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One of my absolute favorite personal finance tasks I complete each month is calculating our net worth.
Tracking our net worth helps our family stay on track with our personal finances. The path to financial independence (FI) that my wife and I have chosen is directly tied to things like our net worth and the amount of passive income we are earning every year.
Most months … our net worth grows. Every once in a while we will see a slight dip in our net worth … but over the long term it is a constant and stead path up.
We published our first net worth report almost 3.5 years ago. In that time, we have seen our total net worth grow by over $190,000!
Here is our latest monthly net worth update.
How We Track Our Net Worth
Before we move on to reviewing our June net worth numbers, I would like to mention how we are using our Personal Capital account to do most of the work.
We are tracking our net worth through this free account. This tool has made it possible for us to easily track our net worth at a moments notice.
[thrive_text_block color=”light” headline=”Personal Capital”]I highly recommend checking out Personal Capital and setting up a free account. It is the best tool available to help track your net worth and can even help with your spending.[/thrive_text_block]
So how did we do this June?
June 2018 Net Worth
As of June 30th, 2018 – our net worth is $625,489. That is a small increase of almost $3,000 in net worth compared to last month (May). This is the highest our net worth has ever reached and we hope to continue this trend through 2018.
We managed to pay down some debt last month … which was a good thing. And our assets increased … which is always fun to see.
Our net worth in June 2018 increased by 0.47% compared to May.
May 2018 Net Worth = $622,548
June 2018 Net Worth = $625,489
Net Worth Change = +$2,941
A high level breakdown of our assets and liabilities are detailed below.
We always report our net worth with 3 main asset categories that include – investments, cash, and home value.
Note – We currently do not count our automobiles as an asset and they are only found in the liability section of our reports.
Below you will find a breakdown of each category for last months checkup.
Our investment category includes a dividend income portfolio, 529 plans for the kids, 457 account, emergency fund accounts, IRA accounts, Roth accounts, and any other retirement account we have opened, etc. We have been building these accounts for the past 10 to 15 years.
These equity investments are currently (and likely will always be) our highest valued asset. There isn’t a day that passes that we are not working to make this asset grow … despite what the overall market is doing.
During June our investments saw a small increase compared to last month. Overall … our investment assets rose by $4,140 in June compared to May.
May 2018 Investments = $468,041
June 2018 Investments = $472,181
Investment Change = +$4,140
That is a 0.88% gain in value of our investments from last month. This isn’t a huge jump … but it is still an increase that builds on our net worth.
Our current cash includes all of our checking and savings accounts. We don’t usually carry a high cash balance and like to move it into the stock market to purchase income producing assets. However, it is also important to have some cash on hand in order to cover unexpected expenses.
May 2018 – Cash = $5,660
June 2018 – Cash = $5,714
Cash Change = +$54
The cash balance grew by about $50.
Note – When it comes to cash … I find it a very inefficient way to build wealth. That is why we put it to good use whenever we can.
Reporting home value in our net worth reports is good and bad. For example, we use Zillow to estimate on our home value. This is simply an estimate at best and may not represent the actual value we could sell our home for. That is the bad part of reporting it on our net worth.
On the other hand, it is such a huge asset that not reporting it would skew our net worth results. We currently owe about 50% (maybe a little more) of the value of the home. That is a significant part of our overall net worth in my opinion.
The estimated value of our home dropped slightly this past month compared to May.
May 2018 – Home Value (est) = $346,629
June 2018 – Home Value (est) = $345,310
Home Value Change = ($1,319)
Again … these are just estimates of our home value.
Our biggest asset class (stocks) rose by over $4,000 last month. The cash balance we carry increased by about $50 and our estimated home value declined by just over $1,000.
Overall our total assets rose by just 0.35% since last reporting.
May 2018 – Total Assets = $820,330
June 2018 – Total Assets = $823,205
Total Asset Change = +$2,875
This wasn’t a record breaking month for growing our assets … but we still managed to increase them by several thousand dollars.
There are 3 main liability categories that we will report on. The first and largest is our mortgage balance. Then we have our credit card balances … which is how we pay for almost every purchase we make.
The last category is our car loan(s). We plan to have one of our vehicles paid off completely by next summer. The other vehicle is a 0% loan … so we are in no rush to pay extra on that one.
One month at a time … we are working to pay down our mortgage debt. Fortunately, we have a reasonable mortgage rate and a monthly payment that doesn’t completely hold us down.
