How We are Growing Our Net Worth – March 2019

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At the end of every month, we publish an update to our net worth.

These monthly net worth updates help us keep track of our assets such as – investments (stocks and bonds), cash, and even the value of our home. It also helps us track how we are paying down our debt every month … which is are known as liabilities.

This past month (March 2019) was another positive month for growing our overall net worth. We gained less than 1% in net worth value compared to February 2019.

However, we also set a new all-time high new worth value ever!

Looking back at the past 4 years (since we started keeping track of our net worth), I can say that most months (probably 80%) we see increases. Every once in a while we will have some declines … which is healthy.

Tracking and growing our net worth is also part of our financial independence (FI) plan.

Our goal to reach FI will depend somewhat on the gap between our assets and liabilities. To make it easiest to understand … we are working to lower our liabilities to $0 while growing our assets as much as possible.

Here is our latest monthly net worth update.

How We Track Our Net Worth

Before we move on to reviewing our March 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 March?

March 2019 Net Worth

As of March 31st, 2019 – our net worth is $665,716!

Overall, that is another healthy increase of almost $4,000 in net worth just in the last month.

This is the highest net worth report we have ever recorded, which is awesome news. We beat our previous record set in September 2018 by $171.

Our net worth in March 2019 increased by 0.59% compared to February.

February 2019 Net Worth = $661,814
March 2019 Net Worth = $665,716

Net Worth Change = +$3,902

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

Assets

In every net worth report, we include 3 main asset categories – 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.

Investments

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 assets for the past 10 to 15 years (depending on the account).

These equity investments are currently (and likely will always be) our highest valued asset.

During March, we saw yet another healthy increase of almost $6,000 in our investment portfolio. This is a result of better market condition … which has been fluctuating a lot the past couple of months.

February 2019 Investments = $506,570
March 2019 Investments = $512,929

Investment Change = +$6,359

Overall, our investments grew by 1.3% in March compared to the prior month.

Cash

Our current cash balance 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.

February 2019 – Cash = $3,303
March 2019 – Cash = $2,678

Cash Change = ($625)

Overall our cash decreased by just over $600. Not really anything exciting to talk about here!

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 either paying down debt or investing it whenever we can … even in a bad stock market!

Home Value

Reporting home value in our net worth reports is good and bad.

In the past, we have always used Zillow to estimate our home value. This was a simple an easy way to estimate the value we could sell our home for.

However, I’ve realized that Zillow estimates seem really high compared to what homes are selling for in our neighborhood. And this is consistent every month … so I thought I would take a different approach to estimating our home value.

Starting this month, we will be using an average home value by taking the estimates from 5 different online sources.

For more information, check out the following article – Websites to Estimate the Value of Your Home.

Here is a breakdown of all 5 online tools and the different estimates for our home as of March 31, 2019.

• Zillow – $347,685
• Trulia – $341,870
• Redfin – $331,773
• Chase Home Estimator – $337,000
• Realtor.com – $339,200

Taking the average of all 5 tools, we can estimate the value of our home at $339,505. This is the method that we will be using going forward.

Home Value Average (March 31st) – $339,505

As you may have noticed, this average is about $8,000 lower than the estimate from Zillow … which happens to be the highest of the 5 tools used.

The new method for estimating the value of our home decreased slightly this past month compared to February. Moving forward, we expect to see a more smooth changes (up or down) month to month. Hopefully not as many crazy fluctuations as we have seen in the past.

February 2019 – Home Value (est) = $342,085
March 2019 – Home Value (est) = $339,505

Home Value Change = ($2,580)

I have struggled to decide if we should keep these estimates in our net worth reports or not. Since the estimated value of our home is about twice what we currently owe (see below) … I think it helps to better reflect what our true net worth is.

Hopefully this new method for estimating our home value will be a better reflection of true value.

Total Assets

Our biggest asset class (investments) saw another nice increase last month. Our cash balance dropped slightly and our home value dropped based on our new calculation method.

Overall our total assets increased ever so slightly by 0.37% since last reporting … which is encouraging.

