With the first month done in 2018 it is time to update my net worth spreadsheet. Writing this introduction prior to updating the spreadsheet, my gut is telling me that it is not going to be a good month for a few reasons. The first is because The Wife’s new business is now underway with payments going out, but few payments coming in (yet). The second reason is that The Wife and I stepped up our travel game – going up to ski in Vermont with really good friends, booking Mexico for our family and Ireland just for us two for our 10 year anniversary. Most of the payments came from our vacation fund, but nonetheless there were incidentals that put pressure on the net worth for the month (not that I would make any other decisions). The last reason, is that I paid my January mortgage payment in December to get the interest deduction in 2017 so that forced reduction in debt won’t appear herein.
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 decided earlier this year that I was going to change my allocation to brace for the inevitable bear market, I am going to continue to accumulate cash for at least a month or two in 2018.
- 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.This was shut down in December. It was an interesting experiment.
- 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.
- Physical Gold – I decided that I would buy a small amount of physical gold every month or two from basically now on.
- Crytocurrency Account – I recently 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.
- 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 – A good portion of it was to capitalize The Wife’s Business. I hope to create a realistic payback schedule in a few months when we get use to running the business.
My Net Worth Increase/Decrease
- From January 1st, 2018 to February 1st, 2018 my net worth increased 2.22%
Despite all the spending above and The Wife’s business growing pains my investment gains in my 401(k) and dividend growth portfolio completely covered the negatives plus some obviously. I am extremely happy with this number!
How was your month?
May 1 Update – I decided to remove my wife’s business checking account from the equation. With that this was a positive month of 4.04% (and obviously YTD increase of 4.04%)