Q1 Finally Ends | Net Worth Update - March 2018

Net Worth | Balance Sheet | Equity | Financial Independence
March 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.

Case in point: February March.

The stock market, via the S&P 500 index, was down again in March and my net worth likewise saw a decline.  For the month the S&P 500 was down 2.69%.  

During March my net worth decreased $2,121.29.  

Total Assets: $713,944.67
Liquid Assets: $250,300.53
Total Liabilities: $-178,563.88
Net Worth: $535,380.79

February brought an end to my 12 month streak of net worth gains and unfortunately March was the start of a new streak.  Sadly it was a streak of declining net worths.  Ouch!  That being said I'm not concerned with my net worth changes on a short time frame, rather it's all about keeping the long term in focus.  Despite the markets declining 2.69% during March I'll chalk it up as a win for diversification and being cash flow positive that my net worth only declined 0.39%.

Our main financial target for 2018 is to pay down our non-mortgage debt.  There's a variety of things that just kind of came up as life moved on.  Some medical debt, a vehicle, an unexpected new air conditioning.  Nothing out of the ordinary, but burdensome nonetheless.  As soon as we get our 2017 taxes paid (I know the deadline's approaching) we'll be able to really start throwing some of our positive cash flow towards the debts and should get back to investing on a monthly basis.  About time!

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 but time will tell on that.  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 March we have 26.1% equity in our house based on our purchase price from 2013.  However, according to Zillow our house has increased in value around $42.4k 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 38.1% 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 March 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 but I have them in my spreadsheet because I was bored).  

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 $20k to give a more accurate representation of our liabilities.
net worth | balance sheet | equity | financial independence | assets | liabilities
Net Worth Breakdown - March 2018
Since I write so much (or at least try to) about investigating companies as an investment I figured it'd be fun to see how our balance sheet looks.  As of the end of March our debt to equity ratio is 33% and our debt to total capitalization is 20%.  Not bad, but I'd love to get that debt down to ZERO!

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Were you able to counter the markets' decline with savings, dividends and diversification to have a net worth gain in March?

Please share your thoughts below!


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  2. JC, Always a good strategy to use any free cash flow to pay down high interest debt. I always like a sure thing/ROI when I can get it. Tom

  3. I agree with Tom. You defnintely want to take care of the high interst rate debt when you can and it isn't a bad use of capital. The decrease in market value sucks, but hey, that's the risk we take when we invest heavily in the market. Like you, I've focused less and less on short-term MV fluctuations and focus on the longer-term metrics. Anyway, still some great progress here during the month!


  4. Yeah, paying down high interest dept seems like a good idea. I've been thinking a lot about using my free cash flow to reduce dept but at the moment I can find better use for my cash.

  5. Even with the decline in the market, you're still posting impressive numbers PIP. Good luck on achieving your 2018 target with respect to paying down your mortgage.

  6. I lost some money in Q1 as well with the stock market being down. But I think this is just a correction and the bull market is still intact, so this is a good place to add more stocks


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