Sunday, January 29, 2017

Net Worth Update - December 2016

net worth, balance sheet, equity, financial independence
December 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 continued it's post Trump election march higher to end 2016.  During December the S&P 500 moved higher by 1.82%.  Since a large portion of my net worth is tied to the performance of the markets my net worth typically comes and goes with the markets, especially since we haven't been having additional savings to invest.  Of course pulling in over $860 in dividends certainly helped. 

For the month our net worth increased $2,329.40.

Current Assets: $652,719.07
Current Liquid Assets: $230,919.43
Current Liabilities: $182,520.71
Net Worth: $470,198.36

After a 4 month streak of declines in our net worth we ended 2016 on a strong note with 2 consecutive months of increases.  They weren't spectacular raises, but considering we were drawing down our cash reserves I'm happy to see that our investments were moving higher.  

For the month our net worth increased 0.50% and year to date it climbed 13.80%. 

If you told me all of the changes we'd have thrown at us in 2016 I don't think I'd have guessed that our net worth would end the year higher by over $50k.  We went from me being the sole income for the household, to then having no income from either of us, welcomed our daughter to this world in July and then had my wife become the sole bread winner.  Although all of that's changed now as I'll be heading back to work next week.  

The next few months might see some variance in my net worth reports because I need to get some of the other debts added onto the spreadsheet to give a more accurate picture of where we stand.  Roughly though our liabilities are about $40k higher across the board due to some outstanding medical, funeral, car and other miscellaneous debt.  I've been meaning to do this for a while now, but with limited time I wanted to focus on providing content related more towards dividend growth investing rather than working on my spreadsheet that's only used once a month.

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 December we have 24.2% equity in our house based on our purchase price from 2013.  However, according to Zillow our house has increased in value $20.5k 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 30.7% 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, balance sheet, equity, financial independence
Net Worth History through December 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, balance sheet, equity, financial independence, assets, liabilities
Net Worth Breakdown - December 2016
Truly passive income, dividends and interest, totaled to $865.95 during December which is over a $30 decrease from September's total of $893.82.  All of the decline is due to dividend payment timing and the closing of positions within the period.  *Dividends are from my taxable accounts only.  

Adding in the gross income earned from blogging/writing added another $178.98 to the monthly non-day job income total.  The total non-day job income for December came to $1,044.93 and was my 3rd $1k+ month for the year.  

We've still got a long ways to go to reach our goal of financial independence, but we're heading in the right direction.  For all of 2016 we generated just under $9.4k outside of traditional employment sources via dividends (taxable accounts only), interest and blogging/writing.


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.  If you prefer Pinterest or Facebook I'm on there too!

How did your net worth fare in December?  Did you meet all of your goals for the year?

Please share your thoughts below!

Image courtesy of holohololand on FreeDigitalPhotos.net.

2 comments:

  1. Fantastic. An increase of 0.5% doesn't sound much but over the long run it is fantastic. Well done to you.

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    Replies
    1. BHL,

      Considering we had a cash drawdown for the month I'm happy to see we eeked out a small gain. It all adds up in the long run.

      Thanks for stopping by!

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