PoP Balance Sheet – May 2017

Welcome to our May 2017 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!

You may not have realized it, but we recently crossed over a milestone – five years of publishing monthly financial statements as we pursued various goals and tried to live life pretty fully along the way.  Five years isn’t really short in real-time (heck that’s a kindergartener for some of our friends!).  But in internet-years, the blog has definitely reached at least middle age, if not nearing retirement.  The very first post on our blog was our balance sheet in May 2012, and it’s fair to say we’ve shown a fair bit of progress since then.

So while it’s been quite a ride in the last 5 years, this past month was mostly boring.  We sold the Miata, which brought in about $4,000 in extra cash from an asset we had written down to zero, so that’s always nice.  But the rest was pretty boring!  (I’m still waiting for the exciting month when our 401K has at least 401K in it!)

Here are the numbers for May:

  • Our total assets up $25.8K
  • Our total liabilities went down by $0.5K 
  • Net worth went up by $26.3K 
  • Total net worth as of the end of May is $1,409.1K, which represents a 1.90% increase for the month

For the details…

dyerware.com


Assets

Brokerage Accounts

  • 401K accounts: $392.0
  • Roth IRA accounts: $214.4
  • HSA account: $20.9
  • Taxable Brokerage Accounts: $212.9
  • Total Brokerage Accounts: $840.2 

Real Estate (based on current market comparable sales)

  • Primary Residence: $269.0
  • Investment Duplex: $175.0
  • Investment Residential Land: $160.0
  • Total Real Estate: $604.0 

Cars (based on “fire sale” pricing per Mr PoP’s research)

Cash Holdings

  • Checking Accounts: $31.6 – in the midst of moving $ into our taxable account to get this lower
  • Savings/Money Market Accounts: $5.0
  • Total Cash Holdings: $36.6

Total Assets: $1,510.8

Liabilities

Real Estate Loans

  • Primary Mortgage: $76.4
  • HELOC on Investment Duplex: $0.0 (re-advanceable)
  • Personal Loan – Used to Purchase $50K Duplex: $0.0
  • Total Real Estate Related Loans: $76.4

Car Loan

  • Loan on NSX: $24.2  – the interest rate is so low on this, almost all of the $727 payment went towards principal
  • Total Car Loans: $24.2

Revolving Credit

  • Credit Card Balance: $1.1
  • Total Revolving Credit: $1.1

Total Liabilities: $101.7 

Net Worth = Assets – Liabilities

Net Worth = $1,409.1, up 1.90% from April

 

How Close Are We Getting to FIRE?

New this year is a graph that Mr PoP and I are still trying to figure out how useful it is to us.

In this one, we’re tracking month-by-month, two lines.  The blue one is an approximation of FIRE income – it is the sum of the last twelve months of net real estate income plus 4% of the most recent brokerage account balances.   The yellow one is an approximation of our FIRE spending, for which I’m using the last twelve months of what I’m thinking of as our “recurring spend”.  Bu that I mean our spending, net of all the crazy shenanigans we’ve been up to the last couple of years with remodeling and “fun car” spending.  The main reason we’re netting these out, is that we definitely won’t be pulling the plug with any big line items like this hanging over us.

Yellow line holding steady under the blue line for at least one month… =)

dyerware.com


We’re still chewing on this visualization a little bit, because while it’s nice and succinct, it still omits some important information from our portfolio and spending patterns, specifically our empty lot (worth ~$160K) that instead of generating income is currently costing us ~$1,500/year, as well as the ever decreasing lifespan of our mortgage.  We also spend ~$9400/year on the principal and interest payment of our mortgage, so paying that off (and the value of the lot would pay it off and then some!) would decrease our outflow needs significantly, and even if we pay it off according to schedule it’ll be gone in 2026.

Do you take any future changes into account in your visualizations?

 

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.

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 175.0. 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

18.45/25 = COL Early Retirement Locale / 175.0

COL Early Retirement Locale = 129.16

… which gives us the city of Brasilia, Brazil!

Given how hot it’s been here the last week, I’m pretty on board with a trip the southern hemisphere where it is currently winter.  =)  Add in a city full of neat architecture built largely in the mid-twentieth century, and I’m sure Mr PoP and I could find a way to enjoy ourselves.

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!
  • February 2016 – Lisbon, Portugal
  • March 2016 – Brno, Czech Republic
  • April 2016 – Vitoria, Brazil
  • May 2016 – Santiago, Chile
  • June 2016 – Johannesburg, South Africa
  • July 2016 – Thessaloniki, Greece
  • August 2016 – Gurgaon, India
  • September 2016 – Grand Cayman, Cayman Islands
  • October 2016 – Las Vegas, Nevada
  • November 2016 – Oakland, California
  • December 2016 – Hartford, Connecticut
  • January 2017 – Montevideo, Uruguay
  • February 2017 – Noweheresville – or maybe we can just live in the car?
  • March 2017 – Stuttgart, Germany
  • April 2017 – Bologna, Italy
  • May 2017 – Brasilia, Brazil

 

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

4 comments to PoP Balance Sheet – May 2017

  • 5 years, Congrats!!!!
    Always good seeing a positive gain on the net worth. $26.3K or 1.9% increase is especially great, do you have a monthly target? I just started tracking and don’t have a target but fell in the same % range as you did. Wondering if the 1.5%-2% is a common range or what others target for?
    fibythecommonguy recently posted..Net Worth Update #2 – May ’17My Profile

    • Thanks! In many ways the 5 years have flown by!

      I don’t think we have a % target, especially not on a monthly basis. So much depends on the market at this point. But we do have as a goal to put a minimum of $100K into various investment accounts every year that we’ve been hitting pretty solidly since we started blogging (though the first year was largely debt paydown instead of investment accounts). We only missed that $100K goal once, when we were deep into renovating our kitchen. But this goal gives is something we can control to a greater extent than the market’s performance, and gives us flexibility to have more savings some months than others.
      Mrs PoP recently posted..PoP Balance Sheet – May 2017My Profile

  • Todd

    Hi guys!
    I’ve been reading for a long time and curious about your thought process when you started your non-retirement investment/brokerage account. Did you effectively double down on Vanguard (VTSAX?) account or choose more diversification elsewhere?

    • I forget exactly why right now – but we ended up going with the ETF total US stock market, VTI, rather than the mutual fund version. Our 401Ks and Roth IRAs have a bit more diversity in them (with bonds and some international), so we just wanted to keep our taxable brokerage ridiculously simple if we could since that’s the one that requires the most active maintenance (buying shares every month).