Net Worth Update - December 2020

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

What a long, strange year 2020 was.  In terms of the financial markets it was year unlike just about any.  The S&P 500 dropped 30% from the end of 2019 to its low point in March and subsequently rallied 65% off that low to end the year up 15%.  Absolutely crazy!  With the majority of our net worth tied up in the markets our net worth went along on that ridiculous rollercoaster.

During December my net worth increased $33,760.97.  

Total Assets: $987,463.95
Liquid Assets: $389,570.55
Total Liabilities: -$155,844.46
Net Worth: $831,619.49

For December my net worth increased 4.2% compared to November and for the full year 2020 our net worth jumped 19.8%.

2020 was definitely a weird year.  From January through March out net worth shed over $121k from where we were at the end of 2019.  Since then it's been on an absolute tear and we finished 2020 with a $137k increase.  That's nuts!  Especially when you consider that peak to trough it was a $259k swing.

We crossed a milestone for our net worth by climbing up over $800k for the first time and what's even more mind-boggling to me is that our assets are approaching the double comma club.

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 $1,550 on it during December.  At the end of December the remaining balance on the loan is $3.8k.

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 December we have 30.4% equity in our house based on our purchase price from 2013.  According to Zillow our house has increased in value around $66.5k 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 48.0%.

Combined our monthly debt reduction between the mortgage and house was $1.8k.  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 December our debt to equity ratio is 19% and our debt to total capitalization is 16%.  Not bad, but I can't wait to get that debt down to ZERO!
capital structure | personal finance | net worth | equity | debt

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!

How did your net worth fare during 2020?  

Please share your thoughts below!


  1. Congrats on nearing double commas - looks like you'll be there in 2 years.


Post a Comment