Happy New Year! I hope the holidays treated you all well. Read on to see how Mr. Market treated us this December!
You can check the latest and greatest info on the Track Our Progress page.
First, the numbers:
Net Worth:
- End of December Balance: $1,064,718 up $47,595
- Year to Date (YTD): Up $304,338 (up 40.0%)
- Since January 2018 (this is when I started tracking our net worth): Up $759,718
Portfolio:
- End of November Balance: $874,260 up $33,290*
- YTD: Up $258,389 (up 42.0%)
- Since January 2018: Up $634,260
A nice surge from Mr. Market to wrap up a historically “great” year.
*All numbers above include contributions and are not indicative of investment returns.
Our actual investment returns were on the order of 25%, roughly matching the S&P 500’s performance. Which should be no surprise since the vast majority of our portfolio is in S&P 500 tracking, low cost index funds.
Also, as a side note, did you notice the wild swing in our net worth?
Yeah, that one. Well it seems that Personal Capital had a wee little glitch in reporting for a time there. I gotta say, my heart skipped a beat when I first noticed an $87,000 single day drop in one account. But alas, all is well.
December Highlights
Closing Out the Year
There is always a checklist of items to knock out in December to wrap up the year financially.
- Pay personal property tax – check
- Make the second car insurance payment – check
- Year end donations – check
- Use remaining medical benefits – almost – I’m hoping I can get my vision claim covered here in early January.
- Claim remaining dependent care funds – not quite there yet, but we still have some time
All in all, we got most of it knocked out.
Breaking Down the Bonus
I received my work bonus in late December. It came a couple weeks later than typical and was a slightly better than last year. What did we do with it?
Good question.
Usually, we use most of it to max out the Roth accounts, but we were fortunate this year in that was already covered. So we started off by boosting our charitable donations from last year. We’ve been able to increase donations each of the last few years. This is a trend I would like to continue.
I did take a portion of the bonus to buy some new hunting gear I’ve had my eye on. Hey, you only live once!
We also did something we haven’t done before….
Casino’s Open!
We took a chunk of my bonus and bought some individual stocks.
*record scratch*
Wait… doesn’t that go against my normal “Simple Path” approach of buying and holding low cost index funds?
Have I given up on my long standbys: Vanguard’s VTSAX/VTI???
The overwhelming portion of our portfolio is invested in low cost index funds (roughly 95% at the time of this writing). This money is earmarked for pure speculation.
Our approach is that once we’ve maxed our tax advantaged accounts and made our planned contributions to our taxable account that a portion of the portfolio should include some bets with a high upside. Since the amounts are relatively small, it wouldn’t be too painful if the stocks went to zero.
Last year we dipped our toes into some cryptocurrencies for the same reasons. That account, dubbed our YOLO account, was up 32% last year (with some absolutely wild fluctuations throughout the year).
This year we are betting on the growing prospects of ***cue ominous sounds*** the Metaverse.
Specifically, we’ve taken small positions in Matterport and Roblox. Our kids are addicted to Roblox, so we end up spending money on it anyways. Might as well have some potential upside!
Of course both stocks fell like lead balloons immediately after we purchased them. Doh!
We would not be speculating if we had high interest debt, remaining tax advantaged contributions to make, or were close to drawing down on our investments.
Coming Up in January
Putting Those Dollars to Work
There is still some remaining bonus money that hasn’t been allocated yet. And if you’ve read this blog long enough you know we can’t leave those dollars without a job.
We are considering the following options:
- Making another contribution to our taxable account
- 529 contributions for the kiddos
- Front loading our 2022 Roth contributions a bit
Past Year Financial Review
I plan to dig through the credit card and bank statements and try to sort out a spending summary for last year. It always feels a bit cringey to rehash all our money decisions, but I feel it is critical to have a sense of where we are at and whether our FI goal is set appropriately.
My gut tells me our spending was up this past year, but the numbers will tell the tale.
Thanks for reading!
