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Net Worth Update, Cash Back Options, How do I Buy the S&P 500 and Community Wins

Brad
Posted by Brad Barrett

Quarter 3 Net Worth Statement

Every 3 months I take 5 minutes to update my net worth spreadsheet and I think this is the most important thing you can do to track your finances.

The 3rd quarter of 2023 just ended and here’s your reminder to update your net worth spreadsheet.

If you haven’t done this before, it’s really simple:

  • Log into each bank/brokerage account you own and write down the current balance
  • Add those balances together with the market value of any real estate or other significant assets you own.  This makes up your Total Assets
  • Write down all debts you owe including mortgage, credit, student loans, etc. and add them together to get your Total Liabilities.
  • Total Assets minus Total Liabilities = Net Worth

Track this quarterly and watch this amazing journey to FI unfold before your eyes!

Best Cash Back Credit Card Options

Julie wrote in:

“My husband and I are not really into traveling enough to use the credit cards with travel points. What's the best point card system that isn't based on travel rewards?”

My response:

​“I would check out CashFreely, which is run by my friend Zac Hood.  It is the best way I know of to maximize cash back on your cards!”(For those of us into travel rewards, Zac also runs Travel Freely, which is a great way to keep track of your travel rewards cards)

How Do I Buy a Part of the S&P 500?

Titus wrote in an important question for people new to investing:

"I have been listening to your podcasts for a little while now and my wife and I currently have investment properties. We are looking to diversify and I would love to get into stocks, but my question is: how do I buy stocks? Not how do I pick the right stock or anything like that. Just, how do I buy one? How do I buy a part of the S&P500?"

I’m personally a fan of Vanguard, Fidelity or Schwab as brokerage options, and wrote Titus back with this step-by-step list of how to open an account and purchase your first ETF at Vanguard.

If you’re looking for a visual, Vanguard has this short video on opening an account and tutorial on How do I buy an ETF or stock?)

Step-by-Step to Open Account and Purchase ETF:

  •  Go to: Vanguard.com and click "Personal Investors"
  • Click "Open an account" and then  "Open a new account with money from my bank"
  • Click "Invest on my own"
  • Click "Sign up" under 'I'm new to Vanguard'
  • Click "Select your account"
  • Click "General investing (individual, joint, trust brokerage)” then click either Individual or Joint below
  • Continue setting up your account with personal information, create login, etc.
  • Once account is setup, link your bank account and once the bank account is verified, transfer cash to your account
  • Go to your account and click "Transact"
  • Then select the investment option, most likely "Trade Vanguard ETFs"
  • On the ‘Trade’ screen, click "Buy" and then in the "Symbol" field, enter whatever fund you're looking for.  VTI is the Total Stock Market and VOO is S&P 500 for instance.
  • In the "Amount" field, enter the number of shares you'd like to buy.
  • Most people would select "Market" under ‘Order Type’
  • Duration must be selected as "Day" for a Market order
  • Click "Preview Order,” review all details and then hit "Submit Order" on the next page

In a few minutes you'll be the proud owner of a part of the S&P 500 or Total Stock Market ETF!

Episode 457 Recap: Mailbag

Rachael Camp, CFP joined me for a mailbag episode this week on the podcast and we tackled some important questions including (timestamps in parenthesis):

  • (3:25) Laura is concerned she started too late to pursue FI and also has credit card debt and some self-doubt.
  • (20:00) Shannon needs help understanding the 4% rule and (27:00) can you withdraw the earnings?
  • (41:45) Alan asks if it’s okay to not max out your 401k and are retirement calculators starting from the wrong place?
  • (51:50) Pradeep asks about 529 plans and financial aid ramifications
  • (58:55) Jonathan asks about Second Generation FI and starting accounts and credit cards for your children

ChooseFI Community Taking Action This Week

  • Nate said, “My 1% better this week is using the salary negotiation techniques that Financial Mechanic shared in episode 454. The advice came at the perfect time as I was going through the interview process for a new job. Just by delaying the salary conversation, doing my research, and knowing my worth I was able to negotiate the new position with a ~50% increase in salary and a sign-on bonus as well. This will go a long way to helping our family meet our FI goals. Listening to Choose FI always pays off, and in this case even more than usual!
  • Kaylen said, “Talk about wins. Here are several for you. My fiancé and I met with Logan at Student Loan Planner and he showed us the best path to paying down my fiancés student loans. Since we are planning to get married in about 18 months, we're really trying to get everything in order. Repayments start in October and we were able to get on the SAVE plan where we don't have to make any payments for the next three years and then only have 12 years to finish paying off his $45,000 debt which will then get forgiven at the 20 year mark. That leaves us only paying $6000 total max and then we will be debt free. That, on top of moving in with his grandma to take care of her while she struggles with dementia puts our rent expense at $0 and really rockets our FI journey. Not to mention any extra cash we don't need immediately, we're investing. Oh and did I mention I got a new job with higher pay, less responsibility, and more exposure to my field?
  • Camilla said, “My 1% better was one that I didn't realize until a recent experience. I serve on the committee for our church's endowment fund, and we recently met with our financial advisor. If this had happened a year ago, I wouldn't have understood a word he was saying, but thanks to the knowledge that I have absorbed from ChooseFI and other podcasts, I was able to understand his summary and the information we were given about our portfolio to help make an informed decision about our investments. And I even made some changes to my own portfolio. Thanks ChooseFI!
  • Kevin said, “My 1% better this week is to redeem I Bonds purchased when the interest rate was over 9% and to take that money and interest earned and place it into a high yield 12-month CD earning 6%. The I Bonds I had purchased are now earning just over 3% and even though I had to give up 3 months of interest on the I Bonds (at that approx 3% level) because I cashed them before the 5 year mark, it was totally worth it. As you probably know, t’s best to cash in I Bonds at the beginning of the month as you’ll get the entire prior month of interest credited whether you redeem the I Bonds on the first or last day of the month.
  • Lauren said, “We did a home energy audit using a device on Amazon that you plug your electric appliances into and it records the amount of electricity each device uses, you can even program it to show the usage in dollar amounts with information from your own bill. That alone is cool, but we saw an Instagram reel of someone taking all the plates off the back of their fridge and vacuuming every bit of dust out of the inside they could reach. Since our fridge was the biggest energy sucker (40 cents per day) and buying a new one is not currently an option we gave it a try, and HOLY COW that same old fridge is now down to 20 cents per day. We are now adding this to our deep cleaning list. Every little bit helps!
  • Alexandra said, “I've been stringing together 1% moves since 2018. In the last five years, my husband and I paid off over $50,000 in debt, paid out of pocket for both of our grad school programs, and hit our first $100,000 this past Spring, all while starting to max out our Roth IRAs, HSAs, and employee retirement matches.  Our 1% this month: My husband and I finally adjusted our budget to increase our monthly Roth IRA contributions to max out the new 2023 allowance of $6500 each. We're now contributing $1250/month instead of $1000 through the end of the year.  Thank you for all the stories you share from this community!

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