Friday, June 13, 2014

Net Worth Update - May 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.  The S&P 500 was up 2.1% during May.  Since more and more of my net worth is tied to the markets, there's a larger correlation between my net worth and the markets and for May a rising tide lifted all boats.  As a dividend growth investor I'm not overly concerned with the short-term gyrations as long as the dividend stream remains in tact, but the markets' effect is noticeable.  I had just over $6,200 in after-tax savings from my paycheck, around $1,030 in ESPP contributions, and over $1,400 in 401k contributions counting the employer match.  The rest of the changes were due to dividends received and changes in the stock market.  All in all May saw a $9,140.28 increase in my net worth.

Current Assets: $564,100.80
Curent Liquid Assets: $184,744.78
Current Debts: -$189,991.47
Net Worth: $374,109.32

My monthly changes have smoothed out after the decrease in January and then record setting February.  March, April, and now May have all been about the same in net worth improvement so it's good to see things settle down a bit.  Liabilities are pretty much just the mortgage on our house which we now have 20.82% equity in our house.  I don't see the point in paying extra on the mortgage given our relatively low interest rate and think we'll come out much further ahead investing extra cash flow for the time being.

May's increase was a 2.50% improvement over April's end and year-to-date I've had an increase of $53,995.10 for a 16.87% improvement from the end of 2013.  My goal for the year is to have a $125,000 increase in my net worth, and so far I'm 43.20% of the way towards my goal.  I'm pretty much exactly on pace to reach my goal as we're 41.67% of the way through the year as of the end of May.  Of course, there's no telling what the investment assets will do towards my progress towards that goal the rest of the year.

I've changed 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.  I also changed the colors because I didn't notice this until April but assets were red and liabilities were green.  So that's now been fixed.


My after-tax savings rate for May came in at 71.13% which is well over my goal of 50%, so I'll be looking to increase that target during my half year review post.  So far this year I'm averaging a 57.09% investment savings rate which I think is awesome.  I don't expect to have too many other big expenses or items to save for the rest of this year so almost all excess cash flow will be funneled directly into savings for investment purposes.  This should help increase my savings rate throughout the rest of the year.  This is a big drop-off from 2013's 81.31% rate, but that's because I changed the way I calculate my savings rate.  It's now just savings from my after-tax income that is specifically marked for investment.  I think this gives a purer savings rate since it's only true savings/investment capital.


It's great to see a new trend forming in my liquid assets expense coverage after the 3 month decline towards the end of 2013.  I've got a new streak going with 4 consecutive months of increases and I hope to keep that up throughout the rest of the year.  As expenses hopefully head lower and savings move higher this ratio should continue to increase in most months.  Based on my expenses from May, my liquid savings would last for 6.09 years, a 0.35 year increase from April.

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

Also, I'm starting a newsletter and I hope to get the first edition out over the next week or two so go on and sign up to receive new posts to your email and newsletter!  Also you'll be the first to hear about new things that I have in store for the blog.  And be sure to follow me on Twitter@JC_PIP to get up to the minute news of new purchases for my portfolio.

How did your net worth do in May?  

8 comments:

  1. Thats a beautiful slope on the net worth chart you have going on PIP. You should take pride in it.

    ReplyDelete
    Replies
    1. PMU,

      I just wish it was a bit steeper but I'll take it as it is right now.

      Thanks for stopping by!

      Delete
  2. That's an impressive growth of 2.5% for the month. Congrats.

    ReplyDelete
    Replies
    1. DGJourney,

      I'm not too worried about my net worth overall because so much of the value is out of my control. So I just try to save as much as possible from my paycheck to set myself up for success.

      Thanks for stopping by!

      Delete
  3. Very nice. Very high rate of growth. 2.5% is big. I would be happy with just a .5 gain lol. You really have your networth and savings working for you. You will be at 1 million within 1a couple years at this rate.

    Good Day and Grind On!

    ReplyDelete
    Replies
    1. A-G,

      I actually wouldn't mind a 10% cut to my net worth due to the stocks I own declining so I can invest capital at even better prices. But a gain is still fun. I can't wait to see that $1m asset mark and then the $1m net worth mark. That'll truly be awesome.

      Thanks for stopping by!

      Delete
  4. $9.1K increase in one month is great...you are on a roll PIP. Keep it up. By the way, you should look into getting your net worth onto Rockstar Finance's Ultimate List of Bloggers Net Worth (http://rockstarfinance.com/blogger-net-worths/). It's a nice way to compare and motivate yourself. :)

    Wishing you continued success in your journey! AFFJ

    ReplyDelete
    Replies
    1. AFFJ,

      That's the benefit of a high income and high savings rate. In down months for the markets I can negate some of the downward pull through savings. And in up months the gains to my net worth are magnified with the markets cooperating. I'm on the list, actually 5 below you as of right now. It's pretty cool to be able to track how everyone's doing in one place. Even though we're all at different points in our lives and have different income/expenses/family situations, a little friendly competition never hurt to help motivate us to move higher up that list.

      Thanks for stopping by!

      Delete