I started the Best Interest on December 16, 2018. It’s been two years! And this also marks two years since I’ve been tracking every single expense in my budget. E-v-e-r-y-t-h-i-n-g. Today’s post will be a year-in-review for both the blog and for my personal finances. There will be lots of fun numbers. And I’ll show you how my preaching works in practice.
Thank you. Yes, you. Thank you for reading, and thank you to my generous patrons.
I don’t write here because of financial gain (see the Sankey diagram in the Budgeting section). I write here because you’re reading. And because it’s incredibly fun and you readers make it rewarding.
I was recently asked about my mission statement. It’s just in draft, but:
I value helping and teaching. At my core, I want to help people improve their lives by teaching them valuable skills & knowledge. I think personal finance is a tangible, vital, and universal skill set.
Improving personal finance == improving lives.
Sharing with you is my mission. And you sharing your attention with me is a privilege that I don’t take for granted.
Who doesn’t like statistics? Here’s what 2020 looked like on the Best Interest.
Back in 2019, about 19,000 people visited the blog. I was ecstatic.
In 2020, over 160,000 readers visited. I’m over the moon. In 2021, I’d like to hit 500,000.
As of this publication, about 210,000 words over 82 articles have been published in 2020. About 70% of those are my own, and the other 30% I can attribute to the wonderful bloggers I work with at the Money Mix.
The Money Mix is a group of like-minded writers, bloggers, and internet nerds. We share lessons learned, tips & tricks, and even share one another’s best written work. I’ve learned a ton since joining in April and attribute much of the Best Interest’s growth to learning from TMM.
The blog’s subscriber base grew by about 400% this year. If you haven’t joined, I send out a quick newsletter every week and include all new Best Interest articles.
And lastly, the blog cost ~$2800 to operate and improve (notice the sweet logo?!), plus the hundreds of hours of writing and site maintenance. The mission makes it worthwhile. But if you’d like to support the cause, please join the patronage. I truly appreciate it. The more this site pays for itself, the more time I can devote to the mission.
Another year, another streak of tracking every single dollar using YNAB. If you’re looking for a smart Christmas present, YNAB is a great idea.
Note: you and I both get a free month of YNAB if you end up signing yourself (or someone else) up with the link above. No extra cost to anyone involved. You get a 34-day trial, and then an additional free month. That’s two months to figure out if you like it!
Below, you can see a snapshot of my YNAB journey from November 2018 until now. During this 2+ year period, I’ve used YNAB to budget and track every dollar that I earn and spend.
Is it overkill? Yes, tracking every dollar is overkill for most people. But I highly recommend that you run a budget, and I even interviewed some other experts for alternative budgeting ideas. Find the right budget for you.
Where the Money Goes
As for where my money actually goes, the Sankey diagram below is a terrific visualization.
I’ve normalized this diagram against 100% of my salary. Why? Because it helps visualize what percentage of my income goes where.
For example, 23.4% of my income went to taxes before I ever saw it. Only 59.42% of my income ever came to my bank account via paychecks and, therefore, was budgeted. Of that 59.4%, I spent about half and saved/invested the other half.
The bottom of the Sankey diagram shows how previous years’ investments grew, and shows the free money that comes from my employer’s 401(k) matching. If the stock market had gone down, the “Investment Interest” section could have been negative.
But as it sits, 2020 stock market returns added the equivalent of 25.44% of my salary to my portfolio. And my employer’s 401(k) match was equivalent to 6% of my salary (that’s free money, by the way). The Investments section below has more detail on those individual investments.
Between budgeted savings (Roth IRA, taxable brokerage account, emergency fund) and pre-tax savings (401k, HSA), about 45% of my salary went towards savings and investments. Add in the “extra” savings (investment returns, 401k match), and the equivalent of 76% of my salary went towards savings and investments.
Your results may vary. But this is how my preaching looks in practice.
After plenty of questioning, I wrote an article in October that provided every detail of how I invest.
