January 1st, 2021

It’s hard to believe that the year we never imagined coming to an end has indeed ended… and at the same time, we look back and it’s unreal to see ourselves in hindsight going through all the things we went through; politically, socially, financially, health wise, as parents…this year really had it all and it has tested us in many ways.

I f you are reading these lines I hope you and your family made it through 2020 OK. Or at least I hope the worst is in your rear mirror. I wish you the best in this new yearly cycle. I don’t know about you but I sometimes feel even guilty for being in a position of somewhat comfort, whereas many other people are out of jobs or impacted directly by the pandemic.
With that said, I think that the end of a year is always a great moment for reflection; for looking into our past year’s goals and make plans for the year ahead.

So here we go…

Just like for everybody else, health wise this year sucked.
Financially though, this year was luckily fantastic for us.
Given the nature of my teaching job and my several years in it, my family and I were shielded from losing my job and I am extremely grateful for that.
We started 2020 with a net worth of $189,000, mainly in home equity between our primary residency and our rental property. Plus a little bit on my 403B plan which did also pretty good.

Personal capital 2020

If I didn’t have Personal Capital I would have said, “meh, my year was just ok.” But when I look into my Personal Capital account I realize that what I did financially this year was simply amazing! My growth was $85,000!!! That is pretty close to my year’s salary (101K)!!! With a family of six? That is extraordinary I think!! That is a growth rate of 44% !!! Even discounting the almost 10K we received from the government due to Covid relief that would put us at a growth rate of 39%, which is still extraordinary.
Why am I so excited about this? Well, first of all, I never thought it was possible to grow your net worth like that.
Second, it is almost double the growth I had in 2018-2019, which was about 23% from what I can gather through Personal Capital; although I must confess I didn’t set it up correctly at first. So, the information I have is accurate only from April 2018 on. In other words from April 2018 until December 2019 the growth was 23%.
But even If I was able to replicate this kind of growth in the neighborhood of 30% the results in just 4 years will be amazing!

Interest Compound Calculator from Moneychimphttp://www.moneychimp.com/calculator/compound_interest_calculator.htm

Not to mention that I am still 8.6 years away from my early retirement age of 55. Even if I could hover around a 20-30% growth rate for 8 years the results would be more than enough for me.

Goals for 2021

As the year starts, we are all packed up and ready to move. If you have read some of my previous posts of this year you know that we have been contemplating the idea of moving. Despite the fact that we absolutely love this home we live in, a family of six people plus a grandma that comes to stay for long periods of time, puts a lot of stress on the family dynamics. This situation has pushed us towards a need for more space.
Likewise, we have been contemplating buying another rental property that can provide a decent cashflow like the one we currently have.
When we put all this together and the environment of historically low interest rates, we came up with the idea of simply moving to solve our space issue, at the same time that we would get to invest in another rental.
By converting our current home in a rental property we are diversifying our portfolio. We currently own what I would call a B- property, and now we would add a Class A rental to the portfolio but modest enough that is still at an entry level in the neighborhood.
If everything works out as planned my expectations are a 71K net worth increase or 25% growth rate.

So, there it is! One more year and I will be revisiting this post as I write to my future self today trying to hold myself accountable for these goals.

If you haven’t set up financial goals for yourself I hope this encourages you to do so. It has really been life changing for me and my family. This has helped me to take control of my finances.
If you have any suggestion, comment or simply want to drop a line below, please do! I would love to hear from you and your FIRE journey.

For now off to a new 2021!