Thursday, February 13, 2014

Net Worth Update - January 2014

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.  Well the markets decided to take a bit of a breather and pull back some during late January.  That's bad for the net worth value but great for the long-term investor since we can buy more shares with the same amount of money.  I was surprised to see how much of a drag the markets took on my net worth, but as more and more of my financial life is tied to the markets eventually a bad month would outweigh the fresh contributions.  I was disappointed to see a net worth decrease since I saved over $5,300 from my after-tax paycheck, $1,400 in combined 401k contributions, $1,000 in ESPP withholdings and of course, my favorite, dividends.  For January it came out to be a -$1,065.01 change in my net worth.

Current Assets: $509,939.71
Curent Liquid Assets: $150,646.91
Current Debts: -$190,890.50
Net Worth: $319,049.21

Assets remained over $500k and liabilities continued to decline, but it end up being a negative change for the month.  A far cry from January 2013's almost $23k increase and well short of 2013's average over $13k and the first decline in my net worth since May 2012.  Ouch!  That sure was a nice streak I had.  I'm not worried at all though as the assets continue to do their job, which is generate cash.  We continued to pay just the minimum on our house and we now have 20.41% equity in our house.  This was a 0.33% decrease from December's tally.  My goal for the year is to have a $125,000 increase in my net worth for the year so I've got a lot of work ahead to make up for slow start to 2014.

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 January came in at 53.14% which is over my goal of 50%, so depending on how the first quarter/half goes, I might be adjusting the target higher.  This is a big dropoff from 2013's 81.31% rate, but that's because I'm changing the way I calculate my savings rate.  It's now just savings from my after-tax income that is specifically marked for investment.  I need to do a better job of in-month tracking of my expenses, but the good thing is that while they've crept up it's not a huge increase over my normal baseline.


My non-retirement accounts net worth took a another dip due to higher expenses and of course the overall decline in net worth.  Another trend that I need to correct.  Things should start trending higher on this again once the markets level out or start to increase and I do a better job of managing my expenses.  Based on my expenses for January my liquid savings would last for 4.69 years.  Not bad but I need to get that headed back in the right direction.

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

How did the new year treat your net worth?  

18 comments:

  1. It's generally not fun to see our net worth going down in a given month, but the good news is that the $5k you invested helped you buy more shares this month. If the market keeps pulling back, I might have to look into getting back in. I don't think buying stocks is much fun until the yields start approaching 4% or so. Then I'm on high alert.

    You're still making wonderful progress, regardless.

    ReplyDelete
    Replies
    1. FI,

      It was a bit of a bummer because it had been around 1.6 years since I had a negative month. I knew this would eventually happen despite a high savings rate, but it let me invest capital at much better prices. I'd love to see some 4% yields on some great DG stocks.

      Thanks for stopping by!

      Delete
  2. The market couldn't go up for ever JC. A decrease is frustrating I'm sure, but keep the perspective. Plus, you're about to delve into the world of rentals. That should be exciting......and with the reduced liquidity comes the benefit of NOT having daily prices :o) I know you're busy and hope you're doing well.
    -Bryan

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    Replies
    1. Bryan,

      I'm not worried about it because I knew this day was coming. It was just a matter of when, not if. Still a bit surprising to me though since I had saved over $10k during the month. I was glad the markets dipped though because I was able to add to some positions that were long overdue to be added to and even added UL to the portfolio.

      Thanks for stopping by!

      Delete
  3. a few bad months here and there are good. gives you a chance to get more shares. Overall it is heading in the right directions. keep it up.

    ReplyDelete
    Replies
    1. FFDividend,

      I definitely welcome the down months because I can buy more with my capital. The long-term trend is higher so I'm just fine with short-term blips. I love getting to buy more shares of the companies I want to own.

      Thanks for stopping by!

      Delete
  4. I think this is a great reminder of why pursuing a DG strategy is a great because in a situation where your well on your way to FI, or in FI for some, your income did not change one iota, while people looking to sell holdings suffered double the losses.

    ReplyDelete
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    1. w2r,

      Completely agree. The portfolio value went down but what really changed. The cash flow sure didn't. Trying to sell into weakness to pay for your expenses is brutal.

      Thanks for stopping by!

      Delete
  5. Just look at the recent dip in the market as an opportunity to pick up more shares of your favorite dividend companies.

    ReplyDelete
    Replies
    1. Marvin,

      I took advantage of the dip to add to some positions and start a new one in UL. So it was definitely a welcomed change from the seemingly non-stop climb during 2013. I'd love to see some more volatility come back into the picture because that gives more opportunities to purchase great companies.

      Thanks for stopping by!

      Delete
  6. You and I both know the stock market don't always go up. Don't sweat it. Seriously.

    Congrats on maintaining an incredible savings rate. I stand in awe!

    ReplyDelete
    Replies
    1. CI,

      I'm not concerned about it, I just thought it'd be later this year before I'd see the market movements outweigh a $10k increase in savings across everything. Oh well. I think showing the savings rate this way is a purer way of showing the actual investment dollars I'm saving and putting to work each month. And that's okay because I'm jealous of your already hefty dividend stream. I've got a lot of work to do to catch up to you there.

      Thanks for stopping by!

      Delete
  7. Pursuit,

    As your net wealth that's tied to equities increases, you really notice down months/ periods a lot more. I view it as a positive development actually, because it means your snowball is taking on a force of it's own. Even though a little snow may come off periodically, it will keep gathering momentum provide you let it ride! Best.

    ReplyDelete
    Replies
    1. Integrator,

      Yeah the down months will start having a much bigger drag on the net worth figures but that's the nature of the beast with investing, especially in equities with second by second quotes. Overall it's good though because I was able to put a good chunk of money to work at better prices and higher yields. That's a good combination right there.

      Thanks for stopping by!

      Delete
  8. Hi PIP,

    you are a 1/3-millionaire!
    That´s awesome!

    I wish you the best, that your net worth will go on to 500.000 USD - as fast as possible!

    Best regards
    D-S

    ReplyDelete
    Replies
    1. D-S,

      You know I didn't even notice that I hit that mark. Now to find a way to get to the halfway mark ASAP. The portfolio is really starting to kick in some solid dividends. My forward 12 month dividends are almost to $4k that's an additional 3-4 purchases each year right there.

      Thanks for stopping by!

      Delete
  9. You're now on our Net Worth Tracker list!

    http://rockstarfinance.com/blogger-net-worths/

    ReplyDelete
    Replies
    1. Thanks for adding me J. Money! Hopefully I'll be moving on up those ranks.

      Delete