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!
A nice month on the balance sheet in May with a few different contributing factors. Modest increases with the stock market, booking an overdue increase on the value of our duplex now that the roof is redone, and increases in our cash balances due to getting back our FPL solar rebate to the tune of ~$15K all contributed to a solid boost this month.
It’s funny, looking back at income statements from years past, May has been a month where the last three years we’ve received a sizable sum of money coming to us. In 2013 it was almost $7K from a car accident settlement. 2014 was $9K from selling the Jeep, and this year it was $15K from our FPL solar rebate. We’ll just have to wait and see if the trend holds in 2016! Somehow I doubt it will. =)
With property values, the duplex is pretty conservatively estimated, and the lot is potentially very conservatively estimated at the moment. There was recently a land sale in the same neighborhood as our lot that went for over $300K. That lot was bigger than ours, probably subdividable into two SFR parcels (ours is a SFR parcel, not subdividable), so we’ll be keeping an eye on that building on that lot and watching out for other sales in the neighborhood. Though the plan right now is probably to hold onto that for another 4 years or so at least.
We also adjusted the value of our car down, as we do every six months (we go by the schedule of when we renew our car insurance) with the help of Kelly Blue Book. It’s almost silly to have it count toward anything anymore, but I oddly like the reminder that the car costs us more than just its running, maintenance, and insurance costs.
Our mortgage also changed in the maximal digit, decreasing from 9X,XXX to 8X,XXX. Though it wasn’t quite as fun as when it dropped from six digits to five, it’ll be a while before we go from five digits to four, so we’ll have to enjoy these mini milestones in the meantime.
The biggest item of note (I realize I’ve totally buired the lede here), is that this is the first month that our total assets are officially worth over $1 million. Granted, we’ve still got $90K worth of liabilities against those assets, so no million dollar club for us yet, but it was the first time that I’ve had to put a comma in any number on our balance sheet (since I list values in K to start with, making the first comma implied) and that felt strange. Good strange, I guess. But strange.
So for the month of May:
- Our total assets went up by $24.8
- Our total liabilities went down by $3.4
- Net worth rose by $28.2K
- Total net worth as of the end of May is $915.4K, which represents a 3.18% increase this month.
And for the details…
- 401K accounts: $252.0
- Roth IRA accounts: $167.4
- HSA account: $11.1
- Taxable Brokerage Accounts: $80.9
- Total Stock Accounts: $511.4
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
- Checking Accounts: $12.4 – need to move $2K to our taxable brokerage. Yay!
- Savings/Money Market Accounts: $15.0
- Total Cash Holdings: $27.4
Total Assets: $1,005.4
Real Estate Loans
- Primary Mortgage: $89.9
- HELOC on Investment Duplex: $0.0 (re-advanceable)
- Personal Loan – Used to Purchase $50K Duplex: $0.0
- Total Real Estate Related Loans: $89.9
- Credit Card Balance: $0.1
- Total Revolving Credit: $0.1
Total Liabilities: $90.0
Net Worth = Assets – Liabilities
Net Worth = $915.4, up 3.18% from April
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 197.5. 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
14.69/25 = COL Early Retirement Locale / 197.5
COL Early Retirement Locale = 116.05
… which brings us to Niteroi, Brazil!
And we’re back in the Americas! Niteroi (The Smile City!) is across the bay from Rio de Janeiro, and to be honest, a medium sized city like Niteroi is much more our speed than a giant metropolis like Rio.
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
How was your balance sheet in May? Where would your savings land you today?