Wednesday, December 16, 2015

Net Worth Update - November 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.

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.

I've updated my Progress page to reflect November'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 November?  Are you set up to have a solid last month of 2015?

Image courtesy of holohololand on FreeDigitalPhotos.net.

10 comments:

  1. I do similar procese each month. I go little overboard by having big dry eraser borad in my office where i have all my dividend stocks, debts, infome streams from home biz, rental housee, stocks etc...update it daily as divdends, rents etc come in, look biz sales on weekly basis so always current picture. I find it fun process.

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    1. Gerald,

      Whatever system keeps you on track is the best one! I like keeping track of my net worth but the cash flow is what really gets me going. Love seeing those dividends rolling in each month and covering more and more of my expenses.

      Thanks for stopping by!

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  2. I had a different view on the mortgage (but mine was at 6% fixed.) I paid it off entirely before I put a dime in the market (well, save the 401k up to what I could get a match on.) This let me reduce my emergency fund in size and be comfortable with being a little aggressive in the markets. I would have never been able to sleep at night with the idea of 20+ more years of debt ahead of me.

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    1. FV,

      I don't blame you one bit about paying off your mortgage early, especially since the interest rate was up at 6%. Ours is better around 4% and the math shows we'll come out way ahead just investing the difference and then using a lump sum to pay it off.

      I'd love to be mortgage free but for now the best thing for us is to save/invest. Once the FI Portfolio can get us to FI through just DG and dividend reinvestment our plan is to aggressively pay down the mortgage. Getting rid of the mortgage would reduce our monthly expenses by $900 which significantly reduces the required portfolio/dividends. That's between 25-33% of our annual expenses that we're required to pay add in property taxes and it bumps up to just over 40% of our annual expenses. $900 in monthly expenses equates to about a $360k portfolio at 3% yield or $270k portfolio at 4%. So the mortgage is likely to be gone prior to FI but there's still so many moving parts to try and figure out.

      Thanks for stopping by!

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  3. Thanks for sharing JC. Always expenses keep on popping, it never ends bud. Once everything is on track, I can't wait to see what you buy. Keep it up bud and dont' stop! I'll be here with you all the way, let's keep up the hustle and I wish you 2 the best in the New Year. Let's start a brand new wonderful chapter.
    Take care bud.

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    Replies
    1. Hustler,

      Yeah it's been a pain these last 3-4 months trying to make sure everything is lined up. But I think everything might finally be in line. Property taxes is about the only thing left that I can think of and we now have enough cash on hand to cover all of that.

      We're definitely looking forward to the new year because 2015 was crazy. Hoping 2016 is much calmer!

      Thanks for stopping by!

      Delete
  4. Good month JC. you did a lot better me in the market. I'm hoarding up cash for the rest of the year and buckling down for the chaos. Good luck in December

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    Replies
    1. BDI,

      I'll likely be hoarding up cash as well so I can fund Roth IRA's for my wife and I in January/February. Looking forward to seeing what else the market will throw at us.

      Thanks for stopping by!

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  5. I love the graphs, JC -- they tell the story so well!

    Due to tax benefits, I feel one shouldn't pay off your mortgage before starting to invest. With interest rates still quite low, I think its better to pay the minimum and invest the rest in great dividend growth stocks. (Having said that, I do round our mortgage payments up to the next $100 multiple and a little extra every month).

    Cheers
    FerdiS, DivGro

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    Replies
    1. Ferdi,

      A picture is worth a thousand words!

      For multiple reasons it doesn't make sense to pay our mortgage off early. Relatively low interest rate, tax benefits... Eventually I'll start moving more towards aggressive pay down once we get closer to FI but for now it's best to invest the excess capital.

      Thanks for stopping by!

      Delete