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It has been almost 4 years since my wife and I started tracking our family’s net worth here on The Money Sprout.
We initially decided to post net worth updates every 3 months or so. But as our goals changed and became more focused on financial independence (FI), we decided to track it every month.
Of all our monthly reports … 90%+ of them are increases. The other new worth reports (like in October) are decreases. While the sting of a monthly decline may hurt a little in the short term … the long term implications are rarely felt.
In fact, I would argue these declines are actually very good for our portfolio. Market declines mean we can invest fresh capital in stocks and assets that are on sale … instead of overpaying when the market is doing well.
Last month … our net worth took back half of the losses we saw in October that were caused by stock market declines. I fully expect this seesaw behavior to continue well into 2019.
Here is our latest monthly net worth update.
How We Track Our Net Worth
Before we move on to reviewing our November 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 November?
November 2018 Net Worth
As of November 30th, 2018 – our net worth is $653,977.
Overall, that is a nice increase of over $14,000 in net worth in one month. That is a good sign since we lost $26,000 in net worth value between September and October.
This is all after we set a record back in September for our highest net worth totals ever.
Our net worth in November 2018 increased by 2.23% compared to October.
October 2018 Net Worth = $639,403
November 2018 Net Worth = $653,977
Net Worth Change = $14,574
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 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 November our investments bounced back a bit from the October lows. At this point, we don’t get that worked up about market corrections, since we are building our portfolio mostly for dividend income.
Overall … our investment assets gained half of the ($26,000) loss in October back. Our investments grew by $13,080 in November compared to October.
October 2018 Investments = $486,108
November 2018 Investments = $499,188
Investment Change = $13,080
It was nice to see a little bounce back … but again we are not all the concerned at this point.
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.
October 2018 – Cash = $3,113
November 2018 – Cash = $5,537
Cash Change = $2,424
Overall our cash grew by over $2,000. This is mostly just the timing of when our income hits our accounts and is used to either pay down debt or invest.
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.
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 increased slightly this past month compared to October.
October 2018 – Home Value (est) = $343,794
November 2018 – Home Value (est) = $344,685
Home Value Change = $891
That is a nice $800+ increase in estimated home value. Again … these are just estimates of our home value and nothing I will get that excited or concerned about.
Honestly, if I thought we could sell our home for $340,000+ … I would put it on the market today. So my thinking is these estimates are a bit over inflated.
All three of our asset classes (investments, cash, and home) saw a modest increase last month. Each grew slightly which is what we like to see every month.
Overall our total assets increased by 1.97% since last reporting … which was a nice increase.
October 2018 – Total Assets = $833,015
November 2018 – Total Assets = $849,410
Total Asset Change = $16,395
Like I mentioned before … after a rough October, this was a nice surprise.
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% 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.
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 38% 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.
October 2018 – Mortgage Balance = ($174,200)
November 2018 – Mortgage Balance = ($173,735)
Mortgage Balance Change = +$465
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.
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 about 9 months from having it completely paid off.
This liability is referred to as “Car Loan #1”.
The second car loan (referred to as “Car Loan #2”) currently has about 4 years, 2 months until it is 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 November … we saw a small drop in debt on both car loans. We expect to have car loan #1 paid off by next August (2019) at the latest.
October 2018 – Car Loan #1 – ($3,236)
November 2018 – Car Loan #1 – ($2,893)
October 2018 – Car Loan #2 ($12,545)
November 2018 – Car Loan #2 ($12,298)
Total Car Loan(s) Change = +$590
Overall, we were able to increase our net worth by over $500!
That $500 counts just as much towards growing our net worth as does a $500 increase in our investments.
Credit Card Balance
Basically all of the spending we do is done through travel rewards credit cards. The only exceptions are paying our mortgage, car payments, and our electrical bill.
One 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.
During November, we saw a very big increase in our month to month credit card balances.
October 2018 – Credit Card Balance(s) = ($3,631)
November 2018 – Credit Card Balance(s) = ($6,507)
Credit Card Balance Change = ($2,876)
Our credit card balances fluctuate a lot month to month … but why such a big increase in November? We had $2,000 worth of maintenance done on our family van. New tires, shocks and struts, etc. ran up a nice big bill. Cars are such a big expense … no matter if they are new or old.
Some of the other increases were a result of extra Christmas spending.
Note – The balances shown above are at a point in time and don’t reflect the amount we spend in a month.
Since last reporting – our mortgage balance dropped, both auto loans dropped, and our credit card balances went up by a bunch.
The net result is an increase of our liability balance and a decrease towards our net worth!
Collectively our total liabilities increased by almost $1,800+.
October 2018 – Total Liabilities = ($193,612)
November 2018 – Total Liabilities = ($195,433)
Total Liabilities Change = ($1,821)
When it comes to growing your net worth … decreasing your liabilities has the same impact as increasing your assets. Unfortunately this month … the opposite is the case.
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 $650,000+ in new worth … which is a sizable increase in less than 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 November net worth totals turn out? What steps are you taking to widen the gap between your assets and liabilities?