December 2019 Net Worth Update

by Evan

Every month for the past 10 years or so I take stock of all my assets and debts. I then share my results month over month as well as year to date. I completely understand how my decision not to share my actual numbers may not satisfy that financial voyeurism itch that most people have, but it is what it is! I absolutely believe that every adult/family should start to track their net worth.

Thoughts before calculating: I like to give a guess, which has been surprisingly accurate, about how I have done month over month. This month I am going to say I am about even. My investment accounts should be way up, but the consumer spending has been ridiculous as The Wife gets closer to Christmas. It is an uphill battle I fight and lose every single year.

My Assets

At this point it feels like I have a lot of balls in the air regarding assets, but it okay!

  • Emergency Fund – In the month of August The Wife and I, scarily, went to zero on this when we closed on the new house.  Not cool.  I got it up to a respectable amount, but it is not currently at a number I am comfortable with.
  • Wife’s Mutual Funds – From years of grandparents and parents gifts this has grown to a nice amount.  When I first got involved they were invested in some terribly priced mutual funds, we changed that right away.  Earlier this year, when we decided on the house we moved to I liquidated almost everything just in case the market corrected and we needed (more liquidity).  Right now, I am going to leave the two-thirds liquid because The Wife and I have discussed some bigger projects on the new house and this is where it will be coming from.
  • Dividend Growth Investment Account – One of my favorite assets/accounts.   Every month I screen the dividend champion and some of the dividend contenders list to find possibly undervalued companies that have paid an increasing dividend for more than 20 years.  In addition to new capital/savings I also sell naked puts on those same companies to further provide positive cash flow in an effort to create a self sustaining stream of income later on in life.  Recently, I have been reducing some of this exposure just because I have some in the money puts that I have been dealing with (i.e. rolling).  Once I amount of those it is off to the races again. I have gotten to the other side of some deep rolls and I am excited!
  • 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 investment account.
  • 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 was 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 – Early 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 until 2019.
  • Rental Property – I am very excited to add this line item! I have been talking about getting into real estate for years, so it is finally nice to be in it.  For my net worth statement I am going to keep this as a net number eliminating the debt from my balance sheet.
  • My Home – Our new home takes over the main residence line item! It is going to hurt watching the mortgage payment basically pay for the interest, but such is an amortization table.
  • Law School Repayment Fund – I took a piece of my bonus and created a separate checking account which is going to be used to pay back my student loans at an accelerated pace. I could have just wrote the check (and maybe I do that one day), but I like having the liquidity on the sideline. The added benefit is that this bill is no longer coming out of my main checking account providing some relief to my monthly nut.
  • Random Home Increase Fund – I took the amount of my increase in housing costs and put aside 6 months. This way if things get tight I can turn to this account for some relief. I have chosen not to include this in my emergency fund yet, because it really is earmarked to be spent when needed. Last month, I used a small piece of it to pay down consumer debt. This month was no different.  I don’t think this is all bad, but either way it needs to be accounted for.

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. As described above I am paying this amount back quickly (should be paid off within 2.5 years if I don’t pull the trigger before that). I have recently been thinking about refinancing this into a variable load since the rates are lower. If I decide to move forward with this I am sure I’ll write about it.
  • My Main Residence Mortgage – Starting over on that amortization schedule hurt, but it is what it is!
  • Credit Cards – My favorite card is my American Express Premier Gold Card, whose fee I fight every year.  I am in the middle of moving away from the AMEX Gold card because they wouldn’t let me fight the annual fee. I open and close other cards to get ridiculous offers but right now I am rolling out of them with nothing on the horizon. I will have to write an update but I am currently on full AMEX Credit Card (instead of a charge card). I don’t know what this looks like going forward, but I’ll figure it out early next year when I finally use my outstanding points.

Few months back I removed the mortgage on my old place and netted it out on the asset side of things.

My Net Worth Change

  • November 1st to December 1st my net worth increased 3.25%
  • Year to date my net worth has increased 61.62%

My gut feeling was completely off. I was expecting a flat month, but that is not what I got. Looking a little deeper at the numbers it seems that the growth on my investment accounts (qualified and non-qualified) completely dwarfed the increase in rolling consumer debt.

how was your month?

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