I can’t imagine anyone getting any type of benefit in reading whether my net worth went up or down in terms of a percentage of the prior month. So why do I do it? Purely for selfish reasons. Giving myself the fake deadline of preparing these posts once a month forces me to open the corresponding net worth spreadsheet and actually looking at my debts (the investment/asset part I check an unhealthy amount anyway). If you want to get deep into some financial voyeurism check out the Rockstar Finance Directory of Net Worth.
My Gut Reaction to Net Worth Before Calculating
Every month I have a feeling of how I did the previous month. Some times I am way off and sometimes I am right on point. Usually, these are negative feelings, but I think that is natural. I don’t check my largest liquid and volatile asset that often, my 401(k). So while I can feel the money being spent on my amex I do not know whether that is up or down.
Like last month I am feeling a particular amount of anxiousness before calculating. I know I have a looming AMEX bill and my dividend growth investments have been derailed by having to take hold of stocks for puts I sold that are deep in the money. For example I am holding 200 shares of Target with a cost basis of $65 or so, with it trading at $54…same with URBN (400 shares) and UAA (100 shares). These aren’t new issues I am dealing with it just day after day, week after week, month after month, that it is starting to wear.
Last month I wrote,
This month, I am feeling a particular amount of pressure on the spend side of the balance sheet. I have an anxious feeling prior to calculating. I am hoping I am proven wrong and the seeds I have built in my 401(k) (and my recent rebalancing and rellocation within my 401(k)) are doing their job to cover up some shitty short term spending habits.
I wasn’t wrong with a .89% gain for the month is basically a rounding error, but it wasn’t the shit show I was feeling. Hopefully this month won’t be either!
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 – It is small, but this is where I have really been focusing my efforts lately and I will writing a lot about it.
- My Wife’s Roth IRA – Nothing special – just a mixture of cheap index funds and individual companies that capture my attention.
- 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 recently rebalanced the account.
- 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.
- 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 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 March 1, 2017 to April 1, 2017 my net worth barely increased .76%
- My net worth increase YTD has increased 9.10%
Frustrating, since I know that kind of increase is a good or bad day in the market.