At the start of 2017, I doubt anyone would have wagered money on how fantastic the stock market performed. I certainly had no idea 2017 would be one of the best years for growing our net worth, especially after I left my full-time job in July. Here is a review on how our Net Worth grew in 2017.
2017 was scary year. Leaving the safety of a corporate job does not come easy. For now, I believe it was the best decision I ever made. I was miserable at my previous employer. The office politics, constant layoffs and restructuring was too much to watch and live through. Countless friends were walked shamefully out the building by security. They wouldn’t even let them speak to anyone or say goodbye. In hindsight I should have started my own consulting company a long time ago.
Time will tell if I am able to secure local contracts in the future, but for now our family is reaping the benefits. 2017 was a fantastic year to watch our investments made years ago blossom.
We grew our net worth by a staggering $413,030 even with no income from me for half the year. How did we achieve this? Let me explain.
Our monetary contributions in 2017 were:
- $8,000 to our children’s 529 account. (These balances do not make it into our net worth calculation)
- $2,400 to our children’s DRIP accounts. (These balances do not make it into our net worth calculation)
- Maxed out Mrs. TPM 401k contribution for the year along with the company match.
- $10,000, plus the company match for my 401k contribution.
- $12,900 in my companies ESPP for half the year at a 15% discount.
- $12,000 in our brokerage account #1.
- $100,000 into a new brokerage account. We will call this brokerage account #2
- $12,000 into various DRIP accounts. You can see my monthly reports to see the companies I am currently dollar cost averaging into.
- $6,0000 into our HSA which we did not access for the year.
- $15,000 mortgage reduction
We invested a total of $178,300 for 2017. We actually were pretty close to hitting our goal of saving 60% of our net income this year. We could do a lot better, especially when our daycare bill starts to decrease. Next year, we will likely need to revise this down to about 50% unless we really curb our expenditures. Our investments are doing most of the heavy lifting at this point so a few percentages of savings make less of an impact.
My goal of centralizing our retirement accounts was a big failure. I just plainly did not have the motivation to open a rollover IRA and process all the documentation. I am not sure I will have the time or energy to do it this year either and is why I left it off our goals for the new year. All of our stock holdings in the retirement accounts are in individual stocks or low-cost index funds. Centralizing them right now will only ease the burden of logging into multiple accounts.
Across all of our retirement accounts, the allocation is still a 70/30 stock to bond ratio. I will likely increase the bond allocation slightly as the year goes on.
Back in November, I rebalanced all the accounts back to the original 70/30 allocation.
Our return when looking at all the accounts in these tax deferred plans was just under 14%. I am happy with this return considering the allocation to bonds and I still hold a pretty sizable position in IBM stock. IBM had another underperforming year.
Our taxable portfolio (SERIP,) returned a whopping 29.34% for the year, including dividends reinvested. Please take a look at the more detailed analysis of this portfolio.
Mortgage on Primary Residence
Zillow estimates that our house is valued at $480,000. This is up from $445,00 a year ago. The area we live in is under constant development and there are many Fortune 500 companies moving into the area driving demand steadily upward. They are also rebuilding our downtown with high rises up to 50 feet. In addition they are still working on this huge upscale outdoor mall. All of these factors continue to drive the land values up.
Financial changes for 2018
We are thinking about selling our home and moving to a new subdivision. The primary purpose is for more land and more privacy. Our lot is very small at just over a quarter acre and it is on a hill. Not to mention our backyard is bordered by many other homes. It served its purpose for the last 10 years, but we want something where we can play more with the kids outdoors. We are still thinking this one over. Moving is always a pain.
For our portfolio, we may sell of some stocks to infuse equity into our new property. Generally, I feel the need to lower the risk profile of our portfolio. We will likely boost our allocation to real estate and bonds over the course of the year.