My NW has almost doubled in 1 year. Why do I feel anxious?

Over the past year, my net worth has almost doubled from $500k to $940k, and I am now <$100k shy of becoming a millionaire. Why do I feel anxious?

Looking back, it's been a year of change.

Seeing the time series view of the past 12 months reminds me of how much has changed. A year ago, I was newly single and rebuilding myself from a place of strength. I have since started a new healthy relationship, moved cities (twice), sold my first home and bought another one. These are such huge positives! I'm much happier overall, feel strength in stability, and am truly enjoying my new neighborhood and an improved experience of home ownership.

Job insecurity scares me.

I was fortunate enough to have survived several rounds of layoffs. However, the thought that I could unwillingly lose my job and have trouble finding a new one that matches my current compensation, or that my health could deteriorate to a point where I might want to walk away from it to prioritize my health, made me realize that I needed a firm plan to protect me.

What if I were to lose my job tomorrow?

My therapist asked me what the probability is of losing my job. It is likely quite low (< 1%) between now and January 2024. By that time, I hope to have had paid off my share of the mortgage (a remaining $50k) and have built my cash emergency fund up to $40k.

But if I were to lose my job tomorrow, I am not sure how many months I would last before needing to find a new one. A lot of this has to do with having recently purchased a home, being aggressive with the down payment, and liquidating nearly all things liquid.

Back to the exercise: if I lose my job tomorrow, I can survive a minimum 3 months.

• My fixed expenses: $800 - $1200 month. This includes auto insurance, HOA fees, escrow (home insurance and property tax), utilities, and odds and ends.

• Discretionary spending is about $2k/month, and could drop down to $1200/month (or less!) with some budgeting.

Realistically, if I were to be laid off I'd still get at least 2 months pay due to WARN notices. Since I spend a fraction of my paycheck, this means that I would likely have closer to 5 to 7 months of an emergency fund.

I'd likely be fine, financially. So what makes me anxious?

• Being Cash Poor: Less than 2 months out from having purchased a new home, I am cash poor. Once I can rebuild my emergency fund to fully cover a (lean) 12 months worth of expenses, I'll feel a lot more grounded. Fortunately, I should be able to achieve this within a few short months.

• Uncertainty over Regular Expenses: I've experienced some lifestyle inflation, and I am okay with it. But since I have moved twice over the last few months I also don't really have a clear picture of how much my 'regular'/'necessity' spending is, and what it would look like if I were out of a job (e.g. since I'd have more time on my hands, I could spend more time bargain shopping). This adds uncertainty to the 'planning' piece of preparing for unemployment spells.

• Am I House Rich or Poor?: My net worth is now 55% comprised of real estate for personal residential purposes, rather than real estate property. This was architected by design to avoid high interest rate costs and the monthly requirement of paying a mortgage by taking care of my portion of the home purchase up front. So while my net worth is high, the piece of it that is "working for me" is much smaller.

I should be able to easily eliminate or alleviate my first two concerns. Each month through the end of the year, I should be able to add at least an extra month worth's of expenses to my emergency fund to hit my goal by EOY. Now that things have stabilized with the move (I've stopped paying moving costs, buying large furniture, double rent, etc.), my spending should look more 'regular' and I should be able to use it to benchmark my new spending average, lifestyle inflation baked in and all.

Addressing the third piece of being house rich or house poor will require a plan for the next few years on how to split between investing and mortgage pay-down.