Wednesday, May 25, 2016

Net Worth Update - April 2016

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.

The S&P 500 was essentially flat for April adding just 0.3%.  Since the majority of my net worth is tied to the performance of the markets that means the bulk of the changes for April came from cash infusions in the form of a tax refund, over $300 in dividends across all my accounts and savings from my income.  Receiving 9 different pay raises during April was a nice bonus in an otherwise slow month for my investments.

For the month our net worth increased $14,290.26.
Current Assets: $651,192.40
Current Liquid Assets: $240,400.82
Current Debts: -$184,537.08
Net Worth: $466,655.32

April had a surprisingly solid result considering our income was a bit lower than we expected and we took a trip to Nashville at the end of the month which raised our expenses up.  Year to date our net worth has risen over $53,000 which is absolutely fantastic.  Although I don't think we can repeat that kind of performance since I was laid off at the end of April and we also had a nice $30k boost to our cash reserves from a back pay settlement.  For the month our net worth had a 3.2% rise compared to the end of March and year to date its risen 12.9%.

As I mentioned earlier I was laid off at the end of April so there's lots of changes on the horizon.  Due to the loss of one of our incomes we're still in cash conservation mode so you won't be seeing much progress on debt reduction or investing which is a bummer.  Luckily though I'll be rolling my 401k over to an IRA soon which will provide over $100k of fresh capital to deploy which will keep me busy.

At this time I don't see the point in paying extra on the mortgage at this time given our relatively low interest rate as well as the tax break on mortgage payments 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 April we have 23.3% equity in our house based on our purchase price.  According to Zillow our house has increased almost $10.5k in value from our purchase price which is a nice bonus, although I'm keeping the purchase price as the value in the net worth equations.  Based on Zillow's estimate the equity in our house is 26.8% thanks to the appreciation.

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 $284.25 during April which was a slight decline compared to January's total of $285.16.  Adding in the gross income earned from blogging/writing added another $161.84 to the monthly non-day job income total.  That's a total of $446.09 of income that's not related to a regular 9-5 job.  We've still got a long ways to go to reach our goal of financial independence, but we're heading in the right direction.

I've updated my Progress page to reflect April's changes.

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How did your net worth fare in April? 

Image courtesy of holohololand on


  1. Wow that is some fantastic movement. I don't get the breakdown of assets (and maybe that is by design and I am being nosey) you have $400k of hard assets but only $180k or so of debt - is that just the single mortgage? and if so wouldn't that mean you have 75% of equity in the home?

    1. Evan,

      I've been meaning to update my net worth chart a bit to try and provide some more clarity on the breakdown. We only own our primary residence and we took out a mortgage on the property. Our hard assets are just our house, although you could include all the stuff we have too but that isn't included in the asset side of the equation. Including our down payment our current equity stake in the house is 23% based on our purchase price. The rest of our assets is either cash and investment vehicles including a regular taxable brokerage account and various retirement accounts. The liquid assets are only comprised of the cash and our taxable brokerage accounts. I don't include our retirement accounts in the liquid assets since they would suffer a huge penalty of roughly 25%+ if we withdrew the funds, although they're there if we absolutely have to access them. I hope that cleared up some of the confusion and if you have any other questions feel free to ask.

      All the best.

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