Tuesday, March 14, 2017

Net Worth Update - February 2017

net worth, balance sheet, equity, financial independence
February 2017 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.

February sure was an interesting month with the DJIA setting all-time records on 65% of the possible trading days during the month.  That's crazy.  The S&P 500 climbed higher by 3.7% during hte month which helped to boost up the asset side of the net worth equation.  Of course the $275 in dividends helped too.

For the month our net worth increased $5,061.37.

Current Assets: $656,868.71
Current Liquid Assets: $228,647.14
Current Liabilities: $182,006.58
Net Worth: $474,862.13

It's amazing what a little bit of income can do to flip things in your favor.  As many of you know the calendar turning to February meant that I was heading back to work so our consistent cash draw finally came to an end now that paychecks are rolling in.  Even after shelling out ~$7k for property taxes, ugh just typing that makes me cringe, we still improved our cash reserves and of course the markets' did their part to move our net worth into positive territory.  

For the month our net worth increased 1.08% and YTD we've shown a gain of 0.99%. 

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 February we have 24.5% equity in our house based on our purchase price from 2013.  However, according to Zillow our house has increased in value $22.3k 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 31.5% due 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 February 2017
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 (they don't really move the needle at all).  

The liabilities are much simpler and fall into either the mortgage or a personal loan that we have.  Although I do need to gather more information on the various medical, funeral and other debts that total around $40k to give a more accurate representation of our liabilities.
net worth, balance sheet, equity, financial independence, assets, liabilities
Net Worth Breakdown - February 2017
Since I write so much about investigating companies as an investment I figured it'd be fun to see how our balance sheet looks.  As of the end of February our debt to equity ratio is 28% and our debt to total capitalization is 22%.  Not bad, but I'd love to get that debt down to ZERO!

Non-Work Cash Flow

Each month I like to examine the state of our non-work cash flow.  Since our goal is to become financially independent that monthly cash flow has to come from somewhere.  

Truly passive income, dividends and interest, totaled $282.36 during February which barely eeked out a gain compared to November's $279.99.  *Dividends are from my taxable accounts only.  

Adding in the EBIT earned from blogging/writing added another $176.39 to the monthly non-day job income total.  Total non-day job income for February came to $458.75 which is about a 12% decrease from November.  Yikes!  Although I'm not too concerned since the actual passive income showed a gain.

I mentioned in January's update that was setting a goal of reaching $10k in non-day job income with a stretch goal being hitting $11k.  That's not a huge increase over 2016's $9.4k, but I don't expect much in the way of new investments until maybe Q4 of this year since we really need to focus on paying down some debt.  

Including dividends, interest and blogging income we've generated $990.53 of additional income through February.  We're 9.9% of the way towards our goal of $10k, but March should go a long ways to getting us closer to that goal.


I've updated my Progress page to reflect February'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 February?  Did you ride the markets higher or hit a bit of a speed bump?

Please share your thoughts below!

Image courtesy of holohololand on FreeDigitalPhotos.net.

8 comments:

  1. Nice way to make a comeback. We all knew it was only temporary until you went back to work. Now you can continue to see the growth of your net worth increase dramatically. Looking forward to your March review. All the best.

    ReplyDelete
    Replies
    1. BHL,

      Now that I'm back at work I should start having consistent gains to my net worth assuming the markets don't tank. It's great to be back and start having positive cash flow again.

      Thanks for stopping by!

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  2. PIP -

    Nice move making on the net worth chart - I assume March is going to be a bit better than what you had in February, excited to read. Keep it up.

    -Lanny

    ReplyDelete
    Replies
    1. Lanny,

      My focus is on the cash flow, but I still want to get a bigger picture view by looking at our balance sheet. February was a good month especially since we had such a big hit due to our property taxes, but we're back on the right track again.

      All the best.

      Delete
  3. Hi JC -- all the best earning some "active" income again! Nice to see that your net worth is climbing despite drawdowns... the market has been hot in February!

    Take care
    FerdiS, DivGro

    ReplyDelete
    Replies
    1. Ferdi,

      Of course I'd love for the passive income to cover everything we're not quite there yet so active income goes a long ways to improving things. I've been quite surprised to see that our net worth pretty much held it's own during the time I was out of work. Of course the market run higher sure helped with that.

      Thanks for stopping by!

      Delete
  4. Love that you're calculating your net worth! I had never calculated mine before, but I might have to give it a try now!
    Loving your journey!
    Emily x http://www.theprettypassiveincome.com

    ReplyDelete
    Replies
    1. Emily,

      I think the bigger focus should be on the passive cash flow, but examining the balance sheet gives you an idea of what is truly at risk and also what you could liquidate everything for and what you would have left.

      Thanks for stopping by!

      Delete