March Net Worth Update

It’s raining right now, which is a small hint that Spring is making its way, slowly, to New England. The start of April signifies that we’ve entered the fourth month of the year and our experiment continues.

March Net Worth Update www.thethreeyearexperiment.com

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. Each month, I record our progress on our net worth and our spending (gulp!). Last year, we increased our net worth by 32% over the year before! This year, we’re trying to increase it by more than 65% from where we started in December 2016. Given the wild ride the market’s likely to take us on this year, I’m not sure it’s doable. But we’re going to try.

March is always my least-favorite month of the year. The rest of the country is enjoying the first signs of Spring, and we’re still covered under snow. This year, March lived up to the adage, and came in like a lion, with storm after storm that buffeted us with snow and left the skies gray and damp. It went out like a lamb, with a few days at the tail end full of blue skies and (slightly warmer) temps. But April has brought wind storms, more cold weather, and a reminder that here in New England, there is no such thing as Spring.

Spring New England town church www.thethreeyearexperiment.com
A view of our small New England town from the library. This is what Spring looks like.

Continue reading “March Net Worth Update”

Ladies, Time to Figure Out Your Worth #WomenRockMoney

It’s International Women’s Day. Go women!
 Women rock money—www.thethreeyearexperiment.com
Do you know why women are awesome? Well, here are a couple of facts:
  • More than half a billion women have joined the world’s labor force over the past 30 years, and women now account for more than 40 percent of workers worldwide (IMF, 2012).
  • When a mother has control over her family’s money in the world’s poorest countries, her children are 20% more likely to survive (Melinda Gates).
  • 90% of married women identified themselves as the principle household shopper in their household (Statistic Brain). #mamacontrolsthemoneyhoney
Women have come so far in the last fifty years! It is amazing. However, in the areas of financial literacy and business development, we still have a ways to go.

Continue reading “Ladies, Time to Figure Out Your Worth #WomenRockMoney”

What We Teach Our Kids About Money: Part 2

Last week, I published a post that talked about the things we do to teach our kids about money. Since it turns out that we actually do quite a lot of things to teach them financial literacy, today is Part 2 of What We Teach Our Kids About Money. If you missed Part 1, read it here!

What We Teach Our Kids About Money Part 2--www.thethreeyearexperiment.com

We Give Them Age-Appropriate Books to Teach Them Financial Literacy

We were given an old kids’ toy book from Chick-Fil-A many moons ago, called The Super Red Racer: Junior Discovers WorkTurns out, it was from a Dave Ramsey series of books for kids that taught about different financial topics like saving, giving, and investing. Junior ThreeYear loved the book so much that we eventually bought him the whole series for Christmas one year.

Those books have gotten a lot of traction. Continue reading “What We Teach Our Kids About Money: Part 2”

What We Teach Our Kids About Money

Parenthood is a big responsibility and I feel like I’m messing it up a dozen times a day. When it comes to teaching our kids about how to manage their money, though, I feel like we really need to get it right.

What We Teach Our Kids About Money--www.thethreeyearexperiment.com

Mr. ThreeYear and I got out of debt by following Dave Ramsey’s baby steps, and we also listened to what he had to say about kids and money. He has a lot of great advice when it comes to teaching your children about financial matters, so we started there. But money is such a complex and important topic that we certainly didn’t end there.

Here’s what we currently do to make sure that our kids have a good relationship with their money.

We Give Them an Opportunity to Earn Money

Ramsey recommends giving your children, at as young ad 3 years old, three jars in which to put their money: Save, Give, Spend. We made jars for the boys early on. They have the opportunity to earn money by doing their chores every week. They can earn up to $6 per week for doing their three chores (these are age appropriate chores–for my 10 year old, it’s making his bed, clearing the table, and doing his laundry each week, and for my 7 year old, it’s setting the table, making his bed, and tidying his room). If they don’t do their chores, they don’t get paid.  Continue reading “What We Teach Our Kids About Money”

The Financial Domino Effect

Have you ever made a change in your life–maybe a huge one, like getting out of debt, or maybe a small one, like deciding not to buy takeout coffee–that in turn, caused benefits that you never imagined?

