Monday, March 16, 2015

Net Worth Update - February 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 February my net worth increased $17,202.15.

Current Assets: $607,852.35
Current Liquid Assets: $204,445.72
Current Debts: -$187,915.97
Net Worth: $419,936.38

What a difference a month can make.  The stock markets soared during February and a rising tide lifts all boats and my net worth appreciated the increase.  I on the other hand wasn't thrilled about it because I want to buy excellent companies at discounts to their fair value.  My net worth is now solidly above the $400k level but that's subject to change depending on how Mr. Market wants to behave.  Over the next few months my plan is to try and rebuild our cash savings up to a more comfortable level and then hopefully between May and July I can start aggressively investing 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.  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 February we have 21.77% equity in our house.

My net worth at the end of February showed a 4.27% increase from January 2015's tally.  YTD there's been a small 0.48% increase in our net worth or a total of just over $2.000.  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 February since I didn't have any income from my job during the month.  I guess technically that pegs it at 0% but February was a bit of an anomaly since I shouldn't have to go without income again anytime soon.


Based on my expenses from February, my liquid savings would last for 6.58 years, a 0.60 year increase from January.  The rising stock market did all of the work for increasing my liquid savings this month.  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 now that income will be rolling in during March.

I've updated my Progress page to reflect February'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 February?  Did you get started off on the right foot towards your financial goals for the year?

12 comments:

  1. Awesome increase JC! Keep it up bud. Slow and steady wins the race. From good to great. Take care and wish you the best.

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    1. Hustler,

      Slow and steady will eventually get us all to the promised land. Step by step is all we can take it. It was great to have a nice rebound after January's decline.

      Thanks for stopping by!

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  2. Whoa! Nice jump in net worth there, JC. Keep up the great work and thanks for sharing

    R2R

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    Replies
    1. R2R,

      It was a really nice bump. Although with the stock market jumping 5%+ and also getting my profit sharing to my 401k it was really nice. Especially since there was no income for the month. I'll take a $17k increase with no real basis of additional funds coming in.

      Thanks for stopping by!

      Delete
  3. Love your net worth jump. Your net worth is climbing nicely. Keep up the good work.

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    Replies
    1. Tawcan,

      It was nice to see on paper although I'd have preferred to see it have a modest increase. I'm still trying to allocate capital so lower stock prices gives me more dividends for my dollars invested. I would love to see it hit $500k this year but I highly doubt it. Most likely sometime next year though depending on Mr. Market.

      Thanks for stopping by!

      Delete
  4. PIP,

    What a boost to your overall net worth. I love the way you are tracking your assets, liabilities, and net worth over a lengthy time period. What program do you use to do this? It seems like it would take a considerable amount of time if using excel and manually putting in values each month.

    Best of luck in you FI pursuit!

    -Dividend Odyssey

    ReplyDelete
    Replies
    1. Odyssey,

      I didn't track the breakdown between assets and liabilities before but I did keep track of my net worth. But oh well. I like having data to go and look back on so I can see just how far I've come. If you'd have told me that in July 2010 I'd have a -$1.6k net worth and then fast forward to February 2015 and it'd be up over $400k, I'm not sure I'd have believed you.

      Thanks for stopping by!

      Delete
  5. Nice numbers. Keep up the good work. I wish I had numbers all the way back to 2008, when I started working.

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  6. Well done PIP! that's a pretty awesome bump in net worth. I had a nice jump as well but on a much much smaller scale.

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  7. Great stuff JC. Like you, I don't currently have a networth or portfolio size goal, but have goals to achieve certain amount of dollars. Maybe I need to start tracking the net worth just to see how it progresses.

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  8. Huge increase there! Very impressive month, I can't wait to see the results of you putting your foot to the pedal a bit more going forward here. Best Wishes.

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