Net Worth Update – February 2016

While cash flow is more important when it comes to financial independence, it’s still good to look at the balance sheet too, which is why I provide these net worth updates.  Since more and more of my net worth is tied to the markets, there’s a larger correlation between my net worth and the markets but in the long run as I continue to save and invest the net worth trend should be higher even though short term fluctuations can vary wildly.  As a dividend growth investor I’m not overly concerned with the short-term gyrations as long as the dividend stream remains in tact, but the markets’ effect is noticeable.

January was brutal for the markets with the S&P 500 declining 5.1%.  The blood-letting continued during the first half of February declining another 6.7% through the first 11 days.  However, things started to reverse to close out February and the S&P 500 ended with just 0.4% decline for the month.  The bulk of my net worth is tied to the performance of the markets so as they go so goes my net worth.

Although with a long term investment horizon the changes are just noise over the short term and are typically best to be ignored.  Of course receiving over $300 in dividends and a whopping 6 dividend increases sure helps to ease the sting of market volatility.  Dividends are great because they are always a positive portion of return.

For the month our net worth increased $809.77.
Current Assets: $581,416.23
Current Liquid Assets: $186,777.73
Current Debts: -$186,777.73
Net Worth: $396,384.93

February was solid for our net worth considering that our income is lower than normal and expenses are higher than normal.  So we don’t get the same kind of boost that we used to get from an extremely high savings rate.  For February our net worth ticked higher ever so slightly, but a win is a win.  It worked out to a $809.77 increase for the month.

I’m pretty pleased with February’s results although January put us in a big hole for our net worth.  Year to date our net worth has declined $16,812.11.  For the month it worked out to a 0.20% gain compared to January; however, we’re still down 4.07% year to date.

We’re still in cash conservation mode for the time being with eventually a swap to aggressive debt reduction and then finally move back to regular investing.  I can’t wait to be on that last step!  Since I work in the oil field and my wife is planning on being a stay at home mom starting in July, cash is our friend.  If there’s more clarity/stability for my job then we’ll be able to take a big chunk of our cash to reduce some of our outstanding debts and really push us forward on the debt reduction plan.

At this time I don’t see the point in paying extra on the mortgage at this time given our relatively low interest rate as well as the tax break on mortgage payments and think we’ll come out much further ahead investing the extra cash flow.  So the liabilities side of the net worth equation will be slow moving.  However, once the FI portfolio is able to get to a self-sustaining level of dividends then I’ll plan to aggressively pay down the mortgage.

As of the end of Febuary we have 23.1% equity in our house.  According to Zillow our house has increased almost $10k in value from our purchase price although I just use our purchase price in my net worth calculations.  Based on Zillow’s estimate the equity in our house is 26.4% thanks to the appreciation.

The following chart shows my assets and liabilities, as well as my net worth, since January 2012.  While I have accurate records for my net worth dating back to July 2010, I didn’t keep track of my assets and liabilities on a monthly basis until the start of 2012.

Truly passive income, dividends and interest, totaled to $315.68 during February which covered 12.0% of my monthly expenses.  Including the income earned from blogging/writing adds another $110.70 to the total bringing my total non-day job income to $426.38.  Non-day job income covered 16.2% of February’s expenses.  Compared to February 2015 non-day job income had excellent growth coming in at a 18.5% improvement.  Although dividends did actually show a decline but writing income more than made up for it.

For each month I calculate the ending liquid assets balance, i.e. cash and liquid investments only but excluding retirement accounts, and divide that by the current month’s expenses.  Based on my expenses from February, my liquid savings would last for 5.92 years.  That was a 0.31 year improvement from January’s level although that was mainly due to a decrease in expenses.

I’ve updated my Progress page to reflect February’s changes.

Make sure you sign up to receive new posts to your email so you don’t miss anything.  And be sure to follow me on Twitter@JC_PIP to get up to the minute news of new purchases for my portfolio.

How did your net worth fare in February?  Were the markets still a drag on your net worth for the year?

Image courtesy of holohololand on

While cash flow is more import..." target="_blank">Linkedin
  • Pinterest