October 2019 Net Worth Update

by Evan
Adding assets and subtracting liabilities to calculate your net worth
Budget Commerce Revenue Accounting Assets Concept

It is my For the past few years I have been tracking my net worth increases or decreases and sharing them on my personal finance blog.  I usually share month over month results as well as year to date.  I am completely aware that without actual numbers the posts aren’t that fun to read, but this is all I am comfortable sharing.  If nothing else it forces me to take account of my assets and liabilities every single month, and I really believe updating a net worth statement is something all adults should do.

Thoughts before calculating: Usually I have a pretty good feeling on how I did over the past 30 days or so.  This month is going I am going to be up, and not just a little bit, but a really significant amount. I received a very generous bonus at work that worked itself through my assets/liabilities this past month.

My Assets

For years I would write that my assets are “pretty straightforward” but I don’t actually think they after really thinking about it, nonetheless, here they are:

  • 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.  Recently, I have been reducing some of this exposure just because I have some in the money puts that I have been dealing with (i.e. rolling).  Once I amount of those it is off to the races again.
  • 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 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 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.  I will be keeping detailed records since this I have two partners that deserve it.  I haven’t completely figured out the logistics, but I am not all that worried.  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.

New Assets This Month:

  • Law School Repayment Fund – I took a piece of my 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.

Liabilities

  • 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).
  • My Main Residence Mortgage – I made my first, painful, mortgage payment on the new home. It is significantly larger than the old home (30% increase). I was happy not to have to use the Random Home Increase Fund, and will appropriately pat myself on the back every month that I don’t have to (or alternatively, make note of when I do have to use it).
  • 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.

Last month I removed my old house’s debt and just created a netted line item in the asset column.

My Net Worth Change

  • From September 1st to October 1st my net worth increased 12.94%
  • Year to date my net worth has increased 54.91%

Last month I wrote,

The increase is basically new money coming in mixed with a realization of the value of my old house at a much higher rate than what I booked it for years.  I always kept the value on my balance sheet lower than what I thought it was worth, so that caused a big “on paper” spike.  At the same time my invests were down hard! A couple of my individual long term holdings as well as my broad mutual funds in my 401(k) tanked hard otherwise the gain would have even been larger (probably a good thing so that when there is a correction I am not too bummed out).

Big, busy month for me and I think September is going to have even more craziness prior to it calming down before the end of the year.

The craziness I was referencing was the bonus finalizing. I wasn’t sure if it was going to come through and the amount, and as such, I didn’t want to go too deep into it. With it now done, I should be back on track for normalized increases/decreases.

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3 comments

JC October 2, 2019 - 11:18 am

A 13% increase for the month is pretty damn good. We were +2.3% so I can’t really complain. Have you written about the rental property partnership details? I’d be curious to learn more about that. I’ve been interested in rental real estate as another investment/income option but thus far haven’t ventured into that realm just yet. A partnership seems like a decent way to dip my toes in the water of rental properties.

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Evan October 3, 2019 - 10:35 am

13% is mainly because of a huge chunk of cash coming into the mix that is likely never to happen again! I am usually happy with low single digits month over month growth because they add up QUICK.

I wrote about my rental property a few weeks ago, I’d love to hear your thoughts – https://www.myjourneytomillions.com/articles/my-rental-real-estate-plan/

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Buy, Hold Long October 5, 2019 - 3:58 am

Killing it Evan
That extra cash is always pretty handy. Keep up the great work my man.
Cheers

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