May 2013 Net Worth Update

Had a pretty good month money wise, but it was mostly because I got a larger than average tax refund.  On the one hand I am bothered that I am giving the government a tax free loan, but on the other, it feels freaking fantastic to get an unexpected lump sum deposited into my checking account (that and owing money would bother the hell out of me).  Most of the money was used to attack our credit card debt (which is at 0%).  While I know this isn’t the right move mathematically The Wife and I aren’t a huge fan of it on our balance sheet.  We also used the remaining money to help out on my short term financial goals, which explains why I made some quick moves on those.

Just as a reminder to myself the current short term goals I am working on are:

  • Invest $500 in my Son’s 529 Account (30% Completed)
  • Save $500 to put towards my Student Loans (56.96%)
  • Increase Home Improvement Fund to $1,000 (100% Completed)
  • Invest $3,000 in my Dividend Investment Fund (57.5%).

I really like the idea of focusing $5,000 at a time – will keep this A.D.D. guy pretty focused. Inside a few weeks with this kind of focus I was able to allocate a few grand!  Again, this is mostly because of having a decent side income and the tax return.

I have already been given thought to how my next $5K will be split up, but am hesitant to write about it until this first round of mini-goals are met.

Calculating my Net Worth

My Assets

  • My Cash Savings Accounts – I only really count my emergency savings since everything else is ear marked to be spent elsewhere.  For example, I have a vacation fund, the aforementioned house improvement fund, etc., and since last month I have come up with a round number that I am going to use going forward.  It is a multiple of my monthly nut.
  • My 401(k) – Just keep throwing part of my paycheck at my 401(k) even though I sort of hate my 401k.
  • Random Non-Qualified Investment Accounts
  • The Wife’s Roth IRA – This account only holds to 2 funds. An index fund of the market and a dividend paying fund.
  • My Dividend Investment Portfolio – Easily my favorite part of my financialempirehut.
  • Home Value – A lot of bloggers seem to stress over home value.  In my old place I just rounded to a number that I thought I’d sell for (I was off by less than 1%), I think I am just going to use my purchase price for the year and look at comparable home sales next year.
  • My Traditional IRA – Been trading using my covered call strategy and earlier this year I bet against my first stock!  I am currently getting KILLED on that bet.  KILLED. I have until June so hopefully the stock falls a bit and I recoup some of the paper losses until they turn into real losses.

My Liabilities

  • My Mortgage – I can’t believe the amount of principal paid in one month when compared to my last mortgage.
  • Law School debt – While I recently paid off the much smaller of the loans I have a while before this category makes any significant moves.  I mentioned above I am going to throw an extra $500 at it.  I would put more (versus the investment fund) but it is still tax deductible for me and is locked in for 30 years at 4%.
  • Credit Card debt!

I haven’t had credit card debt in 3 or so years, but with all these new purchases I knew it was coming.  I called up all my dormant credit cards to see what they could do in terms of 0% on purchases.  One of them offered me 0% until June 2014!  The Wife and I have been using that card as our main card since I am thinking about breaking up with American Express.  While I have the liquidity to pay off the debt I prefer not because I respect liquidity way too much and the debt is at 0%.  The debt isn’t as much as when I started this blog (~$18K) but it is a good amount.

Since its high in February of this year, I have whittled it down by about $4,500.  I think that is pretty damn good!

My Net Worth Growth

  • From April 2013 to May 2013 my net worth increased 4.4%
  • Year to Date my net worth is still down 6.58%.
  • Since January 2011 when I started this little project I am up 120% (down from 136% when I bought the house earlier this year).

Last month my net worth was down 10.51% year to date so that number is decreasing.  If I have another good month of side income and if the market cooperates I can get back to even for the year.  Secretly (or not so secretly since I am putting it here) I’d love for the market to correct so I could buy some cheaper stocks! Short term it will hurt but long term it could catapult the balance sheet.

 

How was your Month? 

24 Responses to May 2013 Net Worth Update

  1. I always do my net worth calculation for the prior month a few days after the 1st, just because that makes sure that credit card and mortgage payments as well as transfers that I do to long term savings have all had the opportunity to clear. From just looking at numbers, I think we will have a positive month.

    I wouldn’t worry about the interest free loan. Interest rates are so low right now, that I think ‘out of sight, out of mind’ actually makes people save more than if they had access to money all year.

    • “I always do my net worth calculation for the prior month a few days after the 1st, just because that makes sure that credit card and mortgage payments as well as transfers that I do to long term savings have all had the opportunity to clear.”
      – Makes sense, but I am excited to do it every month. Plus I think as long as you or I are consistent it doesn’t really matter. If you are consistently doing it a few days later than it won’t matter over the long run since the numbers will always take that into account.

