Aw, man…OK, so I’m bitching about a problem I’m in fact very grateful to have, but as you know, psychological milestones are of the essence in both the accumulation and distribution phases of the road to financial independence slash early retirement.
(Note that we use Personal Capital as our financial management and retirement modeling system. It’s free, and we each get a $20 Amazon gift card when you try it.)
So a net worth of an even $2.4 million would’ve been, I don’t know, satisfying in a sort of irrationally exuberant way. But wait…I have something like $26 rolled up in my sock, meaning it’s time to celebrate. Woo-friggety-hoo.
$2.4 million represents a jump of about forty grand on paper from October’s total of $2,359,164, meaning we’ve accumulated $80,000 in unrealized capital gains since the end of October (which we closed out at a net worth of $2,319,855.)
Yay, a stock market run-up. Or rather: who gives a shit?
To be honest, as nice as the run-up is on paper I’m not gonna go buy an Nebuchadnezzar of champagne over it. Our annual withdrawal amount AKA budget of roughly $50K hasn’t changed for reasons discussed here, and I don’t intend to increase it.1
I’m not moving our budget up because I’m not one to ignore sequence-of-returns risk–i.e., the idea that while stocks return a predictable average return of seven-ish percent across many years, you can’t count on an annual return in a single year that’s sufficient to meet your expenses without depleting your principal. So if you have a good year and jack up your withdrawal percentage to match, it becomes that much more important in a bad year to jack down your withdrawal percentage. But you can’t really plan your life around a budget of, say, $100K in the first year and $20K in the second…so I don’t. The 4.5% rule ain’t-a doin my thankin fer me.
OK…where does that leave us?
Pretty much done. We continue to pay off our credit cards in full each month. Our car loan’s APR is 1.9%, so no stomach cramps there. And our house is worth…well, it’s worth whatever we could sell it for if we were so inclined. Zillow the All-Seeing All-Knowing sack of dog turds may claim it’s $349K, but Zillow hasn’t come around offering to write me any checks as of late.
You folks keep your socks dry and your brandy snifters wet.
- Although…as I’ve mentioned, my wife has taken on a part-time job that’s made our lives a bit more luxurious.