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Net Worth Update 63: 2023 Q4

January 5, 2024 by Mr. Heartland on FIRE

Happy New Year!  Interested in what we’ve been up to in the last quarter of the year?  Read on for the details!

You can check the latest and greatest info on the Track Our Progress page.

First, the numbers:

Net Worth:

  • End of Quarter 4 Balance: $1,331,838 Up $129,278 for Quarter 4
  • Year to Date (YTD): Up 264,916 (25.1%)
  • Since January 2018 (this is when I started tracking our net worth): Up $1,026,838

Portfolio:

  • End of Quarter 4 Balance: $1,037,186 Up $91,666 for Quarter 4
  • YTD: Up $210,755 (24.1%)*
  • Since January 2018: Up $797,186*

*This total value as opposed to an internal rate of return.

What a banger of a quarter to close out the year!

What We’ve Been Doing

Investment Switch Up!

I frequently take a look at our forecasted portfolio value using our Retirement Calculator. I like to run multiple scenarios (what if we increase savings…. what does the timeline look like if spending goes up or down, etc.). But one thing I hadn’t looked at was the forecasted value of our tax deferred accounts separate from our normal brokerage accounts.

Well, I did and the results were eye opening… in both directions.

The good: Our estimated 401k balances look to be well ahead of what we “need”.

The bad: The estimated brokerage account balance was far below where we wanted it to be. Our goal is to retire early and we want to have at least 5 years of spending easily accessible. This should give us some time to due Roth Conversions, etc. to access our tax deferred accounts early. Additionally, we want some extra funds in there to help cover college.

So, how are we planning to resolve this?

Since our 401k accounts should be well above what is needed, we’ve decided to reduce our 401k contributions. Since 2018, we have been maxing out our 401k’s, so this was quite a tough pill to swallow. We’ve decided to contribute about half of what we had been, which results in about 10 percent of each of our salaries. The additional take home pay will be redirected to our taxable brokerage account.

Is this the most tax efficient route? Not a chance.

But… it gives us flexibility. The kind of flexibility necessary to quickly access funds for opportunities and cover the years between “early retirement” and when we are able to access our tax deferred money.

Rollover Beethoven

Mrs. HoF switched jobs in September of 2022. We’ve… ahem… dragged our feet a bit in rolling over her 401k. The fees weren’t bad in her old companies plan and we had our plates full with so many other things.

But as we were staring down the barrel of the end of 2023, we finally pulled the trigger. A few on-line forms from Vanguard and a call with her old companies plan manager and… Voila! The funds are changing hands.

Rolling over the old 401k gets her funds into accounts with lower overall fees, helps us consolidate our accounts, and gives us a lot more control over them.

Coming Up in 2024 Q1

As someone who has to be outdoors to have a good time, staring at nearly 3 months of winter can be a bit demoralizing. One way I like to get through the cold, dark months is to stay busy. Since we were out RVing most weekends during the summer and fall, there is a long list of things that need to get done around the house, so I will be tackling these projects.

As is always an early year focus, I will be doubling down on trying to get in better shape. I made a lot of progress cultivating a workout habit last year, but my diet-discipline collapsed in Q4. So, back to the drawing board (or in this case, mindful eating).

I also turn 40 this quarter…

How am I almost 40!

What a terrifying prospect! To help numb the pain of 40, we have a short trip to Mexico planned.

Thanks for reading!

Filed Under: Annual Planning, Cost Cutting, Debt Reduction, DIY, FI Progress, Lifestyle Improvement, Retirement, Savings, Smart Spending Tagged With: FI progress, Financial Independence, Investment Performance, lifestyle optimization, Net Worth, net worth update, personal finance, Portfolio Growth

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