Net Worth Update: November 2018


So I'm sure you've seen my math behind financial independence in biglaw article, so you know that after everything, under the current salary and bonus pay scales, a first year associate should be able to stash away $106,895.25 after their first year (this figure includes 401k savings and the end-of-year bonus that likely won't hit the account until early the following year). 

That pay scale represents slightly more than what I made because the raise came in July, so I was making $10,000/year less for most of the year. A little math and guestimating taxes tells you that should be only about a $5,000 difference by the end of the year. So our goal is roughly $102,000 after a very generous $45,000/year budget.


This also includes zero loan payments because that varies so much. For full context, I have about $60,000 in loans at 0% interest through a distant relative, so I agreed to pay $10,000/year until it's gone. I understand I'm very lucky and others are straddled with more. So by all means, knock out your loans first and feel free to complain in the comments about the #struggle. I also started my biglaw career with about $15,000 in savings from various jobs and summer associate $$ and what have you (all of which went into a Roth IRA). I also started my job & moved to NYC fall of 2017, so this is just about 1 year of salary + summer bonus. So adding the end-of-year bonus I'll expect to receive in a few months, this update should give a complete picture of how my actual spending/saving/investing compared to my math behind biglaw FI estimate. 

 So now that we have our background - how did I do?!

Net Worth

So here it is: 

So obviously there's a few issues with this image and the corresponding math, which is why I provided all that background earlier. 

  1. For starters, the start date is around June 2018 rather than Fall 2017 because that's when I first got personal capital. Easy enough.
  2. The next issue that likely stands out to you is the seemingly giant leap in net work that occurred around August 2018. That actually isn't a gain in net worth, but Personal Capital finally resolving an issue with a local credit union where I had a Roth IRA I started in college and a CD, which combined for about $30,000. Once it finally linked after a few phone calls, my net worth appeared to shoot up, but really it started $15,000 higher and I bought the CD before getting Personal Capital. Moral of the story here is the end figure is right, and the true start would have been Fall 2017 with $15,000.
  3. That $15,000 Roth IRA is pre-biglaw job, so it should not be counted in comparing my one-year savings to my goal/estimate of $102,000 .
  4. This screenshot is also before I've withdrawn the $10,000 for my student loan payment, so we won't be adding that back in.
  5. This is also before my bonus comes in. The bonus is $15,000, which I expect to yield about $9,000 after tax. So I'll add $9,000 for the comparison.


So. $104,390.20 - $15,000 + $9,000 = $98,390.20. 

Rats. Off by less than $4,000. Meaning my spending + any difference in investments under 5% for this 12 month period come out to just under $49,000. 

Frankly, I'm disappointed in myself because that is an enormous budget for one person without a home, car, or kids, even in NYC. Plus I lived with roommates. However, I only stumbled upon the FIRE scene around when I got Personal Capital (April 2018), so half my year was a budgetless, irresponsible free for all. Through that perspective, it's very possible I've completely righted the ship since then. For example, around that time I cancelled an $80/month gym membership I found was being wasted. Over 6 months, that would've saved me $480 if I never got it at all. I'm sure there are other examples from those early months that could have put me in a position to reach my goal. Also, my investments are not all in the stock market, and probably represent less than 5%, which was included in the $106,895.25 & $102,000 figures. 

This sort of reflection is exactly why it's vital to track your spending, your net worth, and your goals. It's impossible to correct course if you have no idea what direction you're going in or what direction you want to go in. Creating new spending habits and a new mindset can be challenging, but once things go on auto pilot, you may find yourself coasting to FI in no time! Best  of luck to all of you!

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