Net Worth Q2 2016

Net Worth Q2 2016

We broke two different records this quarter:

Our net worth increased more over the past three months than in any other quarter ever! This was not an easy task thanks to the turmoil created by Brexit last week, but we stuck to our investment approach and benefited from a market rally in the last few days.

More importantly, we saved 44% of our post-tax income this quarter, which is the highest savings rate we’ve ever had.

That means we have hit back-to-back record breaking quarters!

Through the first six months, we have saved over 90% of what we saved in ALL of last year!!

One driver to this increased savings rate was the fact we reduced our grocery bill by over 55%. I’m preparing more posts in the coming weeks to outline the other large drivers of my budget this year so be sure to subscribe at the bottom of this article or check back in at a later date.

The goal for Q2 was to save $12,168. Excluding the value of my whole life insurance policy being cashed out, we ended up saving $10,717, or about 90% of our goal.

Altogether, we’re still on pace to accomplish our goal set earlier this year and to reach a net worth of zero by Thanksgiving.

Within this quarter, we did hit 100k in assets for the first time! It was quite the accomplishment, but I’m happy to say it was a product of our combined goals and attitude towards personal finance. My girlfriend had an excellent post where she talked about how we’re in it to win it – together.

If you’re doing the math in your head right now, then yes, we do have over 117k in student loan debt. You can read more about our unconventional approach to tackling student loan debt where we are focusing on maximizing our wealth instead of accelerating our debt payments.

As our assets grow, it will become more meaningful to focus on our savings rate as opposed to the fluctuations in our net worth. Our assets might take a hit in the market or be pushed up because of additional global optimism. Either way, we want to hone in on what we CAN control, which is our savings rate.

Forecasting Ahead — WAY Ahead


Based on a conservative 3% withdrawal rate and a few assumptions outlined below, if we kept at our current pace and stayed within our current lifestyle, we can expect to reach FI and “early retirement” by the ages of 33 (me) and 32 (future wife’s age).


Seeing financial independence as only six years away is CRAZY to think about!

I put “early retirement” in quotes because I prefer to view my path as transitioning from employee to investor. I don’t picture myself on the beach sipping on Mai Tais…at least not every week of the year.

So what are some of my assumptions in reaching FI in our early 30s?

I’m assuming we would be able to further reduce our expenses because of all the additional time we’d get back after no longer being tied to a conventional 40-hour work week. We could find more time to cook for example which would further push down our food budget. We wouldn’t need to book expensive flights on the weekend and could opt to travel only when deals become available.

I’m also assuming within the next 6 years my future wife and I will receive at least one promotion each within our career fields.

With all that said, our current goal is still to reach FI by age 35 because we want to increase our lifestyle in a few realms.

Of course, I completely glossed over the topic of kids, which I would expect would push back our FI date by at least 4 years. Based on reading a lot of other personal finance bloggers talk about their experience with kids, it sounds like 4 years might be overly conservative on my end, but that can be a topic for another day.

How was your Q2? Did you hit the goals you set for yourself? Are you starting to see financial independence on your horizon?

-Matt
Master Distiller

P.S. Check out our first net worth update by clicking here.

26 comments… add one
  • The Green Swan Jul 5, 2016, 6:37 am

    Great quarter, Matt and Mrs. Distilled Dollar! Great long-term goal too (although 6 years isn’t all that far off). It is great to have something to shoot for. Plus, I like the more conservative 3% withdrawal rate. Keep up the good work!

    • Distilled Dollar Jul 5, 2016, 9:07 am

      I’ve started using the 3% rule for now. I’m aiming to dive deeper into the 4% rule in the next year or two. Since we are still so far away from reaching out goal, it has not been a priority yet. Thanks!

  • Vicki@MSDLifeCoaching Jul 5, 2016, 6:58 am

    That is impressive work and focus! I wondered about the kids part 🙂 We have two and it is expensive – but if they are healthy and you have a plan for expenses, the numbers are nothing like what you read. You are on an awesome path and looking forward to following you! (Setting my teens to watch your work now too!)

    • Distilled Dollar Jul 5, 2016, 9:09 am

      Hah – now you know! 🙂

      We’re happy to have built our way up to this stage. The nice thing now is we already have a lot of momentum going for us with great habits in place.

  • TheMoneyMine Jul 5, 2016, 7:27 am

    Very good numbers you have this quarter and congrats on the savings rate of 44%. Increasing my savings rate has literally been an accelerator towards FI, which is now about 5 years away. So keep doing this great work, you’ll be there in no time!

    • Distilled Dollar Jul 5, 2016, 9:11 am

      Thanks for the comment – as our savings rate has been the biggest focus for us.

      It looks like we are on a similar timeline. I have seen a few bloggers talk about how the last few months can turn into a shorter period as it is easy to become a lot more frugal right at the end. Best of luck!

  • Jon Jul 5, 2016, 7:35 am

    Well done and keep up the good work! It’s great that you can already achieve FI within the next six years, that will give you a lot of options in how you want to live your lives once the kids come.

    • Distilled Dollar Jul 5, 2016, 9:12 am

      More options is what it is all about for us. We’re not entirely set on everything we want to do in six years, but we’re more than happy knowing our options will be expanded thanks to our approach FI date.

