PoP Balance Sheet – June 2015

Welcome to our June 2015 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!

Well, it officially happened. After over three years of tracking our net worth on this site and having increases every month, this month we had a net worth drop. We knew this day was bound to happen, and I had thought we might be more stressed out when it finally did. But the truth is, our first net worth drop was a “non-event” in the PoP household. And I think that’s probably the best reaction we could have had.

The markets took a little dive last month, our two biggest holdings (VTI and VTIVX) were both down about 2% for the month, which is pretty indicative of our brokerage accounts overall. And now that those accounts hold over $500K.. 2% down swings are big enough that it’s hard to make up for that in deposits! A good problem to have.
Of course, it didn’t help that it was a pretty spendy month of buying things (mostly tile) for the kitchen renovation. But even if I hadn’t ordered the tile already, our net worth still would have dropped. Just less.
So that’s life.

So for the month of June:

  • Our total assets down by $4.5… oh no, wrong way!
  • Our total liabilities went up by $1.3 – again, wrong way!
  • Net worth DROPPED! by $5.8K 
  • Total net worth as of the end of June is $909.6K, which represents a 0.63% decrease this month.

And for the details…

dyerware.com


Assets

Stock Accounts

  • 401K accounts: $252.0 – stayed flat despite what we deposited
  • Roth IRA accounts: $164.2 – dropped
  • HSA account: $11.3
  • Taxable Brokerage Accounts: $81.1
  • Total Stock Accounts: $508.6 

Real Estate (based on current market comparable sales)

  • Primary Residence $239
  • Investment Duplex: $140 – increased by $10K
  • Investment Residential Land: $80
  • Total Real Estate: $459.0 

Cars (values from Kelly Blue Book)

  • Car 2: $7.6 – decreased… yay depreciation!
  • Total Cars: $7.6

Cash Holdings

  • Checking Accounts: $10.7
  • Savings/Money Market Accounts: $15.0
  • Total Cash Holdings: $25.7

Total Assets: $1,000.9   

Liabilities

Real Estate Loans

  • Primary Mortgage: $89.3
  • HELOC on Investment Duplex: $0.0 (re-advanceable)
  • Personal Loan – Used to Purchase $50K Duplex: $0.0
  • Total Real Estate Related Loans: $89.3

Revolving Credit

  • Credit Card Balance: $2.0
  • Total Revolving Credit: $2.0 

Total Liabilities: $91.3

Net Worth = Assets – Liabilities

Net Worth = $909.6, down 0.63% from May

 

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.

dyerware.com


 

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.

dyerware.com


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 and February 2015 when we spent a bunch installing solar panels), the denominator is so much bigger. Because of that, it’s the overall trend we’re looking for.
Especially in months like this one where we made a big purchase (the tile) that we won’t be doing all the time!

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 184. 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

6.83/25 = COL Early Retirement Locale / 184

COL Early Retirement Locale = 50.24

… which brings us to Nowheresville!

Yup! Between our high spending month and the drop in our investable assets, this month there isn’t a city on the Expatistan list that would meet our ERLI needs if all of our months were like this!

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!

 

How was your balance sheet in June? Where would your savings land you today?

26 comments to PoP Balance Sheet – June 2015

  • June was rough spending-wise. Like you, lots of home renovation expenses. Hoping to be done with those by September.
    Taylor Lee @ Engineer Cents recently posted..June 2015 – Monthly Spending UpdateMy Profile

  • Awww, your first net worth drop! You’re still asset-millionaires though! :) I think my biggest one was January 2014 at $5,300. My net worth didn’t go down this month, which surprised me with how much the market affected my investments and some higher spending.

    I dropped down on the Expatisan list a bit this month – I’m in Belgrade, Serbia!
    Leigh recently posted..June 2015 net worth update (+0.3%)My Profile

    • I spent an afternoon in Belgrade in college. It was neat – except for the soldiers walking the streets with rifles and looking at us knowing we didn’t belong…

  • The markets were unusually rough for us because we have a European Market Mutual Fund, but we managed to not lose too much due to low spending. Unfortunately, the low spending will be reversed this month, but I am excited for the new home repairs that the spending will bring.

  • Ivy

    Everybody got hit in the markets – especially if properly diversified with international funds :-(.

