Net Worth April 2017 Update

Every month for the past 6 or 7 years I have shared how my net worth has changed month over month and year to date.  I honestly believe that calculating your net worth is a valuable exercise for any household.  Calculating your net worth provides a near immediate (30 day) feedback as to how your decisions have affected the bottom line.

Thoughts prior to calculating net worth: I am almost positive that this month is going to be rough.  This likely to be the first time in 3 years that I have two negative months in a row! Between increased spending (The Wife got a new leased car) and the market in general this is the first time in a long time that I am not entirely excited to get this post done.  I have noticed recently that as my net worth increases (due to stock market investment) I have become more and more correlated with the market.  Not sure there is much I can do about that right now, but it is something to consider in the future.

My Net Worth Calculation

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 – 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 – just a mixture of cheap index funds and individual companies that capture my attention.  I have started to sell covered calls within this account.  Just boosts my investment capital – small (read: very tiny) droplets of capital I wouldn’t have had otherwise.
• My 401(k) – I still have about 50% of my contributions going into cash, and every time armageddon has happened this month I deploy some of it.  I am not entirely convinced that this marketing timing is worthwhile given my age (36) and the fact that the account can’t be touched for 24 years at the minimum.
  
• 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 just decided 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.
• 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 Liabilities

• 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.

My Net Worth Increase/Decrease

• From March 1st, 2018 to April 1st, 2018 my net worth increased .36%
• Year to Date my net worth has still increased 1.40%

Last month I wrote that,

I was off with The Wife’s business – she has been killing it! If it had not been for her the bleeding would have been a lot worse.  I am really quite happy with only a 1% decrease considering how bad the markets took to February 2018.

Well, it was The Wife’s cash flow once again that floated this month’s net worth statement.  She cleared just enough to make this a positive month.  I have to go all the way back to a simpler time known as 2015 to find consecutive down months (August, September and October of 2015 were negative).

May 1 Update – I decided to remove my wife’s business checking account from the equation.  With that this was a negative month of -.80% and YTD up 1.19%