I’m sick right now — just a bad cold — and haven’t been able to focus all day. Which strikes me as a perfect opportunity to write up my progress to a $100K net worth.
Here’s the big picture:
After a year-long false start, my tracking in Mint picked up in May 2014, the month before I crossed into positive net worth territory. Fortunate! Counting from summer to summer also tracks with my academic-year salary shifts — not completely since each contract didn’t begin and end at the same time, but fairly close. (Oh, you have to ignore the weird spike in March of this year. There was a technical error and one of my retirement accounts got counted twice, making it look like I had something like $17K more than in fact I did, just for that month. It can’t be corrected now without wiping out the whole account’s history. It’s a little aesthetically annoying but hey, it’s a free service.)
Year 1: June 2014 to June 2015
At the end of June 2014 I had a net worth of $2398, and at the end of June 2015 I had a net worth of $25,035. In Year 1, then, my net worth grew $22637. For most of that year I was bringing home (after taxes, but including 401k contributions) $3339 a month, so I made roughly $40000 in that time and spent about $17500 of it.
Year 2: June 2015 to June 2016
At the end of June 2016 I had a net worth of $49,000. In Year 2, my net worth grew $23965. My base income during that academic year was the same as in the previous year, but I got a substantial freelance project too. Even though that project came with increased living expenses for a time, I still saved a big chunk of the cash.
Year 3: June 2016 to June 2017
At the end of June 2017 I had a net worth of $64,682. I had to check Mint for that number since I wasn’t doing net worth updates that summer…. Anyway, in Year 3 my net worth grew $15682. It wasn’t a great financial year. My base income dropped substantially as I went to 3/4 time at work, and I didn’t cut spending to adjust to that.
Year 4: June 2017 to June 2018
At the end of June 2018 I was back on track with a net worth of $92,000. In Year 4 my net worth grew $27318. This number really surprised me. My base income did go up with a new job during the academic year, but I also spent two months unemployed (you can see the dip in the chart above where my net worth declined for two months) and my monthly expenses were quite high compared to my baseline of the previous years since I was living in a new, very expensive city. For quite a bit of this year my net worth didn’t grow that much per month. However, at the end it started to pick up, since I cut expenses and got the first of my freelance income.
The final push: June 2018 to August 2018
In the last two months of the push to $100K my net worth grew $10,424. That is crazy! It’s 2/3 of the entire year’s growth in 2016-17! In the Mint chart above you can see how the rise in net worth poked along, slowly and steadily, and then the line really slants up sharply at the end. During this time I had my base pay; extra pay from an adjunct course; AND freelance income. So, no wonder I had a sharp increase. I’m so thankful that I not only was offered the extra work, but had the good sense to take it.
So, all in all from $0K to $100,000 took 50 months: 4 years/48 months plus two months extra.
Funnily enough, my rough goal all along has been $2000 in net worth growth per month. Many, many months I didn’t make it. I had a whole dismal year in there. And yet there were exactly enough good months along the way, months with big stock gains or big freelance payouts or unexpectedly low expenses, that it all balanced out and I averaged just about $2000 over the course of the entire project.
I can’t claim any special insight here, nor do I know how to lay out a how-to guide. I had variable income and never really had a clear plan where I could project how much I would make — let alone what the stock market would do. I suppose what I can say is that there was a lot of value for me in having the goal in the first place. It helped me set that $2000/month target, which in turn gave some shape to the budgeting I did during the first couple of years. I put more in savings than I might have otherwise. That in turn gave a foundation so that even during a low year I was still increasing things, and during this last 14 months, when I pushed hard to get to the goal, I was able to make some specific moves (=taking on extra work) to ensure I got there even when I gave up conventional employment 2/3 of the way through the year. I felt motivated to put away as much as I could, simply because I had this goal.
This suggests that I should probably have another goal. I’m feeling a bit intimidated by the logical one, though — will it take another four years to get to $200K? Eesh. That may be something I have to think about for a little while.