Summer is almost here, I hope that everyone reading here in the US is enjoying the weather as it warms up! I know that the Summer months usually bring higher spending for me, but I’ll be looking to control that wherever possible and continue to grow my net worth, even if it is at a slower pace compared to usual. I know that my goal is to hit a six figure net worth as soon as possible, and every little bit brings me closer to my next goal.
This is my net worth for May 2017:
The market decided that it was going to help me out big time this past month, with big increases in my IRA and in my 401k. Since I ended up calculating April’s numbers ahead of time, I had a big drop in my checking account compared to last month. Spending was also a bit higher which also accounts for the change.
When I first running the numbers, I honestly thought I was going to be slightly negative or pretty much even compared to last month. So seeing the final results is a pleasant surprise even to me! I knew that I would have my current 401k contributions to help prop me up, but obviously that would have still put me at a slightly lower net worth because it’s still slow going with such a small balance.
So let’s see how far my assets would actually take me at this point in time. I’m going to calculate that using my average spending over the last 12 months. I’ll then multiply that by 12 months to get the total spending for the year, and then divide my total net worth by that amount. That’s how long I’d be able to live off my savings at that point in time.
$2597 average spending last 12 Months * 12 Months = $31,164 spending in a year
$92,358 net worth / $31,164 spending per year = 2.96 years worth of spending
This is highest point I’ve had when doing this calculation, even if it’s only by a little bit! I’m thinking that by the next time I redo this exercise I should be able to hit 3 years worth of spending. I’m making that the goal for June’s summary, but we shall see.
I also thought it would be cool to see the opposite, how much would I be able to withdraw each month? I set the rate of return at 4% as a conservative guess, and the retirement time period would be for 30 years. I’d be able to withdraw $439 a month for 30 years which is 16.9% of my average monthly spending.
photo credit: iwona_kellie long weekend climbing trip to Skaha.. via photopin (license)
Wow! I’m really impressed that you not only killed a large amount of debt, but you are rapidly growing your net worth! Not easy to do!
Thank you! It’s a major goal of mine so I’m staying focused. A salary increase and cutting major expenses along the way has helped a lot too.