Wednesday, February 18, 2015

Net Worth Update - December 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.  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 but in the long run as I continue to save and invest the net worth trend should be higher even though short term fluctuations can vary wildly.  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.  Between my last update covering October 2014 through the end of the year my net worth increased $18,475.94!

Current Assets: $606,296.41
Current Liquid Assets: $213,165.40
Current Debts: -$188,383.59
Net Worth: $417,912.82

November provided the bulk of the increase since the medical bills hadn't really started rolling in yet so all excess income was funneled to cash savings.  It's pretty cool to finally topple the $400k net worth level as well as crossing the $600k mark for the asset side.  I still find it hard to believe that in 53 months I went from a -$1,663.30 net worth all the way up to $400k+.  That's the beauty of what happens when you combine a high income with high savings and investing the difference.  Over the next few months the plan is to hoard cash, although I'll still probably make a few purchases for my portfolio, and then probably sometime between May and July I'll start investing heavily once again.  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 the extra cash flow.  However, once the FI portfolio is able to get to a self-sustaining level of dividends then I'll aggressively pay down the mortgage.  As of the end of December we have 21.55% equity in our house.

My net worth at the end of December showed a 4.6% increase from October of $18,475.94.  For the year 2014 my net worth increased $97,798.60 or 30.6% from the end of 2013.  My goal for the year was for a $125k increase so I came up rather short but I can't really complain about almost a $100k increase.  The net worth goal has always been a secondary goal since a lot of it is out of my control since I invest primarily in the stock market, so I'm not too disappointed about the shortfall.  I'll just continue to focus on what I can control which is maintaining a high savings rate and investing in high quality companies at fair prices.

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 will be a December came in at 67.56% which was the 4th highest mark I had throughout the year.  Considering the higher than normal expenses for the month I'm very pleased with how that turned out.  My average for the year came to 62.25% which was just short of my 65% goal but showed marked improvement from the starting point in the low 50% range.

Based on my expenses from December, my liquid savings would last for 6.24 years, a 0.17 year decrease from October.  Despite solid increase in my liquid assets that wasn't enough to overcome the rather large jump in expenses for December which lead to the decline.  I'm looking forward to later in 2015 when expenses should hopefully level out and there isn't as much that's in flux on that side of the income statement since that's the fuel for the balance sheet.

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

Make sure you sign up to receive new posts to your email so you don't miss anything.  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 for 2014?  Did you have more or less progress than you set out to make?


  1. Hi PIP,

    Been following your blog for some time and glad to see you're back. I hope your family is doing well. Great progress on your net worth... going from -$1K to $400K in about 4.5 years is very impressive. Do you invest in a 401(k) plan with your employer? If so, is that included in your net worth calculation?

    1. Glad to have you following along and it's bittersweet to be back. I'm glad that I'm back writing again but I'd also much rather prefer to be at the hospital with my wife and son. He's still got a long ways to go and the goal is really to just keep him stable while his body/lungs grow, but because of where he's at he's always teetering on the edge of a cliff so to speak. Yes I do have a 401k plan. Since it's all mutual funds I don't document it that much because it's honestly just kind of boring. Yep I invested in some index funds again this month. But yes it is included in my net worth calculation. I count everything including my house in my net worth calculation. I know some people don't like to include that but as long as I'm consistent with the way I track it I'm fine with it.

      Thanks for stopping by!

  2. I missed these updates, JC. Welcome back to teh world of blogging and congrats on the 30% increase for 2014! That is one hell of an achievement.


    1. R2R,

      I missed being able to do them and it's a heck of a lot easier to keep up with it on a monthly basis rather than trying to catch up 3 months of information. I'd love a repeat ~$100k increase this year but I don't see it in the cards unless the stock markets really take off from here, which I hope doesn't happen. But overall it was a really good 2014 and it's good to be back blogging again.

      Thanks for stopping by!

  3. PIP,

    "I still find it hard to believe that in 53 months I went from a -$1,663.30 net worth all the way up to $400k+."

    Based on your commitment and sacrifices, it doesn't surprise me at all. Great job and keep at it!


    1. MDP,

      The funny thing is that I don't really feel like I've made any sacrifices other than time. That's the biggest sacrifice I've made but at least I'm working on correcting that by getting to a point where I can coast to the finish line of FI with a lighter work schedule or just stay until we're actually FI.

      It still amazes me to see that kind of growth though!

      Thanks for stopping by!

  4. PIP,
    I really like your Net Worth chart that shows your liabilities at the bottom. It's crazy the progress you have achieved in such little time. I am hoping I can achieve half the success in that amount of time. Thanks for sharing and keep it up!

  5. JC,
    Man thats incredible how you turned your net worth from negative to $400K in just 53 months and much congrats on reaching the 400k milestone!
    The market is getting more expensive right now, I cant blame you if you plan on hoarding lots of cash.
    Take care,