July 2017 Net Worth Update

For the past few years, I have calculated my net worth at the beginning of each month and then share how much it moved.  I realize it is a purely selfish exercise being that, even if you were a personal finance voyeur I don’t share actual numbers so the peeking in would be less than satisfying.  Prior to actually calculating the numbers, I try to give a guess of how I did for the previous month.  I am pretty sure that my net worth increased a good amount this month to no fault of my own.  There are 2 reasons I believe this was a good month.  One, I received my tax refund, so that is just some extra cash that was not expected and was used in an appropriate manner.  The other is the market has been on tear.  The second reason, sort of worries me, the market feels very frothy; more and more lay people are starting to pretend to know what they are talking about and we are in the 10th year of a bull market!

The idea of a pending crash is starting to feel more and more real.  The$64,000 question (or really the couple hundred thousand question) is do you do anything about it? At the current time I am banking on no, but to be honest I am not sure that’s the right answer.

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

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 – It is small and been dormant this year (much to my extreme displeasure).
• 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 shit mutual funds, but where else am I getting a match on my money.  I am not one to turn down free cash.  I rebalanced the account last month.
• Wife’s Mutual Funds – This was an amount that was given to my wife from her now deceased grand parents.  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 an nominal 3% in 4 years.  I don’t plan on reviewing this dead money asset for another year or two.
• 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.

My Liabilities

• 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 its 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 Net Worth Increase/Decrease

• From June 1 to July 1 my net worth increased 1.54%
  
• My net worth increase YTD has increased 13.64%

My gut was right, but I thought it would have been more of a swing.  I’ll take positive movement any month of the year!