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!
Markets were pretty flat this month in our accounts, so most of the changes on the balance sheet from this month were from direct savings from our paychecks. But below the December assets and liabilities, scroll down to find a quick look back on the change in our balance sheet in 2014.
So for the month of December:
- Our total assets went up by $10.1
- Our total liabilities went down by $1.5K
- Net worth rose by $11.6K
- Total net worth as of the end of December is $826.6K, which represents a 1.42% increase this month.
And for the details…
- 401K accounts: $217.3
- Roth IRA accounts: $150.7
- HSA account: $9.0
- Taxable Brokerage Accounts: $78.0
- Total Stock Accounts: $455.0
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: $8.4
- Total Cars: $8.4
- Checking Accounts: $10.0
- Savings/Money Market Accounts: $21.0
- Total Cash Holdings: $31.0
Total Assets: $919.4
Real Estate Loans
- Primary Mortgage: $92.6
- HELOC on Investment Duplex: $0.0 (re-advanceable)
- Personal Loan – Used to Purchase $50K Duplex: $0.0
- Total Real Estate Related Loans: $92.6
- Credit Card Balance: $0.2
- Total Revolving Credit: $0.2
Total Liabilities: $92.8
Net Worth = Assets – Liabilities
Net Worth = $826.6, up 1.42% from November
Closing The Books On 2014
We ended 2013 with a net worth of $624.4K, which means we increased our net worth by $202.2 (a neat little number!) in 2014, an increase of 32.4%. Most of the increase was asset growth since we’re paying the mortgage down pretty slowly and that was our only non-revolving debt for the year. That asset growth was definitely helped by some from appreciation in value (some real estate, some brokerage accounts), but over half of the growth on this side of the balance sheet was just us stashing money away every chance we got.
Here’s where we put money in 2014:
- Maxed out 401Ks – $35,000
- Employer matches on 401Ks – $8,355
- Maxed out Roth IRAs – $11,000 (technically this money is waiting to be deposited since we’re not sure if we need to back-door this year)
- HSA payroll deposits – $2,550
- HSA employer funds – $750
- Deposits into Taxable brokerage – $72,500
- Total Stashed Away This Year – $130,155 (of which $9,105 was some sort of employer matching funds)
This total honestly astounds me. We blew our savings goals out of the water this year (the goal was to put $50K into the taxable account after maxing out all the tax advantaged accounts), which feels nice because we know it’ll be a challenge to meet those goals in 2015 with all the planned spending on the kitchen renovation. So we feel like we’ve gotten a bit of a head start on 2015 saving from the strong finish to 2014.
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.
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.
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 172.5. 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
15.66/25 = COL Early Retirement Locale / 172.5
COL Early Retirement Locale = 108.05
… which brings us to Mexico City, Mexico!
We narrowly missed out on the Early Retirement Locale Index landing us in Jakarta, Indonesia, which feels like a good thing since there’s no way Mr PoP will be getting on a plane in Asia anytime in the near future. =/
Oddly, though Mr PoP and I were married in Mexico and have been to Mexico other times, we’ve never been to Mexico City, and a metro area with 20+ million people has never really appealed to us. But then again, an old friend of mine has been living and working in Mexico City for the last year or so, and she was pleasantly surprised with how she’s grown to like Mexico City. Perhaps we need to take a look again at this city with mild weather, interesting historic districts, public transportation and North-America’s second-largest bicycle sharing network, and, of course, great Mexican food. Just not sure I’d be able to get past the pollution problems to enjoy running and other outdoor pursuits…
- 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
- September 2014 – Skopje, Macedonia
- October 2014 – Brasov, Romania
- November 2014 – Prague, Czech Republic
- December 2014 – Mexico City, Mexico
How was your balance sheet in December? Where would your savings land you today?