Our financial situation as of August 1, 2017, or “Zillow Is the Font of All Bastardy.”

Yes. The font of all bastardy. That’s perhaps an unusual headline in the financial independence slash early retirement press, but I’ll explain it shortly. Meanwhile, here’s how our month went.

First up: we’ve chosen to use Personal Capital as our financial management and retirement modeling system. Click here to read my full review.


In the last thirty days our net worth increased from $2,246,178 to $2,310,131–a jump of $63,953.

Although we had a good month with our investments–regaining June’s paper losses and then some–much of this increase was due to a preposterous pop in Zillow’s “Zestimate” of our home. This is exactly the kind of noise I deserve for attempting to include in our net worth a mark-to-market value of real estate, but again, more on that shortly.

So as far as hard numbers, June has indeed proven to be a blip. I say, “blip” because when compared to the 40% whack we took during the initial days of the housing bubble, I can’t find it in me to complain about a 1% decline in the value of our investments.

Something I will complain about, though, is that we exceeded our $4,100 budget by about $500.


Actually, I won’t complain about that even a teeny bit. See, my wife has gotten a part-time job from which she’s making several hundred bucks a month. I could, if I was bent on being a pedantic asshole, insist that we continue spending no more than $4,100 a month and throwing whatever she makes on the pile. But having learned that my wife doesn’t LIKE me when I’m a pedantic asshole, I’m keeping my trap shut…and rather than begrudging a budgetary overrun, I’m instead supporting her when she wants to spend her earnings on fun without feeling guilty.

Which no doubt seems like an obvious way to play it, but I use the phrase “pedantic asshole” because that’s exactly what I was during our accumulation phase…and having back in the day browbeaten my wife into feeling guilty whenever she spends, say, three cents, it’s now my obligation to make amends.

So I guess it’s ME who’s the font of all bastardy rather than Zillow. But if you’re getting started in your pursuit of financial independence and early retirement, just stay aware that this lifestyle can strain the SHIT out of a relationship.

At any rate…all things considered, we had a good month. Boo-yah.


This category includes assets I hold at Morgan Stanley, at Vanguard, and in my daughter’s 529 college fund.

Our assets at Morgan Stanley include a self-managed account that’s pure equities, two managed funds I’m in the process of exiting (see “I have a big-ass tax problem“), and traditional and Roth IRAs. At Vanguard I have an S&P ETF (VOO), and my daughter’s 529 is likewise made up of several Vanguard low-fee funds. I had it set up with a 25% bond component until recently, but finally got tired of leaving money on the table in a bull bond market. Not as conservative an approach as some might take, maybe, but I have a decently high appetite for risk.

While my daughter’s 529 is included in this asset category, I don’t include its $71,046 balance in our 4% rule-of-thumb withdrawal calculation. Wouldn’t be appropriate. This leaves our pure investment balance of $1,857,131; a 4% withdrawal from which would be $74,285. Since our annual spending usually runs $55K-$60K, I’m good with it. Remember that the 4% rule isn’t without its problems, so I think maintaining a lower spending rate is a fine practice.

Note that we’ve been retired for twelve years, so our investments have kicked out roughly $600,000 beyond what you see reflected in our net worth.


Right now our liabilities include four credit cards: Chase Ink Preferred, Citibank Double Cash, Discover, and Kohl’s. Each carries a generous kickback. We pay off all balances every month through an auto-draft against our cash balance at Morgan Stanley.

We started credit card churning at the beginning of June, and so far I like how it’s going. On our new Chase Ink Business Preferred card we’re well on our way to the minimum spend of $5,000 required to collect 80,000 Chase Unlimited Rewards points, which will be worth a minimum of $1,000 in travel. Since we pay in full each month and consequently never owe interest, an initial “investment” of the annual $95 fee is about to lock us in a 952% “return.” I’ll take it.

Current balance on our Chase Unlimited card is $2,846. We also have $1,172 on a Citibank Double Cash card, but that’s mainly a timing thing. Payments are crossing with Personal Capital updates.


A couple of years ago we bought a used Prius, and while I went to the dealer intending to pay cash, I was able to negotiate a five-year fixed-rate 1.9% loan. In general I consider loans under 2% to be free money, so here it is. Current car loan balance = $13,069.

Other Assets:

To complete our net worth picture, I carry a selection of capital assets on our books. Current capital asset balance = $399,324, up from $365,416…a $33,900 pop.

Here’s how our budgeting account works. Obviously some of our expenses are monthly (groceries), while others are payable quarterly (insurance bills), and still others are payable annually (property taxes.) So every month I make a budgetary deduction of $1,145 for accrual purposes. I keep track of this in an imaginary account, and whenever I pay an accrual-type bill, I net that bill out of it. As you see, I show that account in the Other Asset column.

There’s also our “vacation fund,” an imaginary account I haven’t yet updated. It works in a fashion that’s similar to the budgeting account. I consider vacations to also be accrual expenses, so each month I use $250 from our $1,145 budget deduction to fund them. (And I see from the screenshot I’ve just posted that I need to get caught up through today.)

Two cars. They’re capital assets and I’m showing a loan against the Prius, so what the hell. This is just a personal quirk. Debate whether they belong in our net assets or not in the comments.

(My Ranger, incidentally, is on the way out. I’m looking at Honda Elements.)

NOW…back to Zillow.

