Friday, October 27, 2017

Bull Markets & Milestones | Net Worth Update - September 2017

net worth, balance sheet, equity, financial independence
September 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.

Well this bull market just won't seem to let up and our net worth has seen a fairly substantial increase since my last update.  At the end of April my net worth sat at $482,747.35 and through the end of September it's climbed another $17,651.48.  That pushes my net worth over the...drumroll........$500k mark!  Milestone!

During September alone my net worth increased $9,429.40.

Current Assets: $680,573.63
Current Liquid Assets: $232,948.82
Current Liabilities: $180,174.80
Net Worth: $500,398.83

It's been a pretty amazing journey to reach the $0.500 MM mark, somehow it seems like a bigger number when you reference millions.  When I started keeping track of my finances back in July 2010 my net worth was a -$1,663.30.  Yikes!  The combination of high income and high savings rate really helped to propel my net worth firmly into positive territory.  

We've stalled out a bit over the last couple years due to my wife quitting her job while we dealt with all of the issues with our son, then me getting laid off, then her getting a new job while I stayed home with our daughter and then finally we returned back to a two income family earlier this year.  Unfortunately we were cash flow negative/breaking even for a majority of that time which meant there was no savings to be seen let alone invested.  

Overall though I can't really complain because the bull market has powered our net worth higher despite our lack of additional savings.  We still have some debt to work through over the next 6 months or so, but a return to regular investing will be very much welcomed.

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 September we have 25.4% equity in our house based on our purchase price from 2013.  However, according to Zillow our house has increased in value just over $35k 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 35.7% 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 September 2017

I've 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 - September 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 September our debt to equity ratio is 35% and our debt to total capitalization is 21%.  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 the monthly cash flow has to come from somewhere in order to cover our expenses.  

Truly passive income, dividends and interest, totaled $906.75 during September which was about a $16 increase from June of this year.  *Dividends are from my taxable accounts only.  

Adding in the EBIT earned from blogging/writing added another $107.07 to the monthly non-day job income total.  Total non-day job income for September came to $1,013.82.  Comma month!!!

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!

Is your net worth riding the bull market wave to new heights?

Please share your thoughts below!

Image courtesy of holohololand on FreeDigitalPhotos.net.

7 comments:

  1. PiP -

    BOOM!!! Half a Mill!! You have HALF A MILL!!! Congratulations and what a milestone!!

    -Lanny

    ReplyDelete
    Replies
    1. Lanny,

      It was awesome to see the $500k mark finally come up. We crossed that assets wise a while back but our net worth was well behind due to our mortgage, but this bull run just keeps on going. Eventually it'll turn but hopefully it can keep going until we get the majority of our non-mortgage debt paid off and can get back to investing.

      All the best.

      Delete
  2. A big congratulations to you, and thank you for sharing the post about your son. That is so heartbreaking, and I want to wish you guys all the best and much love. Congratulations for your daughter and God bless.

    Sam

    ReplyDelete
  3. PIP,

    Congrats on crossing the $500k mark. Such an accomplishment given everything that you have gone through recently. The post your wrote on your linked page is beautiful and I can't even imagine what you and your went through. I'm looking forward to many future updates about your net worth!

    Bert

    ReplyDelete
  4. Congrats on hitting $500K net worth, that is a huge milestone and job well done. Can't wait that milestone some day, although that's a long way out for me though.

    -CD

    ReplyDelete
  5. Congratulations for your daughter and God bless.


    เกย์ไทย

    ReplyDelete
  6. Congrats, that's an awesome milestone. The one million mark will come a lot faster now with all of the compounding!

    ReplyDelete