Net Worth Update: End Of October 2018

At the end of each month, I post an update of my net worth, including a brief discussion of any notable events that might have occurred. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of October, 2018
Net Worth: $867,812
Change from last Month: -$45,658

Events Of Note Last Month:

My SQL courses on Udemy generated $53.57 of income. Not all that impressive. What is impressive however, is the fact that I now finally crossed the $11,000 lifetime income threshold! Sales have slowed over the past 3 months and I expect they will continue to stay low or drop further. As I talked about last month, this doesn't bother me.

My courses on SkillShare, meanwhile, earned $22.11. This is more of less in line with typical earnings. My courses have been on that platform now for a year. The highest month was $92.80 and the lowest (full) month was $9.88. The average monthly earnings works out to $34.16.

Net Worth Update

I normally wait until the month is completely finished before doing this post, but since the 31st falls on my normal publishing day this month, I'm going to publish this before the month technically ends. Truthfully, one more day won't make that much of a difference. Our net worth took a nose dive this month, dropping by $45,658. Ouch!

September 2018

October 2018

The decline was due to drops in two areas: the stock market and the housing market. The S&P 500 sunk by about 300 points this month. The index funds I'm invested in track the S&P 500, so that means losses for me. I'm looking at the S&P 500 drop as a buying opportunity. The end of the year is coming and that is when many index funds pay out dividends and capital gains. In fact, my fund of choice, SWPPX, only pays out once a year instead of quarterly, so I'm happy to accumulate as many shares as I can before the end of the year when its payout happens.

The housing market in the Seattle area has cooled off considerably as well, causing my home value to drop by about $20,000 from last month. The net result of these two things is a big drop in my net worth. It kinda sucks to see, but it pays to remember that financial figures rarely go up every single month. The important thing is to keep on saving and investing and the market will go back up again eventually.

Last month, I mentioned I was shutting down a self-directed IRA. That process is still continuing, which is why my cash balance remains high. Next month, the final step of moving the funds into a regular IRA should be complete. I was surprised that this has progressed as quick as it has. I had to file some paperwork with the state of Arizona to close my LLC and they said that process could take 50 business days - two and a half months! It turned out not to take that long at all - just 3 or 4 weeks.  Now I have to wait for a closing bank statement showing the LLC's account is closed. That should be in the process of being generated today. Once I have that, I have to mail everything, including the funds, to the company managing the self-directed IRA, then initiate a rollover from them into my regular IRA at Schwab. None of this is complicated, but it does take time.



If you have any questions or suggestions for topics, please drop me a line in the comments section!

My Tesla Energy Costs Versus Gasoline

The Caveat

I'll state right off, that this whole post is based on very limited data. Sixteen days worth, to be precise, and my driving during this time involved mainly just my work commute and driving about on the weekend here and there. No long trips. I'll revisit this subject in the months to come, but because the Tesla is a new toy, I wanted to look into energy price comparisons now.

I thought I'd take a look at how much money, if any, I am saving by driving an electric car instead of a gas car.

Crunching The Numbers

Luckily, I have good data on how much I have spent on gasoline over the past year. Because I track all my spending in an app and on Mint.com, I can easily pull close to a year's worth of data. For this study, I'm using data from November 2017 (the first full month we lived in our house in Washington) through August 2018. (I got my Telsa midway through September 2018, so I'm excluding that month from my calculations.) My gasoline costs include all taxes.

To calculate electricity costs, I need to be a bit more careful. Unlike some areas, my electricity costs are comprised of only two components: costs for electricity used and taxes. My power company does not assess a delivery fee or a base monthly service fee like they do in other parts of the country. Here's a copy of my bill. As you can see, no extraneous charges. Just energy costs and city tax. (State tax is included in the electricity price.)

Click to enlarge

Based on this information, I have what I need to create a basic spreadsheet to compare my monthly average gas costs with the average electricity costs for my Tesla. Last week, I posted some efficiency numbers for the car, but here's a slightly updated version (2 more days of data). My efficiency dropped by 1 Wh/mi. (Technically, it rose, but that means it got worse because lower is better for this metric.)

