Net Worth Update - October 2020

Net Worth | Balance Sheet | Equity | Financial Independence
Net Worth Update - October 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.

In October the stock market, via the S&P 500, continued its pullback declining 2.8% for the month.  Whether that was election fears, rising COVID cases, profit taking I really couldn't tell you.  However, with most of my assets invested in the stock market the monthly trend in my net worth typically follows along with the direction of the markets and October was no exception.

During October my net worth decreased $7,333.20.  

Total Assets: $885,742.69
Liquid Assets: $334,228.61
Total Liabilities: -$159,450.84
Net Worth: $726,291.85

For October my net worth decreased 1.00% compared to the S&P 500's 2.8% dip.

We're still at a solid 4.7% increase compared to the end of 2020 which I'm more than happy to see, all things considered. 

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 October.  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 October the remaining balance on the loan is $6.8k.

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 October we have 30.2% equity in our house based on our purchase price from 2013.  According to Zillow our house has increased in value around $65.8k 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 44.3%.

Combined our monthly debt reduction between the mortgage and house was $1.77k.  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 October 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!