Tuesday, June 26, 2018

Gremlin's Asset Review - 2018

Bookkeeping Gremlin here to discuss my net-worth.  I first made this type of post a year ago, because its my birth month so I might as well see how current me compares to newborn me (financially).  This is something I like to do on annual basis to help me gauge what kind of progress we are making towards financial independence.  This report honestly is the not best I have ever had, but there are glimmers all over the place and it will not take decades to correct the issues that remain on my personal balance sheet.

Debts:

Debt sucks, period.  Most people accept debt as normal and expected, but that is crap.  Still, I have debt though, and am working on crushing it.  So here goes:

Car #1* (my car): $7,198 (maturity: 6/2021, $250 / mo.) interest = 1.9% ($2831 reduction from last year)
Car #2 (her car): $12,585 18,044.33 (maturity: 10/2020, $475 / mo.) interest = 1.5% ($5459 reduction from last year)

Mortgage: $329,855 ($2100 / month, 30 year, 4% interest)
Family Cash: $30,000 - a family obligation 0%, no timetable (help received purchasing our house)
Revolving debt / credit cards: No balances carried or maintained, used as debit cards with credit points.
Total monthly debt payments = $2825
Total debt: $379,638

Currently, we pay my wife's car in exact amounts, and I pay a little extra on my car and our house.  I count our house exclusively as a debt.  Could it be an asset? Yes, but at the moment its a little more important than that.

* - I almost sold my car, but due to work family and obligations, doing so would be a real problem.

Income:

My wife took the end of last year off to spend time with the baby, and will head back to work at the end of this summer.  Last year our total income was approximately $110,000 before taxes.  This year our expected income is closer to $94,000.  Her return to work, coupled with a very conscious effort on my part to cut expenses should help me to eliminate debt and make purchases of stock.

Expected income (2018):
My main job: $80,000
Wife: $14,000
My side gigs: $1,000
Total: $95,000

Looking forward to the second half of this year is a very pleasant thought.  Our income will balloon, savings will grow, and we will focus extra cash on more stock.  Additionally, I will like to dispose of one of my car loans.

Assets:

This is the fun part.  Current assets that are to be considered are my taxable investments, Roth IRA, IRA, 401K, and other retirement savings.  Cash, Health Savings Accounts, and miscellaneous assets are not counted unless they fit into another category.  I work to shield liquidity this way, and separate out what is needed versus what can be invested.  Assets including cash in investment accounts:

Taxable Invested Assets: $39,775
Roth IRA: $20,078
Traditional IRA: $38,468
401K: $19,305
Wife's Retirement / Pension: $15,416
Total = $133,042 ($32,195 total growth)

At the beginning of 2015 the total stood at $47,000.  At the end of 2015 it was $54,000, and at the end of 2016 it was $87,000.  Since the start of 2016 both my rate of investment and the market have been on tears.  Purchasing a house will stifle this, but only briefly.  This past month is the first time our total assets broke $100,000, so time to double down.  It is my goal to make this number hit $145,000 by end 2018.

Total Net Worth = (-$246,596)

Goals:

Last year I wanted to increase my income and investments, and decrease non-housing debt.  That was a success.  So I want to now lay down concrete debt related goals to reach before my next birthday.
1 - Begin retiring some of my family debt.
2 - Eliminate a car payment.
3 - Networth approaching or above $-230k.

Conclusion:

At the moment we are doing well relative to our peers.  However, though our peers represent a good metric, they are not what I want to use to measure my life's progress.  The primary drive is to achieve financial independence in a meaningful way - that independence would then be leveraged to pursue work and life goals that my current 9-5 does not give me time the time to chase.

- How is your net-worth coming along?  Buy a house recently?
- Gremlin

2 comments:

  1. I feel you have under stated your networth by the estimated value of your vehicles and house. I use Zillow estimate each month to get an estimate on the value of our home and also estimate a rough trade in value for our vehicles. I'm totally debt free so these are still assets to be valued to calculate networth. Your networth should be much higher providing your home has not depreciated!

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    1. Anonymous,

      Thanks for the comment. I would agree with you, by the general definition of networth. However, I refuse to include a house as an asset: I view it as 1 - a liability, 2 - screwed if we get kicked out or have to move suddenly, and 3 - a recurring cost. Vehicles are nice tools, but I would not count them as an asset as they are used for important work related things at time (for me and my wife).

      Fun fact - the house had already appreciated upon purchase, so that worked out.

      - Gremlin

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