LASTNAME-LASTNAME

STATE OF THE HOUSEHOLD REPORT

2019
 State of the Household Address
January 2019

Mrs Wife, and Members of the Rodent Defense Committee:

We are 7 years past the founding of this great Household. Seven years of education, travel,
sitting in sunbeams, and work. There have been good times, and bad, and many times that
were just sorta times.
Tonight, we take stock in our progress as a Household, looking back on how far we’ve come
and forward to our goals that we will achieve together.
This year has been trying, with numerous challenges both at work in dealing with unsavory
coworkers, at home with unexpected natural disasters, and in our state politics.
Despite these blows to our sanity and savings rates, we persist, and the State of the Household
is strong.
pause for applause
So what challenges have we faced, and how will we meet them in the future?
First – flooding of the basement during the May and August storms have threatened our
household infrastructure like never before. New research performed by the Committee on
Talking to Neighbors suggests that the floods on our street are infrequent but repeating. Climate
change predictions from the Wisconsin Initiative on Climate Change Impacts further suggest the
future may hold similar rain events. To combat this, we have installed a sewer backflow
preventer, added a sump battery backup, and have plans to replace the basement windows with
glass block and mortar. Our insurance also now has a rider for sump failure.
Second – the unexpected replacement of the roof. Insurance complications forced us to replace
it, but it is warrantied for 45 years, which should address concerns for the foreseeable future.
Third – the detainment of a member of the Rodent Defense Committee for several days in a
neighbor’s garage threatened the security of both of the household cats. The internal border
wall codenamed “Catio” is projected to finish in Spring 2019, which will provide secure outdoor
access to both cats.
Finally – Text redacted.
Despite these trials, at this moment, with stable employment and unprecedented success in
rabbit elimination, we are closer to our goals than ever before. We have laid the groundwork for
our financial independence, and have begun to explore our future second residence
possibilities.
This has been printed in Arial, because I know you much you hate Calibri.
Thank you, God bless you, and God bless this household we love.

In
 2018 Goals
Achieved Add $52k to income generating investments

$7,348.78 Taxable This goal was almost exactly met, somewhat by

$5,500.00 Roth IRA – Redacted coincidence.
$5,500.00 Roth IRA – Redacted
$10,500.00 403b – Redacted We would have really crushed this goal if we
$18,500.00 401k – Redacted hadn’t replaced the roof and paid a massive
$4,756.10 Stock Option amount against the mortgage principle.
$52,096.87 Total
Challenge will stay for 2019 and be increased by
$8k to $60k.

Fail Reduce home improvement spending by $4k

2018 Home imp spending: $8,350 We had a flood and had to unexpectedly replace
2019 Home imp spending: $Lots to roof. I’m not even going to calculate this one.
Difference: $Fail

2019 Goals
Savings / Investments

- Add $60k to income generating investments

o $19k – Redacted 401k
o $19k – Redacted 403b
o $6k/$6k – Redacted and Redacted IRAs
o Remaining taxable

Mortgage

- Pay at least $12k extra against mortgage principle

- Get mortgage remaining balance below $100k

Miscellaneous Todos

- Move traditional IRAs into 401k/403b accounts for backdoor Roth tax optimization
- Remove tree in backyard
- Redacted
 2019 Savings and Debt Calendar

Investments Mortgage
Redacted Redacted Redacted Redacted Monthly
401k 403b IRA IRA Taxable PMI Extra Principle Totals
Jan $3,000 $4,000 $2,300 $1,000 $10,300
Feb $3,000 $4,000 $2,300 $1,000 $10,300
Mar $3,000 $4,000 $2,300 $1,000 $10,300
Apr $3,000 $4,000 $2,300 $1,000 $10,300
May $3,000 $3,000 $1,000 $2,300 $1,000 $10,300
Jun $3,000 $4,000 $2,300 $1,000 $10,300
Jul $1,000 $1,000 $5,000 $2,300 $1,000 $10,300
Aug $1,000 $2,000 $2,300 $1,000 $5,300
Sep $2,000 $2,300 $1,000 $5,300
Oct $2,000 $2,300 $1,000 $5,300
Nov $2,000 $2,300 $1,000 $5,300
Dec $2,000 $2,300 $1,000 $5,300

$19,000 $19,000 $6,000 $6,000 $10,000 $27,600 $12,000 $99,600

Long-term Goals
- Eliminate main house mortgage by end of 2022
- Redacted
- Have $1MM in income producing investments by 2025
 Investment Policy Statement
Philosophy The large majority of investments will follow a buy-and-hold, all-index
strategy with a focus on minimizing costs and tax liability. A small
percentage of funds is allowed to be used for experimental investing
strategies.

Risk Tolerance Our ability to tolerate the uncertainties, complexities, and volatility
inherent in the investment markets is extremely high.
- Fully funded emergency fund
- Age
- No non-mortgage debt
- Dual income
- High demand jobs

Target Domestic vs International

Allocation
- 90% Domestic / US Centric
- 10% International
Investment Type (excluding property)
- 82.5% Stocks
- 10% Bonds
- 5% Cash
- 2.5% Experimental / High Risk, in stocks when not in use

Selection The expense ratio and overall cost of funds shall be a major point in the
Criteria selection criteria. To minimize style drift, index funds are preferred, if
available, for all asset class.

Rebalancing Rebalancing will primarily be performed by buying funds to maintain the

target allocation types during regular contributions. If purchases are
inadequate for reaching targets, a yearly rebalance will be made in
January.

Tax-Loss Tax loss harvesting will be used to reduce the year’s tax liability when
Harvesting >$1,000 loss can be realized in taxable holdings.

Loading No timing strategies (including dollar cost averaging) will be used when
loading money into investments. Money will be deposited as early as it is
available into investments, in the order of most tax-advantaged to least.
 Trend
Net worth 2018: $713,868 Per-day gain: approx. $418.53
Net worth 2017: $584,335
Net worth 2016: $437,298

Net Worth - 2016-18 y = 418.53x - 2E+07

R² = 0.9695
$800,000.00

$700,000.00

$600,000.00

$500,000.00

$400,000.00

$300,000.00

$200,000.00

$100,000.00

$0.00

Adj Net Worth Net Worth Property Equity Linear (Adj Net Worth)
 Holdings
All Holdings

Domestic Stock
34% International Stock
Domestic REIT
51% Domestic Bonds
Cash Equivalents
Real Estate
6% 3%
6%
0%

Location Type
8.81% 10.70%

91.19% 89.30%

Domestic International Stock Bonds REIT Cash Equiv

Real Estate
Redacted – Main House
Mortgage – 15yr @ 3.375%, opened Redacted
$230,000 / $124,388 remaining

Redacted – Rental Property

Mortgage – 30yr @ 4.5%, opened Redacted
$131,250 / $125,964 remaining