Here's my spreadsheet. Formulas are pretty simple. I extrapolate the electricity costs to a monthly value based on a 30 day month. Electricity costs and taxes are taken directly from my electric bill.

Click to enlarge

Note that my electric company does not offer a Time Of Use plan to residential customers, where electricity rates are lower during non-peak hours. They tried it once in 2001 / 2002 but most customers ended up paying more, so they cancelled the program.

"Oops. My bad!"

Given that 16 years have passed and electric cars are becoming more popular, I hope they may reconsider this decision and try the program again. If they did, I could program the Tesla to charge when rates are lowest and possibly save even more.

The Verdict

Based on this, I am saving an average of $51.56 each month by driving an electric car instead of my Prius.

Last month, I adjusted my budget by lowering my gas budget from $100 a month to zero and increasing my electricity budget by $50. I picked that number simply because it was half of my gas budget, but it looks like that was a good guess.

Some Final Thoughts

The car is not going to pay for itself via gas savings. I never thought it would and I've never heard anyone claim it would. But in addition to gas savings, there are a lot of other savings an electric car offers: No oil or oil filter changes. No radiator fluid or transmission fluid changes. No tune ups needed. No spark plugs. No timing belts. No air filter changes. No emission test fees. These savings will add up over time.

My old car was a Prius that got between 48 and 53 miles per gallon. If I drove a non-hybrid car, my savings could easily be twice what they are.

My initial thought is that living in a mountainous area might result in better energy usage numbers. Sure, I have to use more energy going up hills, but I regain a lot of it going back down. Compare this to a place like Arizona, where I used to live. There, the terrain is pretty much flat, which means there are next to no opportunities to charge via gravity. Of course, you still regain some charge from just slowing the car via regenerative braking. I wonder if anyone has compared energy efficiency on the two types of terrain...

Electricity is a price-regulated commodity (at least in most states, including my home state of Washington). This means wild swings in prices are rare. Gasoline, on the other hand, is not regulated and wild pricing swings are common and subject to various geopolitical forces.

A Time Of Use plan could be critical in some areas. In Arizona, the electric company charges three different rates during the year. Lowest rates are in the spring and winter. Rates are higher in June, July, September and October, and rates are the highest in August - peak air conditioning season. Charging your car in such an environment would necessitate being on a Time Of Use plan to charge at the cheapest rates possible.

Installing solar power at your home would increase your savings, although maybe not enough to pay for itself.

Where'd his glasses go in panel 7?

An Energy Primer And My Tesla Energy Usage So Far

(Not actually from my car)

I remember back when I first got my Prius, I was totally fascinated with gas mileage and how to maximize it. There is a whole community dedicated to hypermiling - trying to get the maximum miles per gallon from their cars. After owning a Prius for a while, my interest in gas mileage gradually tapered off and I just accepted that I would get between 48 and 53 miles per gallon. Tesla owners are no different only instead of miles per gallon, they geek out over watt hours per mile.

There are probably not many subjects drawing the attention of Tesla owners, especially new Tesla owners, more than energy usage. A Tesla keeps all sorts of statistics about its energy usage and a lot of that information is made available to programmers via Tesla’s API. This allows for programmers, be it third party developers or just amateur hobbyists, to look at raw data from the car and go full nerdcore on all sorts of technical information.

It’s The Internet. Of Course, People Are Arguing!

In reading Tesla owner’s posts about the subject, it’s clear this can be quite the rabbit hole and I have no intention of falling in. There is a wide range of disagreement on how much power a Tesla actually uses and ways to compare how much power actually gets into the battery versus what is actually drawn from the power company (which isn’t the same due to heat and resistance loses, efficiency losses, battery degradation, etc.), what the best current level to charge at is, as so on. And don’t even get me started on the semantic argument over wall charger versus wall connector! I’ve got a degree in electrical engineering and even I don’t want to get involved with these discussions.

I Don’t Care If I’m Off By A Tiny Bit

Instead, I’m just going to go with what the car reports. This may be slightly different from what is actually used, but trying to figure out anything in more detail involves making a whole lot of assumptions of information we just don’t have.

Look at this like trying to calculate a gasoline car’s miles per gallon. You fill the tank, reset your tripmeter, drive around, fill the tank again, and note your mileage. Your miles per gallon is the number of miles your tripmeter reports divided by the number of gallons of gas you put in. Simple, right?

