Welcome to my net worth update for July 2018!
It’s similar to making retirement contributions. Sometimes you hit some bumps in the road and can’t make your contributions for several months. Whether or not you can make up for those missed months is still in question, but at the very least you want to start contributing again.
So that’s what I’ll do.
Maybe I’ll go back and write those 5 reports… maybe not. Might be better to just move forward. In any case, January finished off with a net worth of $111,469.25, which was less than $1,000 from our all-time high from October 2015.
Did I mention that sometimes you hit a few bumps in the road?
After some setbacks where my net worth got cut in half, we’ve gotten back on track and plowed through our previous high water mark this year to where we entered the month of July at $126,206.72.
Here are the numbers for July:
Net Worth Update July 2018
Our savings went up by almost $3.5k. Although this is a nice increase, it really has more to do with timing of cash flows than adding money to our bank accounts. I don’t really pay a whole lot of attention to this number. Instead, I focus on our net liquid cash flow.
To get that, I take our net income for the month ($4,200) and then subtract our principal payments ($2,200) and retirement contributions ($900).
At the end of the month, $1,100 was actually allocated to our bank accounts. Although the balance can fluctuate wildly due to timing of payments and paychecks, the float is higher now.
The markets have been up and down for 2018, but July was an up month. Contributions made up $900 of the increase while the remaining $1,000 was from market appreciation. When you’re consistently making contributions, down months don’t really get you down.
It’s an opportunity to build up your position.
The market is very close to the same level at the end of July as it was at the end of January. During that time, our retirement accounts have gone up $6,200, which is over an 11% gain.
Real Estate Investment (-$89.60)
July was the conclusion of a house flipping fund that I participated in. This decrease represents the final distribution of my remaining committed capital. It wasn’t until this final distribution that I also received the profit from the investment. On an initial investment of $2,500, I made $392.23 in total profit, which comes to an annualized return of 7.57%. This was lower than projected but it’s still a little better than if we had used the money to pay down additional student loan debt at the highest interest rate of 6.8%.
Rental Property (No change)
I use the estimated sales price minus closing costs to determine the asset value. Appreciation has been very low on this property over the years — good thing I bought it for cash flow. The low appreciation has made me concerned that I was overestimating the value, but it finally appears that the Baltimore housing market is starting to heat up. I feel much more confident in this value based on recent sales and am now more optimistic about future growth.
Car (No change)
Thankfully, depreciation has slowed down significantly on our vehicle. Even though we added mileage in July, the Kelley Blue Book value didn’t decrease at all.
Accounts Receivable (-$1,894.81)
This Accounts Receivable is mainly used for Mrs. Budget Boy’s work-related travel expenses. She received reimbursements for recent trips without having new expenses. There is always some balance in Accounts Receivable due to deposits on our apartment.
After I stopped active trading and took the $30k out of my brokerage account, I used some of that money to pay down my mortgage on the rental property to 78% LTV and terminate PMI. Paying down your mortgage to 78% is a goal that I don’t think gets enough attention. With that goal accomplished, I am no longer allocating any additional principal to the mortgage until student and auto loans are wiped out (and even then I’ll have to consider whether that’s the best option).
Student Loans (-$1,303.44)
With no more PMI, paying down student loans is officially priority #1. The minimum payments right now total $172, but I added an additional $1,200 principal payment. My goal is for that to be the minimum going forward. Ideally, we’ll be able to pay even more than that.
We started attacking these student loans 22 months ago when they were right at $50k. We’ve now crossed the halfway point. Since we’re in a better financial position and can concentrate our money on this goal, the plan is to knock these out completely in the next 12 months.
Car Loan (-$321.44)
The car loan is our lowest interest debt so we have not paid an extra penny in principal. This has been the lowest priority debt, but now that PMI is terminated, this is definitely higher ranked than the remaining mortgage balance. The sad thing is that we still owe more than what the car is worth. And this is after 20 months from purchase.
Credit Cards Payable (+$353.61)
Our total credit card balances went up in July. To be honest, I don’t read too much into this number since similar to our bank accounts since it can be heavily influenced by timing of cash flows. What I instead focus on is tracking every penny of our expenses and comparing that to our monthly budget. We were in our total budget for July, so it was a good month.
In the month of July, our assets increased by $3,402.06 but we also decreased our liabilities by $1,816.45, a total net worth increase of $5,218.51. In terms of percent, that is a 4.13% increase in net worth.
Our net worth of $131,425.23 is at an all-time high! It feels great when every month becomes a new all-time high! Since breaking through that previous October 2015 high in February, this is our 6th consecutive month of setting a new high. Let’s keep this momentum going…