Hi there. It’s been a hot minute. We’re still alive and kicking. Read on to see what we’ve been up to over the first three months of 2023.
You can check the latest and greatest info on the Track Our Progress page.
First, the numbers:
Net Worth:
- End of Quarter 1 Balance: $1,117,586 Up $50,664 for Quarter 1
- Year to Date (YTD): Up 50,664 (5.0%)
- Since January 2018 (this is when I started tracking our net worth): Up $812,586
Portfolio:
- End of Quarter 1 Balance: $853,288 Up $26,857 for Quarter 1
- YTD: Up $26,857 (3.1%)*
- Since January 2018: Up $613,288*
*This total value as opposed to an internal rate of return.
I feel like it has been awhile since I’ve been able to type “up” in the summary above. True, most of this “up” is likely contributions, but it’s positive to see nonetheless.
What We’ve Been Doing
Bonus Time
Some good news… Mrs. HoF got a nice work bonus in Q1. This was part of her negotiated compensation package when she changed jobs last year. Unlike previous bonuses where we hem and haw over what to do with it, we know exactly what to do with this one.
I have become Debt, the Destroyer of Wealth
At the end of the year we made some decidedly… not financially savvy money moves. We traded in our less than one year old RV and bought a new, bigger RV. Aaaaaannd we ordered a bigger truck to tow it with.
I know what what you are thinking:
So, at the beginning of 2022, we had no debt besides our mortgage on our primary residence. Then we bought, and financed, a RV and pickup truck.
Then… we traded up on the RV and ordered a more expensive truck. Ooof. Yes, we are being financially ridiculous. I outlined our reasons for doing so in our last post, but maximizing time with our growing daughters is at the forefront.
Anyways, our general mindset is debt is bad. And debt on depreciating assets is worse. So we vowed to pay off our new debt ASAP. In this case, Mrs. HoF’s bonus gives us enough to payoff the RV. The new truck will take a bit longer.
ROTH Ruh Roh
Career-wise, 2022 was pretty good for us. Mr. HoF switched jobs to a more lucrative position, and I got a big raise early in the year. But as is typical, all good things come to an end. These salary increases resulted in our adjusted gross income exceeding the threshold for ROTH IRA contributions. While that stinks, the issue wasn’t helped that we’d been contributing into our ROTHs early in the year. We didn’t discover this issue until prior to filing our 2022 tax returns.
This caused us to start sweating a bit. What would we do with the contributions? Would we be subject to a penalty? Was the IRS going to kick our door in?
Thankfully, we caught this in time. We were also happy to learn that Vanguard has dealt with this a time or two. We were able to fill out a quick questionnaire and Docusign a form and they took care of the excess contributions. Typically, there is a requirement to withhold taxes on any gains for these excess contributions. However, we were “lucky” that the value of the shares purchased dropped like a rock, so we had no gains to tax!
Travel Rewards Win!
Not all our money moves were bad to start the year! We scored a good travel rewards win for airfare for a cruise planned later this year. Using a combination of Chase Ultimate rewards, transferred to Southwest Airlines, and our Companion Pass earned last year, we were able to cover $2,000 in airfare for under $50!!
Check back at the end of Quarter 2 for more entertaining money mistakes and musings! Thanks for reading!