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 January, 2017:
|December||January||$ Change||% Change|
S&P 500 performance for January, 2017 = 1.79%
Checking – Our checking account balance was up due to a transfer of cash from our brokerage account to our checking account. This money was to pay some work expenses I put on my credit card. I will be reimbursed for these expenses in February.
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 .6% compared to the S&P 500’s 1.82% gain. This is because we have a number of international funds in our retirement accounts that trailed the S&P 500.
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 $901.46 in gains from the market, so these accounts were up just over 6% for the month.
Brokerage accounts – This is our early retirement fund and where most of our net worth is. The brokerage account was down 1.1% due to the aforementioned transfer to our checking account. Due to the size of our portfolio vs the amount we invest each month, the market will have a much stronger effect on our net worth than any new money we invest (or money we pull out of the account).
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. No change this month.
Total assets – Total assets were up $10,773.92 for the month. At a .2% gain this significantly trails the S&P 500 . Most of the increase was due to increased estimates of the value of some rental properties and our primary residence. Obviously I would be delighted to put up these numbers on a monthly basis, but that’s clearly not possible. However, it’s nice to see that we had a balanced performance from our stock and real estate holdings.
Credit cards – the credit card balances are up due to some work related travel.
Rental mortgages – We paid off $645.57 on the mortgages. This number is smaller than usual because about half of the January payments were made on Dec 31 so they would count for the 2016 tax year.
Primary mortgage – We paid $1,232.19 on the mortgages for our primary residence. The goal is to have the second load (~$187k) paid off by the end of 2017. 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 down $2,985.46 for the month. For the last few years I’ve concentrated on increasing assets rather than paying down liabilities. Given the market’s current overvaluation I have changed my focus and will instead pay off the second mortgage then aggressively pay off some or all of the rental properties (they have a higher interest rate than our house).
Total net worth
Net worth was up $7,788.46, which is only a .23% gain. That significantly trails the market’s gain of 1.79% for the month. I expect things will even out later this year. I also expect us to significantly outperform in a down market, as our real estate holdings should provide steady but small gains.
How did everybody else do this month? Is anybody planning on making any changes to their allocations or investment strategies?