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Welcome to my net worth update for July 2018!

This update feels a little strange writing because there’s a big gap between July and my last update, which was for January 2018. I dropped the ball (intentionally) while studying for the CFA Exam.

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

Net Worth Update July 2018

Savings (+$3,463.44)

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.

Retirement (+$1,923.03)

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.

Mortgage (-$545.18)

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.

Bottom Line

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.

net worth update jul 2018

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…

6 thoughts on “Net Worth Update July 2018: $131,425.23 (+$5,200)

  1. Sometimes the month is made simply by managing down debt and other liabilities. No shame in that.

    Overall, it was still a great month for you. Keep it up!

  2. As you say your heading in the right direction. My only suggestion is that you do depreciate the value of your car on a monthly basis to add to the accuracy of the figures. Hit those debts hard (low interest or not). Have fun.

    1. I actually do depreciate our vehicle on a monthly basis. This was just a weird scenario where even with the additional mileage for the month, the Kelley Blue Book value went UP (by like $20). Obviously, that doesn’t make any sense, so I kept the value the same for this month. Thanks for reading!

  3. I agree with Kenin – it looks like you’re making excellent progress.

    One thought: I often miss things, but have you considered the impact of tax deductability on your debt payoff strategy? It looks like you’re focusing on your student loans and your student loan interest might be deductible, whereas the car loan might not.

    Also, since you’re blogging (and presumably making money) are you taking the relevant deductions you’re entitled to?

    1. Hi James, you bring up a very good point.

      I have considered the impact of taxes — the bulk of the student loans are at 6.8% versus 4% for the vehicle, so after adjusting for tax deductions, the highest interest student loans are the clear priority. BUT we are finally about to eliminate the 30K that was at 6.8% and start getting to the lower interest tiers, so the tax implications are going to become a bigger consideration.

      This may sound crazy but I actually haven’t monetized the blog yet and haven’t taken any deductions. That’s definitely a goal for the coming year!

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