With another month in the books it is about time to add up my assets subtract the liabilities and see where the chips fall. I have been doing this for years. Honestly, I believe creating and updating a net worth statement is an exercise that every grown adult should do. How else would one know if they are systematically making correct decisions for themselves and their family, month after month?
Thoughts before calculating: I usually have a feeling about how I have done over the past month, sometimes I am right and sometimes I am wrong (in both directions). I’d like to believe that I am usually right. I think this month is going to be a slightly down month as I think consumer debt has creeped up a bit more than I would like it.
For years I would write that my assets are “pretty straightforward” but I don’t actually think they after really thinking about it, nonetheless, here they are:
- Emergency Fund – In the month of August The Wife and I, scarily, went to zero on this when we closed on the new house. Not cool. I got it up to a respectable amount, but it is not currently at a number I am comfortable with.
- Wife’s Mutual Funds – From years of grandparents and parents gifts this has grown to a nice amount. When I first got involved they were invested in some terribly priced mutual funds, we changed that right away. Earlier this year, when we decided on the house we moved to I liquidated almost everything just in case the market corrected and we needed (more liquidity). Right now, I am going to leave the two-thirds liquid because The Wife and I have discussed some bigger projects on the new house and this is where it will be coming from.
- Dividend Growth Investment Account – One of my favorite assets/accounts. Every month I screen the dividend champion and some of the dividend contenders list to find possibly undervalued companies that have paid an increasing dividend for more than 20 years. In addition to new capital/savings I also sell naked puts on those same companies to further provide positive cash flow in an effort to create a self sustaining stream of income later on in life. Recently, I have been reducing some of this exposure just because I have some in the money puts that I have been dealing with (i.e. rolling). Once I amount of those it is off to the races again.
- My Wife’s Roth IRA – Nothing special – just a mixture of cheap index funds and individual companies that capture my attention.
- My 401(k) – I went back to a long term allocation rather than trying to market time. This is allocated at almost 100% equities and is by far my largest investment account.
- My Traditional IRA – Just a few stocks that have captured my attention.
- Physical Gold – In 2018 I decided on buying a small amount of physical gold every month or two. After doing some quick math, I am getting killed in transaction costs. I set up a capital one 360 account to save the amount I would be buying in gold and I will make a larger purchase less often.
- Cryptocurrency Account – Earlier in 2018 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.
- Cash Surrender Value Life Insurance – I am not a “buy term and invest the difference” kind of guy. Mainly because no one actually invests the difference! I have been building my Cash Surrender Value for a number of years, but I never captured it on these statements until 2019.
- Rental Property – I am very excited to add this line item! I have been talking about getting into real estate for years, so it is finally nice to be in it. For my net worth statement I am going to keep this as a net number eliminating the debt from my balance sheet.
- My Home – Our new home takes over the main residence line item! It is going to hurt watching the mortgage payment basically pay for the interest, but such is an amortization table.
- Law School Repayment Fund – I took a piece of my bonus and created a separate checking account which is going to be used to pay back my student loans at an accelerated pace. I could have just wrote the check (and maybe I do that one day), but I like having the liquidity on the sideline. The added benefit is that this bill is no longer coming out of my main checking account providing some relief to my monthly nut.
- Random Home Increase Fund – I took the amount of my increase in housing costs and put aside 6 months. This way if things get tight I can turn to this account for some relief. I have chosen not to include this in my emergency fund yet, because it really is earmarked to be spent when needed. I used a small piece of this to pay back some consumer debt this month – my goal is not to use this that often but if I do, hold myself accountable here.
- My Law School Loans – I still have a significant amount of law school loans but they are locked in at 3.5%. I figured out last year that my student loan company, NELNET, was misapplying my extra payments but that is all fixed now. As described above I am paying this amount back quickly (should be paid off within 2.5 years if I don’t pull the trigger before that).
- My Main Residence Mortgage – Starting over on that amortization schedule hurt, but it is what it is!
- Credit Cards –
My favorite card is my American Express Premier Gold Card , whose fee I fight every year. I am in the middle of moving away from the AMEX Gold card because they wouldn’t let me fight the annual fee. I open and close other cards to get ridiculous offers but right now I am rolling out of them with nothing on the horizon.
Last month I removed my old house’s debt and just created a netted line item in the asset column.
My Net Worth Change
- From October 1st to November 1st my net worth increased 1.05%
- Year to date my net worth has increased 56.54%
There was a definitive increase in debt this past month, but the grown on my assets and pay down of long term debts completely covered it up and then some.
How was your month?