2016 Financial Year in Review

Creating wealth and reaching our hopes and dreams of financial independence comes down to setting a goal and then taking the necessary steps to reach that goal.  Many of those who have reached financial independence started with a realization they were great savers and soon realized they could do more with their money.  The financial independence unicorn(self-proclaimed) that I am, realized debt was kicking my a**, I wasn’t paying off debt, and my income was minimum wage worthy.  Back in 2010, I had a negative net worth and the future looked closer to a homeless man begging for change on the street corner than a dream of financial independence.  Why do I talk about the past on a post clearly titled 2016 Financial Year in Review?  If you don’t know where you came from, you will never know where you are going.  That’s why today I discuss some of my financial past as it helps me realize where I haven been and the efforts it took me to get where I am today in 2016.

For some reason I’ve been really big on unicorns lately, favorite beer is Ninja vs Unicorn and I just bought Unicorn socks

 

Late in 2015 as I showed my support for small business Saturday as I did again this year and shared my 2016 financial goals.  At approximately the half way point I revisited my goals to share my progress and if I indeed was the financial independence unicorn that I thought I was.  If it’s one that that will get you going is telling millions of readers that you have either failed miserably or are on track to kick a**, both are incredibly motivating.  Today, I will discuss my successes and failures of 2016, thanks for reading.

Increase my H.S.A. to max contribution$6,750

Success.  My company contributed $400 early in 2016 and over the course of 26 bi-weekly paychecks, $244.23 was taken out and this last paycheck will get me to my limit or .02 short and I’m pretty sure that is going to bother me (changing that now be right back).  Brandon over at the Mad Fientist points to this as the Ultimate Retirement Account, I certainly tend to agree.  We only differ on one small logistic as I use my H.S.A card when medical items arise, rather than paying out of pocket to avoid the usage of the H.S.A until the “normal” retirement age to allow your contributions to grow over time.  Not only was I able to contribute the max amount to my account, but I was also able to receive a rather return of approximately 3% from my investments*.  A little disappointing with the high return from the stock market this year, but more important is I reached my goal to a max contribution.

Increase 401 (k) to max contribution-$18,000

Success.  I do not claim to make a large salary, in fact I usually compare myself to the every day Joe or Jane of the American economy.  Sure, I work in the heart of Chicago, but nobody is protesting at my front door claiming I am part of the 1%.  I mention this because the hit on my take home pay was enough to ask myself if I was making the right decision.  I learned that when something is setup as an automatic withdrawal, time after time, like any good habit you understand the rewards far outweigh any difficulty it may cause along the way.  With all that being said,  I was able to max my 401 (k) and finished the year long contribution with my first paycheck in December and received the merits of front loading even if the front loading was helped along with a promotion to a new position.  I celebrated like any good blogger and announce my triumph via twitter.

Mrs. Even Steven Max 401 k contribution-$18,000

Success.  Very similar to the success I had with my own 401 (k) Mrs. Even Steven also hit the $18,000 mark in 2016.  In late November the intentional front loading came to fruition again, once again helped along with a promotion.  Convincing Mrs. ESM  to stay the course during the annual review and subsequent merit raise and bonus was easier said than done.  I personally find it difficult to defer a lump sum bonus as taxes do a number on the bonus that you have worked all year for just to have more taken out by a 401 (k) contribution.  I understand the contribution lowers the tax implications but the present day still results in a lower bonus payout.   After 3 goals, we have reached all 3 and in before tax contributions we are at $43,750!!!

Pay off Florida Rental…..In Full

Success.  We started off the year with a projection of November 2016 as our pay off date, after a few twists and turns along the way I am happy to announce we paid off our mortgage in December(OK in like a week but I promise internet it will happen)!!!!  This is a major part of our journey to Financial Independence, which involves rental real estate and paying off our mortgage, essentially creating a rather large monthly dividend.  I am personally excited for this financial milestone and I’m sure Mrs. ESM shares my excitement as this goal leads into new plans that have been discussed on and off for the better part of 2016.

Roth IRA-Mr. and Mrs. Even StevenUndecided

Failure.  Starting off 2016 with a goal as clear and certain as “Undecided”, I am not surprised that very little was accomplished as the real goal would be to max out each Roth IRA at $5.500 for a grand total of $11,000.  In a spin of sunshine and rainbows and what I would describe as a great compromise by Mrs. ESM, she allowed me to pay back the money I owed her from the  last of my loan to my parents by making contributions to her Roth IRA.  I’m sure she would have much preferred it sitting in her savings account to see or spend as she saw fit.  The progress as 2016 closes is a grand total of $2,900 of the $11,000 contribution limit.  We have until April 15th, 2017 to contribute to 2016, but i’ll leave that for our 2017 goals.

