Sunday, October 2, 2016

Net Worth Update - August 2016...Better Late Than Never

August 2016 Net Worth Update
August 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.

In August the stock markets, via the S&P 500, did a whole lot of nothing.  Since a large portion of my net worth is tied to the performance of the markets my net worth typically moves in line with the markets.  Especially while we have no day job income.  So flat markets mean very little change in my net worth.  Although pulling in over $300 in dividends during the month helped to move things in a positive direction. 

For the month our net worth decreased $1,619.74.

Current Assets: $662,675.41
Current Liquid Assets: $239,949.63
Current Debts: -$183,536.86
Net Worth: $479,138.55

Our net worth has held up surprisingly well considering that August was the 3rd month that we didn't have income from a regular, full-time job.  So essentially a flat month in August is just fine by me.  We're still burning through cash faster than I'd like, but we'll start having *gasp* an income finally starting in November.  

For the month my net worth declined 0.3% although year to date it's climbed 16.0%. 

At this time I don't see much reason in paying extra on the mortgage 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 August we have 23.8% 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 keep the purchase price as the value in the net worth equations.  Based on Zillow's estimate the equity in our house is 28.7% 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 August 2016
Net Worth History through August 2016
During June's update I started including a % breakdown of our net worth with each monthly update.  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 simpler and fall into either the mortgage or a personal loan that we have.  

Net Worth Breakdown - August 2016
Net Worth Breakdown - August 2016
Truly passive income, dividends and interest, totaled to $333.69 during August which is almost a $4 increase from May's total of $316.77.  *Dividends are from my taxable accounts only.  

Adding in the gross income earned from blogging/writing added another $282.58 to the monthly non-day job income total.  That's a total of $616.27 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.  Year to date we've generated over $5.8k outside of traditional employment sources.


I've updated my Progress page to reflect August'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 August?  Did you see any big changes in your investments or did your gains come from savings?

Please share your thoughts below!

Image courtesy of holohololand on FreeDigitalPhotos.net.

2 comments:

  1. Unless your itemized deductions are greater than your standard deduction you won't get a tax break on mortgage interest. If you are in the 15% bracket, the deduction reduces your taxes by $15 for every $100 paid in interest.

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  2. Hey PIP, great job! You are always making smart moves despite what curve balls come your way. Did I miss the post where you decided on a job? Curious to hear if so! Definitely don't pay extra on your mortgage (at least my opinion!).Keep it up,

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