The Financial Domino Effect--www.thethreeyearexperiment.com

Maybe getting out of debt made you realize that your house was too big, so you decided to move into something smaller. Maybe not buying takeout coffee helped you realize you could save in other small areas, and after a few months, you ended up with enough to go on a trip to Florida.

This is the financial domino effect, and it happened to me.

Like a chain of dominoes, where one tile makes the whole line fall down, one seemingly small change in your life creates scenarios that make it more likely you’ll create other small changes.

via GIPHY

One action that is, on the surface, completely unrelated to another action, causes the start of a wave of behaviors that can ultimately change your financial life. Continue reading “The Financial Domino Effect”

January Net Worth Update

It’s time for another net worth update! Are you in the midst of winter, or is it warm and deliciously summery where you live? The ThreeYears are smack dab in the middle of the coldest and snowiest parts of winter, but we made it through January and we’re raring to go for February (Little ThreeYear can hardly wait for Valentine’s Day and all that chocolate he thinks he’ll get from his classmates!).

January Net Worth Update--www.thethreeyearexperiment.com

This is the first report from 2018, and boy is it a good one. Subsequent reports may not be as juicy, given that the stock market may have more “small or significant corrections” coming up, so I’m focusing on January while I can!

If you’re just joining, our family of four is on a three-year journey to double our net worth and become location independent. Each month, I record our progress on our net worth and our spending (gulp!). Last year, we increased our net worth by 32% over the year before! This year, we’re trying to increase it by more than 65%! from where we started in December 2016. Given the wild ride the market’s likely to take us on this year, I’m not sure it’s doable. But we’re going to try!

We started the month of January off in warm Santiago. We took a three week trip to visit my in-laws, and had an amazing time.

La Moneda--www.thethreeyearexperiment.com
The boys had a blast during our visit to Santiago and San Pedro de Atacama in Chile, even if some of the smiles look forced!

I was very excited to see how our spending would look in January as compared to spending in 2017, given we have now eliminated the mortgage in Chile and our car payment. We’re also working to keep our food spending lower than last year.

Continue reading “January Net Worth Update”

The Average Joe’s Ultimate Guide to Getting Out of Debt

What would your life look like with no more payments? No more car payments. No more credit card payments. No more student loan payments. How much extra money would that give you? Imagine the freedom to travel, to build your dream house, to finally retire. It’s a new year. And a chance to finally, once and for all, get out of debt. But what if you’ve tried before, and nothing’s worked? Or you’ve gotten out of debt only to get back into debt?

Average Joe Ultimate Guide Debt--www.thethreeyearexperiment.com

If you’re reading this, you may have an overwhelming amount of debt to tackle. Or you may be a personal finance guru, and need this advice like you need an extra helping of pasta with dinner.

Never fear! This guide is designed to help you get out of debt, but much of this advice will also work for other large, looming goals you’ve set for the year.

But why, you may be asking yourself, should I listen to this random voice on the internet? What does she know about how to get out of debt or how to accomplish my goals?

Our Story

I have written every detail of how Mr. ThreeYear and I managed to get out of debt in this post and this follow up post, but in case you’re new, here’s a recap.

When Mr. ThreeYear and I got married, we were both debt free. This is something of a miracle when most college graduates finish college with debt. According to Tica, The Insitute for College Access and Success, 76% of graduates from New Hampshire, where we live, have college debt upon graduating as undergraduates, and the average debt burden is $33,410. That’s for undergraduate education!