Summary

2016 has been a great year for our financial landscape and our road to financial independence is drawing near as only time can do.  I have been pleasantly reminded that setting a goal and being held accountable can lead to a victorious ending.  Along the way I was also reminded if you set a goal with no specific measurable outcome, you will end up not reaching your goal and probably wondering why you decided to add a goal and list as “Undecided” like you can’t decide what shirt to wear with your new unicorn socks!  I hope to build off our successes in 2016** and look forward to a great 2017.  I promise in the New Year I will be sharing my 2017 financial goals because as well all know if you don’t know where you are going, you will end up someplace else.

Last but not least I mentioned accountability with this blog and you know sharing with the people on the internet.  The thing is I track all of my income, expenses, and investments in one place with Personal Capital.  Personal Capital acts as motivation for me as I see my net worth increase or a gentle reminder on my asset allocation and where they recommend I put my investments.  I get fancy graphs, top notch technology driven data, and a clear picture of where I am at today, where I was in the past, and projecting my future.  Sounds like an infomercial I know, but seriously I use Personal Capital as my primary source in tracking the overall picture of our finances.  I recommend signing up because the whole thing is FREE and I believe once you get all of your financial data into one place to see how it works and what it looks like, I think you just might be impressed.***

*I have the luxury of working at a bank that has great 401K offerings which are dominated by Vanguard, but it “Bogle”‘s my mind that we have such poor choices compared to our 401K dominated Vanguard options.  0.46% is the lowest fee and over 1.50% is the current expense fees offered.  Maybe I’m spoiled I don’t know.

**Included in my original goals were skipping my 2016 vision insurance and purchasing vacation for 2016, both of which were accomplished early on during my benefit choices, no need to dive in any further.

***If you use my Personal Capital link there’s a chance that I will get money sent my way to support Even Steven Money and apparently my move to the unicorn phase of my life.  I’m a pretty honest guy and since I use Personal Capital a couple times a week it’s pretty easy to recommend.  If you don’t use my link I will cry like a grown man after one of those ESPN specials with the kids who are not doing so well and they make the kid feel like a million bucks even if it’s just for a day, seriously though those get me every time.

10 Responses to “2016 Financial Year in Review

  • Awesome savings job! Maxing out two 401ks plus an HSA is definitely a great achievement. That’s over 40k put away in a year! Really goes to show how, once you get the savings automated, you really just eventually get used to it.

    Plus, with a paid off rental…things are looking pretty sweet for you.
    Financial Panther recently posted…Qapital Review – A Free App That Saves Your Spare ChangeMy Profile

    • EvenStevenMoney
      8 months ago

      Thanks Financial Panther! It’s been a long road and to get to this point, makes me feel great about today and the future.

  • It’s interesting that you took the approach of maxing out your 401Ks instead of just matching out your matching AND maxing out your RothIRAs. That’s what I’ve usually seen: getting that full 5/6/etc% and then focusing on the Roth IRA. I would love to hear more about why you decided to go that route!

    • EvenStevenMoney
      8 months ago

      The main reason we chose to max out our 401K is the tax advantage that it creates. Our combined salaries in the ESM household lean towards getting taxed more heavily than we would like and are willing to take the tax advantage today and assume a larger amount to grow over time than the tax implications later. Our working plan would be to slowly move the money from our 401K to an IRA then to the Roth IRA over time, minimizing the taxes as well. Of course thats all a working theory for taxes as the rules change.

  • Fantabulous. We will, unfortunately, have contributed about 27k to our retirement, but better than nothing. Woo hoo. One step closer to FI.
    Jason recently posted…Should I Change My Investments for 2017?My Profile

    • EvenStevenMoney
      8 months ago

      27K sounds fantastic, up until this year I have never reached that amount, so Cheers to you sir!

  • “Undecided” for a goal? Hmm, I usually term those “stretch” and consider them as extra credit. Four for four — good work!

    I’ve been trying out something called “OKRs” — objectives and key results. Up to five objectives, with up to five key results rolling up into each one, and aiming for 60%-80% achieved. It’s more aspirational than goal-setting, at least as I understand it right now. I can definitely improve the achievement side as I’m sitting around 40% right now. 😉

    • EvenStevenMoney
      8 months ago

      Yeah I’m mostly mad at myself for writing “Undecided”, but the other ones hit the mark:)

      I like the term objectives and key results, you might lose me a little on aiming for 60-80 percent, I want 100%!!!

  • Hey Steven great job on all the financial goals!

    What is the indecisiveness with the IRAs?

    For us it’s the HSAs. We just can’t seem to decided if that’s a good idea for a family.sounds great for singles or DInKs

    Also say hi to Mrs. Even Steven. If you are ever out in California let us know.
    The Roamer recently posted…2016 Goals: Year End ReviewMy Profile

    • EvenStevenMoney
      7 months ago

      Thanks! I think some of the indecisiveness is my poor job convincing Mrs. ESM how valuable an IRA can be. We also wanted to make paying off the mortgage in 2016 a priority.

      I will look for the opportunity to be in California;)

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