can trust your partner with financials gives us room for money saving opportunities. One example from this last quarter: I paid the majority of the credit card bills while my girlfriend focused on finalizing her 2015 IRA contributions. Our teamwork led to a tax savings of $1,437.50. +1 for taxes!

Second guideline for me is Don’t Forget Guideline Number 1. It might be tempting to view my financial situation and be proud of the accomplishment of being at net worth positive, but this is a distracting fact. My girlfriend and I are in this together for the long haul, so it would be foolish to isolate our individual circumstances.

My Third Guideline is to stay respectful of the process and to enjoy it. Financial Independence involves going through phases and it is always helpful to remember that we do what we can, but no one is perfect.

As such, we will have holes in our budget that we will work to patch up, but they shouldn’t cause us too much stress.

As long as we keep at it with the big stuff, then we shouldn’t sweat the small stuff.

I know that is easier said than done. Still gonna say it.

One final note about our only major purchase recap from Q1: 5.6k Hawaii Trip

We celebrated our 2nd anniversary — of dating, not marriage…yet 🙂 — with a trip to Hawaii. We found ways to save money via large items such as AirBnb and finding ways to utilize credit card points. We even found a few frugal opportunities to save while we traveled back home.

Altogether, with airfare and lodging included, our 16 day Hawaii trip came out to ~$350 per day for a total cost of ~$5,600.

This might seem like a lot of money, but we planned far in advance for this expensive trip and we saved enough of our money to never feel guilty about enjoying our time.

Master Distiller

*N/A = I did not have the prior quarter numbers to compare the increase/decrease in my cash buffer and so I couldn’t calculate the total savings rate. I didn’t bother tracking income since the savings rate information was missing.

26 comments… add one
  • ambertree Apr 2, 2016, 9:03 am

    Some great progress. When do you estimate to be debt free?

    It is interesting to see how you put the emphasis on “our”. As I am married, this is obvious for us. It is indeed a journey to do together.

    • Distilled Dollar Apr 2, 2016, 10:00 am

      We’re on track to hit a net worth of zero before the end of this year. My goal is by Nov 2016.

      As for debt-free, we’ll be FI before we ever end up debt-free. Since we’re not accelerating our student loan payments, we will have those for another 8-9 years. After this, I would expect us to have a monthly mortgage payment or payments.

  • Apathy Ends Apr 2, 2016, 11:42 am

    “The most critical number I review each quarter is not the increase/decrease of net worth, but our ‘savings rate’.”

    Couldn’t agree more, net worth is a product of meeting goals and your savings rate. I have written a few posts about how I view those benchmarks.

    Just curious – have you refinanced your student loans for a lower interest rate? If not – definitely look into it!

    Nice work!

    • Distilled Dollar Apr 2, 2016, 12:47 pm

      I looked into a few different services that offered refinancing, but I haven’t seen any offers that matched my interest rate of ~5.3%. I just checked SoFi again right now and they offer 5.75%.

      For my girlfriends’ loans, the rate is also relatively low at ~5.5%, but we had a different issue because of the loans coming out of forbearance. We are planning on checking again once she is eligible to refinance.

      If there’s any specific refinance services you recommend, let me know!

      • Apathy Ends Apr 2, 2016, 12:55 pm

        I used SoFi and recommend them, my variable rate was under 4% after the auto pay discount. It has ticked up a bit with the LIBOR rate rising but still well under my previous rates.

        • Distilled Dollar Apr 2, 2016, 1:06 pm

          I’m curious, how much and how often has your interest rate gone up?

          I checked SoFi again on the variable rate and they are offering me 4.5% (after the auto pay benefit). Refinancing would save me $15/month, but I’m not sure how the variable interest portion will play out.

          Any feedback on this? My concern would be if I refinance and the rate goes up – eliminating my $15/month savings.