We have a 30 year mortgage on our home with a rate of 4.375%. That isn’t too bad of a rate, so we don’t normally pay any extra on the mortgage.
If we could go back about 10 years, my wife and I would have purchased a slightly smaller home. We made a mistake and bought a home that was too big. We could have easily raised our 3 kids in a house that was 1,000 less square foot than what we have now. That move alone would have saved us thousands and thousands of dollars every year.
Over the past several months, we have been considering downsizing our home to something smaller and less expensive. We are continuing to look for smaller homes in our area … but it seems that the housing market is booming so homes don’t stay on the market for very long.
For now … we will continue to just pay our mortgage every month and watch the principal shrink little by little.
May 2018 – Mortgage Balance = ($176,598)
June 2018 – Mortgage Balance = ($176,142)
Mortgage Balance Change = +$456
Each month we make a mortgage payment, our principal drops by a little bit more each month. This past month we got a boost by adding another $21+ to our payment.
At the start of last year (January 2017), we took on a lot more debt after buying a second car … which I will refer to as “car loan #2”. My 16+ year old vehicle finally died, so I needed reliable transportation.
The good news is that we were able to purchase a new vehicle that gets over 35 mpg with a 0% financed loan. The bad news is that we took on $17,000+ in debt and a second car payment. I fully expect to drive this car for 15 years or eventually sell it to my son when he starts to drive.
As far as our other “family car”, we have a very low rate and are on year #6 of the loan. We refer to this as “car loan #1”.
Since our rate on this vehicle is 1.56%, we haven’t paid too much extra on it. While we are anxious to pay this loan off, we think we could make a higher return from investing the money.
During June … we saw a drop in debt on both of our auto loans.
May 2018 – Car Loan #1 = ($4,771)
June 2018 – Car Loan #1 = ($4,527)
May 2018 – Car Loan #2 = ($13,774)
June 2018 – Car Loan #2 = ($13,528)
Car Loan(s) Change = +$490
In total, our car loans pushed our net worth higher by almost $500!
Credit Card Balance
Normally, our credit card spending is the biggest area for improvement when it comes to debt.
We never (ever) let our credit card payments slip past their due date. Paying interest or late fee’s is a complete waste of assets.
May 2018 – Credit Card Balance(s) = ($2,639)
June 2018 – Credit Card Balance(s) = ($3,519)
Credit Card Balance Change = ($880)
Our credit card balances fluctuate a lot month to month. During this past month’s snapshot, we had $880 more in short-term credit card debt … which is no big deal really.
Note – The balances shown above are at a point in time and don’t reflect the amount we spend in a month.
One of the things I absolutely lover about credit cards are the travel rewards we are starting to bank. Check out our Travel Rewards page for up-to-date information on our pursuit for FREE Travel.
Now into month 11 of our credit card journey, we have banked over $10,000 in future free travel!
Since last reporting, our mortgage balance dropped a little – as expected. We also saw a nice dip in car loan debt – which was also expected.
Our credit card balances saw a bump up in short-term debt.
Collectively our total liabilities decreased by $66. That certainly isn’t a ton … but it is still a move in the right direction and will go towards growing our overall net worth.
Remember … growing your net worth is not just about increasing your assets. It is just as important to lower your liabilities at the same time.
The larger the gap is between your total assets and total liabilities is the key to financial independence and something my family is working towards.
May 2018 – Total Liabilities = ($197,782)
June 2018 – Total Liabilities = ($197,716)
Total Liabilities Change = +$66
Net Worth Summary
As promised … we plan to keep these net worth posts updated every month now. Not only does it keep us accountable in how we save, earn, and invest … it is great motivation when you see growth like we have over the past 3 years.
For example, our first ever net worth report was posted back in March 2015 … 3+ years ago. We reported a net worth of $434,984 back then. In 40 months time, we have managed to grow our net worth by over $190,000.
We should be able to conservatively cross the 7-figure net worth well within the next decade … hopefully much sooner. Even with market uncertainty, we will continue to pump in new money each month into the market while we work to pay down our debt. Focusing on both sides of the net worth equation should help us push past $1,000,000 and then on closer to our actually FI Number … which is somewhere between $1.0 million to $1.5 million.
I really enjoy looking back at our old numbers (like our March 2015 net worth totals) as it helps keep us motivated and show us tangible results of our work.
Do you track your net worth? How did your June net worth totals turn out? What steps are you taking to widen the gap between your assets and liabilities?