Good Evening Everyone,
This post is going to be quite extensive so if you do not want to take 10 min to read everything, scroll to the bottom and I'll give you the main points.
So where to begin? First, I would like to apologize to all the readers who have stopped by in the past few weeks and have had no new material to read. Life is always hectic in the summer time and although we have not had weddings every weekend, something has always seemed to take priority over the blog.
Since my last true post back on August 2nd my life has been quite the whirlwind with regards to everyday life, finances and fun.
My wife and I went on a week long vacation like we do every year in the middle of August. We had weekend trips to Philadelphia, Pittsburgh and the Eastern Shore of Maryland. My wife started a new job, my work won a much needed contract, the stock market rallied, and dividend checks kept rolling in. I tried to slow life down a bit by relaxing on the weekends (to no avail), and the blog went silent. My grandpa past away so the family has been working on his house which took up more time and before you know it, 2 months have passed.
This year has moved faster than any other year previously in my life. To be sitting here and its already October seems crazy to me. It still feels like spring was just yesterday, the flowers were starting to grow, the grass needed cutting, and weekends at the pool just around the corner.
With that bit of information out of the way, lets move onto the main topics of the post:
Like I stated above, my wife started another new job! For years my wife has been working in the government/charity side of her business. As you can imagine, the pay was not all that great but the benefits were good. She had been working in a school for the past year but then her contract there was not renewed. She stuck it out with the company for about 3 weeks but her new school/role was not at all like her previous. She began looking for new jobs and within one week she landed a job in - private industry -- with wait for it --- a 63% PAY RAISE!! Needless to say, I was ecstatic about the situation and immediately began updating our retirement timeline.
She collected her last paycheck from the other job, payout from comp hours unused and took a week off. She started the new job two weeks ago and just received her first paycheck. But, boy was she disappointed! It turns out that her take home pay will be less than her other paycheck haha. However, this is because my paycheck is going up. She will be taking care of healthcare for both of us and what seems to be the new trend, she has a high deductible plan. This means we will be paying fully into her HSA - or $5750 per year. The other $1000 her company puts in. We will also be fully funding her 401K - or $18,500 a year. At her previous job we were only around $5000 per year to get the company match, but read on to see why we have bumped it up so much...
I have completely sold out of 38 positions in my portfolio! This leaves us with just 13 positions in our brokerage account. All of these stocks were sold starting on September 7th with the most recent sells occurring just last week. Our cash balance after these transactions was $110,000.
This is an extremely large number for us to be looking at. Over the past 5 years, we have been collecting positions in 52 separate companies. These positions averaged under $3,000 each so when things are so spread out, it does not seem like you have that much money. Kind of a good thing I suppose because it makes us push to continue saving.
However, in the past 4 months, our account has increased by $50,000 just through stock market returns!! Added capital only makes that number larger. So, as you can imagine I am hesitant to throw more money into an already overheated market. Not to mention, we are going into a new presidential year so the market could be quite volatile -- at least that is my thinking. With a limited number of potential investments, and a stock market bull rally for over 7 years, I thought it was prudent to take a bit of money off the table.
The main reason for cashing out --- We are going to pay off our mortgage!!!!!
As of last month, our mortgage stood at $170,000. Since some of our sells were just this past week, we have not put the full $110,000 at the mortgage but have put $95,000 towards it. Therefore, our current balance is $75,000!
Our mortgage was for $195,000 at a 4.15% roughly 5 years ago. To imagine that we have been paying $1,200 a month for 5 years and our balance is only down $25,000 is mind blowing. With additional principal payments over the years getting us to about $15,000 a year total -- we are looking at $75,000!!! Holy shit! $50,000 wasted in interest.
To make up for the last $75,000 on the mortgage, we plan to use the $15,000 sitting in our brokerage account, another $25,000 I have in my "play around" Scottrade account (see older posts on that one) and finally $20,000 from a savings account. Do the math, and you'll see we are still $15,000 short. Sure , we could sell off the rest of our investments (currently around $80,000) but I dont want to miss out completely on any rallies - should we have them. Therefore, this $15,000 will be paid using our paychecks from work. We run a pretty tight ship most of the time so I think by December the mortgage should be gone!!
So, there we have it, the reasons for selling stocks is to pay off our house!
What a relief that should be for us. To know that at the end of the day, no matter what happens, we will always have a roof over our head (after we pay the taxes and insurance) is pretty frickin awesome. This is also why my wife will be maxing out her 401K. Mine is already being maxed out and with savings of roughly $15,000 from the mortgage, we should have no problem maxing out her 401K. This will bring down our taxable income so theoretically (if I did my math right) we should be okay come tax time with no big surprises. Chime in if you know more info!
With the fun financial topics out of the way, here are a few more to keep you updated:
We have a contract in place to install all new doors and windows in our house. This should bring our energy bills down a little bit considering our current doors and windows are over 20 years old, single pane.
After relaxing last winter and not doing many things in the house, I told my wife I will work hard to give her what she wants this winter. This means we/I will be installing new trim/moulding around doors, windows, floors, ceilings, etc. We will be ripping up the carpet that covers 60% of our house and unveiling those beautiful hardwood floors. We will sand and stain them to our taste, and we will be painting a couple rooms to change things up a bit!
We are heading to the West Coast for 15 days!! My wife has family in Seattle and Williams OR so we will stop to hang with them for a few days and then we are road tripping all the way to San Diego. If you know of any good places we must stop at, let us know!
After being gone most of December, we are heading to New England for New Years for 5 days as well. My wife also has family up there so we will hang out and have fun/go skiing and relax
So that is pretty much it!!
- My wife got a new job - 63% pay raise
- I sold 38 stocks
- I have 13 stocks left
- I cashed out over $110,000
- The mortgage is just a few months from being paid off
- Our house will have brand new doors and windows for the winter
- Our house will have new wood floors and moulding/trim
- Going to West Coast for 15 days
- Going to New England for 5 days
We continue to appreciate every day together and are so fortunate to be in the position that we are in. To think that I will have my mortgage paid off before my parents is truly a remarkable feeling. It all starts by maintaining a high savings rate!!
It is not how much you make but how much you spend. Keep your expenses low and you too can take 20 days off of work in December, pay off your mortgage, put in new windows and doors, update the inside of your house, and still have money left over! None of these things are possible if we spent recklessly throughout the year. We saved hard this whole year and now we are enjoying the fruits of our labor.
Hope you enjoyed the post. Till next time, keep living the American Dividend Dream