Net Worth Update - January 2021

Net Worth | Balance Sheet | Equity | Financial Independence
Net Worth Update - January 2021

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.

During January the S&P 500 declined 1.1%, but considering the run it went on since bottoming in March I don't think anyone can really complain much about that.  With the majority of our net worth tied up in the markets it shouldn't be a surprise to see that our net work declined slightly as well during the month.  Thankfully with savings and dividends as well as debt reduction our net worth outperformed the S&P 500.  It's the little things am I right?

During January my net worth decreased $5,473.76.  

Total Assets: $980,345.21
Liquid Assets: $383,873.37
Total Liabilities: -$154,199.48
Net Worth: $826,145.73

For January my net worth decreased 0.7% compared to December 2020.

Our main goal for 2021 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 $1,350 on it during January.  At the end of January the remaining balance on the loan is $2.5k and we're within striking distance of kicking this to the curb.

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 January we have 30.6% equity in our house based on our purchase price from 2013.  According to Zillow our house has increased in value around $66.8k 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 48.5%.

Combined our monthly debt reduction between the mortgage and house was $1.6k.  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 January 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

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Were you able to overcome the slight decline in the markets to boost your net worth for the month?  

Please share your thoughts below!