Friday, July 17, 2015

Net Worth Update - June 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.  It's been a while since my last update which was all the way back in March.  Since then my net worth has decreased $738.77.  Although all of the loss was due to June's poor showing with almost a $8.7k decrease alone which wiped out the gains from April and May.

Current Assets: $608,546.14
Current Liquid Assets: $204,820.20
Current Debts: -$186,969.56
Net Worth: $421,576.57

Overall though I'm still pretty happy with where my net worth is at.  I've been able to increase my net worth to over $400k since July 2010 when I was at -$1.6k.  Not bad for just about 5 years of work.  Since I ended up having about 2.5 months off from work that led to pretty much no income coming in which helped lead to the decline in my net worth.  I still have plans to try and build up some more cash buffer over the next couple months but I expect that I'll be making at least a couple purchases each month as well if we continue to get increased volatility and better valuations.  Year to date my net worth has increased $3,663.75 or 0.88%, although I was sitting on a $12k+ improvement prior to June's decline.

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 June we have 22.20% equity in our house.

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 June since I spent more than I had in income.  So there was a negative savings rate throughout the month which certainly didn't help out my net worth.  However, on a positive note my job income for the month came in at $1,685.09 but between dividends, interest, and blogging income I earned $1,074.87.  That's my first month ever of having $1k in income that wasn't tied to my day job which is just fantastic as far as I'm concerned.  I know I won't be able to repeat that until maybe September because dividends did the heavy lifting but it's exciting to see over $1k in investing and side income.  That covered 47.7% of my expenses for June!  Truly passive income, dividends and interest, was able to cover 37.0% of June's expenses.


Based on my expenses from June, my liquid savings would last for 6.91 years, a 1.32 year increase from March.  All of the improvement came thanks to a reduction in expenses from over $3k in March to just under $2.5k for June.

I've updated my Progress page to reflect June'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 half of 2015?  Are you on track to meet your net worth goals for the year?

Image courtesy of holohololand on FreeDigitalPhotos.net.

10 comments:

  1. Thanks for sharing JC. Overall trend is up so it's all good and logging and blogging consistently will help you crush your goals. No doubt about it. Over 1 k in passive income is awesome. Feels wonderful. Keep hustling hard and I wish you 3 the best! Cheers!

    ReplyDelete
    Replies
    1. Hustler,

      Yeah, I'm okay with a slight decrease over the last quarter especially since the stock markets were volatile and I didn't have much income coming in over the second half of the quarter. So that meant little savings.

      I'm most impressed to see the $1k in non-work income. I know that's not going to be an average month but even doing that in one month is awesome to me. I hope to boost up my blogging income and that should happen with more consistent writing.

      Thanks for the well wishes. It's back to the grind with Luke right now so we'll see how things go.

      Thanks for stopping by!

      Delete
  2. PIP: I don't know if you've answered this before (or if you even want to answer it), but what assets do you have beyond the house and liquid assets? It seems like there is a $150-200k gap between house and liquid assets. Is it retirement accounts or a pension? Just curious.

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    Replies
    1. Widerhaken,

      I don't think I've specifically covered it before but it's just as you guessed. The difference is due to my retirement assets. In a true emergency I could convert that to liquid assets but I'd take a huge tax hit to do so. It'd cut that down by about 1/3. The asset side is pretty much checking, savings, brokerage accounts, retirement accounts, and our house.

      Thanks for the question and thanks for stopping by!

      Delete
  3. You are going to catch me soon. Gogogoogogogo!

    ReplyDelete
    Replies
    1. FV,

      If I can just get back to consistent work instead of it being so lumpy then I can really start to make progress again. The bull market and great income from my job allowed me to make such good progress over the last 5 years.

      Thanks for stopping by!

      Delete
  4. Thanks for sharing JC!

    Wow! from -$1.6k to over $400k in just five years is by far the most impressive thing I've read all week! When you get back to a more consistent income you'll hit that $500k mark in no time! My portfolio was in a real roller coaster during June, first down 5% and then back up 7%. It's been storming on the European markets because of the situation in Greece. I only own shares in two american companies right now, were your portfolio affected by it al all?

    Keep those posts coming, I love following success stories like yours. It motivates me to keep on going. I wish all three of you my very best!

    ReplyDelete
    Replies
    1. Life Designer,

      There could be an outside chance to hit $500k this year if the markets helped out but who knows what will happen.

      I have a lot of exposure to US multinationals so they saw more volatility because of Greece and China. Not as much as you did I'm sure but plenty of it. Just wish I could have added some shares during that time but I was sitting there watching it unfold without capital ready to deploy. That's not a good feeling, but it happens from time to time.

      It feels great to be back to writing more consistently. It's still not as much as I'd like and I'd really love to get a solid backlog of posts written and ready for the days that I just don't have time to write due to either my son or work. Hopefully I can get on top of that but that's been in my plans for the last 3 years and I've rarely accomplished that.

      Thanks for stopping by!

      Delete
  5. I know you didn't have a net positive gain this quarter but I'd be willing to bet that very few did with the market in somewhat of a slump lately. On the positive side, that means we can all pick up shares with higher overall yields and in many cases growth. :)

    Also, congrats on surpassing the $1K mark in passive income. Your passive income is growing nicely!

    Best wishes and continued success. AFFJ

    ReplyDelete
    Replies
    1. AFFJ,

      The fact that I was about neutral with income being as erratic as it was and the market slumping at the end, I'm not concerned at all. Especially since that does mean there's better valuations in the markets!

      There's still a long ways to go before that's a consistent number that I can hit but just doing it once is extremely motivating. I'm building up my resources to provide more and more.

      Thanks for stopping by!

      Delete