Net Worth Update - August 2020

Net Worth | Balance Sheet | Equity | Financial Independence
Net Worth Update - August 2020

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 the stonk market continued higher once again in August.  On the heels of a 5.5% rise during July, August saw the S&P 500 climb 7.0%.  With the majority of my assets in publicly traded securities, it should come as no surprise that my net worth showed a solid gain on again.

During August my net worth increased $35,723.20.  

Total Assets: $910,277.01
Liquid Assets: $346,088.74
Total Liabilities: -$162,973.61
Net Worth: $747,303.41

For August my net worth increased 5.0%.

Despite the market rebound since bottoming in March our net worth hadn't crossed the previous month end high reached in December 2019 until finally doing so in July.  With August's move higher we're now up to a 7.7% increase YTD.

In July we crossed some big milestones and the next one on tap was likely to be total assets >$900k.  I can't say that I expected that to happen just one month later, yet here we are.

I'm still in awe of the last 10 years and how far we've come from a balance sheet perspective.  At the end of my first month of tracking my net worth was -$1.7k and 121 months later my net worth is just shy of $750k with assets over $900k.  

Our main goal for 2020 continues to be ridding ourselves of the one non-mortgage debt, the loan on my car, that we carry.  We're making good progress and paid an extra $1.500 on it during August.  I'm still not 100% sold on needing to focus all of our disposable income on debt reduction but do still want to pay it off on an accelerated timeline.  At the end of August the remaining balance on the loan is $9.7k.

At this time I don't believe it makes sense 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.  So the liabilities side of the net worth equation will be slow moving outside of the car loans.  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 August we have 29.9% equity in our house based on our purchase price from 2013.  According to Zillow our house has increased in value around $65k 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 jumps to 45.1%.

Combined our monthly debt reduction between the mortgage and house was $1.75k.  Not bad for one month!

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

In order to give you a general idea of the breakdown of my net worth I include 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 and deeply discounted (they don't really move the needle at all but I have them in my spreadsheet because I was bored).
net worth | balance sheet | equity | financial independence | assets | liabilities

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.  At the end of August our debt to equity ratio is 22% and our debt to total capitalization is 18%.  Not bad, but I can't wait to get that debt down to ZERO!
capital structure | personal finance | net worth | equity | debt

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How has your net worth fared throughout the craziness of 2020?  

Please share your thoughts below!