Monday, January 18, 2016

Net Worth Update - December 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.

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.

I've updated my Progress page to reflect December'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 December?  Did the markets push your net worth into the red?

Image courtesy of holohololand on FreeDigitalPhotos.net.

12 comments:

  1. Awesome month for you JC. Over 1200 is just so sweet. Keep it up and thanks for sharing your journey with us. Keep hustling hella hard and happy hunting. Can't wait to see what you buy in these awesome times. Cheers bud.

    ReplyDelete
    Replies
    1. Hustler,

      It was awesome to see that we pulled in over $800 in dividends and over $1,300 in non day job income for just one month. I can't wait until we average that but it'll still be a while until we get there. I hope to really bump up my online presence and writing income this year but it'll definitely be a lot of work.

      Thanks for stopping by!

      Delete
  2. Great month, and I'm with you regarding mortgages... 30 year fixed low rate? I'll want to hold onto that as long as I can. In fact, we just completed two refis and locked in 4.125% for 30 years, increasing the cash flow quite a bit (4.75% before).

    Over the long run, you'll come out miles ahead using any excess funds to invest, instead.

    Cheers!

    ReplyDelete
    Replies
    1. FI Fighter,

      Eventually I think we'll make the switch towards paying down the mortgage instead of just continually building up the portfolio but it'll take a lot of projections to try and figure out the timing of that. Ideally I'd like to have the mortgage paid off by the time we reach the crossover point because that significantly reduces our monthly expenses. Our mortgage alone is just under $11k per year which would require a portfolio of $270k-$360k based on a 3-4% yield.

      Lots of planning ahead which I think is how this year is going to look.

      Thanks for stopping by!

      Delete
  3. I like that idea to keep your mortgage longer at such a low rate :) More to invest.

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    Replies
    1. Kate,

      I figure I might as well take advantage of some interest rate arbitrage while I can so I can invest more. Although eventually I need to make the switch to pay down the mortgage. Lots of calculations to run through in order to make the switch though.

      Thanks for stopping by!

      Delete
  4. Great month JC. A $224 decline is pocket change with your kind of net worth. I was down about $900 in December but January is looking like an even worse month so far, lol. It's a good thing we both have a reliable stream of dividend income. :) Speaking of which, I referenced your dividend page in my recent post yesterday. #TeamDividendGrowth

    ReplyDelete
    Replies
    1. Liquid,

      There's no worries about the net worth although I would like to see it start moving in the other direction through better savings and investing and of course building up the dividend stream. January is horrible thus far but who knows what the rest of the month will bring.

      Thanks for the mention I skimmed our article yesterday because I was short on time but I'll check it out soon.

      Thanks for stopping by!

      Delete
  5. Great month JC. I wouldn't worry about the small changes in net worth. Mortgage in such low rate is great, that should hep you in the long run.

    ReplyDelete
    Replies
    1. Tawcan,

      Yeah there's no worries about the flat net worth. Especially after the hit it's taken thus far in 2016. Since I'm not able to invest much capital right now I'd love to see the market reverse course. I'm a bit selfish.

      Thanks for stopping by!

      Delete
  6. Hey JC,

    Definitely have to tune out the market gyrations and be satisfied, or even smile, with that constant rising dividend income falling straight into your accounts. Good choice on the mortgage, hopefully share prices continue to become more attractively valued.

    Best regards,
    DB

    ReplyDelete
    Replies
    1. Beginner,

      I've done a pretty good job being immune to the market gyrations. I actually find the big up days more disheartening than the big down days. Unfortunately though I haven't been able to take advantage of the volatility to start off 2016 in my taxable FI accounts although I'm hoping to get that corrected soon.

      Thanks for stopping by!

      Delete