Welcome to another Dr. PayItBack monthly checkup! I use this space to remain accountable to our expenses and goals, track net worth and debt, and muse on what was done well and what can be improved.
I’ve already done a 2021 retrospective post to close out the year, so my focus here will mostly remain on December specifically as well as a look ahead to the upcoming year.
Just like last year, the holidays led to December being one of our highest-spend months of the year. We shelled out $1,200 on Airbnb reservations for a beach vacation this spring, and we spent about $1,400 on Christmas gifts for friends and family including $625 for my office staff. Finally, we rented out a theater for a birthday party ($300).
Unlike last year, I finally received an annual bonus that made all this output look like a drop in the bucket. This figure was a hair over $73,000, which amounted to an extra $50,000 after taxes.
Altogether 78% of net income was put toward savings or debt in 2021, up from 70% in 2020.
Back to boring ol’ minimum payments. Whatever happens to the fed rate in 2022, the LIBOR isn’t budging yet.
In December — as in all of 2021 — the markets treated us well. Our portfolio finished up 22% on the year, just a little shy of the S&P 500’s gain of 27%. Our taxable brokerage now dwarfs our other accounts. Crypto has been essentially a wash, with a few hundred dollars in net gains (as of this moment).
Even with another month of 5-figure spending, the massive amounts that we’re shoveling into our net worth are really starting to show. The expected income from our portfolio is now over $20,000 per year, and the increasing rate in the past few months is visibly evident on the chart. Summer of 2027 may be a little overoptimistic, but more and more I am believing that we could have our spending covered by passage cashflow before the decade is over.
Financial Goals for 2021
1) Max out 403b: $19,500 of $19,500 (100% done) ✅
2) Max out backdoor Roth IRAs: $12,000 of $12,000 (100% done) ✅
3) Use taxable brokerage in addition to 1) and 2) to save $100,000 total for retirement: $184,500 of $68,500 (269.3% done) ✅
4) Max out 529s for state tax benefit: $16,000 of $16,000 (100% done) ✅
5) Save 20% down payment for a $450,000 house: $90,000 of $90,000 (100% done) ✅
6) Continue to pay minimums on student loans as long as rates remain <4% ❌
7) Finalize estate documents ❌
We blew past most of our 2021, with the majority of retirement account funding happening early in the year. Furthermore, we crushed our taxable savings goal by multiples. We have finished saving a downpayment amount that can get us any house we would want in the area.
I failed our student loan goal with an early payoff of Mrs. PIB’s loan, which I can’t get too upset about. More frustrating is that we still have not made the time to get our estate plan in order. This is a priority for early 2022.
Financial Goals for 2022
1) Max out 403b: $20,500
2) Max out backdoor Roth IRAs: $12,000
3) Use taxable brokerage in addition to 1) and 2) to save $120,000 total for retirement: $87,500
4) Max out 529s for state tax benefit: $16,000
5) Continue to pay minimum on student loan as long as rate remains <4%
6) Finalize estate documents
7) Purchase a house