  • Apathy Ends Jul 5, 2016, 7:43 am

    Love the record setting quarters! Being FI at 33 is impressive.

    Do you think you will ever change your student loan stance?

    • Distilled Dollar Jul 5, 2016, 9:15 am

      For student loans, we’re set in our ways of maxing out our pre-tax accounts first. We are nearing the point, thanks to our savings rate climbing, where we will have additional cash each month.

      Right now we are saving for a down payment. After this, I can easily see us accelerating the student debt payments instead of investing cash post-tax. I hope that answers your question.

  • FinanceSuperhero Jul 5, 2016, 1:38 pm

    Great Q2 progress, Matt. You’ll be in positive net worth territory in no time what your savings rate.

    My wife and I have yet to sit down and try to pinpoint an FI date. I’m going to pencil that task in for our next family financial summit.

    • Distilled Dollar Jul 5, 2016, 6:13 pm

      Thanks! I’m happy to see our savings rate slowly climb, and I’m confident it will continue to edge up over time.

      Let us know how your discussion goes. Definitely sounds like a post-worthy topic.

  • Stefan @Mllnnlbudget Jul 6, 2016, 9:50 am

    Awesome job Matt, even with kids your FI is still very early so something you should be very proud of! Nice to see how all those budget cuts and having your gf be on the same page as you help. Best of luck man looking forward to the next quarter!

    • Distilled Dollar Jul 7, 2016, 8:15 pm

      Thanks Stefan – we’re real happy with our progress so far. The next challenge will be to make the next quarter even better.

  • Pamela Jul 6, 2016, 10:49 am

    Very encouraging numbers. Your progress to $0 net worth is promising and congratulations on hitting $100k in assets. That’s pretty cool.

    • Distilled Dollar Jul 7, 2016, 8:16 pm

      We can’t wait to see our net worth go from red to black, it will be a great day to celebrate.

  • Preston @TheDrunkMillionaire Jul 6, 2016, 12:17 pm

    Great numbers Matt! Awesome to see what you’ve been able to accomplish this past quarter. It’s great to follow along with your net worth updates as we share the same FI year/goal! Maybe someday I’ll work up the courage to post our net worth- you’re definitely motivates me.

    • Distilled Dollar Jul 7, 2016, 8:19 pm

      You should do it, but I know you also told some family and close friends about your blog. I feel confident posting mine because I’ve maintained at least some level of anonymity. For close friends who really care, I wouldn’t bother telling them anyway, so it is a personal choice at the end of the day.

      The positives to posting it is that it helps us stay even more accountable. There are MANY frugal tips and tricks I would not have pursued, so at least you should detail some of your goals (without mentioning net worth) to help keep you accountable.

  • Financial Slacker Jul 9, 2016, 10:23 am

    Congratulations on hitting your goals. I do like your comment about focusing more on savings % rather than net worth as your net worth increases. I think that’s smart. You can’t always control your net worth and by itself, it’s not as meaningful as other metrics. Although it is fun to see it increase especially as you hit certain thresholds.

    You’re also right about kids pushing back your FI date. Obviously, it all depends on how frugal you are once you have kids, but I’m glad we saved as much as we did before kids. They seem to cost way more than Ms. Financial Slacker and I put together.

    • Distilled Dollar Jul 10, 2016, 12:42 pm

      I love seeing our net worth getting closer to zero. Although we will def celebrate that day, it is as you mentioned, we care more about our savings rate than anything else.

  • Dividend Diplomats Jul 10, 2016, 9:47 am

    Distilled,

    This post is absolutely awesome your networth is actually “growing” by a phenomenal rate!! I try to go at least 60% on the savings rate – think there are more tweaks left? I can’t imagine how much cash flow will be opened up once the student loans are gone. Nice job and keep the rocket launched!

    -Lanny

    • Distilled Dollar Jul 10, 2016, 12:48 pm

      Yep, we’re pretty excited about our current rate of investment. Despite being at a net worth negative, I know we are in a great spot because of the habits we’re forming today.

      Thanks for the comment Lanny!

  • Rudy SMT Jul 11, 2016, 6:57 am

    You talk about kids and one point I can make is the later the better.

    Not only the costs involve, but you drastically reduce your possibility to move around for career opportunities.

    So, first settle the career, and after make some baby.

    • Distilled Dollar Jul 21, 2016, 6:13 am

      That’s a good point, although I suppose we haven’t thought about it at that level.

      We are happy that our careers are growing. I feel confident in mine because there is a lot of job security in being a CPA.

  • Dividends Down Under Jul 22, 2016, 12:43 am

    Hey Matt, awesome job. We aren’t yet officially tracking our net worth each quarter, though we may do soon. You are doing an awesome job! Keep it up buddy, it’s amazing seeing how much your net worth is growing each quarter.

    Tristan

    • Distilled Dollar Jul 22, 2016, 4:59 pm

      Once I started tracking my net worth it became much more motivating to increase it. Plus, it definitely is reassuring to see the numbers go up over time, despite the level of debt we’re working with.

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