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Compounding Retirement Returns

June 9th, 2017 at 06:27 pm

So I wanted to see how compounding has worked for LAL and DH. DH started saving in 2005 when he got his 1st job and LAL started probably in 2001 but didn't save much! I have never had a 401k so my entire retirement account has been in Roth IRA. Here are my balances on the first of the year. In 2005 was the first time I contributed the maximum of $4000. The total contributions for 2005-2016 is $59,000.

1/1/2003 $1,604.43
1/1/2004 $1,649.98
1/1/2005 $1,523.08
1/1/2006 $5,797.28
1/1/2007 $6,055.02
1/1/2008 $11,247.42
1/1/2009 $11,964.48
1/1/2010 $18,810.28
1/1/2011 $21,820.45
1/1/2012 $29,829.13
1/1/2013 $39,922.18
1/1/2014 $62,515.36
1/1/2015 $77,467.00
1/1/2016 $83,467.30
1/1/2017 $93,054.38

On January 1st, 2017 I would have contributed at total of $59,000. But in reality I only contributed $53,500 since I didn't make my 2016 contribution till 4/1/17. So based on compounding I made $39,554. ($39,554/53,500)/12 for a rough estimate return of 6.16% return. The proper way would be to calculate each year but I'm tired.

Currently though with my $5500 2016 contribution I have $104,926.89 in my Roth IRA. Not to shabby considering I have now contributed $59,000 and still have to do 2017 $5500 contributions.

DH is a lot more impressive but he's had a 401k with match.

DH Roll DH IRA 401k B 401k V 401k F


$0
$4,000 $0 $4,871
$4,148 $24,581
$8,322 $9,351 $38,895
$27,149 $13,642 $21,491
$18,497 $38,484 $59,763
$74,170 $100,378
$81,580 $121,116
$97,781 $165,139
$134,170 $247,078
$148,742 $288,367
$148,993 $320,533
$228,543 $304,448

Starting with zero in 2005 he contributed in 2005 the maximum IRA $4000 and $4871 to a 401k. Not bad considering he worked 2 months out of the year. As of January 1, 2017 he has a total $532,991 for retirement in 12 years. He also did not contribute for 2016 IRA but did max out the 401k for 2016 so we didn't miss a year. He contributed $251,000 so an approximate return of 9.36%. Not too shabby. Plus with the $5500 2016 contributions and 401k this year he's at $598,962. We broke the $700k retirement savings mark combined.

I'm not sure where we are heading but we are up $77,840 for the YTD and 2016 we went up with contributions and returns $73,501. 2015 we made $40,157, 2014 we went up $73,151.

I am going to guess we're getting over the hump where our returns will be more than our contributions annually. Which is $29k/year.

While not fantastic or super exciting I'm thinking that overall we're average boring investors in index funds now. Before DH would try to pick stocks which might explain why our returns are poor compared to the market. It also could be we had a few bad years in 2008-2010. But overall I think in another 10 years we'll see around average 8% returns.

we're making a house offer

April 25th, 2017 at 03:32 pm

Our agent is submitting an offer on the house today at 2 pm. I'm not sure if I'm excited or not. It's a good house with everything we wanted and a decent location. In the area we wanted but not quite middle of city more like edge. Still in the school district but DH's commute is longer than I would have liked. But otherwise the location works. It works for us weekend commute wise to where we like to go. It works for schools. It works for quiet. The house is a good layout and a good size.

So any hang ups? Well we are coming in under asking by a lot. And we do have an escalation in case there is another offer. We decided this because we had a home inspection yesterday because our realtor felt something was off about the house but couldn't pinpoint it. She said the preinspection the seller did didn't feel right to her so she asked us to get one. Turns out she was right. Best $675 we ever spent. Over 4 hours and we now know that the roof is leaking in multiple places including a couple of skylights. The siding has problems and needs repair that will cause the house to need to be painted. The backyard has to be regraded with the sitting water and side of driveway recemented. We also need to replace the water heater and piping, and the a/c that they once had obviously broke and they hauled it away so they wouldn't need to replace it. It's something we'd like to replace as well. So hence our below ask offer. They may laugh us off but at least we did our due diligence and will accept the house for less.

Our plan initially before the inspection was to put wood throughout the entire house and paint it. The house is 2004 built and quite dirty. The roof leak was probably due to the owner power washing it and probably the builder being cheap when installing it. The siding was due to improper installation. But this is all fixable. Inside was okay but normal wear and tear of carpet all over the house from 13 years and probably never replaced. And never painted so marks all over the wall.