The problem is that’s not going to be super accurate. Your tripmeter is calibrated for a certain diameter wheel and tire. Is your wheel the same size as what the manufacturer calibrated with or did you get custom wheels? What about the tires? Did you know different tires have different rolling resistances and that rolling resistance may account for 5% to 15% of fuel consumption? Tire pressure affects mileage, so if your tires change pressure (and they do with temperature, as well with possible leaks), you can’t get an accurate number. The density of gasoline varies with temperature, so if you initially filled your tank on a hot day then filled it again on a cold day, you might be putting more gas into your tank than you actually burned.

In other words, when you figure your car’s miles per gallon, you ignore a whole bunch of variables that may affect your final number and you just use the data the car reports to you (via the tripmeter and the gas pump). I’m going to do the same with my electric car and avoid falling down that rabbit hole I mentioned earlier.

I’ve linked my Tesla account to the EVTripping website. This allows the website to get an authentication token that allows it to connect to my Tesla and download data each night. I’ve had an account with them since I bought my car, so they’ve got my entire usage history from Day 1.

The MPG Equivalent For Electric Cars

The important number EV owners track is watt hours per mile (Wh/mi) – how much energy it takes to move the car per mile. The lower the number, the better. Just like it assigns gas cars a miles per gallon figure, the EPA rates electric cars with an energy usage value. They rate my car at 35 kWh/100 miles . That is another way of saying 350 Wh/mi because 1 kWh = 1,000 Wh.

Many of the apps that track Tesla energy usage calculate an efficiency number. This number is how your car compares to the EPA rated performance. In gas car terms, this is like comparing your actual gas mileage with the EPA stated gas mileage for your vehicle. If the EPA says your car gets 25 miles per gallon and your actual figure was 20 miles per gallon, you could say your efficiency was 80%, or 20 divided by 25.

A similar calculation is done by most Tesla-related apps. Your efficiency is your actual energy usage divided by the EPA rated energy usage. Numbers greater than 100% indicate you are using less energy than the EPA calculated you would.

It’s incredibly rare for a gas car to get better gas mileage than the EPA calculated value. After all, their tests are done under ideal conditions and your driving isn't. Further, with gas cars, fuel flows in one direction – from your tank through the engine. By that, I mean if you are going downhill, you may use less gas, but you don’t actually get more gas in your tank as you travel down the hill.

Wait, I Get Power Back?

Thanks to regenerative braking, electric vehicles do reverse the energy flow and refill your “tank” (aka battery pack)! As gravity pulls your car down the hill, your motor switches from consuming energy to generating energy and feeds it back into your batteries. In effect, this lets gravity “refill your tank.”

Now, there is no free lunch. Going down a hill will never allow you to recapture *all* of the energy used going up the hill. You lose energy due to friction, heat, wind resistance, and a bunch of other factors. However, going down the hill can regain you around 90% of the energy used to go up the hill in the first place. (Again, this is a number many people argue about, but it’s what most trip planning sites use when calculating energy usage over changing elevations and it seems to match well with people’s experiences, so I’m going with it.)

Being able to generate their own electricity is what helps electric cars achieve greater than 100% efficiency. For example, look at this data from my drive to and from work:

The trips are listed in reverse chronological order, so the bottom trip is my drive to work and the top is my drive home. You’ll notice my drive to work has an efficiency of over 100%. Part of this is due to the change in elevation. My home sits at 375 feet above sea level and my work is 138 feet above sea level. My morning commute is basically a 237 foot downhill drive. (For those sharp-eyed readers looking at the distance figures, I take different routes to and from work to avoid traffic, which is why the mileage is slightly different for the trips.)

I also use Autopilot in both directions, which helps reduce energy consumption by reducing the small fluctuations in speed that happen naturally with human drivers because they can't keep their foot pressure perfectly constant. (Cruise control in gas cars provides a similar boost to MPG.)

My Numbers

After two weeks of ownership, here are my lifetime energy usage numbers. Note that this chart lists efficiency as Wh/mile rather than a percent comparison to the EPA rated number (which again, is 350 Wh/mile).