          • Apathy Ends Apr 2, 2016, 2:51 pm

            It is up about .4 of a percent since I signed up about 7 months ago. My average interest rate was higher than yours so my “break even point” is over 6% interest. If it gets up to that point I will probably re-finance again for a fixed rate. The money I save between now and then is worth it – as long as it slowly rises, not in large jumps

          • Apathy Ends Apr 2, 2016, 3:00 pm

            Actually I just checked – it has gone up .25% (essentially wiping my auto pay discount out)

            Hopefully the LIBOR rate chills out for a bit or goes down…….

  • Ty @ Get Rich Quickish Apr 2, 2016, 11:54 am

    Nice work doubling your assets in 18 months! And that net worth is rapidly climbing in the right direction – well done!

    I like to see how others calculate their net worth, what’s included vs. what gets left out; how savings rates are defined and what that rate is, etc. so thanks for sharing this info!

    • Distilled Dollar Apr 2, 2016, 12:28 pm

      I’ve noticed ‘savings rate’ has been all over the place as well, haha. Some people prefer pre-tax and others prefer post-tax. Some exclude mortgage payments or student loans whereas others include those payments and the interest on those payments.

      I suppose that’s another reason why its considered personal finance.

  • Allan @ The Practical Saver Apr 3, 2016, 4:07 pm

    This is great. You guys have gone a long to reducing your debt. It looks like you guys are on your way to $0 debt in a year or so. Financial independence is almost there.

    I was looking at 3/31/15 and 3/31/16, and realized your debt decreased by around 50%. That is a big accomplishment. Your savings rate for 3/31/16 is really outstanding.

    Kudos to you guys.

    • Distilled Dollar Apr 3, 2016, 9:05 pm

      Thanks Allan. Part of the reason the savings rate jumped up was also because of starting this blog. Putting our goal out there in the public has reinforced our commitment to seeing things through this year.

      Based on your comment, it looks like you were looking at our net worth # and not our debt/liabilities #. Haha, I wish our liabilities were cut in half over that same period, but our focus has been on maximizing our retirement accounts instead of paying down student loans.

      • A4L @ Jun 15, 2016, 10:54 pm

        I’m curious, why the emphasis on maximizing retirement accounts, instead of paying down debt? Have you done analysis on what the tax benefits of maximizing the retirement accounts are vs the savings on interest if debt is paid down earlier? I’m going to hunt around to see if you’ve got a post on it already, but off a first glance, I’d assume over the long run you’d be able to realize a bigger return on paying down debt faster. Either way, the progress from 97K to 38K in 18 months is impressive. I’m looking forward to seeing what you’re at for Q2!

        • Distilled Dollar Jun 19, 2016, 10:53 am

          Great question, since my debt approach is typically seen as unusual or unconventional. I’ll recap it here and then end this comment by talking about the tax savings.

          For debt,

          A) We are paying down credit card debt rapidly. I’ll write a future post about this but we did take advantage of setting up a few 0% interest transfer balances last year and in the process racked up 13.1k in credit card debt at the start of this year. By the end of June, we might be as low as 4k on all credit card balances, which to me has been an amazing journey of paying down debt. Although there is 0% interest, we are still rushing to pay this debt down.

          B) We don’t have a mortgage or car loan(s), so that covers these two debt items.

          C) We do have over 100k in student loan debt, but we are opting to optimize our pre-tax savings accounts first and then we will either invest in real estate with the excess cash flows, or pay down student loan debt. I go into FULL detail here in another post that you might like reading.

          As for tax implications, we are planning on retiring early which will give us a large run way to take advantage of a few tax saving strategies while also allowing us to tap into our retirement accounts early, penalty free. The chief strategy here is the IRA Conversion Ladder which I haven’t discussed here before, but you can learn all about it from this great post by the Mad Fientist.

          I hope this answers your questions!

          • A4L @ Jun 24, 2016, 1:22 pm

            Yea that definitely makes sense. That’s some awesome progress on the credit card debt in half a year. And I love that you’ve thought through the math on whether its more beneficial to put money into pre-tax accounts (especially if you’re going the early retirment/conversion ladder method you mentioned) vs paying down those student loans.