One of the nice things—for both you and I—is that it’s fairly easy to track my portfolio over time. There are four assets:
- Large U.S. stock index fund (ex: Fidelity’s S&P 500 index fund, FXIAX)
- Mid and small U.S. stock index fund (ex: Fidelity’s Russell 2000 index fund, FSSNX)
- Bond index fund (ex: Fidelity’s Total Bond Fund, FTBFX)
- International stocks fund (ex: Fidelity’s Total International Stock Fund, FTIHX)
As of 12/16/20, these assets have performed as follows in 2020:
- S&P 500 Index = +13.3%
- Russell 2000 Index = +17.6%
- Bond Index = +3.6%
- International Stock Index = +6.2%
For the 2019 year, these indices’ performances were:
- S&P 500 Index = +28.9%
- Russell 2000 Index = +23.72%
- Bond Index = +9.9%
- International Stock Index = +21.5%
What are the takeaways? 2019 performance was blistering, and 2020 performance feels oddly optimistic given current events. I don’t expect every year to be as “good” as the past two.
Nevertheless, I’m trying to leave my emotion at the door and stick with my plan. Specifically, I invest the same dollar amount every month, whether the market is up or down. If you want to learn why I’m confident in that plan (despite current events), I wrote all about it this past autumn:
- The Market Crash is Coming (…Eventually)
- Should You Keep Investing At All-Time Highs?
- Long-Term Investing Takes Faith
Even if the markets are at all-time highs and it feels like a crash is coming, my outlook is long-term. I have faith the the long-term (10, 20, 30+ years) economic outlook is good.
Favorite Blogs Posts
I’m proud that my writing is highly regarded. I was featured this year on MSN, Grow/CNBC, the Ladders, the Good Men Project, SoFi, Budgets are $exy, the Plutus Awards Showcase, and elsewhere. Woohoo!
If you think my writing is worthy of someone else’s attention, I’d love for you to share it with them. Post a link on Facebook, Reddit, Twitter, etc. Send your Uncle Dave the article I wrote about him. If you found a post particularly useful, let your tribe know about it. Simple grassroots sharing.
Here are some of the best posts from 2020:
January—The 2010’s Will Happen Again—If you’re worried that the 2010’s were a “once in a lifetime” investing decade, this article will show you how that’s not quite true.
February—Index Fund Bubble: Arguments For and Against—I invest solely in index funds. So when well-known investors warned of a bubble, I wanted to understand for myself.
March—Viral Stock Market Strategies—Lots of Twitter experts discussed their personal investing techniques during the early days of COVID-19. So I wrote a MATLAB script to back-test all their best laid plans. Spoiler—the simplest approaches always fare best.
April—The Biggest Lesson from COVID-19—Slack. Safety net. Margin. Out of the many lessons from COVID-19, this article discusses the biggest one: how building slack in our systems—personal finance, business, hospitals, even hiking—is a life-and-death issue.
May—Jeff Bezos and the Meritocracy Kings—Jeff Bezos, resource allocation, Vonnegut, meritocracy, survivorship bias, systemic flaws, and quarantine kings.
June—Simple Financial Goals—a two-minute punch-list to start you down the path to better personal finances.
July—Do you know Dave?—a funny story about a man you know, and the perilous personal finance circumstances he finds himself in.
August—Long Term Investing Takes Faith—I returned from a camping trip rejuvenated. But memories of the rolling waves reminded me of slow, steady, long-term investing.
September—Amazing People Everywhere—inspired by Tim Ferriss’s Tools of Titans, I interviewed some amazing people in my own life, and asked them what lessons they’ve learned in their unique journeys.
October—The True Cost of Car Ownership—a detailed analysis of car costs, answering the important questions like:
- How should I compare time owned vs. miles driven?
- What’s the full-life true cost of owning a car?
- How much does a car’s value depreciate over time?
- How do I place value on the utility of my car (e.g. a work truck vs. a compact sedan)?
- When is a used car purchase smarter than a new car?
- How does leasing compare to owning?
