So this is kind of a curious analysis of our last 8 years. Basically what I have saved in accessible accounts, subtract mortgage and all other debt.
As I’ve mentioned in previous posts, this is the most telling of metrics. Savings in retirement, and college plans is just automatic and don’t figure in to our overall immediate financial health. House values do not figure in as well as they are the least liquid asset we have. Same goes for vehicles as they massively depreciate and should not be considered.
So an average and median of about 36K I am pretty happy with.
|Year||Net (Liquid – Debt)|
So a few things I can explain:
- 2012, sale of my company and I received several bonuses. I believe these extended in to 2013/2014.
- 2015 was a bit of a mystery at first, then I was able to put it together . I purchased a vehicle mostly with cash in June of that year. (would account for 20K, and added in the rest of 16K as debt). I also changed jobs and my income dipped a bit until I started receiving bonuses in 2016.
- 2018, initiated an auto lease so put a -26K debt on the books.
- 2017 and 2019 – high income, stock bonus, and appreciation
- Believe we purchased another vehicle in 2011 (used was about 25K purchased in cash).
- Vehicles kill savings in the year the transaction takes place (2018/2015/2011). Looming is another purchase or lease in 2021.
- Stock appreciation and grants account for much of the acceleration between 2015-2019. This is not guaranteed
- Average of 68K over the last 3 years should be the goal going forward, even with upcoming car purchases.
- 100K is expected by the end of this year. This should be the goal each year a car purchase is not made.
- 40-50K stock award after taxes is expected per year. This drives much of the growth.
- 20K knocked off the mortgage per year (800 extra + regular principal) is the next most influential
- This leaves between 0K-40K of additional savings. This is made up of savings of regular income, and market appreciation.
- This number becomes more sensitive to market whims as it grows larger. The way the accounts are managed now I would expect a correction in the markets to drop savings by half the market correction. So if we drop by 30%, I would expect my accounts to drop by ~15% overall because of the balance I have created in the our portfolio.
- Given the above, a market correction should result in this number declining of the overall metrics by 40-50K for a given a year, with a robust recovery the following year.
- Taxes are a funny variable, expecting a bit of a tax bill this year.
This is good as the 100K metric is what I have planned out through 10/31/2022