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.
October was great for the net worth and November followed up with a very meh month. The S&P 500 was essentially flat for the month which meant changes were primarily made via savings. Unfortunately there wasn't much on the savings front due to me forgetting about our homeowner's insurance bill being due. which took away pretty much all the investment capital. The majority of our net worth is tied to the performance of the stock market so a break from the roller coaster of the last few months was welcomed The good news though is that the market changes are just noise to try and get your emotions to make you do something foolish. It's the dividends that help to keep you sane when the markets are crazy or even boring. Dividends are always a positive portion of return and in November we ended up with over $420 in dividends received.
Even better was the THREE dividend increases announced during the month. That's extra money for doing nothing and I'm way okay with that.
For the month our net worth was flat just like the markets with a decline of just $12.46.
Current Assets: $599,186.99
Current Liquid Assets: $194,539.26
Current Debts: -$185,765.33
Net Worth: $413,421.66
As I mentioned above, November was a pretty blah month for my net worth. The $12.46 decline from October's total ended up being a 0% change month over month and a I'm still sitting at a 1.1% decline from the end of 2014.
It's taken a while to try and figure out what expenses we have coming up that we would normally save for on a monthly basis and it seems like there's always something else that keeps popping up. We're also in the middle of transitioning to primarily a one income family right now, although my wife is subbing in schools a few times a week. The transition as well as expenses that were forgotten about have led to a less than stellar cash flow situation but I think we might finally be on top of everything now that November is behind us. Of course I've thought that for the past couple months so who knows. We still need to save up for our property taxes which will be due by the end of January so investment capital is likely going to still be light until then which is a shame because I'm ready to invest and still see some solid values in the markets.
I don't see the point in paying extra on the mortgage at this time 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 plan to aggressively pay down the mortgage. As of the end of November we have 22.75% equity in our house. Also, according to Zillow our house has increased just over $10k in value from our purchase price although I'm just using our purchase price in my net worth calculations.
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.
Truly passive income, dividends and interest, amounted to $422.50 during November which covered 7.5% of my monthly expenses. Including the income earned from blogging/writing adds another $396.06 to the total bring my total non-day job income to $818.56. That covered 14.5% of expenses for November.
Based on my expenses from November, my liquid savings would last for just 2.86 years. That large decline is due to expenses that would normally be saved for each month but are being ramped up due to lack of savings earlier this year. Based on normalized expenses liquid savings would last for 7.51 years.
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How did your net worth fare in November? Are you set up to have a solid last month of 2015?
Image courtesy of holohololand on FreeDigitalPhotos.net.