Net Worth Update: January, 2020

Our net worth increased from Dec. 26 to Jan. 26 in USD by 4.72% and in EUR by 5.48% to $62,387 and €56,561 respectively.

Some Changes to the Chart

This is the first time I've broken out the holdings in my taxable brokerage. I didn't do this by individual securities but instead by currency and cash amount. Since I have some securities based in euros in addition to dollars, I have split those up. You can see that reflected in the slightly higher euro assets.

Additionally, I'm using a ~10% margin position in euros. Namely, I sold euros to buy dollars some months ago, and I would like to have that debt acknowledged in my spreadsheet and chart. After long consideration paired with the low interest rates my broker charges for euros, I thought it a good idea to lever up a little bit. 10% is a very mild levered position, but it's still mildly unsettling: I am in debt, and I pay interest on that debt. It's worked out so far, but I want it to show, and you can see it in the sudden amount of euro liabilities.

I plan on going back and adjusting the previous months to show this change, but there's no set schedule for when I'll do that.

Major Factors in the MoM Change

I tried to be aggressive with our saving overall, and we saved around 37.5% of our blended income (post-tax for me pre-tax for her) this month. Some of income came after I finalized the spreadsheet: I got one of the refunds I've been expecting for my dental work, so it will be reflected in next month's net worth change.

In addition to that refund, I got some random income boosts. We both got some gift money: since we live abroad, those who wish to give us gifts often just send money. In addition, a colleague hired me for some extra work and sent that money straight into my bank account. That story deserves its own post.

The stock market performed reasonably well, though it wasn't a crazy positive month.

Possible Big Purchase in 2020

After thinking we wouldn't be buying anything large, my wife and I discussed 2020 money goals, and she mentioned a large purchase she's interested in: a piano. In my mind, this might eventually happen as an ongoing rental or a fixed upfront cost of 1000-4000€. I have some math to do!

We also haven't made fixed plans for the summer. The summer trip to see family is often our biggest outlay for the year, so that's a big wild card.

February Outlook

There's one final dental cost refund that I expect to happen in February, but otherwise, I don't expect any big cash infusions beyond our normal income. Our February budget right now is aiming for a 22.6% savings rate, so if the market holds still for a month, we're looking at a net worth change of ~€1000-€2000.

If You Buy It to Keep It Forever, Then You Need to Actually Keep It Forever

Last month, my wife's computer died.

The trackpad started glitching out, the battery couldn't hold a charge despite not being very old, and it had trouble accessing the boot disk. After some basic triaging, I determined that any potential fix was worth more than the computer was.

It was totaled.

I bought that computer in 2011 for my personal use before giving it to my wife. Back then Macbook Pros were upgradeable without too much fuss: if you wanted to add more RAM or a larger or faster disk, it wasn't difficult at all. And that's exactly what I did. I doubled the RAM in the first year, then I bought a 1 TB hard disk, and then, once prices were more reasonable, I bought a SSD and added it.

The computer, amazingly, got faster over time. OS X "Lion" was truly awful when it came to speed, but in the years that followed, OS X and subsequently macOS got faster. That combined with my hardware upgrades meant that the machine even in its final years felt speedy. In many ways it was faster than the "upgrade" I bought used via eBay that was manufactured a couple of years later.

In addition to the upgrades, I also made repairs. The most significant was changing out the keyboard after it started glitching out. That was a major operation that lasted many hours, but it fixed the problem for much less than a new computer. I also changed the battery and replaced faulty RAM sticks. When colleagues had problems with their Macs of this vintage, they'd bring them to me for the repair. This actually got us a free used computer after I revived a Macbook Air with liquid damage that the owner had given up for dead.

When I bought it, I paid up for several upgrades, but I was determined to wring every ounce of life out of that computer. And I did until it finally became untenable to do so anymore.

This is not meant as an endorsement of Macs, but instead, it's meant to be a reminder: if you pay up for something because you believe it will last a long time, then you actually need to use it a long time to get that value from it.

I've saved myself a lot of money on unnecessary replacements by asking myself, "Did I buy the thing I want to replace while thinking that I would be able to use it a more or less forever? Have I reached forever?"

If not, then I don't buy a replacement.

Obviously, "forever" isn't literal but means instead until the product becomes untenable to use. It's up to you to define what that means, but "totaled" is a good concept here: once a product costs more to repair than to discard, it's probably time to move on.

For example, I'm saved a lot on clothing with this Q/A. Boots and coats are expensive, but they're also fashion items subject to our whims. I'd love to buy the next fashionable "keep it forever" item, but I'm already in possession of several. So the better course of action it to look at what I already have and then take care of it, either through repair or basic maintenance.

I'll add that cars also fall into this category. With proper maintenance, modern cars can last very long times. When I owned my last and only vehicle (since we're car-less now), I was a regular at the quick oil-change place and the various mechanics I trusted. I drove a 1999 vehicle until 2013, and I sold it for a still respectable price once I had to. Had we not moved abroad, I assume that I'd still be driving that vehicle.

In all cases, beware the story you sell yourself to convince you that a new thing will be the real "keep it forever" item. Look at what you have and ask whether it's really and truly done for, or if you're just in the mood to spend some money.