Wednesday, February 25, 2015

Net Worth Update - January 2015

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.  During January my net worth decreased $15,178.59.

Current Assets: $590,884.46
Current Liquid Assets: $201,774.56
Current Debts: -$188,150.24
Net Worth: $402,734.23

The combination of a declining stock market and about $7k in medical bills is a sure fire way to drop your net worth.  Especially since I was on FMLA and had no income coming in from my job.  Despite the large decline it's great to see the total still over the $400k mark, although, just barely.  February will be my last month with no job income so March should be back to normal operations with an above average income and a relatively high savings rate.  Over the next few months my plan will still be to hoard cash, although there should still be the occasional stock purchase.  By May I expect to be back into full on aggressive investing mode with the majority of savings going into building up my portfolio and dividend income streams.

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.  So the liabilities side of the net worth equation will be slow moving.  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 January we have 21.66% equity in our house.

My net worth at the end of January showed a 3.6% decrease from December 2014's tally.  So year to date there isn't a great showing for my net worth but I expect that to get back on track throughout the year.  I haven't set any goals yet for my net worth because there's just too much in flux with our financial house to be able to come up with reasonable goals.  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.  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.

The following chart shows my assets and liabilities, as well as my net worth, since January 2012.  While I have accurate records for my net worth dating back to July 2010, I didn't keep track of my assets and liabilities on a monthly basis until the start of 2012.


There's no after-tax savings rate for January since I didn't have any income from my job during the month.  I guess technically that pegs it at 0% but January was a bit of an anomaly since I shouldn't have to go without income again anytime soon.


Based on my expenses from January, my liquid savings would last for 5.98 years, a 0.26 year decrease from December.  The decrease was spurred along by the drop in my net worth as well as higher than my base line expenses.  While expenses should stay the same or creep higher throughout the year, I expect the liquid assets side to of the equation to start trending higher once again.

I've updated my Progress page to reflect January'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 fare in the first month of 2015?  Did you get started off on the right foot towards your financial goals for the year?

13 comments:

  1. Hey JC. Thanks for sharing. I hope everything will be back to normal and all the best to the little one. Hope Luke's gonna be better. Life's so precious and special. We have to enjoy everyday. Hope you will have a great year and I will be following side by side with you my friend. Much love. Tyler.

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    1. Hustler,

      A bit of normalcy would be much appreciated, but I'm sure as anyone with kids would say that there is no normalcy once they're here.

      Thanks for stopping by!

      Delete
  2. Always enjoy the specifics. The numbers continue to be impressive.

    Our 2015 is going well so far, except the $1,000 I shelled out to fix a car.

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    1. Adam,

      I try to be as open as possible because I feel that gives the most meaning to what I'm trying to do to inspire/motivate others. Glad your 2015 is going well. If I could we'd be a one car family but for now that's just not feasible.

      Thanks for stopping by!

      Delete
  3. JC -- hang in there, with your regular monthly income starting up again, you'll be in a better position in short time. I like these updates and especially the charts. Good luck!

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    1. Ferdi,

      I'll be glad to have things just settle down as far as income and expenses so I can get back to investing on a regular basis. I like the numbers behind the charts myself!

      Thanks for stopping by!

      Delete
  4. Keep on trucking JC. It's been tough, but you are weathering the storm quite well. Having over $400,000 in assets is fantastic. Despite not working, your dividends are still rolling in and one day you'll look back at this time in your life and see only a hiccup in the chart above.

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    Replies
    1. American Dividend Dream,

      It's great to have that $400k in net worth to fall back on if absolutely need be. Although we're far from needing to tap that. I have no concerns with the short term dips and actually welcome them since they allow me to get more bang for my buck with my investment capital.

      Thanks for stopping by!

      Delete
  5. Keep on trucking JC. It's been tough, but you are weathering the storm quite well. Having over $400,000 in assets is fantastic. Despite not working, your dividends are still rolling in and one day you'll look back at this time in your life and see only a hiccup in the chart above.

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  6. As the song goes....."mama said they'll be days like this (or months)." ;) Short term setback will occur here and there as that is simply life happening. Keep with the plan and you'll be right back on track before you know it. Best wishes! AFFJ

    BTW, love the chart showing with your assets and liabilities....it clear that you are doing well growing those assets as the bar appears to only grow with time. Keep it up!

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    1. AFFJ,

      It was fully expected to not have income for a month or two so no surprises there. It just happened to coincide with the markets taking a dive throughout January. The only bad part is that since I didn't have income I didn't have available investment capital. Well, I didn't want to dip into my cash reserve while I didn't have any extra coming in.

      Thanks for stopping by!

      Delete
  7. Medical bills are a killer. I am sorry you had to incur these. I agree with you, do not pay off your mortgage if the rate is low. I would just make 1-extra payment a year r cut the monthly payment into weekly payments. I am sure you know this but either approach shave 9 years off a 30-year mortgage. Best of luck to you sir.

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    Replies
    1. Dividend Dreams,

      They definitely are but at least we were prepared for them. I currently don't pay any extra on the mortgage but have considered adding an extra payment each year. Possibly with our tax return because I expect to get a pretty hefty one this year since there were so many changes happening I'd have preferred to have a refund than to owe.

      Thanks for stopping by!

      Delete