Net Worth – April, 2017

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.

 MarchApril$ Change% Change
Checking$48,256.18$43,433.71-$4,822.47-10.0%
Retirement accounts$625,734.37$628,653.60$2,919.230.5%
529 accounts$18,185.20$19,866.96$1,181.766.5%
Brokerage accounts$1,409,278.06$1,425,969.28$16,691.221.2%
Private equity$200,000.00$200,000.00$0.000.0%
Rental properties$917,171.00$917,171.00$0.000.0%
Primary residence$1,607,000.00$1,607,000.00$0.000.0%
$4,825,624.81$4,841,594.55$15,969.740.3%
Credit cards$882.47$4,177.23$3,294.76373.4%
Rental mortgages$521,613.35$520,881.09-$732.26-0.1%
Primary mortgage$753,064.04$750,715.48-$2,348.56-0.3%
$1,274,356.30$1,275,773.80$1,417.500.1%
$3,550,064.95$3,565,820.75$15,755.800.44%

S&P 500 performance for April, 2017 = 0.91%

Assets

Checking – Down a bit from last month just because April my April commission check wasn’t particularly large. We like to keep a sizable chunk of money in cash for a few reasons. First, we have a number of rental properties and a large cash reserve is protection against having multiple properties either vacant or needing repairs. Second, I’m slowly building our cash reserve as a defensive move. As I’ve pointed out many times in the last few months, I strongly feel the market is overvalued today and I’d rather hold cash than invest at these valuations.

Retirement Accounts – This includes a 401(k), a few IRAs, and a few Roth IRAs. The only account we are currently contributing to is the 401(k), as we are ineligible to invest in the rest. These were up only 0.5%.

529 accounts – We are contributing $500/month for each kid, and given the low balance of these accounts I expect that our contributions will dwarf any investment returns for quite some time. We added $1,000 and got another $2.74 in gains from the market, so it looks like my expectations are about right.

Brokerage accounts – This is our early retirement fund and where most of our net worth is. This account was up 1.2%, which resulted in a total gain of $16,691.22. We made no contributions/investments this month.

Private equity – 2 separate equity investments in startups. Since there’s no way to value these investments I will continue to keep them valued at my initial investment amount. Hopefully I’ll one day be pleasantly surprised to see that the companies are worth something.

Rental properties – On the last day of each quarter I adjust the value of the properties based on Zillow’s estimate. No change this month.

Primary residence – Just like the rental properties, I adjust the value of our house at the end of each quarter. The value of our house doesn’t really matter because we hope to live in this house forever, but I track it for the sake of completeness.

Total assets – Total assets were up $15,969.74 for the month (a mere 0.3% gain).

Liabilities

Credit cards – We don’t carry a balance from month to month on our credit cards, so this just reflects our balance as of the end of the month.The balance is quite a bit higher this month due to some work expenses (which I will be reimbursed for).

Rental mortgages – We paid off $732.26 on the mortgages. Nothing spectacular, but it’s good to see the mortgage balances slowly drop every month.

Primary mortgage – We paid $2,348.56 on the loan for our primary residence. The goal is to have the second loan (~$187k) paid off by the end of 2017. This will be a slam dunk (see below for more details).

Although I don’t really consider our house to be an asset, I definitely consider our home loans to be liabilities. I think it would be difficult to retire early with substantial mortgage payments hanging over our heads.

Total liabilities – Total liabilities were UP $213.94 for the month. This is due to the work expenses on our credit cards.

Total net worth

Net worth was up $15,755.80 for the month to $3,565,820.75. This was a solid but unspectacular 0.44% increase from last month.

Due to our real estate holdings I expect us to underperform the market on the way up but significantly outperform in a down market. My guess is that we’ll find out sooner rather than later if this is the case.

The net worth number will look dramatically different at the end of May. As I’ve alluded to a few times in the past 6 months, I’ve been working on a very large deal for the last 5 years or so. The deal was finally closed in two stages. I closed the first stage in March and the second stage in April. As a result, I will be receiving my commissions checks in May and June.

 

How did everybody else do this month? Is anybody planning on making any changes to their allocations or investment strategies?

7 thoughts on “Net Worth – April, 2017

  1. Nice jump in the asset increase, I would love to see that sort of change month over month. I think you hit it on the head with your over and under performing comment at the end. Honestly it’s why it’s nice to have multiple streams of income.

    1. Thanks! Like I said – time will tell if our asset allocation is defensive enough or not.

      Big changes are coming to the asset allocation in the next 2 months, so I’ll essentially have a chance to start over to implement any allocation I want. That’s both empowering and frightening…

  2. I am not sure where you live but the cost of housing is mind blowing. I’ve got a nice four bedroom, four bath approximately 3000 sq ft house on two acres and it is probably worth less than $200,000. I can’t imagine what a $1.6 million house must look like, 27 bedrooms, indoor Olympic pool, observatory? I can’t imagine what payments on that kind of mortgage must be like. We never had payments exceed $700 per month including all taxes, insurance, etc. But that was many years ago before we paid the house off early. You are doing very well for your stage of life, congratulations.

    1. Ha – I wish I had an indoor Olympic swimming pool! Sadly, $1.6M on the Central Coast of California does not get you nearly as much as you’d think. My house is 4 bedrooms plus an office and just over 3,000 square feet. Nice, but certainly not a mansion.

      Thanks for the kind words. I have a few big announcements coming soon, so stay tuned.

    1. I’m glad you find it useful/inspiring. That’s the reason I post our net worth and income – to show others what’s possible as well as get feedback from the community on ideas for improvements.

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