I was fortunate to have scholarships to college and parents who paid the rest. Mr. ThreeYear was fortunate to live in a country where undergraduate education is more reasonably priced: Chile. When we met (in said country), neither of us had any debt. We spent a few years living like the DINKS we were, but Mr. ThreeYear’s way: we bought everything in cash. If we couldn’t afford to buy it with cash, we couldn’t afford it. I scoffed at Mr. ThreeYear as he saved up to buy a car, in cash. “Why don’t you just take out a car loan?” He looked at me like I was crazy. “I don’t want to take out a car loan! I’ll just wait and buy it when I have enough money.”

hiking in Chile--www.thethreeyearexperiment.com
Mr. and Mrs. ThreeYear, very long ago, in Chile.

Two years later, we moved to the States. We moved to the fast and furious city of Atlanta, where Mr. ThreeYear, and then I, found jobs, and slowly, every-so-slowly, we began to adopt the Atlanta way of life. First, we bought a house. We had been renting a very nice, 1100-square-foot apartment that was 15 minutes away from Mr. ThreeYear’s job (it was literally two miles away from us, but you know, Atlanta traffic). It had tennis courts and a pool, and a low rent (we paid around $850 a month for a two-bedroom in the heart of the city), but we decided we should buy a house, instead. Continue reading “The Average Joe’s Ultimate Guide to Getting Out of Debt”

Don’t Want to Think About Saving for Retirement? Just Do This.

Personal finance can be overwhelming. There are so many steps, dos and don’ts, behaviors to adopt, what have you. Once in a while it would be nice to have a fail-safe, simple solution to follow to make sure you have enough for retirement.

Don't Want to Think About Saving for Retirement? Just Do This--www.thethreeyearexperiment.com

 

Maxing out your 401K is the single best way to save for retirement, lower your tax implications, and spend less, all in one fell swoop. Continue reading “Don’t Want to Think About Saving for Retirement? Just Do This.”

How We Plan to Double Our Net Worth in 3 Years

I started this blog almost a year ago to document our family’s journey toward location independence over three years. We picked a three-year time frame because it coincided with several significant events in our family’s life: our oldest son finishing sixth grade, my husband turning forty-five, and me turning forty.

How We Plan to Double Our Net Worth in 3 Years

We love to travel, and we also have family who live in two different continents, so becoming location independent would allow us to spend a few years, before our boys start high school, living in an international location, or traveling between our respective families for a few years.

In order to make our plan work, we decided we would need to double our net worth and find jobs that would support us during our travel time. While doubling our net worth could allow us to live on 4% of our investments at a certain spending level, we know that with our current spending plus the need to fund two college accounts, we would prefer to have employment during our travel years, preferably employment that provides health benefits.

While we’ve talked about other aspects of our plan, we haven’t delved into how, exactly, we plan to double our net worth. So I thought I’d walk through our plan in this post.

Year 1 (roughly 33% increase):

We have almost completed Year 1 of our Three Year Experiment. This year’s focus was on paying off the last of our debts and funding some major home repair projects, all while saving and investing to grow our investments and decrease our debts.

I don’t know if we’ll increase our net worth by the full 33.33% this year, but we’ll likely be close. Here is where the majority of the gain has come/will come from. Continue reading “How We Plan to Double Our Net Worth in 3 Years”

The Best Way to Avoid Lifestyle Creep

Recently, I was listening to an interview by The Mad Fientist of financial planner Michael Kitces, who is the person responsible for a lot of the research done on the 4% withdrawal rule. Kitces has worked with many clients working towards financial independence and/or early retirement.

The Best Way to Avoid Lifestyle Creep--www.thethreeyearexperiment.com

At the end of the interview, the Mad Fientist asked him for one piece of advice for speeding up one’s journey to FI, and Kitces replied, “avoid lifestyle creep.”

Lifestyle creep, or lifestyle inflation, is the tendency we have to inflate our standard of living as our incomes increase. When we first graduate college and get a “real job,” we’re content to live in an apartment with a roommate, use Goodwill furniture, and drive a beater car. But as we bring in more money, we tend to upgrade our houses, furniture, and cars, and once we trade up for a nicer model, it’s really difficult to downgrade again.  Continue reading “The Best Way to Avoid Lifestyle Creep”