I have been particularly excited and anxious about this month’s net worth update. Excited because the market is on a ridiculous tear and a really good portion of my net worth is tied up in marketable securities. I am also pretty anxious about it, because I have seen this movie before! There is nothing in the market’s history which indicates that the broad market hockey stick growth is sustainable. If I had to guess all it means is that 2018 will have some down months. But, until that happens, let the good feelings continue!
This month will also be very interesting to look back at in the years to come for another reason. The Wife is purchasing a business this month through the use of our HELOC. The details aren’t all that important but for accounting purposes I am going to keep the debt on my HELOC line item and create a new line item under asset for the business which I’ll “value” at the cash of the business at the end of the month. I don’t believe it’ll ever have a fair market value much different than that, but I could be wrong! I am pretty excited about this since I was just writing in my birthday post about wanting to have something to help build next year. I think I found my muse.
My Net Worth Calculation
Creating a net worth statement is pretty simple. All one has to do is honestly add up your assets and minus your liabilities. If you build your net worth calculation on lies, what’s the point of even doing the exercise? I know calculating my net worth helps me keep track of my decreasing liabilities while seeing if my investments are growing like they should be.
My assets are pretty simple:
- Emergency Fund – It is a little less than where I would like it, but I don’t calculate it in terms of monthly expenditures. Rather I think to myself how much cash would I really need if an emergency happens.
- My Dividend Growth Account – I am finally back into undervalued dividend growth investing and I am very excited to share my screens and purchases!
- My Wife’s Roth IRA – Nothing special – just a mixture of cheap index funds and individual companies that capture my attention. I have started to sell covered calls within this account. Just boosts my investment capital – small (read: very tiny) droplets of capital I wouldn’t have had otherwise.
- My 401(k) – My 401(k) is terrible with high fees for garbage mutual funds, but where else am I getting a match on my money. I am not one to turn down free cash. I just decided this month that I am going to change my allocation to brace for the inevitable bear market.
- 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.
- My House – This is the first year after buying the house for 4 years where I increased the value of the home. I increased it a nominal 3% in 4 years. I don’t plan on reviewing this dead money asset for another year or two. I also just took out a HELOC but haven’t used any of it.
- My Traditional IRA – Just a few stocks that have captured my attention. Similar to my wife’s Roth IRA I will often sell covered calls on holdings to generate nominal amounts of cash flow.
- Investment Account with my Brother – The Wife and my brother invested a nominal amount ($1,200 each) to try and give my brother confidence with his stock picking ability.
- Wife’s Business – NEW – Just going to value this at the cash that is on the books at the end of every month. There won’t be a distribution for quite sometime, so hopefully, there is a nice trend upwards.
- My Law School Loans – Despite being almost 35 years old I have a significant amount of law school loans left. They are locked in at 3.5%, so what’s the rush to pay them off?
- 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.
- Credit Cards – My favorite card is my American Express Premier Gold Card, whose fee I fight every year. I also have some minor outstanding balances that I’ll just pay down slowly.
- My HELOC – Brand new line item –
I haven’t really used any of it, but have to keep a small balance for promotional purposes. There is now a sizeable balance, and over the next few months I’ll be able to create a realistic payback schedule.
My Net Worth Increase/Decrease
- From November 1st to December 1st my net worth increased 3.59%
- My net worth increase YTD has increased 28%
Pretty damn good month, but I am absolutely terrified of what may occur on the other end of this bull market.