    Our worst month spending-wise is still ahead – September is when we prepay the preschool year. 20% of our annual spending in one month!

  • Good news about the dip you are in it for the long term, so no need to worry. :) We had a plus in June even with a career bump experienced.
    Brian @DebtDiscipline recently posted..What type of Shopper are you?My Profile

    • Agreed. We are in this for the long haul, so at every dip I just remind my friend at work that we hope it happens on paycheck days so we can buy into our 401Ks on sale. =)

  • Tough go this month, and by the looks of July, you’ll be hard pressed to not make it two-in-a-row (Thanks, Greece). All said, though, glad you had no reaction to the drop; it really makes no difference. If it weren’t for the diligent tracking of net worth, you would have been none the wiser.

    Isn’t it reasonable to adjust the value of your primary residence if you’re doing big repairs/upgrades? I do this. If I spend $1,000 on finishings, I look at an online calculator for return on various improvements, and I’ll increase my home value by, say, $300. It’s small, but there should be some ROI.

    Eric
    Retire29 recently posted..Question to Stay-At-Home-Parents: Are Two Incomes Really Better Than One?My Profile

    • Grexit? I’m very curious to see what’s going to happen there.

      As for adjusting the value of the house, we will when we’re all done with the project (like we did after the solar was installed), but until then, the construction zone that is our kitchen is probably making our house worth even less until it’s done. Ideally I want to move our HELOC from our duplex to our own house, but can’t right now because I don’t want an appraiser out with the house in its current state.

  • We had a rough June, too. I think anyone in the investor class took a beating…hopefully everyone was able to buy on some of the dips.
    Done by Forty recently posted..Football is ComingMy Profile

    • That was the biggest disappointment, I think – that because of our high spending, we only bought in the usual amount on our 401K and didn’t have any extra to buy in. Ah well.

  • Guess you guys better keep your dayjobs, at least until the home renovation spending is over. We’re planning to spend more than we earn all year, so I would be surprised by increases in net worth for us.
    nicoleandmaggie recently posted..What is your favorite candy?My Profile

  • Well, it still seems like the overall picture is good, but I know how depressing it is to take steps backward. It feels like we do that every couple of months.

    I guess there isn’t much to say except keep pluggin’ away.
    Abigail @ipickuppennies recently posted..Things a specialist shouldn’t do: laughMy Profile

  • I’m having the same thing happen to me this month, this whole Greece and China thing is probably going to put the market on a wild ride. Personally I’m pretty happy that the market is going down, save a up a few more bucks and plant some more pennies!
    Duncan’s Dividends recently posted..Bad days and the little thingsMy Profile

    • Yeah, the market’s been pretty crazy for July already and we’re just a week in! Who knows what’ll happen in the remaining few weeks?

  • This blog is awesome! I’m embarrassed that I’m just now finding it!
    Will @ Phroogal recently posted..Want to Become a Single-Car Household?My Profile

  • June was a down month for me, although I am usually able to generate enough cash flow to stay afloat. Hopefully it pops again, which it appears like it may be.
    No Nonsense Landlord recently posted..June – July 2015 Rental Cash FlowMy Profile

    • Was it vacancies or maintenance/other expenses that did you in last month? We tend to have rental turnover in the summer and sometimes have more vacancies then, but so far it looks like we’re good on that this summer.

  • Sometimes a drop in the market, helps you buy more shares, and on the upside you will get a bigger increase. That’s funny you will live in nowhere city? Is that near the ocean? Would be interesting to know your dividends on the 500K in investment accounts.
    EL @ Moneywatch101 recently posted..What is SavingsMy Profile

    • Yeah, I would have been more excited about the market drop if it hadn’t come in a month where we spent pretty much all of our take-home pay. We bought in on the dip with our 401K purchases, but didn’t have any extra to buy into our taxable. #firstworldproblem

      We don’t really pay a whole lot of attention to dividends since they’re all set to reinvest and most of that $500K is in tax-preferred vehicles like IRA/HSA/401K so we don’t have to worry about it. The taxable brokerage account threw off less than $1K in dividends in 2014 (I’m thinking it was ~$8XX, but could be wrong), but I only know that much because we had to pay taxes on them even though they were reinvested and that was a first for us since it was our first year with a sizable taxable brokerage account. =P