Welcome to our January 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!
Kindof a lot of action on the balance sheet this month. This month was a pretty big win for us.
That in mind… a bit crazy is the fact that we actually just hit the average for household net worth in this country, which was about $673.5K/household as of a few months ago. That’s $77.3 trillion / 114,761,359 households, and illustrates pretty well the difference between AVERAGE and MEDIAN, since the MEDIAN household net worth is just $10.9K according to this NYT piece. (That seems extraordinarily low, so if someone has another source/number please share!)
For our balance sheet, most of the action was on the assets side, where we had some increases and some decreases…
- First things first, I totally won the He Said/She Said poll on writing down the cars’ values (in politics it would have been considered a “landslide”), but we still compromised. Mr PoP’s car is now listed at $0 on our list of assets, so this was a decrease of $7.4K.
- We updated the market value of our rental duplex that I had neglected to do for over a year… that resulted in an increase of $33K.
- On the stock side, we had an increase of $15.5K on a month when the S&P went down 3.56%. Awesome, right? Well, until you stop and realize that a little over $22K was put into those accounts over the course of the month ($11K to fund our Roth IRAs for 2013, $1K to Mr PoP’s HSA, and another $10K went into our 401Ks this month – thanks to that big paycheck Mr PoP earned). So we were able to counteract those market losses for the month, and we’re still hopeful that the market will sputter some more so we can pick up shares at an even bigger discount as the year goes by. (“As goes January, so goes the year…”? *Fingers crossed* for all of us in the accumulation phase!?!)
But for the month of January:
- Our total assets went up by $45.9K
- Our total liabilities went down by $3.6K
- Net worth rose by $49.5K
- Total net worth as of the end of December is $673.9K, which represents a 7.9% increase this month.
We’re also trying out a couple of different ways of looking at the growth of our investments (for us, this excludes our cars and the house we live in) within the context of a possible early retirement scheme. So please scroll below and take a look at them and see if they make sense or if you have any other suggestions about what works best for you!
And for the details…
- 401K accounts: $162.8
- Roth IRA accounts: $134.6
- HSA account: $5.6
- Non-Retirement Stock Accounts: $0.6
- Total Stock Accounts: $304.6
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 1: $0.0 – we compromised and wrote this one down to $0 since it fell below 1% of our total assets… but for the record, I totally won the poll on our He Said She Said
- Car 2: $9.7
- Total Cars: $9.7
- Checking Accounts: $10.0
- Savings/Money Market Accounts: $23.3 – this is about $12K high right now while we figure out exactly where and what we want to buy in our new taxable investment account…
- Total Cash Holdings: $33.3
Total Assets: $772.6
Real Estate Loans
- Primary Mortgage: $98.4
- HELOC on Investment Duplex: $0.0 (re-advanceable)
- Personal Loan – Used to Purchase $50K Duplex: $0.0
- Total Real Estate Related Loans: $98.4
- Credit Card Balance: $0.3
- Total Revolving Credit: $0.3
Total Liabilities: $98.7
Net Worth = Assets – Liabilities
Net Worth = $673.9K up 7.9% from December
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.
And this second one seeks to answer the question, “How many years worth of spending do we have saved up?” Basically 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 last February 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.
How was your January? And for those of you who have retired or are seeking to retire or reach financial independence, how do you find it most useful to track your investment growth, particularly compared with spending patterns?