Net Worth Update - Q3 2022

Net Worth Update - Q3 2022

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 2022 has definitely been marked by volatility with big moves both up and down although definitely more down.  The markets, by way of the S&P 500, were down 5.3% during the third quarter although it definitely felt like it was more since they rallied strongly from mid-June to mid-August .  My net worth fared slightly better thanks to continued savings each month and some opportune purchases.

During 3Q my net worth decreased $28,884.95.  

Total Assets: $1,016,107.83
Liquid Assets: $11,060.59
Total Liabilities: -$145,235.34

Net Worth: $870,872.49

During the third quarter my net worth declined 3.2%.  The one bright spot is that it didn't fall as much as the S&P 500.  The year-to-date results aren't pretty either at a 15.4% decline for my net worth.  Compared to the S&P 500's decline of 24.8% over that time I can't really complain.

I do believe this downturn in my net worth will just be temporary.  The question though is how long and how deep that temporary period becomes.  As recently as March our net worth was over $1 MM; however, due to the pullback we're back to levels not seen since February 2021 for our net worth.

With our non-mortgage debt officially gone as of February 2021 we don't have much of a goal as far as the balance sheet.  So it's stock pile cash for a possible down payment on some land/house or a business venture and continue funneling savings into the brokerage account.

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.  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 September we have 33.5% equity in our house based on our purchase price from 2013.  According to Zillow our house has increased in value around $227k from our purchase price which is a nice bonus, although I keep the purchase price as the value in the net worth equations.  I'm not holding my breath on being able to get that kind of sale price in the market though especially with mortgage rates where they are now.  Based on Zillow's estimate the equity in our house jumps to 61.0%.

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.

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).

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 September our debt to equity ratio is 17% and our debt to total capitalization is 14%.  

Going forward I plan to only update my net worth after each quarter barring any substantial changes to the balance sheet.

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.  

Do you track your net worth?  If so how did it fare through the volatility of Q3?  

Please share your thoughts below!