      “I wouldn’t worry about the interest free loan. Interest rates are so low right now, that I think ‘out of sight, out of mind’ actually makes people save more than if they had access to money all year.”
      – Completely agree! What did I really miss out on? An extra 30 bucks MAYBE vs. the awesomeness of a lump sum of $5K or so.

  2. I’m up 3.8% this month and 15% YTD thanks in large part to a real estate recovery in my area driving up the home value. If you take out those gains, I’m still up 3.2% and 12% respectively so my growth is diversified.

    Speaking of getting killed….DCTH Why, why, why do I chase these damn things when I should only buy index ETFs? *face palm*

    • Wow DCTH is one UGLY chart. What part of the country are you in that you are seeing such a growth in real estate?

    • Wow an 8.1% gain according to zillow! That is awesome. Do you feel like it may be another mini-bubble? or just “recorrecting” the crash

      • Absolutely a correction. That takes it back to the level where I purchased it in 2008. Not that I paid that price, but it’s back to the same Zillow level. I was lucky to “steal” my house as my realtor said…and still says every time I complain about something else to fix.

  3. How’s your net worth not counting the house or the mortgage out of curiosity?

    I can’t imagine how you could be down 10.51% YTD, since most of the markets have been up. Although if you had some larger expenses this month it would make sense.
    I try not to include my house in my net worth, since I have to have someplace to live.

    I’m not sure how my net worth has been doing YTD, but I know my portfolio growth has been 8% YTD. It would have been higher except I accidentally sold off one of my dividend stocks for a complete gain for the year so far.

    • I can play with the calcs, but it isn’t the house value that has reduced the net worth…it was the wasted costs in buying the house (attorney’s fee, recording fee, title insurance was 6 grand alone, etc). Then we got new carpets, a new couch, which provided nothing on the asset side of the world but did on the debt.

      The portfolio growth is the only thing that didn’t make me go on a rampage!

  4. I pulled 1/3 of the money I had invested out of stocks hoping it would correct too! But I wimped out and put almost all of it back in the market.

    It’s got to have a dip sooner or later (at least a 5% dip if not a correction)…

  5. It is actually a 2013 new years resolution of mine to start doing monthly net worth calculations and how to make them grow. I am looking forward to getting started very soon before 2014 gets here…

    • I was against it for a long time, but it really did get me motivated to make sure it went up every month for fear of having to write down a worse number on the blog.

  6. I’m trying to keep up with the S&P 500, but it’s hard b/c I can’t stomach going ALL IN on my net worth in risk investments.

    I need to get more greedy, but it’s hard b/c I’m happy w/ what I have.

    • If you are happy, why do you need to get greedy? You have done the needs analysis (ad naseum if I had to guess) – in fact since you are retired early why do you need to take any risk if your living expenses are low?

      • While I agree with you Evan, why wouldn’t you get a little greedy. Let’s say put 25% into more risky investments and play with it a little. Especially when retired early like Sam did.
        After all, he could grow his NUT even larger and then have an extra vacation every year, or simply let it compound further in his portfolio accounts.

        I’d want my accounts to grow it by at least inflation plus the amount I’d have to withdraw to ensure I could continue my lifestyle, which would require growth of 6%-8%/year.

  7. Wow, 4.4% is huge in one month. Our net worth up a little over 7% for the year. I’m pretty happy with that and I doubt we can keep up the pace for the rest of the year.

    • At this point 4.4% is just gaining back what I lost in transaction costs for the house, but I am grateful of any positive month over month number!

      7% year to date is fantastic, but like Sam, it shouldn’t be that important to you since you are already retired. You are staying a head of inflation and still get to be home! That is a win win in my book.

  8. Oh, the vaunted covered call strategy :> I’ve done that here and there over the years. But you shouldn’t really be getting “killed” right? Just net even dollar for dollar? if fully covered. Actually, I used to sell one contract for ~75 shares long to optimize my return a bit. See, delta on an option is usually 50 cents per dollar move in stock at the money, so I figured the price would have to go way over strike to really start losing money. Which happened of course.

  9. I’ve made most of my investments for the year at the very beginning of January, so I’m not really looking to actively add, but I’ve made a few minor adjustments here and there in the last month. There should be a minor pullback at some point, likely on some bad news out of europe, but again, who knows when that will be!!

  10. I like how you are tracking this for us to follow… definitely motivates me to save more, I wish you the best as you continue eliminating credit card debt!!!!!

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