Every winter, I always go in excited for the first “real” snowfall of the year. It’s new, it’s different, it carries with it a bit of excitement… and it’s almost immediately enough to get me wishing for spring and warmer weather. That was February this year. Bitter cold temperatures rivaling any seen in the past 30 years and lingering snowfall canceled classes harkening back to March 2020. And we were the fortunate ones. But even while the world was freezing around us we tried to heat up our journey towards FI.
You can check the latest and greatest info on the Track Our Progress page.
First, the numbers:
Net Worth:
- End of February Balance: $794,906 up $27,618
- Year to Date (YTD): Up $34,526 (up 4.5%)
- Since January 2018 (this is when I started tracking our net worth): Up $489,906
Portfolio:
- End of February Balance: $644,210 up $24,800
- YTD: Up $28,339 (4.6%)
- Since January 2018: Up $404,210
February Highlights
A Raise for the Missus
Congratulations are in order for Mrs. HoF! She got a raise! We honestly were surprised at the amount based on how 2020 unfolded at her work. Even better than the raise, was that with her tenure, she is now eligible for an additional week of vacation! Things have always been tight trying to plan trips with the limited vacation time she had. An extra week is a huge help. Good job!
Refi for the Win!
As I mentioned last month we were proceeding with refinancing our primary residence. Welp, we followed through and were able to close at the end of February. Here are the deets:
- Term: 15 years
- Rate: 2.125%
- 1% rate decrease (we were at 3.125% before)
- Monthly payment lowered by $234*
- Break even with closing costs in less than 2 years
*While we are lowered our minimum payment, we are considering applying the savings as an additional principal payment. This would have us paying off the loan in 12.4 years compared to the 15 year term… but we don’t expect to pay it off. We are looking at this as a home equity play. We plan to move sometime in the next 5 to 10 years to a nearby neighborhood.
Paying the additional principal looks, at first blush, to give us a return on the order of $1,500 to $4,000** if we move within that timeframe. **Computed as the interest savings + additional equity – cost additional principal payments.
However, if you look at the opportunity cost that advantage could disappear. When factoring in a return of 6% if we invested the $234 into the stock market each month, it actually flips the script and investing that additional money would be to our benefit to the tune of $1,400 to $8,000.
COMING UP IN MARCH
Working on the Roths
Thus far this year we haven’t been contributing to each of our Roth IRAs. After paying off the last of the DIY renovations, Christmas, and the closing costs for the refinance, we finally are in a position to start chipping away at the $12,000 ($6,000 for each spouse) we are allowed.
Tax Time
This one is pretty self explanatory . At some point this month we are going to buckle down and try to get the taxes done. This year, for the first time, we are strongly considering turning to the pros for some help. This flows from the sale of our rental property last year and trying to navigate the capital gains tax and depreciation recapture on the property. This is further complicated by the extensive remodel (read $$$ poured into the house to sell it).
2020 Spending Breakdown
I am slowly working to pull together our spending from last year. I’m hoping to have it pulled together for the next update. It should be a real treat. A global pandemic, a whole-house remodel (the rental), a new kitchen floor, patio, and master bath (primary residence)… that’s a lot to unpack. Getchya popcorn ready.
That’s about it for this update. Stay warm and healthy all!
