The Commitment in 2017:
- Build our emergency fund
- Build a travel fund
- Save at least 40% of our income
In January we put $30,000 of that into a CD with a yield of a measly 1.25%. It really didn’t do too much for us. I started doing some research earlier in the year and kept coming back to blogs where people have made extremely early retirement work. People from 28 year olds to 45 year olds who committed to savings and were retired at those respective ages. I was absolutely floored and I continued to research on how this works.
Every blog talked about investing and how that investment got them to early retirement. Fascinated, I started to look up ETFs and realized how easy it was to find 3-4 ETFs and diversify your portfolio without having to watch the market too closely. I’m guilty of purchasing individual stocks and monitoring the market on a regular basis. In this case, I really don’t have to do that too often. In fact, most blogs have suggested find 3 low-expense ETFs where 1 is bond/high-yield dividend payouts, 1 is large cap domestic stocks (i.e. ETFs with Apple, Amazon, Chevron, BOA, and etc…), and 1 is large cap international stocks (i.e. Alibaba, Tenant, and etc…). So in April, I took $30,000 to purchase 3 EFTs and in August, I purchased another 3 using $30,000. In November, I checked and I’m up 11%, but it wasn’t necessary to have 6 EFTs when I could just have 3 as suggested by other bloggers. So, I rebalanced the accounts.
Now for a mortgage review. We are 3.5 years into living in our 565 square feet apartment with an original cost of $241,900. We did manage to put 20% down payment and get an awesome interest rate of 3.063% via a 7/1 arm. After the 20% down payment, we were left with a loan of $193,520. As of today, we owe a little over $150K. In 3.5 years, we’ve managed to pay off $35,000. We’re slowly chipping away at the mortgage.
After removing the interest from ETF investments and the initial commitment, we have saved about 57% of our income as of 12/1/17.
This year, we spent a lot of money on going out to nice fancy restaurants – Mr. Hair likes food (3 Michelin star restaurants and a few expensive dinners that were at least $100/person). We also spent quite a bit on luxury goods. In the middle of this year, we also completely decluttered our closets and rebuilt a small portion with items that we need to fill our last pieces of the “minimalist efforts.” Basically, we really figured out what we needed versus didn’t need and items that needed to be replaced.
Next year, we have committed to spending less on fancy Michelin star restaurants and are saying no to luxury goods shopping. I believe we’ve really spent a lot this year on that stuff and we should be very satisfied with what we have. Cheers to a next year and higher savings rate!