The picture above is of a demolition and I feel that this is appropriate to frame the past few months of my life. For the first time in my professional career I lost my job and found myself with bills to pay and no income in sight. Fortunately I had built in a safety net was was able to land back on my feet but to a person who values stability as much as I do calling the experience jarring is a bit of an understatement. I've spent time evaluating my life and my goals and making some decisions about taking my ideas about retirement from the hypothetical to reality.
Lessons Learned
Being without an income for the first time in my life was an eye opening experience and it taught me a few things.
- An Emergency Fund is CRITICAL - To be honest, I lucked into having an emergency fund. I have always considered myself to be in a rock solid place career wise and had placed much less emphasis on an emergency fund. That has changed now with an emergency fund being on equal footing with investing and paying the bills.
- Plan to be flexible - I thought I would retire at the last job that I was working and lived my life appropriately. The thought of selling the house and moving was not something I ever considered. I have now taken that into account and used it to help shape my future plans.
- Pay attention to what you have - My change in work came with a rather severe pay cut. With that pay cut came the realization that I had a lot of available funds prior to this year. Where did all of that money go? To short term luxuries mostly. That of course has to change now as I don't have those funds but more importantly going forward I need to keep that in mind and utilize what I have.
Total Net Worth
Once things started to settle down I decided that change was needed. I never again want to feel as helpless as I did sitting in front of my computer uploading my resume to different sites while wondering if I was going to run out of money before I could get employed and pull my first paycheck. I have my goal, the same goal I have had for the entire time. I want to build a portfolio of dividend paying stocks to provide a passive income stream to live off of. Now I wanted to know how close I was.
I had previously used Personal Capital to track my net worth but had deleted my account a few years ago because I was unable to add all of my investments accounts. As time has progressed the platform has matured and is not capable of collecting *almost* all of my data. I have loaded my retirement accounts, house, and debts into the dashboard for a more complete view of my situation and I can say that at this time I am 50% towards the minimum that I would consider retiring at. That includes selling my current house. Frankly I am surprised that I am already at the halfway mark. Due to the beauty of compounding interest it is probable that I will accumulate the additional 50% in less time. My current goal is to reach 100% within the next seven years.
Words to Action
The crisis is averted, the plan for the future has been documented, where do I go from here? That is going to be the subject of my next post. I will be consolidating my investments and buying into the few items I have identified as "forever" buy and holds. I still plan to experiment with different vehicles in a reduced capacity in the future however now is the time to start doing what I need to be doing for the remainder of my wealth accumulation phase. Stay tuned.
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