Interestingly their inspection report did not find the roof leaks. Nor the siding issue. It also said "owner has a lot of personal effects making evaluating the house difficult." And yes they have A LOT of stuff. Nice, expensive stuff, but OMG it was really crammed into the house. I say that not as someone trying to minimize but really as someone just house hunting. Seriously they should have rented a storage because a couple of the rooms you couldn't really see the floor it was packed full of boxes and stuff.

Anyway we'll see what they even say or respond.

itinerary planning

April 11th, 2017 at 03:23 pm

So I've pretty much finalized my parents crazy tickets. I spent some time and I think I got it for $1100 which is a good deal. Way better than expected considering they are also flying multi-city with us and another island connection in hawaii.

I'm researching for a deal to hawaii this summer and next February.

Right now I'm debating between VRBO and hotels. VRBOs seem to make sense when we stay put for like 4 to 5 days in a city. But I'm not sure it makes sense for 1-2 days in a city to pay a cleaning fee on top of the cost of the rental.

I'm also debating our mode of transit between cities. Obviously train is the first option but buses are often used as well. Did I forget to mention we're doing Japan and Hong Kong? I've finalized the airfare but not the details. Now I'm working on the cities and plans.

Right now I only know Tokyo Disney and Hong Kong Disney. Onwards to planning.

When Frugality crosses the line...

May 20th, 2014 at 05:36 pm

Well it's when what you do affects others. And what you did causes others to suffer or pay more. The easiest example is people who always split the bill in the group and throw in far less than their fair share. I know this because I love to get credit card rewards but more often than not the amount comes up short. Seriously tax and tip people. People who are frugal will budget for a split bill and not mind. People who are cheap will pay for their meal but not the tax and tip. Trust I know from watching the bill of what people throw in.

Recently I went to a wedding that was so obvious they were trying to be "cheap" and save on a big wedding rather than having a wedding they could afford.

During the appetizer time samosas and chicken strips with lemonade, water, and coffee were served (good move no booze so frugal). The catering staff forgot to put out plates, knives, forks, napkins. So people were standing around looking for help and trying to get something to eat off of. But then the lemonade, water, and cups ran out. When I went to ask the catering people they said too bad. There wasn't enough because the couple didn't order enough. CHEAP! Seriously you can scrimp on what you serve but the amount? To not order enough food and drinks?

Then the buffet. It was spicy, no kid friendly food. Personally I ate the food but I like spicy. But again on each table there was one pitcher of water for 10 people. Luckily our table had 8 adults and my two kids. So the one pitcher really didn't have to fill all 10 cups. When we tried to stop the couple of waiters they said they were busy and would get to it. So not enough tap water! UGH. But apparently there was soda but only waiters were carrying around pitchers because there wasn't enough pitchers to leave on every table. There was 140 guest by the way. Then we had to bus the tables ourselves and rearrange the tables for dancing at 8:30. So the couple CHEAPED out and didn't hire wait staff or pitchers for soda! I mean seriously fill a few coolers with ice and throw in bottles of water, soda, juice and put it next to the buffet and let people grab their own. What would it cost? $200 at most! CHEAP! Again the couple cared about themselves and not how to provide enough beverages for the guest. I can accept busing my own table, getting my own drinks, but to not even enough water? Okay it's a bit much.

Then the cake cutting of a tiny cake at 9:15. They didn't have a knife or server so they used spoons to feed each other and "cut" the cake. Fine didn't want to bring a knife or forgot it. However they didn't serve the cake. People had to go up to the kitchen area and get cake from the one server working. I asked for a piece vanilla and a piece of chocolate, and was told there wasn't enough cake for everyone so I couldn't do it. I was stunned. Lucky my piece went to one kid and DH got the other kid another piece. Not enough cake for all the guest? CHEAP. Provide enough food if you are hosting a party/wedding.

I have to say the groom asked me about cakes about a month before and to be "frugal" and save money I suggested a $100 "cutting" cake for photos then sheet cakes at least 2-3 from Costco at $40/each. WTF! CHEAP!

The only bigger insult was the couple trying to hit guests up for cash for their honeymoon. I don't think it often gets worse than that.

Moral of the story? The line between frugality and cheap is thin. It's really easy to cross over and hurt people by being more than just frugal, becoming cheap. Having the expectation that others will provide largess to make up for the lack of your own contribution.