My average efficiency is better than the EPA stated 350 Wh/mi. Granted, this is only after two weeks of use and, as you can see, there is no battery degradation. Over time, batteries do start to lose some of their energy storage capability. Real world testing by Tesla users has shown that I can expect about a 5% loss after 50,000 miles, but the loss really tapers off after that. Tesla battery packs should retain 90% of their capacity after 160,000 miles and 80% after 500,000 miles!

For comparison, with my Prius, I did not notice any battery degradation after 8 years and 145,000 miles. Granted, the Prius provided absolutely no way to measure battery usage other than a 6 segment image on the dash, so it’s not likely I would have noticed a 5% to 10% loss in capacity.

In short, I’m not worried about battery life.

Next week, I’ll talk about energy costs and compare it to what I would have spent on gasoline.

If you have questions or comments, be sure to leave a note below!

My First Week Of Tesla Ownership

Ava, The Quickening

Wow. What a fun week! The car is amazing! Here are some random highlights:

What's In A Name?

In the Tesla software, you can name your car. I tested out an Easter egg by naming my car 42 - which was changed to "Life, The Universe, And Everything." I ended up going with a suggestion from my wife: Ava, which was the name of the robot from Ex Machina. Not sure if that means she thinks the car is going to kill us.

The Original Ava

Charging

I've set the car to charge nightly to 80% battery capacity. This gives me about 250 miles of energy. Tesla recommends charging to 80% to 90% for day-to-day use and only going to 100% for long trips. This is to help extend the life of the battery. I drove to and from work Monday and Tuesday, about 62 miles round trip each day and, without charging it Monday night, I was down to 28% charge on Tuesday night.

My car is scheduled to charge at 12:30 AM and the Tesla app tells me when it stops charging. On Tuesday night, to go from 28% to 80% took 3 hours and 15 minutes using the high power wall charger. Sadly, my local electric company does not offer a time-of-use plan for residential customers where power costs at night are lower. Still, I'm just going to leave my car programmed for doing scheduled charging at night.

I haven't tried a Supercharger yet, nor have we done a long road trip where we need one, but one is in the works. As part of planning for that, I also signed up for free cards from the ChargePoint and Blink charging networks. The cards are free and give you a discounted price when you use their chargers. I don't plan on using anything other than Tesla Superchargers, but it pays to plan for contingencies.

Tech Goodies

I love Autopilot!! It makes my commute so easy, especially on the way home when I sometimes hit stop and go traffic. Autopilot takes care of the tedious starting and stopping. Here are a couple videos I made of Autopilot in action on my way to work.






I'll be the first to admit these aren't the most exciting Tesla videos out there, but I wanted to show the dashboard display and the early morning hours seemed a good time, with it being dark out and all. You can see the Tesla detect cars in the adjacent lanes as they approach. I like that the image of my car changes - when the car slows, the brake lights on the car image come on and, as you can see, when the headlights are on, the image shows headlights. I am easily amused.

The displays to the left and right of the center image are configurable. To the left, I keep mileage and trip energy usage data. To the right is a graph showing my energy usage over the last 5, 15, or 30 miles. But if you don't like those, you can display other data - the air pressure of each tire, a navigation display, an analog clock, phone contacts, or media player info (either FM or XM radio or media from a connected phone, or some other internet streaming service). The left image changes to a turn-by-turn navigation map when you are using navigation.

The car uses GPS location to intelligently perform some tasks. For example, when I approach or drive away from my house, it will automatically open or close my garage door. I have the air suspension option and the car remembers the location of where you set it to the High or Highest position. Whenever you return to that location, it automatically raises the car. This is nice because I have a steep driveway and my Prius was always bottoming out. Now, whenever I am near home, the suspension raises. When you hit 35 MPH, the suspension automatically drops from Highest to High and at 45 MPH, it drops from High to Standard. For less wind resistance at higher speeds, you can tell the car to drop to the lowest position over XX MPH. (It defaults to 90 MPH.)

I can use the Summon feature on the Tesla app to have my car remotely pull out of or into the garage. Out of the garage works fine, but going into the garage has some problems. Because my driveway is so steep, the car won't go forward until at least the front wheels are in the garage and on a flat surface. But Summon actually works anywhere, so if I'm in a parking lot and someone has parked too close to let me open my doors, I can have the car pull forward so I can get in.

