August 2019 Net Worth Update

by Evan

July was not that crazy of a month but my world is about to turn upside down in August.  We are:

  • Buying a new house – The closing costs in New York are infuriating, plus the moving costs, painting, flooring, etc., etc., etc.
  • Going on at least 3 trips that I know of – camping, something for my father in law’s birthday, and possibly something for my mother
  • I may be selling a piece of my current home to two investors (a close buddy and brother) – I haven’t talked a lot about this yet, but I am in talks with them to buy 10% of the equity of my house
  • I may be invading a non-qualified deferred compensation I have through work
  • I am likely paying off some debt very soon

Despite nothing like the above happening in July it is time that I add up all my assets, minus my liabilities and figure out if my net worth has grown or shrunk of the past 31 days or so.  I have been doing this exercise and sharing my net worth results for years.

Thoughts before Calculating my Net Worth: Usually I have a feeling before I actually take the step of calculating my net worth, and this month is no different.  Given that the market has done well in the past month or so, I am thinking my net worth will be up, but nothing too crazy.  My correlation to the market is quite frustrating, but profitable recently.

My Assets

My assets are pretty simple:

  • Emergency Fund – My goal is to keep an amount in cash that The Wife and I believe is needed for a real emergency amount rather than a specific amount linked to monthly expenditures.  At this point it is a quite a bit lower than I’d like it to be.  As we get closer and closer to contract on our new home, this is going likely going to diminish and be held in escrow at some point.
  • My Dividend Growth Account – I am finally back into undervalued dividend growth investingand I am very excited to share my screens and purchases!  Earlier this month, I was able to share how my undervalued dividend growth account performed in 1Q2019.
  • My Wife’s Roth IRA – Nothing special – just a mixture of cheap index funds and individual companies that capture my attention.
  • My 401(k) – I went back to a long term allocation rather than trying to market time.  This is allocated at almost 100% equities and is by far my largest asset (outside of my home).
  • Wife’s Mutual Funds – This was an amount that was given to my wife from her deceased grandparents.  They were horribly mismanaged until I stepped in, putting them in low expense vanguard mutual funds.  She and I both look at this account as a super emergency fund.  In January of 2019 I moved a good portion of this account to cash, not because of marketing timing but because we may have a liquidity need that I don’t want to be beholden to a time like 4Q2018 (see house above).
  • My House – I increased the value of my home starting in 2018 3%.  I have decided to leave it flat in 2019, if  when The Wife and I sell it it’ll just add a large jump in the net worth statement.
  • My Traditional IRA – Just a few stocks that have captured my attention.
  • Physical Gold – In 2018 I decided on buying a small amount of physical gold every month or two.  After doing some quick math, I am getting killed in transaction costs.  I set up a capital one 360 account to save the amount I would be buying in gold and I will make a larger purchase less often.
  • Cryptocurrency Account – Earlier in 2018 bought a tiny amount of Bitcoin.  By the time my initial payment cleared bitcoin had dropped 40%.  I am not exactly sure what I am going to do with this account just yet.  Right now I am going to ignore it.
  • Cash Surrender Value Life Insurance – I am not a “buy term and invest the difference” kind of guy. Mainly because no one actually invests the difference! I have been building my Cash Surrender Value for a number of years, but I never captured it on these statements.  This year I’ll be adding/updating this line item.

I have some money in escrow for the new house, which I created a line item for but will likely be replaced by equity in the new house come next month.

My Liabilities

  • My Law School Loans – I still have a significant amount of law school loans but they are locked in at 3.5%.  I figured out last year that my student loan company, NELNET, was misapplying my extra payments but that is all fixed now.
  • My Mortgage – I live on Long Island (and it’s on, not in) so the odds of me ever prepaying this down, especially with a 3.375% 30yr fixed is unrealistic.  I just chip away month after month, year after year.  My tenant is going to be chipping away at this for me.
  • Credit Cards – My favorite card is my American Express Premier Gold Card, whose fee I fight every year.  I open and close other cards to get ridiculous offers but right now I am rolling out of them with nothing on the horizon.
  • My HELOC – A good portion of it was to capitalize The Wife’s Business.  I decided to keep the debt of the HELOC on the balance sheet, but ignore the corresponding asset (the removed checking account).  Starting last month, I have been putting a lot of cash flow into paying this asset down.  Without a substantial change this will take years to pay off, but after last quarter’s shit show I realized I am not comfortable with this much debt on my books, even at ridiculously low rates.  For the past few months I wrote, “I am not sure I’ll keep up with it for the entire calendar year, but right now it is my plan.” Well I stopped and put the monthly extra payments toward some 0% credit card debt that I have.  Once that is cleared (hopefully by the beginning of 4Q2019 they’ll go back to this.

This section is going to look wildly different next month.

Net Worth Increase/Decrease

  • From July 1st to August 1st my net worth increased 3.3%
  • Year to date my net worth has increased 32.62%

Not a bad month! I love seeing liabilities decrease over time, however, with the new house purchase they are going to SKYROCKET next month.  Nothing I can do except wait to see what our new normal is.

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1 comment

JC August 2, 2019 - 2:29 pm

Man sounds like a pretty crazy August is in store for you. I don’t miss the house buying process one bit, although I know we’ll have one sometime in the future as we look for our “forever” home, hopefully one that’s custom built. We’re working on paying down debt too and should hopefully be done sometime by the end of the year which will free up a lot of cash flow each month and then we’ll start plowing that into more investing or building up cash.

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