- Should I sink more money into an old beater? Or just get a new car?
November—Your Retirement Savings Goal for 2021—my first dabble into coding my own calculators. If you’re looking for an easy 2021 resolution, start by calculating your 2021 savings goal.
December—Curses, Miracles, and the Best Interest Student Loan Solution—The status quo is a haunting curse. The proposed solution is a divine miracle. I propose a middle-ground solution. And the math backs me up.
2020: Year of the Dog
We fostered nine sweet dogs in 2020. No dog goals for 2021, other than to keep fostering. There are lots of great dogs that just need a home. If you’re looking for a dog, consider adopting through a shelter or foster organization.
But because it’s fun and funny, here are the 2020 dog power rankings.
- Starting at #9: Josie. She was one of Sadie’s puppies. And man, was she mean. Clearly, Josie learned that the meanest puppy always gets fed, and she would absolutely torment poor Oscar. If you’ve ever seen Tasmanian devils fighting on the National Geographic channel, that’s how Josie was at feeding time. Bad girl! But she’s a sweetheart now as a young adult 🙂
- Next at #8, Ranger. While Ranger was a good boy, he chewed on too many things. Most dogs are athletes. Not Ranger. He was a happy, dopey, skittish, and unathletic dog.
- Louis a.k.a. Mr. Bones a.k.a. Louie Long Legs comes in at #7. Not the cutest pup, and one of the only dogs that legitimately drew blood from his playful bites and claws. But he was just a pup, so you can’t hold it against him!
- Jules is our current foster, and she comes in at #6. She’s a little whiny and took a poop behind the Christmas tree. Is she super cute? Sure. But a cute face only gets you so far on the Best Interest.
- #5 is Raven, a solid puppy. The most athletic of Sadie’s puppies, there was nothing to dislike about Raven. If she has stayed around longer, she could have competed for the top 3. But she got adopted quickly and didn’t have much time to rise to the top of the heap.
- Esther—coming in at #4—was one of two recent moms to come through our home. And poor Esther definitely missed her puppies, making multiple escape attempts over our fence. She was a sweetie. Not much is cuter than hearing a 25-pound part-Huskie give out a “big” wolf howl.
- Sadie’s third-and-final puppy, Oscar, comes in at #3. This little guy was everyone’s favorite of Sadie’s three puppies. While we figured, “Ahh. Dad must have been a Blue Heeler,” we actually found out that Sadie is 55% Blue Heeler. Her recessive traits are expressed in her more slender physique and black color. Oscar’s phenotype, however, is very much the stocky, mottled grey Blue Heeler.
- Scooby, the cutest bloodhound puppy around, is #2. Not only did Scooby have stellar looks, but he had the personality to match. He was playful, mostly potty-trained, and slept through the night from Day 1. He was wise beyond his weeks. The “Doobie Brother” was a very good boy.
- Coming in at numero uno, it’s got to be Sadie. I’m a big softie for Sadie. She was our first foster and probably the only one who arrived at our door significantly unhealthy. She had been homeless in Houston, scrounging for nutrition to support herself and her three puppies (Josie, Raven, and Oscar). Sadie was only 27 pounds when she showed up. But we nourished her, fell for her, and adopted her ourselves! She’s now a sturdy 42 pounds and has been a great friend to all the other fosters to come through our house. She’s also kinda famous in the blogging world.
2021 and Beyond
In 2021, I’d love to help half-a-million (or more!) readers.
Monetization of the blog is something I’ve considered before. Right now, a few generous Patrons donate to the blog, and I don’t run ads (here’s why). But if the income from running ads allowed me to further the blog’s mission without interfering with that mission…would that be worthwhile? I’m interested in what you think about that idea. Do ads bother you?
Content-wise, I’m always looking for useful questions to answer. My own confusion inspired my Explaining the “Big Short” post. The many new parents in my life inspired this guide to 529 plans. If you want to learn something, let me know.
I’m excited for 2021! And I hope you are too.
This article—just like every other—is supported by readers like you.