| * Million Dollar Milestones. I've reached two significant million-dollar milestones this month.
First, my share of the year-end profit was larger than expected, exceeding $300,000, which brings my income for this year to over a million dollars for the first time. This was a very cool milestone. To put it in perspective, this is a 30% increase in income over last year's income of approximately $800,000. Even better, this is not likely to be a one-time event. With my increased equity in the law firm, I expect that my total income will continue to exceed $1 million per year through my 40's (FWIW, I turned 41 a few weeks ago).
Second, my net worth topped $5,000,000 for the first time. My ambition is to be a "Decamillionaire," which means I need another $5,000,000. I'm currently on track to reach that goal by age 45, though I'd prefer to exclude my law firm equity from the calculation since it's not liquid. Reaching the goal with reasonably liquid assets will take me to age 47-48, right when my daughters start college.
* Stock market. Still not in the stock market. I expect we will go over "the cliff." I'm eager to get back in, however, because the lesson learned above tells me that whatever nose-dive we take will be short-lived.
[UPDATE: This further proof that I suck at market timing. Congress reached an 11th hour deal and the market melted up by almost 3% in one day, and that came after a nearly 2% melt-up a day-before on hopes of a deal. I honestly should never try to time the market again. Now, if I can only figure out when to get back in.]
* Real estate. I continue to be conservative in valuing my real property and the posted value is the conservative amount less 6% in "transaction costs" a/k/a commissions, which are closing in on $250,000. Imagine that -- it's a little stunning to me to have a basket of 3 assets (properties) that would cost me a quarter-million to liquidate (not to mention taxes).
* Taxes. I've actually tried to reduce my net worth for any anticipated tax liability, but it's easier said than done. What would my tax hit be on my real estate, for example? Obviously that varies depending upon whether it is a primary residence, the adjusted cost basis in the property, the changing tax rates (both state and federal, and I have properties in two states) as well as (legal) tax avoidance or delay strategies, such as 1031 exchanges or gifting, etc. And that's just one piece of the puzzle. This month I deposited about $50,000 towards my federal tax obligation, but I expect to pay another $150,000 in state and federal taxes by April, 2013. |