Welcome to our July 2013 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!
Okay, so fair warning that this month’s balance sheet update looks pretty ridiculous. Assets dropping but net worth growing like mad (contrary to Mr PoP’s not-so-secret desire for our net worth to drop). There are a few things going on…
First off, we paid off that $50K loan, which dropped our liabilities by a ton, but also our assets by the same amount, so while it was net worth neutral, it definitely increased the Asset/Liability ratio and changed the composition of our net worth.
Next, the market went gangbusters. Whatever happened to “sell in May and go away”? Our stock accounts showed a good bit of growth, but when it goes up that quickly I tend not to trust it and keep waiting for it to pull back.
Lastly, we finally updated the market value of our house. I’d been postponing it for a few months waiting for “one more sale” then “one more sale” because the numbers just felt so high that I kept waiting for a sale to bring the average down. It didn’t really happen. So we booked a $29K increase in the market value of our house this month since the last time we updated it.
We’re going for accuracy in our reporting here (and to ourselves), so the update was due. But in reality, it’s worth even less than a “paper gain”. At this point in our lives we really have no intention of ever selling this house, and don’t consider it to be included in our “edible equity”, so it’s kindof moot what it’s worth on an open market. (And our homestead exemption means it’s not going to affect our property taxes either.) Nonetheless, expect a post soon on how we keep track of market comps and our home value more accurately than Zillow.
So for the month of July:
- Our total assets went down (oops! wrong direction – but only b/c we used all that cash to pay off the loan) by ~$4.0K
- Our total liabilities went down by ~$49.8K.
- Net worth rose by about $45.8K this month.
- Total net worth as of the end of July is $564.1K, which represents an 8.8% increase this month.
And for the details…
Why do we look at our assets and liabilities split up this way? For us, it’s an easy way to look across all the different categories of assets and see which ones we have equity in, and how much equity. If the Assets bar is taller than the Liabilities bar, that’s equity in that asset class.
- 401K accounts: $128.2
- Roth IRA accounts: $116.4
- Non-Retirement Stock Accounts: $0.6
- Total Stock Accounts: $245.2
Real Estate (based on current market comparable sales)
- Primary Residence $215 (finally updated this value…)
- Investment Duplex: $97
- Investment Residential Land: $80
- Total Real Estate: $392.0
Cars (values from Kelly Blue Book)
- Car 1: $8.2
- Car 2: $11.3
- Total Cars: $19.5
- Checking Accounts: $10.0
- Savings/Money Market Accounts: $1.5
- Total Cash Holdings: $11.5
Total Assets: $668.2
Real Estate Loans
- Primary Mortgage: $101.5
- HELOC on Investment Duplex: $0.0
- Personal Loan – Used to Purchase $50K Duplex: $0.0 Paid off! Woohoo!
- Total Real Estate Related Loans: $101.5
- Credit Card Balance: $2.6
- Total Revolving Credit: $2.6 – I know, we let this get a little big this month, but it’ll still be paid off before any interest accrues
Total Liabilities: $104.1
Net Worth = Assets – Liabilities
Net Worth = $564.1, up 8.8% from June
Anyone else see some some asset growth or make some progress in killing off liabilities this month?