I used to carry our home on the books at its purchase price of $310,000 plus the $10,000 we spent renovating our kitchen. Cost of acquisition, in other words. But when I switched financial management systems from Mint to Personal Capital, I for the first time had the opportunity to carry our home on the books on a mark-to-market basis. Sure, I thought. Why the hell not?

And so now I understand why the hell not. The noise in Zillow’s “Zestimate” of the worth of residential real estate worked greatly to our benefit this month.

According to Zillow’s website, “The Zestimate is automatically computed daily based on millions of public and user-submitted data points.”

That’s marketing-speak for “Thrice  weekly our Global Vice-President of Heuristic Shamanism feeds a sloe-eyed virgin into the volcano and divines a dollar value from the ensuing smoke-fart.” Home value is closely correlated to this smoke-fart; hence our revaluation.

Well…I exaggerate. It wasn’t a sloe-eyed virgin, of course. It seems clear that what triggered this re-valuation was a sad neighborhood event: our neighbors–excellent friends of ours–sold their house after the husband was forced to take a directed transfer. Our house, while smaller in square feet, sits on a double lot. Since this is a hot neighborhood in the best school district in the city, and since there’s an enormous amount of construction going on, this double lot of ours is legitimately increasing in value.

We just don’t know by how much.

So I’m not thrilled with Zillow, but since I carry all our other assets at current value, and since Zillow’s valuation is the best mark-to-market I have convenient access to, I again figure what the hell. I could keep my own comps, but who has time? You pays your money and you takes your chance.

So in conclusion: this is our latest monthly update. Please check back each month for the latest installment.. Your comments are welcome. And again, please check out my full review of Personal Capital.

Author: ER Dude

Sick of your job? After a thirteen-year career, Early Retirement Dude fled corporate America for good. You can do it too! Visit http://EarlyRetirementDude.com or email EarlyRetirementDude@gmail.com.

17 thoughts

  1. Freaking Zillow! I too had a “smoke-fart correction” to the tune of about a 17% drop. I agree with you as its the easiest to access but I’ve always thought, when looking at their own website, that on average they overestimate at least 2-3%. Thats still a lot of $$.

    1. I spoke with our county property tax assessor once and Zillow came up. Instant eye-rolling. “You wouldn’t believe how many people appeal their assessments based on what Zillow says. Drives me insane.”

  2. We saw the same leap in Zillow’s estimate of our home. It went from $227K to $251K overnight (ha!). When I logged in the next morning, it took me a few minutes to figure out why our Net Worth had increased by $23K overnight…

    Great job in July!

  3. I had the opposite issue with Zillow…for months, my home’s estimated value kept going up and up and up. And with it, my Net Worth.

    Then mysteriously, on 7/17/17 – BOOM – Dropped $22K. I’m like, WHAT?

    I’m over it now, but at the time, it totally freaked me out.

  4. I completely agree that while Zillow is not perfect, it is convenient. I don’t plan to sell my house any time soon so I don’t really care what it’s worth.

    “Which no doubt seems like an obvious way to play it, but I use the phrase
    “pedantic asshole” because that’s exactly what I was during our accumulation
    phase…and having back in the day browbeaten my wife into feeling guilty
    whenever she spends, say, three cents, it’s now my obligation to make amends.”

    This right here hits me where I live. My wife and I have had a number of somewhat heated conversations about her feeling like she cannot spend a dime without me getting upset about it. And, I feel like she does not care as much as I do about trying to accumulate a nest egg. We are not really on the same page in pursuing FI/ER since she loves working while I most definitely do not. We otherwise have a perfect relationship, but I totally get what you are saying.

    1. I wish you well in your effort to come together. Took too many years for me to discover that it was one of those problems I had to get out of the same way I came in. Behave your way there, you gotta behave your way back. Talk won’t do it. Seems so obvious now, but…

  5. I’ve commented before that I stopped looking at net worth and just focus on investable assets (since we have no debt). I didn’t mind the noise from Zillow as much as the fact that my house is in terrible condition so the resulting net worth wasn’t realistic for me.

    Just for fun, I went and checked Zillow and was pleasantly surprised that the inflated value was even higher than expected. (Our city has has some of the nation’s fastest increases this year.)

    So just for fun, here are my numbers:
    Investments: $2,132,945
    House: $377,962 (but not really)
    Credit cards: $13,000
    (includes unusual costs for college, vacation, and a funeral)
    Net Worth: $2,497,907

    Wow, that’s not a bad number, even if it is not entirely real. I’m not quite where I want to be to retire but I’m close enough that one of these days I’ll probably say, “Screw it. Close enough.”

    1. Stackfault… Almost 2.5 million and you’re still working?! Hopefully you really like what you do for a living because there is no financial reason to continue working as long as your lifestyle is not outrageously expensive. I keep thinking how MMM retired with roughly 800K in net worth… Compared to that 2.5 mil sounds extremely lavish!

    1. I agree. Geographic arbitrage can accelerate an early retirement plan by years, but it’s not for everyone. One reason we can we can live on ~$50K is that we own our home outright.

  6. I am considering revising my net worth calculation to use a Present Value of Annuity calculation of Rent-Expenses for our rental home. This mitigates the Zillow impact, while giving visiblity to what the alternative is. I would use the yield from VNQ as the interest rate.

    1. Seems reasonable. Obviously there’s a lot of debate about the “proper” way to account for home ownership in net worth, but that sounds like a fresh approach to rental.

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