In the second half of 2017, I decided to start keeping track of my net worth, mostly out of curiosity. I knew how much money I had in my savings accounts, but I only checked my retirement accounts every few months or so (because who needs to add the stress of daily stock market fluctuations into their life?). I wanted an easy way to see how my net worth changed over time.
So I built myself a simple Excel file that listed all of my retirement and savings accounts with columns for every month of the year. When I say simple, I mean simple — I’m at a point in my life where I don’t have any debt, and I don’t count any of my possessions toward my net worth. (With the exception of my ten-year-old car, I doubt I’d get much for selling any of it, anyway). On the last day of every month, I log into my accounts, type the balances into the appropriate column and row, and then let AutoSum work its magic.
The day I created the file, my net worth was about $95,500. As of today, it’s about $107,500.
1. This feels like a ridiculous amount of money.
An unbelievably ridiculous amount of money. My first job straight out of college paid me $36,000. Last year was the first year in my life that I cleared $50,000. I’m making a solid middle class living in my area for a single woman without kids, but I’m nowhere near six-figure territory. And yet I’ve got six figures to my name right now. (At least until the stock market takes a nosedive.)
While I’m thrilled to have hit this huge milestone, I’m still baffled by it. Really? All of that belongs to me? Without buying a house? Without inheriting money? Without hitting it big with cryptocurrency or other high-risk endeavors? Without having a prestigious job?
2. I couldn’t have done this without taking a family finance class in college.
Family finance was the closest I came to a math class in college, and taking it was one of the wisest decisions I have ever made. Besides my editing classes (a.k.a. my career classes), family finance was truly the best preparation I could have gotten for my post-college life. The class covered everything from budgeting basics to saving for retirement to calculating interest paid on loans. The book from that class was one of the very few college textbooks I kept instead of selling it back at the end of the semester.
I credit that class with my decision to start my own Roth IRA soon after I got my first adult job instead of sitting back and waiting to be eligible for my employer’s 401(k). Because of that class, I knew I needed to invest at least 10% of my gross income into retirement accounts. (I’ve since progressed to twice that.) That class taught me that the greatest asset I had when it came to investing was time. It kept me contributing to my Roth IRA and my 401(k) in the depths of the Great Recession instead of waiting for the market to recover. Thanks to that class, I learned that I could start taking care of my future self right now.
If you ever have an opportunity to take a personal/family finance class, especially if you’re in need of something useful to meet GE requirements, consider taking it. I’m grateful I had a professor who truly wanted his students to understand what adulthood looked like financially and urged us to save for the future.
3. My funeral expenses are covered, several times over.
Yeah, it’s morbid, and I don’t really like thinking about it, but the eventual cessation of your existence is one of the things you’ve got to grapple with in adulthood. (I plan on living for a good fifty years at least, but the universe is out to get us all.) Dying isn’t cheap.
The last thing I’d want is to leave my parents a financial burden while they’re grieving me, which is why they’re currently my beneficiaries on everything. Should I end up dying before they do, they’ll be able to make decisions about how to say goodbye to me without having to also stress about how to pay for it —
4. I need to put together an “in case of death” folder.
— provided they can find all of my accounts.
I told my mother when I got my first job that she and my father were my beneficiaries, but I don’t think I’ve mentioned it since. While I have confidence that they could get access to the life insurance payout and 401(k) from my current employer fairly easily, they don’t actually know where the rest of my money is. I don’t have cards connected to my Roth IRA, rollover 401(k), or savings accounts, and I’m all about paperless statements, so there aren’t any physical clues for them to dig through. And since my computer and phone are password-protected, they couldn’t easily get access to my email or my browser history and hunt for clues that way.
I’ve made some baby steps toward creating this folder (a.k.a. typing “in case of death folder finance” into my search bar and reading a few articles), but I need to officially put it on my to-do list for the year. Maybe I’m at the point where I should consider having a will drawn up. At the very least, I need to write down which financial institutions my parents would need to take death certificates to, stick that piece of paper in a secure place, and then tell them where that secure place is.
5. I still have a long way to go.
It took me about nine and a half years to amass $100,000 — and that’s nowhere near what I’ll need in order to retire. I have about $84,000 in my retirement accounts (the rest is in an emergency fund or has been set aside for short-term goals). If I’m following the 4% rule, that $84,000 will only get me about $280/month. On the one hand, my groceries are taken care of; on the other hand, there’s everything else I still need to be able to pay for.
Thanks to the magic of compound interest and the general nature of stocks, hitting the next $100,000 milestone should take less time than the first one did. (And the third will take less time than the second, the fourth less than the third, etc.) Based on the retirement calculators I’ve played with, and provided I keep on my current course, it’s looking like I’ll actually be able to retire comfortably — and maybe even a few years early.
Hitting $100,000 is great, but it’s still an early milestone in my financial journey. Luckily, it turns out that slow and steady can actually get you somewhere. Here’s to the next $100,000.
Image via Unsplash