At the beginning of every month I update my net worth statement and share how I have done over the past month and year to date. I believe the exercising of taking stock of your assets and debts would be a fantastic use of time for every single adult. Being aware of where you sit is a powerful motivator to make more money or deterrent of reckless spending.
Thoughts before calculating: I am pretty sure this is going to be a good month. The Wife took some excess money out of her corporation and I received a pretty good bonus from work. Those two bonuses were consciously allocated into different financial buckets.
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.
- 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 mid-year 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. The past few months I have had to take a little piece out of this account. I am happy to report (to myself) I did not have to use any of this money in December 2019.
- 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 an AMEX Credit Card (instead of a charge card). More research is going to have be done with regard to credit card opportunities.
I used all my points last week for 4 flights to Jamaica for May, so now I have a clean slate and not exactly sure what I should do with regard to my family’s credit card situation. Going to work on my options this month.
My Net Worth Change
- From December 1st to January 1st my net worth increased 1.98%
- Year to date my net worth has increased 64.82%
I thought my month over month gain was going to be bigger, but I am quite happy with my 2019 progress. Part of my financial goals this year is to pay off a good amount of debt. Almost all of my debt is what most would consider “good” debt (i.e. mortgage and low interest student loans), however, I really would like to recast my mortgage at some point in the future so I am going to need to start attacking it.
As the year continues I am going to share the progress on paying off $50,000.00 of debt this year of my $678,000 debt. Some of this is going to happen by just paying my monthly payments, but some is going to need to take creativity and determination. This is not going to be an easy goal, but should be a fun one to track.