Fit And Function

The interior of the car has a very minimalist look. In fact, there are no storage pockets in the doors, there are no handholds on the ceiling and, something Tesla owners have been complaining about for years, there are no coat hooks. After a couple of days, I did find one storage area right under the main view screen. Unfortunately, this area does not have a door to it or even a small lip. When stuff is in there, it tends to come flying out when you accelerate quickly 😄

The car doors have a high threshold. I find I have to raise my leg fairly high to get out of the car. Maybe I just have my seat too low. You can set it to adjust the seat and steering wheel when you park to make entering and exiting the car a bit easier.

Buzz

We went out to dinner Wednesday night and I had my first instance of Tesla time. Tesla time is the term owners coined for the time Tesla owners spend answering questions from curious strangers about their cars. The waiter had seen me park and asked some questions about my Model S. He was fairly knowledgeable and commented that he hadn't seen many P100Ds around.

I'm A Scaredy Cat

I haven't tried Ludicrous mode yet. The car accelerates so quickly in standard mode, I'm honestly more than a bit scared to see what the faster mode is like. You want to know why I am scared? Read this Motor Trend examination of what happens during Ludicrous acceleration. One point four one g at 0.4 seconds after launch! Zero to sixty in 2.28 seconds! It hits 30 MPH after traveling 1.5 car lengths!

I also would like to first try it on a straight stretch of road, which is hard to come by in Washington. I am looking into racing tracks around the area. Seriously.

Show Me The Money

My monthly car payment is a bit lower than I planned. I also will pay less total interest over the life of the loan than I calculated. I originally thought I would pay about $6,800 dollars in interest. It turns out, I will pay significantly less (because I ended up putting more down).

Only $5,682! My purchase qualified for the $7,500 tax credit, which means even taking out a loan, I'm still coming out $1,818 ahead.

Net Worth Update: End of September 2018

At the end of each month, I post an update of my net worth, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of September, 2018
Net Worth: $913,470
Change from last Month: +$848

Welcome To The New Monthly Update Page!

Now that I went out a bought my Tesla, I no longer have a goal to track progress towards. I could have started counting down until my car loan is paid off, but that's pretty boring. Also, that information will be reflected in my net worth number anyway, so I've decided this monthly post will just become a monthly net worth update.

Events Of Note Last Month:

The biggest event, of course, was that I unlocked a new achievement:

Woo hoo!!

In less exciting news, my SQL courses on Udemy generated $76.46 of income. My courses on SkillShare earned $25.58. As usual, this money went towards the Tesla. Last month, I was less than $100 away from hitting $11,000 in lifetime earnings on Udemy for my online courses. I came very close to crossing that milestone in September but I fell short by.... twenty one cents! Argh! Next month...

Truthfully, my online courses are getting a bit out of date. Not technically. Everything in my courses still applies and is valid. However, I made the courses using SQL Server 2012, which was the latest version at the time. Since they were made, SQL 2014, 2016, and 2017 have been released. The user interface has changed slightly, so I expect to start getting complaints from students that my course is teaching an old version. I'm not sure I care. It was a huge effort to make the courses and re-recording them just for a UI update doesn't seem worth the hassle.

Now that I have the Tesla, my motivation is lacking. I know I can still use the course income to pay down my loan, but.... meh. There are some new features I can make new courses about, but I don't have the setup to demonstrate those on my laptop. So, I expect my course income to start dwindling off soon.

Net Worth Update

Surprisingly, our net worth rose again, this month by $848 to another all time high of $913,470. I really wasn't expecting this.

August 2018

September 2018

The gain would have likely been higher, but Tesla stock is down $43 as I write this because the SEC just filed a lawsuit against Elon Musk for his tweets about taking the company private. One of the terms they are asking for is that Musk no longer be allowed to serve as an officer or director of any publicly traded company. I think Musk was stupid to tweet what he did, but that penalty seems a bit harsh. We'll see how this plays out.

Lots of numbers jumping around this month.

