At it again... one month later :)

Well, look how long that PF ban lasted... just over a month. 

Part of it is that I just got a large infusion of $27,000 post tax (ok it's not that big, other people earn this in a normal month) and I am trying to figure out if this changes anything. Short answer, given the falling markets right now, it doesn't. 

I think around the time I hit 1m NW, I will change the way I do my accounting. 

As I started to spell out in my last post, I need to start thinking of things not just in terms of overall net worth, but in four chunks: 

1) Whether I have a primary residence paid off 

2) Whether I have enough retirement funds (separate from emergency funds) 

3) Enough emergency funds 

4) Continued savings for 2 children 

Whether I have a primary residence paid off 

This goal is going to take a long time, given I don't have a primary residence at all and have just most of a downpayment saved up. I estimate between 10-20 years. I do still believe that it is important to purchase a primary property, to help with wealth accumulation and financial security. 

This goal will probably require around $1 million in capital overall for my share (given a split with my husband). I have about $100k towards a downpayment. 

Whether I have enough retirement funds 

Given annual expenses around $40k in current terms, I will need $1.3 million at a conservative 3% withdrawal rate. I have about 500k towards this now if we count the rental apartment and pension. I should still try and put additional money into paying off the property when possible. 

Emergency funds 

Will need to cover a year's worth of living expenses, so around $40k. I currently don't have this separated from my regular accounts but have around 30k that I could immediately liquidate for living expenses. However my job is at least guaranteed till January 2024, so this is not the most essential part. 

Savings for two children

Should cover their university education expenses. If I keep working at my current job this will likely not go over $80k each (so $160k for both). I currently have $20k set aside for Kid 1 and she still has about 10 years to go, so about $6k per year into her account. 

In total, it means I should have $2.5 million minimum as net worth. It does look like I will only get there around age 55 or so barring any increase in fortune or otherwise. I will have shaved 10 years off my working life this way. 

I still have my BHAG of $20 million - but no plan to get there yet!!

ALSO - the huge point that my own finances cannot realistically be separated from that of my husband. We are a family unit now. 

Enough PF stuff for 2022!

Here's the annual "don't think about PF anymore" post. 

I am a LONG way from a (comfortable) retirement. I'm not socking away the around 200k per year I think I would need to get there. At my current savings rate, about half of that, I should be able to retire a "standard" early retirement of 57 or so but anything earlier than that is probably not going to work. So I need to stop fantasizing about leaving work in the next year or two because it's not going to happen. 

My house needs to be paid off to retire, and I must have enough money to cover substantial expenses during retirement. 

The better and more productive way would be: 

1. To figure out how to do a better job at work 

2. To figure out how to be more frugal 

3. To keep a regular exercise routine and keep flossing and brushing your teeth 

4. To figure out how to be a better parent... not to figure out ways to stop working 

And stop focusing on the numbers. 

check in: net worth $882K ($650K)

Hi, it's me again, doing a check in 5 months since the last one. 

Over time, I do see pretty substantial income and net worth growth - I've earned over 67k since the last update. I just don't see it over the day to day period so it feels a bit stagnant right now. 

The biggest drag on net worth growth has of course been the stock market, which has been on its downward trend since January (although with a nice uptick in the last few months, thank goodness I could not access Interactive Brokers during the very low period to see all the losses! It's very healthy not to access your investment accounts). I have learned my lesson about focusing too much on individual stocks, and will now return to the usual boring but stable program of Vanguard all world and all USA ETFs. 

The second biggest drag has been expenses, such as paying annual taxes, fees associated with the move, and apartment furnishings (something which can make its own separate post). 

I have refinanced my mortgage on my place and the interest rate is quite high (5.29%); however I wanted to lock in a rate now rather than see it continue to go up. So it will add another $500/month to my expenses which will come out to $30000 over 5 years going straight to the bank. But that can't be helped, and my apartment value (likely $50-100k) and equity (+$48000) will continue to grow over that time so it will offset the increased costs. The rent on our current place is so low ($1570/month) that it helps a lot with financial decisions. 

I also have big news that I am expecting child #2 early next year. I have fairly stable income of $10000/month post tax coming in over the next 10 months at least. This is great because it means I can grow net worth to hopefully close to $1M ($740k-750k) by this time next year, IF I can keep our lifestyle modest, and keep spending under control and not buy every high end thing on the market for baby. I don't think it's healthy to speculate beyond that but I have a big incentive to go back to the job soon - if I manage to return to the office and stay on the job another year I can see some fairly significant gains (around $100k) due to pension vesting, and therefore with some luck should reach $1.2M ($950k) around this time in 2 years. Of course, I have no idea what will happen at work with all the politics and senior management changes, but so far I enjoy my job and can see myself doing it for a few years more, and at least have a guarantee till the end of my maternity leave in a year. Then, I know people generally rather keep personnel on than let them go, so it should at least be ok for me to keep with the job for a bit longer. 

So, smooth sailing for now. 

check in: net worth $837K ($620K)

 I had to devalue the estimated price of my house. That, plus, stock market slumps, puts me at a net worth right now similar to what I was at 7 months ago. It is frustrating not to see progress but I think it's an honest account, plus it makes me think that I should not be going around obsessing over these numbers so much. 

Anyways this does not detail my plans.  

in general I think it's pretty insane what we have been able to make and save by being in this African country for the last two years. Income wise it's been crazy - making 280 chf take home combined in one year. I didn't expect that it would be so lucrative. Of course the inheritance helped. 

I'm going to reach 1m CAD in a year and a half (age 37 instead of 36). It's funny because I feel like reaching this milestone now does not impact my life in any way. Watching the numbers does not do anything for me now, except waste my time. 

Doing net worth calculations does not make me any happier because the pace of change is so glacial. 

Three years ago at this time I had less than $500k CAD. Now that I have $300k more, I feel absolutely nothing from the increase. I feel the same way that I did back when I had $500k CAD, or when I had $100k CAD. 

If you gave me $300k now, I'd be through the moon happy. I'd feel so rich. But if you fast forwarded another 6 months or so, I'd feel exactly the same way that I do now. The happiness would normalize. 

I'm chasing the happiness that comes from gaining money, or the relief from anxiety that comes from gaining money. But these feelings are temporary and don't solve any of your problems for the long term. So I don't think they are as useful as I think. 

It is very likely I will gain another $300k CAD in another 3 years, or more, which will put me squarely in the bona fide millionaire set. But I will feel the same as I do today. It will not increase my security, nor make me a better employee, nor increase my capacity to contribute to the world, nor make me a better partner nor parent. It will simply be. 

I think, "oh, but I would be happier if I got a $200k per year increase, not a $100k per year increase! Wow, wouldn't that be something. Then I would be happy." 

But when you think about it that's not true either. The happiness comes in the brief moment when you imagine this possibility and feel the hope of the change. When you actually experience it you will be in exactly the same level of happiness as you are now (with possibly a very very negligible or slight increase in your rated well being, but likely something you would not notice).