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!
Our balance sheet update isn’t horribly exciting this month. The S&P500 was down about 1.75% for the month, and our investments followed a similar trajectory. Our savings offset the drop a bit – and we’re happy to be buying on a dip, especially with the additional 2% “discount” that we got from executing our monthly taxable investments after China dragged the markets down on Monday. But we still ended up down about 0.35% for the month.
Looking back, 2015 as a whole wasn’t nearly as exciting on our balance sheet as 2013 and 2014 had been. Those years saw gains of right around $200K each on our balance sheet between real estate appreciation, stock market appreciation, and keeping our spending nice and low. This year our cash outflows were significantly higher, the stock market ended the year down, and we’ve been reticent to book increases in the value of our real estate lately. Altogether, this means that we only saw a $122K increase in our net worth for 2015.
Honestly, I never really thought that there would be a point in our lives where I used the words “only a $122K increase”, but after 2013 and 2014 I’d be lying if I didn’t say that looking strictly at that number 2015 feels a little bit like a let down. But the reality is that there was WAY more to 2015 that isn’t captured in that one number, so we’re really not disappointed with the way the year shook out. (More on this in an upcoming post looking back on the whole year.)
Anyhow, here are our numbers for December!
- Our total assets down by $2.8
- Our total liabilities went up by $0.5K (merely a function of when we pay the cc bill…)
- Net worth went down by $3.3K
- Total net worth as of the end of December is $949.3K, which represents a 0.35% decrease this month.
And for the details…
- 401K accounts: $257.0
- Roth IRA accounts: $158.2
- HSA account: $12.4
- Taxable Brokerage Accounts: $105.7
- Total Stock Accounts: $533.4
Real Estate (based on current market comparable sales)
- Primary Residence $239
- Investment Duplex: $140
- Investment Residential Land: $80
- Total Real Estate: $459.0
Cars (values from Kelly Blue Book)
- Car 2: $6.0
- Total Cars: $6.0
- Checking Accounts: $20.7 – need to move some over to taxable
- Savings/Money Market Accounts: $20.0
- Total Cash Holdings: $40.7
Total Assets: $1,039.1
Real Estate Loans
- Primary Mortgage: $86.0
- HELOC on Investment Duplex: $0.0 (re-advanceable)
- Personal Loan – Used to Purchase $50K Duplex: $0.0
- Total Real Estate Related Loans: $86.0
- Credit Card Balance: $3.8
- Total Revolving Credit: $3.8
Total Liabilities: $89.8
Net Worth = Assets – Liabilities
Net Worth = $949.3, down 0.35% from November
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 204. 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
10.16/25 = COL Early Retirement Locale / 192
COL Early Retirement Locale = 78.06
… which gives us Tbilisi, Georgia!
The capital of Georgia, Tbilisi seems like a pretty approachable city, having a little more than a million people living there. It also sounds like the rivers and hills that it is built around would provide an interesting and welcome relief from overwhelming urbanism.
Here’s our journey through the ERLI so far…
- 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
- January 2015 – Zadar, Croatia
- February 2015 – Kiev, Ukraine
- March 2015 – Cairo, Egypt
- April 2015 – Bangalore, India
- May 2015 – Niteroi, Brazil
- June 2015 – Nowhere!
- July 2015 – Skopje, Macedonia
- August 2015 – Recife, Brazil
- September 2015 – Ankara, Turkey
- October 2015 – Lisbon, Portugal / Santo Domingo, Dominican Republic
- November 2015 – Debrecen, Hungary
- December 2015 – Tbilisi, Georgia
How was your balance sheet in December? Where would your savings land you today?