June 2015 – Net Worth Update

How to Track and Grow Your Net Worth - June 2015

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Back in March of this year, my wife and I decided to start tracking our net worth. After reading up on other personal finance bloggers and their net worth, I thought it was time to start tracking ours.

Net worth is something that I had never really cared about too much in the past. For one thing, a big portion of our net worth is our home. I think it is difficult to track our home value as it is just an estimate of what we think the home is worth – or rather what Zillow estimates it is worth.

While tracking our home value can be a bit volatile, reporting on other assets like investments and cash are actually very helpful. I want to see our investment dollars grow, so what better way to showcase our growth than reporting it in our net worth?

I also find it helpful to highlight our liabilities and track the progress we are making. Reporting the shrinking balance on our car loan and mortgage shows the other side of the net worth equation that isn’t discussed that much – reducing our liabilities.

So while I don’t think it to be very helpful to report our net worth every month, I do find value in still reporting it. That is why my wife and I have decided to report it every quarter. That way we can track how our assets are growing and liabilities are shrinking every 3 months.

Note – We are tracking our net worth through our Personal Capital account. Without this great tool, I can tell you that we wouldn’t have the time or patience to track our net worth.

Now on to our second ever net worth update –

June 1, 2015 Net Worth

As of June 1st, 2015, our net worth is $452,099.34! Just like in our first report, I still believe that reporting on certain assets like a mortgage can be misleading. However, it is still kinda cool to see that our net worth is growing.

My wife and I hope that by calculating our net worth every 3 months, we can see progress in our results and look for areas to improve upon. For example, we recently initiated a credit card spending challenge as a direct result of reporting our net worth 3 months ago. We studied our credit card spending and decided that there were plenty of cuts that could (and should) be made in that area.

Our net worth in June rose by 3.8% compared to March. That was an increase of $16,415.52 over those 3 months.

March 2015 Net Worth = $435,683.82
June 2015 Net Worth = $452,099.34

Net Worth Change = + $16,415.52

Note – I under reported our net worth back in March by $700. As a result, our March 1, 2015 net worth was actually $435,683.82. I had previously reported it as $434,983.82.

A high level breakdown of our assets and liabilities are detailed below.

Assets

We currently have 3 main asset categories that we are reporting on, which include investments, cash, and home value.

I really thought long and hard about including the value of our two cars as assets, but couldn’t get myself to do it. While my wife and I both have a car, I don’t consider them an asset at all which is why I left them off the asset category.

Investments

This category includes our dividend income portfolio, 529 plans for the kids, emergency fund accounts, retirement accounts, etc. It is currently the highest valued asset and we plan to continue growing it.

Over the next couple of years, I expect to see major gains from our investments – which will push our net worth much higher.

March 2015 Investments = $349,218.66
June 2015 Investments = $356,417.82

Investment Change = + $7,199.16

I expected to see a little higher increase in our investments to be honest. We have been pumping money into our investments since the beginning of the year. As these investments grow and start earning dividends, I expect our investments to really start growing nicely for years to come.

Cash

Our current cash includes all of our checking and savings accounts. I expect this category to remain constant throughout the year. The plan is to move as much cash as we can to our investment accounts. That is where we will see the solid growth in the future – not from checking and savings account returning less than a 1% return.

March 2015 – Cash = $8,943.94
June 2015 – Cash = $9,054.23

Cash Change = + $110.29

As I mentioned before, I don’t expect big gains from our cash category between reports. My wife and I are constantly moving our cash into new investments and will keep our cash balance steady.

Home Value

I am not a huge fan of reporting on our home value, but it is one of our largest assets so I need to include it. We are currently using the Zillow estimate on our home, which is calculated directly through Personal Capital. This asset will likely see a bunch of ups and downs each time I report our net worth – which is another reason not to calculate it every month.

March 2015 – Home Value (est) = $289,010.00
June 2015 – Home Value (est) = $296,079.00

Home Value Change = + $7,069.00

This is the most volatile asset that we currently have. While we saw a nice bump in our home value since March, it could very easily be back down $10,000 when we report our net worth again.

