After a June net worth summary that was less than desirable, I was able to come back in July with some good news and a positive trend change. My net worth is now back into the positive in a huge way this month. I know there are going to be down months eventually, especially if the market decides it isn’t going to cooperate, but it’s always nice to instantly reverse a negative trend as well. The other good news is that spending was actually down in July as well, which is traditionally a higher spend month for me.
Here is my net worth after July:Solid month for me, with huge gains across all my retirement accounts. My checking account is down because of paying off credit card expenses from previous months, but that’s expected and not a big deal. The important part is the positive net worth trend again.
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.
$2571 average spending last 12 Months * 12 Months = $30,852 spending in a year
$142,061 net worth / $30,852 spending per year = 4.60 years worth of spending
I’m slowly approaching 5 years worth of spending, and I do think I’ll be able to get there by the end of the year at this pace.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 $676 a month for 30 years which is 26.3% of my average monthly spending.
I’m back on the positive side of this equation, and moving along towards that 30% goal. It’s not looking impossible at this point!