Our Family's Financial Plan

We updated our family's comprehensive financial plan today!

Here's a post including the unique financial planning insights and opportunities we discovered.

And to update your own, here's the data-gathering checklist to get started!

Starting with the Balance Sheet, we reviewed and subtracted our liabilities (what we OWE) from our assets (what we OWN).

I prefer to break down Net Worth by tax location, separating our home equity:

Taxable: 26%

Pre-Tax: 0%

Tax-Free: 40%

Home Equity: 34%

The asset allocation of our TOTAL portfolio allocation (squishing all accounts together) is: 75% US Equity, 15% Foreign Equity, 10% Cash

We prefer to have liquidity available for short-term savings objectives, including our emergency fund. We give every dollar a 'use-by' date!

Since buying our home in 2015, its appraised value has grown by 8% (annualized), including 21% from 2022 to 2023. We have $125,000 remaining on our mortgage, with 26 years / 4 months left at 3.25% (fixed rate). We have 53% equity, and we don't plan to pay it off early (yet). If we continue making only minimum payments to our mortgage and stay in this home, it will be paid off when we're in our early 60s. We'll pay $61,000 in future interest, but that is not subject to inflation since it's a fixed-rate mortgage.

We are thrilled to have a family health savings account (HSA) balance of ~$45,000. It's invested in 100% equity, prioritized for long-term growth and to reimburse ourselves for current and future medical expenses. This is effectively our long-term care funding account!

We have unrealized capital gains of $9,047 within our taxable brokerage account. Since we don't need to sell our investments to support our living expenses and aren't within the 0% LTCG bracket, we will prioritize giving these appreciated securities to charity vs. cash.

We reviewed our annual spending and were shocked at how much insurance premiums add up! We "pay" ourselves $5,000 per month to cover our after-tax living expenses, and our health insurance premiums are deductible since I'm self-employed. We love to cook and hate to travel!

Based on our current savings and investment assumptions, we are on track to be financially independent by our early 40s. But I don't plan to stop working. I plan to work because I WANT to, not because I HAVE to. And we're CoastFI for our early 60s.

I reviewed our Social Security earnings records and conservatively calculated our future SSA retirement income - although we hope we don't NEED it. Since retirement benefits are based on the highest 35 years of earnings, my SSA statement includes unrealistic estimates at my age.

To learn how to create your own comprehensive financial plan as a family, look out for my upcoming video course at MeasureTwiceMoney.com! You can sign up for email updates now - to receive announcements and free samples along the way.

Measure Twice Money will be my primary focus in January and February 2024.