Our cash balance is really high because I'm in the middle of exiting a real estate investment. I had $70,000 in a self-directed IRA that was invested in a hard money loan (i.e., I was a mortgage lender). That mortgage was paid off and my partner has been having some difficulties finding new investments, so I've decided to roll that investment back into an IRA at a traditional brokerage. The self-directed IRA is nice, but the company that manages it is fairly expensive. If I can't get an 8% or higher return, it's not worth the hassle for me.

And it is a hassle. A self-directed IRA requires an LLC and mine was formed in Arizona, where I no longer live. The bank account for the LLC was also in Arizona. I can't open a business bank account in Washington unless the LLC is registered in Washington, which costs a couple hundred dollars to do. So rather than move all that stuff here only to get mediocre returns with my partner, I'm just going to close the LLC and move the IRA back into the stock market. Unfortunately, officially closing the LLC requires filing paperwork with the state of Arizona and they say that process can take up to 50 business days. That's two and a half months for filing a single piece of paper! Anyway, the upshot of all this is that my $70,000 is sitting in a savings account until that process is finished, so my cash number will be inflated for a while. When all is said and done, that money will eventually find a home in the Investments category.

Similarly, I had a hard money loan investment in my daughter's name and I also moved that into the stock market.

Those two investments were formerly part of the Property category, due to how Mint.com handles manual account entries.

On the other hand, the Property category now also includes my Tesla, the value of which is somewhat offset by my new auto loan which shows in the Loan category.

So just looking at the numbers provides a somewhat blurry image of how my net worth is actually composed this month, but the final number is the one that really matters. And that went up, so all is good!


If you have any questions or suggestions for topics, please drop me a line in the comments section!

Don't Leave Money On The Table: My Credit Card Cashback Rewards Year To Date (Sep. 2018)

This week, I'm going to take a short break from all the Tesla posts and get back to some personal finance topics. My post on my first week of Tesla ownership will be next week, I promise!

I got an email from my Chase Freedom credit card a week ago showing me how much I've earned in cash back bonuses so far this year.

That's a pretty big chunk of change! It's higher than I would have guessed.

But this was only for one of my credit cards. I also have a Discover card that earns cash back and partway through the year, my wife switched to the Citi Double Cash card, which gives you 1% back on charges and 1% back on payments. My wife also has a Discover card as well, so we earn cash back there. Basically, every credit card we own gives us cash back.

We charge just about everything we purchase and pay off our balances in full each month (each week, actually). Because we never carry a balance, we are never charged interest. This means all the cash back we earn goes straight into our pocket. It's like getting free money.

I was curious to see how much free money we earned over all of our credit cards so far this year. Luckily, I track all my transactions on a phone app, so it was a simple matter to get this information.

Wow! $1,025.66! That's a lot of free money! (And there's still three more months in the year!)

This isn't phantom savings either. I don't take this money and go spend it all on hookers and blow frivolous items. Each month, as soon as the cash back is awarded, I immediately apply it to my credit card balance. That means it directly reduces the cost of my day-to-day monthly expenses.

The trick to maximizing cash back is to pay attention to the details of your cash back program. For example, both my Chase Freedom card and our Discover cards have a bonus category each quarter where you earn 5% cash back instead of the normal 1% or 2%.

For July, August, and September, the bonus category for Discover was restaurants. So anytime we went to a restaurant (even fast food), I made sure to use my Discover card. For October, November, and December, the bonus category changes to Amazon.com. So on October 1, I'm going to change my default credit card on Amazon to be my Discover card. I'll probably also do most of my holiday shopping on Amazon to earn more. (I'm an Amazon Prime member, so shipping doesn't cost me any extra.)

I keep a note in my wallet listing the bonus categories for each card, so I can make sure I use the right card in the right situation.

It's really nice when you can put big expenses on a cash back card. Back in August, I paid my $2,500 Tesla deposit with my Chase Freedom card. The $4,000 worth of electrical work I had done for installing the wall charger and new electrical panel? On the credit card.

Of course, the important part is being able to pay off your credit card bill in full each month. If you can't do that, you'll end up losing money. But if you are careful with budgeting and are able to consistently pay off your monthly bill, you can earn some serious coin for buying stuff you needed anyway. So take full advantage of your cash back cards and don't leave money on the table!