Total Assets

It was a good quarter in terms of our total assets increasing. Our home value had a very nice jump and our total investments certainly shot up from all the new money we are investing. We decided to invest our tax return this year into dividend stocks, which will certainly help boost up our bottom line.

March 2015 – Total Assets – $647,172.60
June 2015 – Total Assets – $661,551.05

Total Asset Change = + $14,378.45

Liabilities

There are 3 main liability categories that we will report on. The first and largest is our mortgage balance. Then we have a car loan for our family vehicle. Last, we charge almost all of our expenses through 2 credit cards.

Mortgage Balance

My wife and I really enjoy having a house. With 3 young children, we really have no desire to rent. While we certainly enjoy home ownership, it does come with a cost – monthly mortgage payments!

We have a decent mortgage rate on our 30 year loan and continue to make payments every month. My wife and I would love to pay extra on the mortgage each month (which we have done in the past) but for now we are putting our money to work buying dividend stocks.

March 2015 – Mortgage Balance – ($192,584.71)
June 2015 – Mortgage Balance – ($191,452.35)

Mortgage Balance Change = + $1,132.36

Each quarter, we should expect similar results. Nothing fancy here, just paying down our mortgage debt one month at a time.

Car Loan

We have an incredibly low rate on our auto loan (1.56%), so it doesn’t bother me that much to make these payments. Just like our mortgage, every month we see our principal decreasing and our net worth increasing as a result.

March 2015 – Car Loan – ($17,075.72)
June 2015 – Car Loan – ($16,153.38)

Car Loan Change = + $922.34

We have no current plans to pay extra on our car loan. With the very low rate, I would rather be investing our money into dividend stocks or even paying extra on our mortgage.

Credit Card Balance

Since we are not paying any extra money on our mortgage and our car loan has such a low rate, our credit card spending is the biggest area for improvement. We are taking some steps and challenging ourselves to spend less on our credit cards each month.

Note – Just to be clear, we have always paid our balance off every month on our credit cards. We are however trying to limit what we spend so that the extra money can be pumped into more investments.

March 2015 – Credit Card Balance(s) = ($1,828.35)
June 2015 – Credit Card Balance(s) = ($1,845.98)

Credit Card Balance Change = ($17.63)

My wife and I have initiated a credit card spending challenge to try and limit our spending to less than $1,600 a month on our two cards. We currently are spending around $2,500 per month.

Note – The balances shown above are at a point in time and don’t reflect the amount we spend in a month.

Total Liabilities

It was a good quarter in terms of our total liabilities decreasing. Both our mortgage and car loan balances dropped – as expected. Our credit card balances remained almost constant. It is just as important to reduce liabilities as it is to increase assets in terms of reporting our net worth.

March 2015 – Total Liabilities – ($211,488.78)
June 2015 – Total Liabilities – ($209,451.71)

Total Liabilities Change = + $2,037.07

Net Worth Summary

Overall I think it was a good 3 months and we took some positive steps towards building our net worth. It is nice to see some of our liabilities drop (which they should) like our mortgage and car loan. Growing our net worth is just as much about reducing our expenses (liabilities) as it is about growing our assets. That is one of the reasons why we decided to start reporting our net worth – to show our work on reducing liabilities.

We also like tracking our investments in our net worth. While we report our dividend income at the end of every month, we still have several other investments like 401K’s and 529 plans that are not included. Reporting our investments as assets helps give my wife and I a clearer picture of our total net worth.

Do you track your net worth? How often do you track it?

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Dividend Mantra - June 2, 2015

John,

Huge net worth numbers up there. Congrats, especially on the investment accounts. Very, very nice work! 🙂

I don’t personally track net worth because I don’t see the value in it against my goal of living off of dividend income, but a lot of people track it and find value in it. Personal finance is personal for a reason. All in what works for you.

Keep it up!

Best regards.

Reply
    John - June 3, 2015

    @Mantra – In the past I had never really wanted to track our net worth. Just like you, I would rather report our dividend income – which is most important to us. However, recently I have been motivated to report net worth to get a bigger picture of our overall wealth. I just can’t get myself to report on it every month though – which is why we are doing it quarterly.

    Thanks for stopping by!

    Reply

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