As we finish up May and start June, it is about time to take a look at my financial score card and share with the interwebs how I have done. I have been keeping my spreadsheet updated and sharing whether I have increased or decreased my net worth over the past month and year to date for years and years.
I usually have a feeling as to whether the month is going to be good or bad – I am pretty sure this month is going to be a down month. Between lower online income in May and the terrible market we saw in May 2019 I am pretty sure this is going to be one of my largest drops ever.
OUCH! I am pretty correlated to the market at this point, so when there is 6% drop in the broad market I know the end calculation is going to suck.
My assets are pretty simple:
- Emergency Fund – My goal is to keep an amount in cash that The Wife and I believe is needed for a real emergency amount rather than a specific amount linked to monthly expenditures. At this point it is a quite a bit lower than I’d like it to be. As we get closer and closer to contract on our new home, this is going likely going to diminish and be held in escrow at some point.
- My Dividend Growth Account – I am finally back into undervalued dividend growth investingand I am very excited to share my screens and purchases! Earlier this month, I was able to share how my undervalued dividend growth account performed in 1Q2019.
- 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 asset (outside of my home).
- 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. In January of 2019 I moved a good portion of this account to cash, not because of marketing timing but because we may have a liquidity need that I don’t want to be beholden to a time like 4Q2018 (see house above).
- My House – I increased the value of my home starting in 2018 3%. I have decided to leave it flat in 2019,
ifwhen The Wife and I sell it it’ll just add a large jump in the net worth statement.
- 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 am 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 – Earlier 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. This year I’ll be adding/updating this line item.
The biggest swings are my trading account (not shocking since naked puts plummet in value when the underlying equity decreases) and my 401(k).
- My Law School Loans – I still have a significant amount of law school loans but they are locked in at 3.5%, so I have no real rush to pay them off. I’d like to get the monthly cash flow back but at about the $35,000 it would be a tremendous hit to liquidity. I figured out last year that my student loan company, NELNET, was misapplying my extra payments but that is all fixed now.
- 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. I just chip away month after month, year after year.
- Credit Cards – My favorite card is my American Express Premier Gold Card, whose fee I fight every year. I open and close other cards to get ridiculous offers but right now I am rolling out of them with nothing on the horizon.
- My HELOC – A good portion of it was to capitalize The Wife’s Business. I decided to keep the debt of the HELOC on the balance sheet, but ignore the corresponding asset (the removed checking account). Starting last month, I have been putting a lot of cash flow into paying this asset down. Without a substantial change this will take years to pay off, but after last quarter’s shit show I realized I am not comfortable with this much debt on my books, even at ridiculously low rates. For the past few months I wrote, “I am not sure I’ll keep up with it for the entire calendar year, but right now it is my plan.” Well I stopped and put the monthly extra payments toward some 0% credit card debt that I have. Once that is cleared (hopefully by the beginning of 4Q2019 they’ll go back to this.
Net Worth Increase/Decrease
- From to May 1 to June 1st my net worth decreased 4.57%
- Year to date my net worth has increased 20.56%
OUCH! While it wasn’t shocking it sucked nonetheless. Almost the entire swing is from the two accounts mentioned above (dividend account w/naked puts and the 401(k)). Those are all the accounts that swing the entire ship upward when the market winds are at my back instead of in my face. Is what it is!