First of the month, so it is naturally that time to take account and see how I did for the past 30 days or so! I have said this in the past, but I have no idea how other adults keep track of their finances without a spreadsheet or similar online tool. Maybe they just don’t? I get not having to share it with the world, but if you aren’t keeping track of your net worth you are completely doing yourself a disservice. At the very least it forces you to load up your debt and take account to make sure it isn’t increasing.
Thoughts before I calculate my net worth: I usually have a feeling as to how I did with regard to my net worth. I don’t think this month is going to be anything special. The markets, which I am pretty correlated to, have done alright and with regards to debt there will be the normal amount of reduction (i.e. normal reduction in amortized loans). While The Wife and I traveled through Ireland for 8 amazing days, it was all covered! I have a vacation account that I keep fully funded, so the day after I got home I had transferred the cash needed to pay off all the credit cards.
My Net Worth Calculation
My assets are pretty simple:
- Emergency Fund – I am about $4,000.00 from my next goal (where I’ll keep it for a year or two). I don’t have any plans to fund it quickly, but if I have a particularly low spending month this is where some of the money will go. I have discussed in the past that my funding level is not in terms of month, but rather how much cash would I really need if an emergency happens.
- My Dividend Growth Account – I am finally back into undervalued dividend growth investing and I am very excited to share my screens and purchases!
- My Wife’s Roth IRA – Nothing special. I just buy and sell companies that grab my attention. We do not actively contribute to this account.
- My 401(k) – I still have about 50% of my contributions going into cash. I am interested in building a solid cash position so that I can deploy it when there is another pull back in the market. My goal is to get it up to about 15% of the overall account and then just adjust quarterly.
- Wife’s Mutual Funds – This was an amount that was given to my wife from her deceased grandparents. 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 – I increased the value of my home starting in 2018 3%. This was the first time since I bought the home that I even bothered to increase the value. Interestingly, The Wife and I decided a few months ago to put it up on Make Me Move for 20% higher than what I have it marked down as.
- My Traditional IRA – Just a few stocks that have captured my attention. Similar to my wife’s Roth IRA I will often sell covered calls on holdings to generate nominal amounts of cash flow.
Wife’s Business – NEW IN 2018– Just going to value this at the cash that is on the books at the end of every month. There won’t be a distribution for quite sometime, so hopefully, there is a nice trend upwards.Removed in May of 2018.
- Physical Gold – I decided that I would buy a small amount of physical gold every month or two from basically now on.
- Crytocurrency Account – I recently bought a tiny amount of Bitcoin. By the time my initial payment cleared bitcoin had dropped 40%. I am not exactly sure what I am going to do with this account just yet. Right now I am going to ignore it.
- My Law School Loans – Despite being 36 years old I have a significant amount of law school loans left. They are locked in at 3.5%, so I have no real rush to pay them off. I’d like to get the monthly cash flow back but at about the $40,000 it would be a tremendous hit to liquidity.
- My Mortgage – I live on Long Island (and it’s 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 was 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. I just recently opened up an American Express Platinum Card for 60,000 points and a lot of benefits for the first year.
- My HELOC – A good portion of it was to capitalize The Wife’s Business. I hope to create a realistic payback schedule in a few months when we get use to running the business.
I decided to keep the debt of the HELOC but ignore the corresponding asset (the removed checking account).
My Net Worth Increase/Decrease
- From May 1st to June 1st my net worth increased 1.5%
- Year to date my net worth has increased 5.33%
Not a bad month, nothing spectacular, but I’ll take any positive movement.
Great month for you, Evan. Couple of comments/questions:
1. How has your strategy performed, historically, of building up cash in your 401(k) and deploying during a pullback in the market? Seems like you might be trying to time the market. Separate but related question, what are your thoughts on DCA vs. Front-Loading?
2. Are you fighting the annual fee for the AMEX Platinum or do the benefits outweigh the cost?
3. What is the business the HELOC is funding? After the business revenues generate enough, over time, to repay the HELOC, AND assuming the HELOC rates are below your law school debt, would you recycle the HELOC to pay off the 3.375%? Again, this question depends on where rates are at, but could be beneficial if the HELOC is below 3.375%.
Awesome questions! Really appreciate them:
1) There is no history of me building up cash. I was basically 95% invested in stocks during my entire tenure investing in my 401(k). So no real way to test it. I started building up cash around Aug of 2017 (http://myjourneytomillions.com/articles/what-is-cape-and-why-am-i-moving-future-contributions-to-my-401k-to-cash/). I don’t think 9 months provides any real insight it how it has worked, but if I HAD to guess I bet I am trailing the broad market because of the fees in my SHITTY 401k and that we haven’t had a real pull back that I could just deploy all of it into.
2) From what I have heard you can’t really fight the platinum amex fee. So my goal is to downgrade as soon as it hits in a year back to gold which I did successfully fight every single year. For us, the fee made 100% sense this year. We traveled to Mexico, Ireland and will be hitting up Atlanta in the fall. We got $200 of airline credits, $160 towards PreCheck (TSA), access to airline clubs, 60k points, and a few free uber rides.
3) So the HELOC is acting as a private bank solution (similar to your WL) where I funded The Wife’s business checking account. The hope would be to take chunks at the end of the year if there is a surplus from the business checking and pay the family back. The HELCO isn’t at 3.375 (it is around 4), that is my 30year fixed mortgage.
Evan, thanks for the responses and insight. I love people publishing their net worth because I can learn so much from others and implement similar strategies into my own wealth engine.
I love the HELOC play. It’s an ice-breaker. Get it? Home equity = frozen liquidity. Terrible old man, finance, jokes.
When you think about it, the HELOC isn’t a “sale” of an investment whereby you must give up yield/return in order to fund another investment. Or, you have a drain your savings to fund another investment. The HELOC allows you to maintain your current holdings and fund your current project. AND, assuming the market cooperates, your home may appreciate in value. This is what I like to call “Multiple Uses of a Dollar” where the HELOC is just a borrowing against your home and continues to appreciate in value while it funds an additional investment to appreciate in value.