            Totally agree on the tax savings on retirement accounts if you’re planning on retiring early. The IRA Conversion Ladder is an awesome way to take advantage and use those retirement accounts. I’m not sure if I want to go down that path yet, so I’ve been doing Roth Contributions while my income is relatively low compared to what I’m expecting in the future. I’ve tried to read through and listen to most of the Mad Fientists posts and podcasts, and one that I thought was crazy that you may be able to take advantage of too is the Mega Backdoor Roth. I know you mentioned you work for one of the Big 4, and I think the one that I work for has a 401(k) plan that meets all of the requirements to do it. I’m not quite making/saving enough to do it yet, but I think by the time I’m a 2nd year senior I should be able to swing it. It doesnt have the same benefit of pre-tax now and then minimizing tax in the future with the ladder, but it can be an extra cushion you can use for the first few years before your ladder kicks in.

  • The Green Swan Apr 4, 2016, 8:51 am

    You two have made some great progress in the last 18 months, congrats. You have a lot of great things going for you, (i) you’re both young, employed and have good earning potential, (ii) you are in it together with the same goals, (iii) you are definitely financially literate and you have a calculated approach to managing your personal finances, and (iv) you are focused and determined to grow your net worth.

    Kudos to you. I look forward to watching your net worth continue to grow and grow!

    Also, good for you for celebrating your anniversary in style. Staying focused on living frugal and saving takes a lot of hard work and it is important to live a little as well. And an anniversary is a great thing to celebrate.

    Congrats again, and keep up the good work.

    The Green Swan @

    • Distilled Dollar Apr 5, 2016, 7:18 am

      Thanks for the comment The Green Swan! We couldn’t be happier with the progress we’ve made so far. We’ve built up a lot of momentum, so now we need to stick with our plan!

      The Hawaii trip was a big expenditure for us, but as you said, its important to live a little. Since we planned our trip well in advance, it gave us something to save for. In some ways, the expensive trip helped offset purchases from earlier in the year.

  • Tawcan Apr 6, 2016, 1:35 pm

    That’s fantastic progress you’re making. Becoming debt free by end of the year will do wonder to your overall net worth moving forward. Good savings rate is a powerful tool, continue use this tool to grow your net worth. 🙂

    • Distilled Dollar Apr 7, 2016, 6:55 am

      Yep, I’m pretty excited about becoming ‘worthless’ by the end of the year, haha.

      My girlfriend doesn’t think we can do it by November, so we’re in for a showdown!

  • Dividendsdownunder Apr 7, 2016, 10:04 pm

    This is a really cool update, thanks for sharing. I love how the net worth is getting higher in every period. Getting close to $0!

    I think it’s a great thing to consider your finances as joint with your girlfriend as that’s that best way to see your finances; a joint thing that you are both 50% of and each have a huge role to play in them. Good luck for the rest of the year (and your life 🙂 )


    • Distilled Dollar Apr 9, 2016, 2:24 pm

      My girlfriend loves seeing the number getting closer to $0. It is reassuring to know there is a lot of positive momentum moving in the right direction.

  • The Fire Guy Apr 24, 2016, 10:56 pm

    Impressive movement and looks like you are going to be in the black in no time. Keep it up and soon your assets will do the heavy lifting for you guys! Look forward to watching the growth.

    • Distilled Dollar Apr 25, 2016, 8:14 pm

      I’m looking forward to the day our net worth fluctuates more than our savings for that quarter. I know I shouldn’t be focused on that number since it means I’m looking at fluctuations in the market instead of our savings rate, BUT it will be a cool sight!

  • Rudy SMT May 17, 2016, 1:53 am

    Being debts free will change your life…

    Keep up the journey.

    • Distilled Dollar May 17, 2016, 6:41 am

      Thanks Rudy! I imagine as the student loan debt becomes closer to zero we’ll have a mortgage or two by that point. If I had to put money on it, I would say we’ll be financially independent long before we eliminate all of our debt.

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