Welcome to our February 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!
Nothing too exciting on the balance sheet this month, though we got a bit of a boost by the stock market’s rebound throughout February. We’ll see how it ends up for the rest of the year!
But for the month of February:
- Our total assets went up by $19.2K
- Our total liabilities went up by $0.4K
- Net worth rose by $18.8K
- Total net worth as of the end of February is $692.7K, which represents a 2.8% increase this month.
But we did add one more way that we hope to continue tracking investment growth, so let us know how what you think of our new “Early Retirement Locale Index” below.
And for the details…
- 401K accounts: $171.8
- Roth IRA accounts: $139.6
- HSA account: $5.7
- Taxable Brokerage Accounts: $14.7
- Total Stock Accounts: $331.8
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: $9.7
- Total Cars: $9.7
- Checking Accounts: $12.0
- Savings/Money Market Accounts: $13.3 – this is about $2K high right now since I need to move more into our taxable brokerage account at Vanguard
- Total Cash Holdings: $25.3
Total Assets: $791.8
Real Estate Loans
- Primary Mortgage: $97.8
- HELOC on Investment Duplex: $0.0 (re-advanceable)
- Personal Loan – Used to Purchase $50K Duplex: $0.0
- Total Real Estate Related Loans: $97.8
- Credit Card Balance: $1.3
- Total Revolving Credit: $1.3
Total Liabilities: $99.1
Net Worth = Assets – Liabilities
Net Worth = $692.7, up 2.8% from January
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.
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 152. 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
13.90/25 = COL Early Retirement Locale / 152
COL Early Retirement Locale = 84.5
… which puts us in Quito, Eucador.
And quite coincidentally, Mr PoP emailed me a link about how to retire in Quito, Ecuador back in November 2012. Unless you think he’s done this for lots of different locales, he hasn’t. Quito’s the only one.
In January we had higher spending and a bit less in savings, so we were at 62, which put us smack in the middle of Delhi, India and Chişinău (Moldova). Since we don’t want to stretch, we’ll use the floor function and go with Delhi, India.
If I can figure out an easy way to graph this to show progress, I will. But for now, we’ll just list them.
- January 2014 – Delhi, India
- February 2014 – Quito, Ecuador
Are either of these 2nd world countries?
How was your February? What do you think of the Early Retirement Locale Index? Would you be willing to move to a foreign country to retire earlier?