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.
Much like November, December ended up being a pretty bland month in terms of net worth. The S&P 500 was down around 1.75% during December so essentially a flat month for my net worth again is fine by me since the majority of our net worth is tied to the performance of the stock market. Although market changes are generally just noise that are typically best to be ignored. Of course receiving over $840 in dividends and getting three raises to boot sure does help to ease the sting of market volatility. Dividends are great because they are always a positive portion of return. For the month our net worth declined by $224.62.
Current Assets: $598,718.66
Current Liquid Assets: $197,223.58
Current Debts: -$185,521.62
Net Worth: $413,197.04
As I mentioned above, December was a pretty blah month for my net worth. The $224 decline from November's total ended up being a -0.05% change month over month. Year to date our net worth took a slight step backwards declining $4,715.78 or 1.13%.
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 December we have 22.86% equity in our house. Also, according to Zillow our house has increased just over $12k 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, totaled to $849.51 during December which covered 28.5% of my monthly expenses. Including the income earned from blogging/writing adds another $493.79 to the total bringing my total non-day job income to $1,343.30 which was my largest monthly haul by about $250. Non-day job income covered 45.1% of expenses for December.
Based on my expenses from December, my liquid savings would last for 5.51 years. The large jump was due to finally being caught up on the extra savings/expenses that was needing to be made in order to make our property tax payment later this month.
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How did your net worth fare in December? Did the markets push your net worth into the red?
Image courtesy of holohololand on FreeDigitalPhotos.net.