Monthly Net Worth Check Point: September (down 6.1%)
To track how we are doing financially, I monitor our net worth and update it on a monthly basis. I think it is a great way to keep track of how all your planning and hard work is paying off. Check out this page if you want to see the spreadsheet I use to track it and a video tutorial on how to create and update it . If you prefer, I also have a post on some online tools for tracking your net worth .
Yikes! A 13.4% drop in our assets!
The hard work does not seem to be paying off (at least not this month!) It was actually a crazy month for us finance-wise. For example, our total assets dropped 13.4% driven by a whopping 65.6% drop in our liquid assets. Of course, since you are all faithful readers, I’m sure you remember that we paid off our final student loan this month and that accounts for the vast majority of the drop.
On top of that, however, it seems to have been a poor month for my mutual funds and company stock. Actually, the value of my company stock holdings dropped more than 7% and the value of my stock options fell off a cliff, dropping almost 50%! My other stock market exposure (in 401ks and mutual funds) also accounted for some of the asset drop, but they were down less than 2% each.
Woohoo! Our liabilities decreased by 17.5%.
Again, the weirdness of the month created quite a large drop in total liabilities. Ahhh, it is so nice to not have to obsess about paying off the student loan anymore. I haven’t really started obsessing about anything in its place yet (like paying off the mortgage, for instance). I’m still waiting for our liquid assets to recover a bit over the next months due to not putting so much cash towards that loan each month. After a trip to IKEA , however, I’m not sure how fast those numbers will rebound.
Our net worth decreased approximately 6.1% in August.
Putting those two large numbers together yields a slightly smaller, but still pretty large, drop in our net worth. Obviously the stock market wasn’t too kind to us this month. Taking into account the fact that a large amount of our cash buffer was used to pay off the student loan, you can see that the stock market exposure will continue to have a large impact on our net worth in the months to come.
This month, however, was much more about getting rid of our last student loan that anything else. I am very happy with our decision to use some of our cash to eliminate it. We are now down to only having the mortgage (and the other contractual obligation to pay back if my wife stops working in the next 15 months). From a net worth point of view, it will probably be bumpy for the foreseeable future as it will depend in large part on stock market performance.
As we go forward, we won’t be looking to replenish our cash reserves to where they were previously. We will keep our emergency fund at its current level of 3 or so months of expenses. We have started some short term savings for vacation, gifts, large home purchases, and yearly expenses. Also, I finally decided on an asset allocation for my rollover IRA and our taxable mutual funds. We will start putting more money into those mutual funds soon and probably increase our kids’ college savings accounts as well.
So, I sum up the month thusly: 6.1% drop: bad . No more student loans: great!
Monthly Net Worth Check Point: August (up 3.7%)
To track how we are doing financially, I monitor our net worth and update it on a monthly basis. I think it is a great way to keep track of how all your planning and hard work is paying off.
I usually calculate our net worth around the 5th of each month, after our mortgage payment is deducted from our checking account. I feel that doing it the same time each month gives me an accurate picture of what happened the previous month. So, after I see that the mortgage payment is debited, I sit down in front of the computer and go through all of our accounts and update my little spreadsheet.
The overall number is important but I also like to create a number of groupings of various accounts and liabilities to provide a finer-grained view of exactly what is happening with all the components of our net worth. If anyone is interested, I can create a post detailing exactly how I set up the spreadsheet to collect this useful information and how I update it each month. You can even have it create a simple little graph for all you visual people out there. Click here to continue reading…
Checkpoint: My Current Financial Situation
Of course I had to do this – to lay out my current financial situation in general terms. Give me a break, this is a personal finance blog, right? And it is my blog, right? So, I get to lay out where I currently stand. 
I wanted to do this early on in the life of BFN so that I have something to refer back to as times goes by. So here we go… Click here to continue reading…
Subscribe to Borrow From None
Affiliates
-
Social Networking
Links of Interest
What is RSS?