It’s only been a month, but it seems 2021 told 2020 to “hold my beer”. Every day brings with it something new and weird. But as crazy as everything was outside, January was pretty ho hum around here with all the DIY projects finally wrapped up. So we turned our attention to other matters this month.
You can check the latest and greatest info on the Track Our Progress page.
First, the numbers:
Net Worth:
- End of January Balance: $767,288 up $6,908
- Year to Date (YTD): Up $6,908 (up 0.9%)
- Since January 2018 (this is when I started tracking our net worth): Up $462,288
Portfolio:
- End of January Balance: $619,410 up $3,539
- YTD: Up $3,539 (0.6%)
- Since January 2018: Up $379,410
January Highlights
Rub a Dub Dub – We Got a Tub!
I was finally able to finish the tub installation as part of the master bath remodel. It took more time and money than I expected, but we are happy with the result. Besides, now I know how to plumb and install a free standing tub!
Check it out:
Summer Vacation Plans Firming Up
We definitely missed hitting up a beach last year. So our first order of vacation business this year was to book a beach house in Gulf Shores for the end of the summer. With the vaccines rolling out, we are hoping that by this time most folks would be vaccinated (or at least our at-risk family members). But if not, at least we have a beach spot where social distancing could be pulled off and a house with a kitchen to minimize dining in restaurants.
Speaking of beach season, it’s long past time to be a responsible adult and start eating right again.
Bringing Breakfast Back
For most of 2020 I practiced intermittent fasting (IF). I would eat lunch and dinner and skip breakfast. I found I could do it without issue, and occasionally would only eat dinner. But I didn’t lose much weight. Usually, I found myself overeating in my “window” for meals.
To make matters worse, I often found myself extremely agitated by late morning. I felt like I was turning into a rage monster.
So… less than optimal.
With my weight back to where it was at the start of 2020, and my nerves frazzled out I’ve decided to go back to the basics.
I’m counting calories again. I know I said wouldn’t (ahem) but I am. It’s not fun, but it definitely works for me.
Most importantly, I am adding breakfast back to my day. I definitely feel more under control after eating breakfast, and the scale is showing the promising early returns.
COMING UP IN FEBRUARY
We’re Refinancing Our House
If you’ve paid attention to interest rates recently you might have noticed that they are very low. Like as low as I’ve ever seen. In fact, check out this chart for 30-year mortgage rates from the St. Louis Fred HERE and 15-Year rates HERE. These go back to 1971 and easily predate me.
Back in 2019 we refinanced to a 15-year mortgage with a 3.125% rate… and felt pretty good about it. Now you can get under 2.75% on a 30-year mortgage!
With the rates as low as they are we took a hard look at whether to refinance or not. And whether to go with a 15 or 30-yr option.
After running lots a calculations, building our own loan amortization spreadsheet (because, of course I didn’t like the numerous freely available versions), and getting rate quotes…
It appears the refinance would payoff in less than 2 years. That is a decent payback. So we are going for it.
We are sticking with a 15-year mortgage. I realize this may sound a bit crazy with 30-year mortgages so cheap. Yes, a 30-year would drastically reduce our monthly payment. Those savings could be invested…
An important distinction is that we plan to move in 5 to 10 years. Meaning we plan to use the equity in our house (or sell investments) to help finance the purchase of the next house. Also, we are taking the difference of our current payment and the new reduced payment and applying it to our new payment, so our net out of pocket won’t change.
We looked at the opportunity cost of taking, and investing, the savings with a 30-year mortgage over time periods of 5 to 10 years. Yay, more calculations!
When comparing the equity from the 15-year option against the equity plus investment gains from the 30-year option, the 15-year mortgage looks like a winner over this timeframe. Plus, it should have significantly lower risk when compared with the potential stock market returns for the invested savings with the 30-year option.
It should be noted that the area we plan to move to is nearby and essentially prices track together. So if the housing market tanks (thereby crushing our equity), the price of the next house would also most likely decline right with it resulting in a wash. The stock market on the other hand can do anything over that time period.
The math flips around beyond 10 years or with an average annual return over 8%. So, if we were definitely staying longer then the 30-year option would make a lot more sense. Is it realistic to get better than 8% in the market over a timeframe of 10 years or less?
Here’s to a healthy February for you all. Would ya pass the celery? Thanks for reading!
