Monday, July 25, 2016

Net Worth Update - June 2016

June 2016 Net Worth Update
June 2016 Net Worth Update
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 cooled down a bit during June eeking out a small increase of 0.09%.  Since the majority of my net worth is tied to the performance of the markets my net worth moves in line with the markets.  Although the dividends I receive help to boost my returns and my net worth increased more than the markets so that's a small win in my book.  Of course a record setting month of dividends can do that as I pulled in over $900 in dividends across all of my accounts during June.  

For the month our net worth increased $4,746.05.

Current Assets: $667,229.78
Current Liquid Assets: $253,603.66
Current Debts: -$184,038.95
Net Worth: $483,190.83

I'm still amazed at the improvement in our net worth so far this year considering everything that's changed, mainly getting laid off at the end of April.  Our net worth has climbed higher by almost $70k through the first 6 months of this year thanks to a rising stock market and some unexpected severance pay and the back overtime pay that was paid out earlier this year.  Sadly I don't expect this trend to continue as we're drawing down our cash reserves some until my wife's paycheck kicks in sometime in October or November.  For the month our net worth increased 1.0% and year to date it's just 16.9%.

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 the plan is to aggressively pay down the mortgage.

As of the end of June we have 23.5% equity in our house based on our purchase price from 2013.  According to Zillow our house has increased just over $15k 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 28.5% 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.

Net Worth History through June 2016
Net Worth History through June 2016
I've also been receiving lots of questions about the breakdown of our net worth.  So I'm adding a graph that shows our net worth broken down by category as well as the percentage of our net worth that accounts for.  The assets are broken down into cash, taxable investments, tax advantaged investments (401k, Traditional & Roth IRAs), house (using our purchase price) and other which covers things like our cars and various collectibles from when I was a kid.  The liabilities are much easier and fall into either the mortgage or a personal loan that we have.  

Let me know what you think of the new Net Worth Breakdown graph!

Net Worth Breakdown - June 2016
Net Worth Breakdown - June 2016
Truly passive income, dividends and interest, totaled to $877.27 during June which is about a $50 increase from March's total of $824.98.  *The dividends are from my taxable accounts only.  Adding in the gross income earned from blogging/writing added another $71.77 to the monthly non-day job income total.  That's a total of $949.04 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 June'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.  If you prefer Pinterest or Facebook I'm on there too!

How did your net worth fare in June? 

Image courtesy of holohololand on FreeDigitalPhotos.net.

8 comments:

  1. Way to go JC! That's awesome, and I'm very glad you aren't paying extra towards your mortgage. Let the BANK HAVE THE RISK..not you and your own money. :) I could talk for hours about why that's the perspective we should have when owning real estate. Keep it up!

    ReplyDelete
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    1. PID,

      Eventually we'll start paying down more on the mortgage because it drastically reduces the capital needed to spin off the dividends. But for now I prefer to keep that money for myself.

      Thanks for stopping by!

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  2. Gogogogogogo! I know you will get there. These posts are fun. I already passed the finish line and I kind of miss the chase. This lets me relive that.

    Also, I am not a robot.

    ReplyDelete
    Replies
    1. FV,

      Congrats on crossing the finish line. That's awesome stuff. I prefer to look at my cash flow comparisons, but net worth is still fun to track. It's amazing when I think back to how much progress we've made in just a few short years.

      Thanks for stopping by!

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  3. Hard to be mad about a $4,000+ net worth increase considering what you have been dealing with. It's exciting seeing the stock market increase the way it has, but I can't help but simultaneously be a little sad about how much more expensive it has made stocks across the board valuation wise. Keep on, keepin' on!

    ReplyDelete
    Replies
    1. Stacker,

      Definitely nothing wrong with a $4k increase especially since we didn't have much in the form of income for the month. So that's exciting. Although like you I know we'll be giving back some of these net worth gains because the market likely won't keep these valuations up.

      Thanks for stopping by!

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  4. Very impressive JC. It is always nice to keep these metrics around, for me it is s motivator as I see that total number increase. Keep up the good work and thanks for sharing!

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    Replies
    1. More Dividends,

      Cash flow tells you more about you financial independence level, but net worth tells you how you got there. It's like with analyzing companies I start with the cash flow statement, but you can be sure that I check the balance sheet as well. Each one gives you a different piece of the picture.

      Thanks for stopping by!

      Delete