Thursday, January 9, 2014

Net Worth Update - December 2013

While cash flow is more important when it comes to financial independence, it's still good to look at the balance sheet too, which is why I provide these net worth updates.  The markets continued their march higher to close out the year which just serves the purpose of sucking more value away from me and my fellow dividend growth investors.  However, thanks to the rising tide lifting all boats and a solid savings from my income, I was able to notch my 10th $10k+ monthly net worth increase.  This was an amazing year as far as net worth goes and I didn't expect anything close to this kind of progress.  Some of the lifting was due to the markets rising around 30% for the year but I still did my part by continuing to save and invest in high quality dividend growth companies.  For December I ended up with a $12,115 increase with just over $950 in combined 401k contributions, $700 in ESPP withholdings, and over $5,900 in after tax savings.  The rest of the change was due to market changes and dividends received throughout the month.

Current Assets: $511.227.26
Curent Liquid Assets: $149.460.65
Current Debts: -$191,113.04
Net Worth: $320,114.22

I almost hit the $500k assets mark at the end of November and then flew by it after December.  The only debt reduction came from the mortgage payment and we're now sitting on 20.30% equity in our house.  This was a 3.93% increase over November's tally.  It was an amazing run in 2013 that saw my net worth increase over $164k, good for a 105.3% increase from December 2012.  This far exceeded my second revision of my net worth goal to achieve $306k by the end of the year.  I don't expect to see a repeat in 2014 but you never know what's in store.  All we can do is take care of what we can by saving as much as possible and investing it.

I'm changing the chart for my net worth to better reflect our situation now that there's significant debt on the books with our mortgage.  The chart will now show both assets and liabilities as well as the net worth.


My after-tax savings rate for December ended up at 69.72% which is around what I expected, although I know I can do better.  The plan for 2014 is to get expenses under better control as the whole second half of the year I didn't really track my spending throughout the month.  Expenses crept up because of that so I need to refocus.  I'd love to see a stable savings rate in the 70-75% level going forward when accounting for the new expense level.  I was able to average a 81.31% savings rate for 2013 which was higher than my 80%+ savings rate goal.  This is only savings from my net income that actually hits my checking account.  However, I do have another 8% after tax being withheld to purchase shares through the employee stock purchase plan provided by my employer.


My non-retirement accounts net worth took a another dip due to higher expenses.  Another trend that I need to correct.  I've lost over 3.7 years of liquid savings since August thanks to higher expenses.  That despite increasing my net worth by almost $60k in that time.  Based on my expenses from December my liquid savings would last for over 4.89 years, which is a 0.12 year decrease from November.  Luckily this should get back on it's rising ways as my expenses level out from here.

I've updated my Progress page to reflect December's changes.

How was your December?  Did you do better or worse than you expected this month?  How about for the year?

14 comments:

  1. keep it up and in another 2 year you will be a millionaire. Great Job!!

    ReplyDelete
    Replies
    1. FFDividend,

      I'd love to hit the millionaire status in 2 years, but the markets 30% increase this year did a lot to help catapult the net worth higher. I wish it would continue, but I know it won't. I can't wait to hit that $1M in assets though. That could be doable in 2 years.

      Thanks for stopping by!

      Delete
  2. What happened in September? Did you buy a rental property or something? I admit I completely missed that until now.

    ReplyDelete
    Replies
    1. PMU,

      I wish it was a rental property, but it was our primary residence. Great house in a great location. Although it's a bit more than we need right now, I didn't want to have to pay the "tax" of additional closing costs to move again when we add to our family in the next few years. Hopefully there will be a rental property or two in the cards for 2014 though.

      Thanks for stopping by!

      Delete
  3. I think I will have to have a look at my net worth, adding together my current company pension, previous employers pension, personal pension, tax free investment account, around 80%of my house (other 20%belongs to mortgage company) and savings it might add up to a tidy sum.

    Maybe million dollar status is not so far away after all!

    ReplyDelete
    Replies
    1. FI UK,

      You'll never know unless you calculate it. I'm most concerned with the cash flow from my investments, but I think looking at the balance sheet (net worth) is important too. I wouldn't want to be so leveraged that a few events completely devastated us.

      Thanks for stopping by!

      Delete
  4. Hi PIP,

    great chart with assets and liabilities - This is a very charming idea! :-)
    And great, how your net worth rises continuously!

    You own more than I ;-)
    My total net worth is at the moment round about 250,000 EUR

    regards!
    D-S

    ReplyDelete
    Replies
    1. D-S,

      250k euro is still very impressive. The one thing I don't like about posting the actual numbers is that I don't want people to see them and then get discouraged because they aren't at a certain point. Believe me, there's plenty of bloggers that I check in on that are doing way better on their net worth, and some are doing so at a younger age than myself. We all have different capabilities and different life situations that will drastically impact the total number and rate of growth of that number. I think I've had 2 negative month over month changes, but a lot of that was due to having such a low starting point. Eventually the swings in the market will start outpacing the positive contribution from savings. As long as it keeps moving up and to the right, that's fine by me.

      Thanks for stopping by!

      Delete
  5. That is incredible progress in just one year. I'm humbled.

    ReplyDelete
    Replies
    1. Done by Forty,

      Believe me it was a lot more than I expected would have been possible. I'd love for a repeat but don't really expect it anytime soon.

      Thanks for stopping by!

      Delete
  6. Outstanding move JC. I'm very impressed! My December was a tough month, but was about how I expected. It's a new year, and hopefully a great year. I wrote out my Watch/Wish list and posted it to the blog today. Thanks for your comments and support.
    Have a great night.
    -Bryan

    ReplyDelete
    Replies
    1. Bryan,

      At least your December wasn't worse than you expected. It's usually a rough month as budgets usually get stretched with the holidays.

      Thanks for stopping by!

      Delete
  7. 80% savings rate is pretty impressive. What's the end goal for early retirement?

    ReplyDelete
    Replies
    1. Ben,

      The plan is by 40, but I'm hoping/expecting for it to be earlier than that. Although I don't plan for a full on early retirement. I'll definitely take a break but after a few months off I'll be looking for some other endeavor. It's more of a FI path where I can comfortably pursue whatever it is I feel like going after at the time.

      Thanks for stopping by!

      Delete