2016 Financial Review
Hello and welcome to my 2016 financial review! It was a blessed year with lots of new experiences and learning. From a financial standpoint, I received a small raise at the beginning of the summer (around 8%) and my wife started a new job in the fall that also gave her a slight bump in pay. We moved to a new apartment that is a few hundred more per month but we both think is worth it due to the fact that we enjoy it so much more and it is in a much better area. Paying down our student loans is still our number one priority but we are also making a point to enjoy life and try new things.
I finished my undergrad degree almost 5 years ago (yikes!) and as soon as I was on my own and working full time, I decided that I wanted to get out of the rat race as soon as possible. I developed a passion for personal finance, investing, trading stocks, and basically anything that would help me reach my goal of financial independence.
I was never a big spender so it was not a huge stretch when I opened my first retirement account, which was a Roth IRA, and set up a monthly contribution. I also opened a brokerage account where I would start investing and later trading equities. Although I wanted to pay off our loans as soon as possible, I knew that it would take many years and saving for the future could not wait.
Each year we have been making more and putting more towards loans and saving. Our only debt is student loans and I was able to negotiate our highest interest loan down this past year so our highest percent is now 6.55%. We both have a 401k and Roth IRA that we contribute to.
There is not much else to say so let’s dive into the numbers.
ASSETS (Q over Q)
| Retirement savings accounts | Brokerage account | Liquid cash | |
| Q4 2016 | $34,601.87 | $6,290.73 | $8,030.22 |
| Q3 2016 | $31,043.05 | $6,194.33 | $6,925.70 |
| % Change | +11.5% | +1.6% | +16.0% |
(YOY)
| Retirement savings accounts | Brokerage account | Liquid cash | |
| Q4 2016 | $34,601.87 | $6,290.73 | $8,030.22 |
| Q4 2015 | $20,715.93 | $5,228.28 | $6,198.14 |
| % Change | +67.0% | +20.3% | +29.6% |
Current Assets = $48,922.82
This is obviously an awesome increase in our retirement savings. The percent will undoubtedly decline as the overall number increases, but I hope to also keep increasing our contributions each year. I hope to earn at least mid 20’s as far as investment returns every year. I upgraded both of our Roth IRAs to a brokerage IRA with Vanguard and will be investing in individual securities here and there with a long term buy and hold approach that I believe have the potential for dramatic returns over the next few decades.
I have been investing/trading in my brokerage account but also funding it from our bank account. My goal this year is to keep growing the account without contributing any outside money. I am slowly adding to our savings account because we will most likely have to buy another vehicle this year and another soon after that as both our cars have been having consistent issues and are from ’98 an ’02.
I broke down a few notable categories from this year and how much went towards it (other than the main monthly bills/expenses).
| Loans | 19,169 |
| Broker/Vanguard | 4,940 |
| Europe trip | 4,297 |
| Other travel | 4,128 |
| Car (repairs/maintenance) | 3,966 |
| Puppy | 2,523 |
| Home (move/furn etc.) | 2,053 |
Liabilities (Q over Q)
| Student loans | Credit card | |
| Q4 2016 | $135,605.97 | $0 |
| Q3 2016 | $137,740.16 | $462.27 |
| %Change | -1.5% | -100% |
(YOY)
| Student loans | Credit card | |
| Q4 2016 | $135,605.97 | $0 |
| Q4 2015 | $147,304.82 | $2,843.49 |
| %Change | -7.9% | -100% |
= –$135,605.97
Net worth: 48,922.42-135,605.97 = -$86,683.55
We are using the avalanche method which is paying down the loan with the highest interest rate first, once that one is paid off, the extra payments go towards the next highest etc. It seems slow at first, but as each loan gets paid off, more and more of the money gets applied to the actual principle due to the interest rates decreasing.
The following is the total change of assets and liabilities from the beginning to the end of 2016. I had a goal of reaching 50k in assets by the end of the year which we came very close to. It is a lofty goal, but I would like to add another 20k to our assets this year which means we would end 2017 with about 70k. I would also like to lower our debt by 18k which would bring our total less than 117k.
| Assets | Liabilities | |
| End of 2016 | 48,922.42 | 135,605.97 |
| End 0f 2015 | 31,942.35 | 150,148.31 |
| % Change | +53.2% | -9.7% |
This last stat serves as additional encouragement to our loan situation. It is difficult paying so much each month but hardly making a dent on the initial balance due to the incredible amount of interest. This is the remaining loan balance and the amount we have paid off including interest.
| Loan Balance | Paid towards loans |
| $135,605.97 | $76,752.04 |
There are many things I would love to do if I was financially independent. There is a lot I can do even while I am working, but I desire the freedom to not have to work so that is what I am aiming for. I thoroughly enjoy blogging this journey because I love seeing the numbers and progress but just as importantly I want to eventually inspire others to achieve financial independence someday as well.
I named this blog Wealth for Tomorrow because I am showing that with wise choices, discipline and patience, anyone can dig themselves out of a financial hole and build wealth for tomorrow.