I never did a year end recap of my net worth or expenses, but better late than never! Here's a quickie version:
My net worth as of 12/31/25 was $2,994,337, an increase of $459,534 since the prior year. (As of this writing, my net worth is now up to $3,281,000.)
I'm not making a ton of money these days, but my early efforts to save and invest are paying off, as my net worth keeps growing mainly from the snowball effect of investment gains over the past 25+ years.
My 2025 income was $67,528 in gross salary, plus $3,190 in employer 401k matching funds.
My total expenses including taxes (but not 401k contributions) were $72,912. I don't love the negative cash flow of $2,194 but you can see that it was not very significant in comparison to the growth of my investments. Of course the value of the investments could fall, and sometimes does, but at this point, it could probably go up or down more in a day than I make from working in a whole year. I have to start just accepting that it's okay to spend some of my savings. (And I WAS accepting that back when I wasn't working, but then when I got a job again I was so happy I was covering my expenses that it's now disappointing when I'm not!)
My expenses were pretty consistent year on year with a few exceptions: more gift giving, more charitable giving, and more spent on household and garden stuff. Lower health insurance costs because Sweetie switched from my plan to Medicare towards the end of 2024. We spent more on travel, in part due to a business class upgrade, but Sweetie paid for more of that than I did so my travel expenses actually went down vs. the prior year.
Looking ahead to the rest of this year, I think most of our expenses will continue to be similar, but our travel budget will take another big jump. It's a little scary to be getting into that phase of life where you have to start scheduling in all the bucket list trips before your body can't handle them anymore. But lie-flat airplane seats help with some of that! And I feel so lucky we are able to afford them now. But psychologically, it's hard to adjust to spending money on something that always seemed like an out-of-reach extravagance-- a topic for another blog post one of these days.
4 comments:
So good to hear from you and hear you are doing well! I follow your site and check in periodically to read your updates....
I am really confused as you counting in an unusual way: adding gross income with 401k and subtracting net spending. Spending savings while working is not OK, unless it is an emergency. 3 million will generate 90K a year, if you are lucky.
For me it is mind boggling how people on 5 figure salary feeling ok to fly in business class with their own money. Something is horribly wrong with the airlines and economy seats. I have recently sat on a 9 hour flight in economy plus -it was a painful experience.
It's great to see an update from you! Seems to me you're doing great, if your income is so close to covering all of your expenses. (And if your employer covers your health insurance that's worth another ~6k at least, right?)
DO THE TRAVEL. Our bodies won't hold up forever - I'm personally looking at 75 as an age after which I'll likely do a lot less travel, based on examples in my family and older friends' lives. If I am robust and still able to get out there, great, but I am definitely doing as much as I can while I have the relative health and ability. If your sweetie is on medicare then you can see how quickly 75 will arrive.
Your $90k/year from $3 million suggestion is a 3% annual withdrawal rate which is very conservative, but even using that number annual spending is $73k per year which is quite a bit less. The portfolio supports this spending level by itself with no need of a salary, but a salary provides additional money and having it can't lower the safe level of annual spending.
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