2020 has been quite the year. We were very fortunate that our biggest gripes for the year ended up being loneliness and isolation and constant fear and anxiety. No one we knew became exceptionally ill or passed away. I know for so many others, however, incalculable losses punctuated their year. My heart goes out to everyone who suffered in 2020. It was a shitty year for so many.

Since my last net worth update was from April 2019 (ahem, so much for monthly updates), I’m going to cover where we started off financially in 2020 and where we ended up by the end of the year.

2020 Financial Year in Review

A few good decisions made years ago and dumb luck is what allowed us to weather the storm of 2020 financially. While I certainly didn’t feel that way then, I’ve now since realized that getting laid off in 2015 was the best thing that ever happened to me. It forced me to take stock of what we valued. I realized while we liked the Boston area and our friends there, that we were saddled with debts and living a life far from what we wanted. And so, we moved, diversifying our debts, which meant we could handle changes to our income more easily than when so much of our budget was tied up in rent payments. 

We made several improvements to the house – a new parking area, repairs to rotten framing in the basement, and landscaping. I will win my battle against invasive Asiatic bittersweet vines!

My ability to save and invest dramatically decreased as a lot more money went to servicing debts and paying for projects. Because most of our money is in broad based mutual funds, we still saw significant gains despite only adding about $10,000 to our retirement accounts ourselves.

We’re now in the space where our money makes serious money.

Here’s How Our Assets Grew Over 2020:

We refinanced our home mortgage from a 4.875% interest rate to a 3.25% interest rate, shaving off almost $500/month in mortgage payments. Since we refinanced, I also have the hard values of house appraisals to compare how much our property is worth. It went from $510,000 to $620,000.

According to a local realtor, we actually could list our house tomorrow for $645,000 – $700,000 as our area and property is in demand. But, we like living here. And I’m valuing house equity conservatively. So, it’ll stay flat until we have another appraisal, or at least 12 months have passed and I calculate a conservative % change. 

Our 5 year old car is an asset, as it could be dumped for cash if need be, but it’s certainly not an appreciating asset. 

Our $70,186 retirement account growth for the year was from the power of compounding and a roaring stock market. We invested less than $10,000 during 2020 as money went towards house improvements. I’m hoping to max out my 401(k) and IRAs next year. But I’m starting January with my 401(k) contribution still at only 5% (I need to do 4% to receive a 2% match). 

We have a chunk of cash in our savings and checking accounts that will be spent on a bathroom renovation this winter while Airbnb bookings are down (We started an Airbnb in Sept 2019).  

Here’s How Our Liabilities Changed in 2020:

Boy the mortgage didn’t seem to move much! That’s because we refinanced and rolled closing costs back into it. Our refinance has less than a 12 month payback. It’s also been helpful as Airbnb rental income is down. 

The car loan is slowly and steadily decreasing. We bought the car in mid-2018 with a 60 month loan. 

On credit cards, we paid down a lot, then charged a lot, then moved a lot. Nearly all this debt is at 0% interest currently. There’s about $30,000 at 0% that’s expiring this winter. I’m hoping to find a way to pay that all quickly down. Getting rid of the credit card debt is a big goal for 2021 and is more important than finding more money to put in my 401(k). 

How Much Did our Net Worth Increase in 2020? 

We started 2020 worth $152,405. We ended the year worth $367,564. That’s an increase of over $200,000. In twelve months! When I first started publishing our net worth in August 2016, we were worth less than our 2 year old. Our net worth was NEGATIVE $4,328.  I had the goal of financial independence by 40, which seemed possible but also impossible. Since setting that lofty goal, we’ve increased our net worth over $370,000! Suddenly, financial independence by 40, which is now just 3 years away, doesn’t seem so impossible. 

But I still have a long way to go!