A Brutally Honest Look at My Finances at 25

I started this blog just after getting laid off, which coincided with my 25th birthday. A lot has happened since:

Plus, a whole slew of other things! All the while, I’ve been working hard and building my way towards Financial Independence, bit by bit. So, almost a year in, it’s time I put my money where my mouth is (great figure of speech for a finance blogger).

Here it is, folks: a completely exposed look at my finances.

Investments: $18,227

Images courtesy of Future Advisor and Personal Capital

Not the ideal balance, but I’m working on it!

After years of working with startups, I’m finally with a company that offers a 401K (with match!) – and I always try to maximize my investments. I actually have quite a few investment accounts:

  • John Hancock (401K)
  • M1 Finance (taxable brokerage)
  • Robinhood (taxable brokerage)
  • Scottrade (Roth IRA)
  • Transamerica (401K)
  • Schwab (Traditional IRA)

And I fund them in that order. I only put enough money in my 401(K) to receive the full match, partially because John Hancock is notorious for having absurd fees, and also because I’m rebuilding my emergency fund after cutting it close with my home purchase.

After the 401(K) and emergency fund contributions, I’m funneling any savings into M1 and Robinhood, and saving up $5,500 to put towards my Roth IRA by the end of the year, which will give me the best tax-advantaged options long-term, even if it won’t count as a deduction today.

Transamerica was the 401(K) from my last company. I’m thinking about rolling it over into another account, but haven’t done enough research quite yet.

I also zeroed-out my traditional IRA with Schwab before buying my home, and am not putting a penny towards it. Without the tax advantage, lovingly removed from me by my newly found 401(K), I just don’t see the point in using it.

My goal is to start funneling the money from my 401(K)s into my Roth thanks to backdoor contributions to minimize taxes. Unfortunately that’s going to take some time.

Property: $61,300 – $77,520

After getting dumped and subsequently kicked out of my dream apartment (right on the water, sea lions fighting at night, wistful sigh), I made it my mission to find a new place, and actually own it. Actually, my big fancy-pants goal was to be a property owner before I hit 26. Very exciting, but difficult in Los Angeles.

It took 6 months, but I’m happy to say it did happen!

There are a lot of positive aspects of my newly-established home ownership – mental, physical, and financial – but it’s tricky to nail down the actual value of my new home. Because things like real estate are only worth what someone is actually paying for them, there are discrepancies in value across Zillow, Redfin, and every other tool under the sun. For the sake of simplicity, I’m looking at two sources:

Property Value (Zillow – Redfin) $437,193 – $453,413
Debt (Quicken Loans) $375,893
Equity $61,300 – $77,520

This is my first time taking on such substantial debt, but hopefully it’s worth it in the long run. It’s a nice feeling to see that number tick down every month, but ooph. $375K… better get to it!

Net Worth: $95,383 – $112,416

Images courtesy of Mint and my own spreadsheet.

This one’s also a bit tricky to nail down, only because of the aforementioned property owner dilemma.

So while Mint is showing my net worth as $95K, it might be $96K or it might be $112K, or anything in between. Damn data inconsistencies. So it goes.

Retirement Planning

FutureAdvisor

Future Advisor

So, looking forward!

I’ve preached my love of Personal Capital before, but this is the tool I go to time and time again to make sure I’m not way off base with my lofty Early Retirement goals! One of my favorite aspects of this tool is that it lets you insert big financial events, such as my recent home purchase (and subsequent expected rental income), or making post-retirement income. So far, it looks like I’m on track to hit my FI/RE goals well before 40!

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So there you have it: a totally exposed look at my financial health! There are definitely some areas for improvement, but hopefully I’m setting myself up for long term security, and soon. I’ll be sure to check in every once in awhile with updates on how this progresses!

M1 Finance

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