February 2019 – Total Assets = $851,958
March 2019 – Total Assets = $855,112

Total Asset Change = +$3,154

Liabilities

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 this summer. The other vehicle is a 0% interest rate loan … so we are in no rush to pay extra on that one.

Here is a high level breakdown of each liability category.

Mortgage Balance

We have a 30 year mortgage on our home with an interest rate of 4.375%.

If we were to continue paying the minimum monthly amount … our home would be paid off in about 20 years or so. But that isn’t necessarily our plan.

Eventually we will likely downsize into a much smaller home in order to reduce our housing expenses … which currently makes up 37% of our monthly spending.

If we could go back about 10 years, my wife and I would have purchased a much smaller home. We made a mistake and bought a home that was way too big.

We could have lived comfortably with a 1,000 less square foot than what we have now. That move alone would have saved us thousands and thousands of dollars every year.

And we would have purchased a home closer to my work … to help save on transportation costs.

But while we are still living in our home, we continue to lower our mortgage balance every time we make a payment.

February 2019 – Mortgage Balance = ($171,859)
March 2019 – Mortgage Balance = ($171,385)

Mortgage Balance Change = +$474

Each time 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.

Car Loan(s)

We currently have two car loans. One of these loans is for our “family vehicle” (a van). This loan has a very low 1.56% interest rate and we are now less than 4 months from having it completely paid off.

My wife and I have already agreed to continue driving this car for at least 2 more years and enjoy the no monthly payments! We also have a third driver coming on board soon in the family (our son will be 16 later this year), so we are trying to plan out vehicles in the coming years.

This liability on our family van is referred to as “Car Loan #1”.

The second car loan (referred to as “Car Loan #2”) currently has about 4 years until it is fully paid off.

The big difference here is that this second car loan has a 0% interest rate … so we are not in a huge rush to get it paid down. Although I wouldn’t mind getting this debt off our books for piece of mind sometime in the future.

During March … we saw another nice drop in debt on both car loans. We expect to have car loan #1 paid off by this July (2019) at the latest.

February 2019 – Car Loan #1 = ($1,767)
March 2019 – Car Loan #1 = ($1,420)

February 2019 – Car Loan #2 = ($11,560)
March 2019 – Car Loan #2 = ($11,315)

Total Car Loan(s) Change = +$592

Overall, we were able to increase our net worth by almost $600!

That $600+ counts just as much towards growing our net worth as does a $600 increase in our investments.

Credit Card Balance

The majority of the spending we do each month is done through travel rewards credit card. The only exceptions are paying our mortgage, car payments, and our electrical bill.

An important thing to keep in mind is that we never let our credit card payments slip past their due date. Paying interest or late fee’s is a complete waste of assets and not part of our plan.

During March, we saw slight uptick in our month to month credit card balances compared to February.

February 2019 – Credit Card Balance(s) = ($4,958)
March 2019 – Credit Card Balance(s) = ($5,276)

Credit Card Balance Change = ($318)

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

We are hoping to start working these balances back down towards the $3,000 range in the next couple of months.

Total Liabilities

Since last reporting – our mortgage balance dropped, both auto loans dropped, and our credit card balances increased. This is just as important as growing our assets when it comes to building net worth.

Collectively our total liabilities increased by $748, which isn’t so bad and will go towards growing our net worth.

February 2019 – Total Liabilities = ($190,144)
March 2019 – Total Liabilities = ($189,396)

Total Liabilities Change = +$748

When it comes to growing your net worth … decreasing your liabilities has the same impact as increasing your assets.

I look forward to paying off our auto debt so we can then use that extra cash to save. Then maybe we will focus on paying down more of our mortgage? That is a guaranteed 4.375% return on our money based on our current mortgage rate.

Net Worth Summary

We plan to keep these net worth posts updated every month.

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 to 4 years.

For example, our first ever net worth report was posted back in March 2015 … which was 3+ years ago. We reported a net worth of $434,984 back then.

Now we are over $665,000+ in new worth … which is a sizable increase in almost 4 years. We also realize the huge gains in the stock market have helped us grow our net worth.

Do you track your net worth? How did your March net worth totals turn out? What steps are you taking to widen the gap between your assets and liabilities?