PoP Balance Sheet – August 2014

Welcome to our August 2014 Balance Sheet!

We use the structure of a monthly income statement and balance sheet in tandem to make sure we are keeping our expenses low and planting our pennies wisely. If you’re not already tracking your finances using these two methods, go to mint.com and get started today! If you have any questions about how we do this just post a comment and we’ll be sure to help!

August was an average month when it came to our savings, but the stock market gave us a nice little boost as well, so we had some pretty solid growth in our brokerage accounts this month.  But other than that, the balance sheet was pretty boring this month.

So for the month of August:

  • Our total assets went up by $22.1K
  • Our total liabilities went down by $0.3K
  • Net worth rose by $22.4K
  • Total net worth as of the end of July is $786.3K, which represents a 2.9% increase this month.

And for the details…

dyerware.com


Assets

Stock Accounts

  • 401K accounts: $211.1
  • Roth IRA accounts: $150.0
  • HSA account: $7.8
  • Taxable Brokerage Accounts: $48.9
  • Total Stock Accounts: $417.8

Real Estate (based on current market comparable sales)

  • Primary Residence $215
  • Investment Duplex: $130
  • Investment Residential Land: $80
  • Total Real Estate: $425.0

Cars (values from Kelly Blue Book)

  • Car 2: $9.2
  • Total Cars: $9.2

Cash Holdings

  • Checking Accounts: $11.9 – need to move another $1K into taxable
  • Savings/Money Market Accounts: $18.0
  • Total Cash Holdings: $29.9

Total Assets: $881.9

Liabilities

Real Estate Loans

  • Primary Mortgage: $94.7
  • HELOC on Investment Duplex: $0.0 (re-advanceable)
  • Personal Loan – Used to Purchase $50K Duplex: $0.0
  • Total Real Estate Related Loans: $95.2

Revolving Credit

  • Credit Card Balance: $0.9
  • Total Revolving Credit: $0.9

Total Liabilities: $95.6

Net Worth = Assets – Liabilities

Net Worth = $786.3, up 2.9% from July

 

Tracking Investable Asset Growth

This first graph shows the growth of our investable assets (net of any liabilities against them), and shows the distribution of the various equity classes we hold. Pretty self explanatory.

dyerware.com


656.8/(12*3.996) 47.952

How Many Years Of Spending Do We Have Saved?

Here I’ve taken the total of our investable assets for each month and divided it by the expenses (excluding our investment property expenses) for that month. The idea being that this shows how many years we could live off of those assets at that rate and gives us a better idea of what lifestyle inflation (or intentional deflation) can do to the relative value of our savings.

dyerware.com


It fluctuates in a much bigger range, because in high spending months (like February 2013 when we spent almost $7K paying off our car completely), the denominator is so much bigger. Because of that, it’s the overall trend we’re looking for.

Early Retirement Locale Index

Mr PoP wanted one more way to understand more viscerally how much we have in “investable assets”, so we’ve come up with what we’re calling our Early Retirement Locale Index. The basic idea is that we know how many years of savings we have at our disposal if we were to continue living in south Florida. (That’s the chart above.) But using the “magical” 25 years of savings necessary for early retirement, where would we have to move so that our current investable assets would cover 25x our COL adjusted current spending? (Note, this is purely for fun, we’re not intending to move. Don’t worry Mama & Papa PoP!) If you want to follow along, we’re using this Cost of Living Index from Expatistan, and using the average of the two big cities in south Florida on the list (Miami and Tampa) as our current COL index, which gets us 159.5. Our city isn’t on their full list, hence the average – but maybe yours is. Then we’re solving this equation:

Current Years Saved/ 25 = COL Early Retirement Locale / COL S. FL

13.70/25 = COL Early Retirement Locale / 159.5

COL Early Retirement Locale = 87.40

… which gives us the choice between Dhaka, Bangladesh and Yerevan, Armenia.  A city of 1mm people is much more our speed than one of 14mm, so this month we’re choosing Armenia as our COL Locale.  Plus, I had a friend growing up whose mother was from Armenia and she was a pretty awesome mother hen to the rest of us kids, a lovely ambassador for Armenia. The semi-arid environment coupled with extremes in temperature (as hot as 104 F in the summer and as cold as 5 F in the winter!) would take some getting used to after living in our semi-tropical home in Florida, but at least it’s a sunny climate and the nearby mountains would provide opportunities for lots of outdoor hiking.

  • January 2014 – Delhi, India
  • February 2014 – Quito, Ecuador
  • March 2014 – Kiev, Ukraine
  • April 2014 – Chiang Mai, Thailand
  • May 2014 – Madras/Chennai, India
  • June 2014 – Colombo, Sri Lanka
  • July 2014 – Bangalore, India
  • August 2014 – Yerevan, Armenia

How was your balance sheet in August? Where would your savings land you today?

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