Higher & Higher | Net Worth Update - January 2018

Net Worth | Balance Sheet | Equity | Financial Independence
January 2018 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.

January started off with a bang for the markets with the S&P 500 gaining 5.6% for the month.  Although that's down from the high point when it was up 7.5% earlier in the month.  Of course the dip at the end of January was apparently just the beginning of a crazy start to February.  

During January my net worth increased $19,325.38.  

Total Assets: $732,928.05
Liquid Assets: $261,387.10
Total Liabilities: $-179,105.10
Net Worth: $553,822.95

My net worth increased a whopping 3.6% during January.  Even crazier is since January 2017 my net worth has climbed over $84k or 17.9% which is especially impressive since we weren't investing new capital in that time.  We were still transitioning back to me working again so investing wasn't the main focus.  

It's fun to ride the wave of a bull market higher, but that will only last so long.  The more important thing is seeing that we're back to being cash flow positive by a few grand each month.  During January I set some financial targets for my wife and I to get our debt paid down which is priority #1.  There's honestly no reason to keep that debt hanging around even though it is at low/no interest.  

At this time I don't see much reason to pay 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.  Actually I'm considering trying to do a refi sometime during Q2 or later.  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 January we have 25.8% 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 36.1% 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 January 2018
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 $25k to give a more accurate representation of our liabilities.
net worth | balance sheet | equity | financial independence | assets | liabilities
Net Worth Breakdown - January 2018
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 January our debt to equity ratio is 32% and our debt to total capitalization is 20%.  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 $279.01 during January which was about a $21 increase from October 2017.  *Dividends are from my taxable accounts only.  

With my writing taking a back seat the past few months the EBIT from blogging/writing has been fairly negligible the past few months.  As such, January saw a big, fat ZERO of EBIT.  

Thus far in 2018 I've totaled $279.01 worth of income outside of a traditional day job.

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.


  1. Nice work JC. As you indicate, cash flow is king, but it's nice to look at the balance sheet too. Tom

    1. Tom,

      I much prefer the cash flow, but the balance sheet also gives another view of the overall financial landscape. I'm happy with the run my net worth has had and judging by the last few days February could just turn into a positive month as well.

      Thanks for stopping by!

  2. Congrats on the increase in net worth in January. I've been considering for a while whether I should blog about my net worth, but haven't yet decided. I'm with you in wanting to get rid of debt, even though the interest is low, but at the same time, not seeing a need to pay off the mortgage early at this time. I'm actually in a similar boat. I have a student loan debt with a 2.625% interest rate that I'm trying to pay off. But, I'm trying to let my tenant pay off my mortgage (3.5%) while I focus on other investments. Eventually, if I own additional properties, (which I'm trying to do), I'll employ a strategy where I begin to aggressively pay off my mortgage early.

    I look forward to following your progress. I think this might be my first time here (or at least first time in a long time - can't remember).

  3. Our NW has definitely been riding the boom these past several years. It's getting a little choppy these days, but I'm not too worried since we're invested for the long run. We're also diversified with our real estate assets as well. 2018 will be an interesting year to come!


Post a Comment