With another month in the books, it is time to take stock of whether my net worth increased or decreased. I can’t express how important this exercise is for me, and as such, this post is usually my favorite to write each month. I don’t think I am alone considering how many sites, forums, apps, etc., exist to calculate and share this number.
Prior to calculating the number, I like to take a moment to think about whether it went up or down. It gives me a few minutes to actively think about whether I made good or bad decisions the previous 30 days or so. It doesn’t feel like I had a particularly rough spending month or inspiring saving/income month, however, I am almost positive my net worth has I think my net worth is going to have increased over the past 30 days. A couple of my larger holdings have been (finally) going the right way!
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. This is where LB and AOBC are.
- 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 just decided this month that I am going to change my allocation to brace for the inevitable bear market.
- 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.
- 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 HELOC – Brand new line item – I haven’t really used any of it, but have to keep a small balance for promotional purposes.
My Net Worth Increase/Decrease
- From September 1 to October 1 my net worth increased 2.71%
- My net worth increase YTD has increased 21.07%
Not a bad month!