Portfolio Update – Q1 ’21

I was pleasantly surprised to find an additional $3,500 in my bank account this morning. Just last week, we had guests from NY who told us they didn’t get any stimulus checks. And here we were, getting most it. Were we poor?

It turns out that because we maxed out 401ks, our taxable income lowered to where we qualified for the checks. We also made less in 2020 and they’d based the initial stimulus checks on our 2019 returns. So the IRS made the adjustment, which also included a belated but generous birthday gift to our little Gofi.

A while back, I read about how earnings and savings are key to net worth in the initial stages of wealth accumulation. At a certain point, your investments pick up and exceed your income and savings. The idea is to get to that mark as soon as possible. And the earlier you start, the earlier you get there.

A rising tide lifts all boats, and I don’t have any aptitude for individual stocks. We have faith in America, and we buy that instead. Every now and then, when a Gamestop happens, I allow myself to dream. But we don’t really need to play that game anymore.

We invest, as and when we can, in spite of the market. We maxed our Roth IRA earlier in the year, and intend to max our 401Ks by fall. Our allocation remains aggressive, with over 88% of our net worth in S&P 500 tracking index funds (primarily VTSAXVTI , FXAIX, and small positions in VYM, VGT, and VTIAX). We trailed the S&P 500: 5.73% to 5.77% this quarter.

VTIVX (Vanguard’s Target Retirement 2045 Fund), which at 88.4% stocks resembles our allocation exactly at this point, grew by 5.18% this quarter.

We hold nearly 10% of our net worth in cash. We’re hoping to use it towards a down payment in the future or buy more VTSAX during a downturn – whichever comes first.

We spent $17,062 this quarter. More than half of that go into day care and mortgage.

Our plan forward remains unchanged. Once we max our 401ks, we’ll divert the spare funds into our non-retirement accounts and buy more VTSAX.

We are incredibly fortunate to be where we are. The hope is to be of use to others once we’re FI.

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