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!
Despite the fact that we just had our lowest spend month in 2.5 years, our balance sheet didn’t move in the positive direction. With the S&P500 dropping nearly 6% over the course of the month (and being down as much as 10% during one trading session!), we didn’t have enough income coming in to offset our market losses, even if we had spent $0! But, we did drop some cash into the market…
After seeing our 2015 W-2s, I went ahead and completed the back-door funding of our Roth IRAs for 2015. So that moved $11K that we had set aside in cash into our Roth IRA accounts. While I’d love to say that I timed it perfectly and executed the trade when the market was at its low point this month, my luck just isn’t that good. But we did end up buying in at ~13% discount to where we bought in last year, so I’ll call that a win.
Anyhow, here are our numbers for January!
- Our total assets down by $19.4
- Our total liabilities went down by $2.9K
- Net worth went down by $16.5K
- Total net worth as of the end of January is $932.8K, which represents a 1.74% decrease this month.
And for the details…
- 401K accounts: $249.9 – a sizable hit here, despite 401K deposits starting back up again
- Roth IRA accounts: $159.5 – our deposit of $11K here just made up what we were down
- HSA account: $12.8
- Taxable Brokerage Accounts: $105.9 – deposits here again just made up what we were down
- Total Stock Accounts: $528.1
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: $14.1 – need to move some over to taxable
- Savings/Money Market Accounts: $12.5
- Total Cash Holdings: $26.6
Total Assets: $1,019.7
Real Estate Loans
- Primary Mortgage: $85.5
- HELOC on Investment Duplex: $0.0 (re-advanceable)
- Personal Loan – Used to Purchase $50K Duplex: $0.0
- Total Real Estate Related Loans: $85.5
- Credit Card Balance: $1.4
- Total Revolving Credit: $1.4
Total Liabilities: $86.9
Net Worth = Assets – Liabilities
Net Worth = $932.8, down 1.74% 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.
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 189.5. 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
19.44/25 = COL Early Retirement Locale / 189.5
COL Early Retirement Locale = 19.44
… which gives us San Antonio, TX or Louisville, KY!
Wow! Before calculating this, I thought there was a good chance we’d hit North America due to the low spend month, but didn’t expect for the ERLI to land us in the US quite yet. Wow! And the most impressive part is that our rank this month is officially higher than the town where my parents live. I knew their COL was low, but looks like it’s even lower than I realized! (No, Mr PoP, a low COL is not a compelling reason to move there.)
As for choosing between San Antonio and Louisville, we’re not really sure which to choose. A good friend of Mr PoP’s lived in Louisville for several years after college, but didn’t like it enough to want to stay. Similarly, my sister moved to San Antonio for a job, but also didn’t like it enough to want to stay. Neither of those are really ringing endorsements from some of the people that know us best. But we’re open to other opinions! Of Louisville and San Antonio, which would you choose and why?
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
- January 2016 – San Antonio, Texas or Louisville, KY – readers pick!
How was your balance sheet in January? Where would your savings land you today? Which ERLI would you pick – San Antonio or Louisville?