February 2017 Net Worth Update

Every month when I open my net worth spreadsheet to update it I get a bit anxious.  It is like getting back the results of a single test in high school.  You can’t do anything to change it as the test was already taken and you know that one single test doesn’t really matter, but nonetheless, you are receiving objective feedback as to how well you did in a short amount of time. To extend the analogy a little bit more, you kind of know how well you did since you know if your spending was out of control or the market in general is down.  Notwithstanding the uneasiness I believe it is absolutely necessary for every adult to at least attempt creating a net worth spreadsheet.

Calculating my Net Worth

Creating a net worth statement is pretty simple.  All one has to do is honestly add up your assets and minus your liabilities.  If you build your net worth calculation on lies, what’s the point of even doing the exercise.  I know calculating my net worth helps me keep track of my decreasing liabilities while seeing if my investments are growing like they should be.

My Assets

My assets are pretty simple:

• Emergency Fund – It is a little less than where I would like it, but I don’t calculate it in terms of monthly expenditures.  Rather I think to myself how much cash would I really need if an emergency happens.
• My Dividend Growth Account – It is small, but this is where I have really been focusing my efforts lately and I will writing a lot about it.
• My Wife’s Roth IRA – Nothing special – just a mixture of cheap index funds and individual companies that capture my attention.
• My 401(k) – My 401(k) is terrible with high fees for shit mutual funds, but where else am I getting a match on my money.  I am not one to turn down free cash.
• Wife’s Mutual Funds – This was an amount that was given to my wife from her now deceased grand parents.  They were horribly mismanaged until I stepped in, putting them in low expense vanguard mutual funds.  She and I both look at this account as a super emergency fund.
• My House – This is the first month after owning the house for 4 years where I increased the value of the home.  I increased it an nominal 3% in 4 years.  I don’t plan on reviewing this dead money asset for another year or two.
• My Traditional IRA – Just a few stocks that have captured my attention.
• Investment Account with my Brother – The Wife and my brother invested a nominal amount ($1,200 each) to try and give my brother confidence with his stock picking ability.

My Liabilities

• My Law School Loans – Despite being almost 35 years old I have a significant amount of law school loans left. They are locked in at 3.5%, so what’s the rush to pay them off?
• My Mortgage – I live on Long Island (and its on not in), so the odds of me ever prepaying this down, especially with a 3.375% 30yr fixed is unrealistic.
• Credit Cards – My favorite card is my American Express Premier Gold Card, whose fee I fight every year.  I also have some minor outstanding balances that I’ll just pay down slowly.

My Net Worth Increase/Decrease

• From January 1, 2017 to February 1, 2017 my net worth increased 7.32%
  
• My net worth increase YTD is the same as it is the first true update of the year

That 7% is made up mostly of the increase in home value.  Without it my net worth increased a much more normal 1.6%.