FYI, I’m writing this at the beginning of January even though it won’t post for a month or so. My plan is to take mid-January through beginning of April off from writing as we’ll be vacationing in Florida. 😉
As such, the numbers I’ll be sharing aren’t final yet (I’ll sort through the official ones when I do my taxes). These have not been verified, audited, adjusted for tax purposes, etc.
But if I waited until I file my taxes to do this report (which I’ll likely extend this year since we don’t get home until the beginning of April), you’d be reading this at the end of May at the earliest, which seems way too late.
Besides, the numbers are pretty close. I track every penny in Quicken and have done so for 25 years now.
I say all this because I don’t want someone coming back to me in six months saying, “You said the number was this!” if I quote a different number sometime. Haha!
For those of you interested in historical perspective, here are my reports for past years:
Overall, 2021 was a very good year on a number of fronts, so let’s get to the details…
We’ll begin with what I consider my key financial measure: net worth.
I include all assets and liabilities when I calculate net worth, but historically I had some of my assets in at cost versus market values (which lowered my actual number.) As you’ll see, this year that issue has been rectified.
The bottom line is that my net worth ended 2021 at $6.5 million.
That’s up over $1 million since last year, for two main reasons:
- I sold my rental properties (see Why and How I Sold Most of My Rental Properties and Why and How I Sold My Last Rental Property for details). I had moved the value of these up in Quicken (from cost) to better approximate their real value, but even so I underestimated their ultimate value.
- The stock market remained on fire. And since I didn’t withdraw any assets, they all simply grew as the market climbed.
So, with this result, I have now gained over $3 million in net worth (and almost doubled my net worth) since I retired. How wild is that?
This was the sixth best annual percentage performance since I started tracking my net worth in 1996. It’s also the third gain over 20% in three years. (Yes, I know all of the gain wasn’t earned this year (with my properties), but I don’t want to go back and spread the gains out over 5-7 years, so this is the way I’m simplifying it.)
It was the single-largest dollar gain for me on record and ten of the 12 months this year featured a record high net worth.
So retirement is going pretty well on the financial front. Hahahaha.
We have now averaged 13.78% compound average annual net worth growth since I started tracking in 1996.
Overall, net worth was very strong — an excellent year all around.
Let’s begin with the raw income results and then I’ll explain them…
- Websites: $135,772
- Dividend Income: $66,496
- Rental Income: $42,432
- Interest Income: $36,120
- Wife’s Job: $10,653
- Other Income: $2,677
Here are the details of these results:
- Both ESI Money and Millionaire Money Mentors (MMM) had record years with increased traffic, ad rates (for ESI Money), and members (MMM). They are both doing very well and I’m really enjoying each of them.
- Dividend income is the combination of my dividend stocks and my index funds. The latter makes up the lion’s share of the earnings and since they are in IRAs, they are simply reinvested and I have no access to them, so it’s not like this is income available to spend (though some of it could be if we wanted it to be).
- Rental income was down (of course) since I sold my places throughout the year.
- Interest income has gone up dramatically as I invested some of my rental sale proceeds into real estate syndications.
- I’ve mentioned that my wife volunteers part-time at our church — or at least she did until they insisted on paying her. Not bad for a hobby she really enjoys.
- Other income is mostly from cash back credit cards.
FYI, the above does not include capital gains “income” from selling our rental homes. Those numbers are reflected in net worth.
Now, for the expenses…
- Taxes: $35,643
- Travel: $18,597
- Medical: $7,260
- Food: $7,036
- Misc: $6,096
- Med. Insurance: $5,642
- Utilities: $5,362
- Christmas: $5,109
- Eating Out : $3,271
- Entertainment: $3,111
- Home Repair: $2,694
- House Insurance: $2,289
- Donations: $1,694
- Clothes: $1,625
- Car Insurance: $1,349
- Gas: $1,005
- Life Insurance: $848
- Car Repairs: $792
- Furnishings: $787
- Cat: $456
- Umbrella: $288
- Personal: $249
This needs some explaining as well:
- Taxes above are income taxes (I pay estimated quarterly taxes) plus real estate taxes. The much bigger numbers for taxes are detailed below.
- The majority of the travel cost is related to our January-March trip to The Villages this year (paid in advance). Throw in a few other trips (wife to see her sisters, me to see college buddies, etc.) and it adds up quickly.
- The medical number now includes my gym (which I view as a proactive, prepaid medical cost) plus my trainer. That’s why the number is so high compared to last year. The rest is made up of medical costs we pay ourselves — colonoscopy, doctors visits, dental and eye visits, etc.
- Food is consistent with past years. We do eat a lot of high-end meat that I make on the Traeger.
- Miscellaneous costs are much higher than past years as that’s where the costs for seeing my mom in the hospital went. Three flights to Las Vegas, hotel rooms, etc. are all included in that.
- Utilities are lower than last year as I backed off the watering a bit this summer.
- Christmas includes $3,750 in gifts we gave to our kids ($1,250 each to son, daughter, and son-in-law).
- Eating out is higher as I used to eat breakfast at my club every day at $7 a pop. Then “inflation” hit and now it’s $10+ a pop and I’m making my own breakfasts at home (which are actually better) for a couple bucks.
- The vast majority of entertainment costs are fees for indoor pickleball courts. Hahahaha. These have basically replaced movie costs from previous years as we go to few movies these days.
- Most of the home repair cost is a new tree for our front yard, some work we had done on the humidifier attached to our furnace, and the removal of some dead bushes from the front of our house.
- Donations are non-tax deductible gifts given out through the year. The majority are cash gifts we made to people in need.
Those are the highlights — the rest are fairly self-explanatory.
The above costs were all paid out of income. In addition to these, we had two major expenses paid in other ways:
- Taxes: $211,102 — This was the combined capital gains and depreciation recapture paid on the sale of my three properties — paid from the proceeds of the sale. Yes, I could have done a 1031 exchange and deferred these for some time, but I explained why I didn’t do that in the posts detailing the sales linked above.
- Giving: $166,000 — We gave this to various charities by contributing appreciated assets (index funds) to our donor-advised fund and then contributing dollars from the DAF to various non-profits.
2022 Estimated Budget
Looking ahead, here are the high-level numbers for our 2022 budget, starting with income:
- Websites: $100,000
- Interest Income: $80,000
- Dividend Income: $70,000
- Wife’s Job: $5,000
- Other Income: $2,000
Explanation of these:
- Both ESI Money and MMM had great years, but I’m not going to push as hard on either in 2022. ESI Money will only have three posts per week for the entire year and I’ll only open up MMM three times (most likely) in 2022 (and I plan to increase the price for new members sometime in the year — current members will keep their same prices.)
- Interest income will be strong as all of my syndicate deals come online plus income from my private loans.
- Dividend income should be roughly the same as last year. If there’s a market dip I will likely buy some more dividend stocks.
- My wife’s income will be lower since she won’t be working the first three months of the year for sure and may not go back to work at all.
Not much to say here other than I expect expenses to be about the same. There’s not much reason to think they’d be dramatically higher or lower.
So those are our results for 2021 and plans for 2022.
Any thoughts, comments, or questions?
How was 2021 for you financially?