The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
My goal for my net worth in 2016 was apparently too light. I looked back on the post from last year to see what I expected or hoped for at the end of 2016. “I would be quite happy if the net worth change for 2016 was a positive 25,000 or more. That would be a nearly 17% increase, I’ll take it.” When I totaled up my numbers for 2016, I beat that guess by over 50%. It was a good year, not as good as some, but good enough for me. I ended 2016 with a net worth that was higher by over $39,000. It was my second best year ever and it was mainly driven by savings increases and some modest debt repayment. As always, I let you look at where all the gains came from.
Once again it was my 401K that led the change in the net worth number. The change in 401K value represents about 70% of the overall change in my net worth. The change in value was almost evenly distributed between my contributions, the company’s contribution and market gains. I directed about $9,400 into the account this year. I was able to bump up my contribution rate at one point during the year to 9%. That is split between a traditional 401K (6%) and a Roth 401K (3%). The company matches my 6% and then also has a floor contribution of 2% in lieu of a pension. The company’s contributions amounted to about $9,100 for the year. Overall market gains for the year were much better than last year. Market gains contributed $9,600 to the value this year. Since I’m relatively young, I tend to be aggressive with my investment approach, favoring a higher ratio of stocks. For the coming year, I do not anticipate any reductions to my contributions, nor do I see any increases either. If I should be lucky enough to receive a decent raise, that could change, but seems unlikely.
The brokerage account saw modest gains in comparison to the 401K, but I still am happy with the progress. The account grew by over $1,500 for the year. I contributed $855 into it and that number will likely be higher this coming year. By the end of the year I had my monthly contribution at $100. I saw market gains at about $500 for the year and dividends of about $200. The dividends are automatically reinvested. I can remember just a few years ago when the account was barely at $1,000 and now it is over $8,000. As I’ve said before, I use it as the second part of my emergency fund. I would like to see the value be north of $15,000. I’ll get there eventually.
My savings account increased just over $3,400 for the year. This was mainly due to my wife’s extra income. This allowed us to fund a lot of our savings categories in advance. I normally use any bonus I get to pad various categories in our savings. If I should get a bonus this year, we are thinking of doing some home improvements. The savings number is going to go down this year as we are planning on going to Disney. We have been setting aside money the last 4 years, so that the trip wouldn’t be too overwhelming to the budget.
The debt numbers did go down. We only have the car and house left. The car is paid off at the end of this year. The house still has a way to go. I have a pretty good interest rate right now. It is 3.375% for 20 years. For the first time on the house, I am paying more towards the principal than the interest. Overall the debt reduction boosted the net worth by about $6,000.
Hope for this Year
I would be pretty happy again to see an increase of over $30,000. If the market doesn’t go down this year, between me and the company, there will be over $18,000 of contributions in the 401K. Debt reduction should total up to be just over $14,000. I do plan on hitting the savings hard for the Disney trip, so I’m hoping that the market gains can offset that number. How did you do last year?