Net Worth – July 2016

Each month I’ll be keeping track of our net worth on this blog. The reason for making our net worth public is to not only hold myself accountable, but to provide a record so I can review my progress over time. I’ll be giving a brief analysis on our results for the month and what changes I’m thinking of making.

Here’s how our net worth looked for July:

 

June July Change % change
Assets
Checking $27,660.95 $23,152.46 -$4,508.50 -16.3%
Rental properties $855,069.00 $855,069.00 $0.00 0.0%
Retirement accounts $537,631.22 $542,404.69 $4,773.47 0.9%
529 accounts $7,052.18 $8,677.89 $1,625.71 23.1%
Private equity $200,000.00 $200,000.00 $0.00 0.0%
Brokerage accounts $1,281,404.26 $1,322,344.12 $40,939.86 3.2%
Primary residence $1,540,000.00 $1,540,000.00 $0.00 0.0%
Assets total $4,448,817.61 $4,491,648.16 $42,830.54 1.0%
Liabilities
Credit cards $6,810.79 $2,271.61 -$4,539.18 -66.6%
Rental mortgages $529,474.92 $528,647.98 -$826.94 -0.2%
Primary mortgage $780,522.27 $779,299.24 -$1,223.03 -0.2%
Liabilites total $1,316,807.98 $1,310,218.83 -$6,589.15 -0.5%
Net worth $3,132,009.63 $3,181,429.33 $49,419.69 1.6%

 

July was a solid month. We paid down a total of $826.94 of principle on the mortgages on the rental properties and our brokerage account was up a solid 3.2% due to a strong stock market. Due to the size of our portfolio vs the amount we can invest each month, the market will have a much stronger effect on our net worth than any new money we invest.

The 529 accounts, on the other hand, are so small that our monthly deposits in those accounts have a much larger impact than the performance of the market. That’s why those accounts were up a total of 23.1% this month.

As I mentioned in my recent post, the stock market is substantially overvalued. As a result, I will be hoarding cash in my brokerage account (currently at around $10,000 in cash) until I find a compelling valuation in the market. In anticipation of a market correction I am actively looking for ways to dial back the risk in our portfolio. I might sell off a few positions in some stocks with high debt loads or lower credit ratings. Doing so will not only reduce the risk in our portfolio but increase our cash cushion as well.

How did everybody else do this month? Did the markets treat you well?




4 thoughts on “Net Worth – July 2016

  1. Congratulations, you’ve done fairly well for yourself. When did you make the bulk of your money? Was it through consistent savings or by making shrewd stock and real estate investments during the downturn periods.

    1. James – thanks! It’s been a combination of a few things – consistent savings and investing since I graduated from college in 1998, plus some investments during the financial crisis. The bulk of it has just come from earnings – I’ve been a high earner for a number of years and while we live a moderately extravagant life we’ve managed to save and invest a bunch too. I’ve never inherited any money and I had to pay for most of college by myself (multiple jobs during college plus student loans).

      I was able to become a high earner by getting into sales – that will be the topic of an upcoming post, so tune in to learn more.

  2. Fascinating look MC! No desire to pay down more principal? I’m raising a lot of cash right now too and lobbing an extra $1,000 – $5,000 to a couple mortgages. I’m trying to make the extra principal payments not hurt, but also add up over time.

    I like your goals and money philosophies. Sounds like we have a lot in common!

    Best,

    Sam

    1. Sam – Funny you should mention paying down the principle – that’s exactly what I’m starting to do now. Based on my recent post about the entire market being overvalued I’m actively working to reduce the risk in my portfolio. I’ve sold a few of my stocks and I’m upping my cash holdings. I’m also going to get even more aggressive about paying down the 2nd mortgage on my house (it’s actually a line of credit, but it’s essentially the same thing). My income is “lumpy” (discussed an article I’m posting today) so I tend to have big chucks of money occasionally available for this sort of thing.

      I think I’d have a hard time actually retiring if I’m still carrying the mortgages on my house. I’m less concerned about the mortgages on my investment properties, as the leverage is providing me with pretty massive ROI/ROE. I’m more likely to buy a few more properties than I am to pay down the mortgages on the existing ones.

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