Net Worth Update: Up 0.35%

Mo NW Update - Oct 2018October Net Worth: Δ 0.35% m/m
YTD Net Worth: Δ 88.2%

My net worth results are in and they are AT BEST …meh!  This update was painful to watch as I approached my capture date (11th of each month) as the numbers seemed to go down significantly every day.  More detail on that will be explained later.  Further confounding this was my inability to control my personal spending.  I love to buy books.  Tropical Storm wasn’t helpful but I spent more than I should have on recreational items and that made my debt repayment lower than projected.

For this month let’s start with the markets and its effect on my assets.  A large portion of my asset base is tied up in two line items: my 401k and my primary residence.  I do not change the value on my home for these updates but my 401k changes monthly.

Have you seen this chart…

S&P 500 YTD Performance Snapshot (9/1-10/15)

Part of my Net Worth capture period overlays this period and my 401k took a hit!  Market corrections like these are historically normal and I am not complaining.  I am simply pointing out the balance between a short-term view (monthly) versus a long-term perspective (YTD).  It’s easy to get too excited or too depressed about a monthly number.  However, its important to step back and look at the bigger picture.  My Net Worth is up 87% YTD and if I can clean up some spending habits, I can see bigger gains even in market corrections.  This is my first update with a market correction but it will not be my last.  I will continue to push the plan and I will surely hit my goal!

LIABILITIES: Down 0.03% m/m
Credit Cards: This is where the lack of budget discipline most affects me.  My other debts such as student loans are on auto pilot to pay a little above minimum until I get this last card paid off.  This month the balance is just about even from last month as I had to delay the “extra” payment to pay for tree damage from the storm ($1,900).  Next month’s debt payment will be a little light but much higher than this month’s.

Loans:  Nothing new here.  As mentioned earlier, these are on autopilot.

  • Student loan (3% APR, ~$68,000)
  • Car loan (0% APR, $17,622)
  • Mortgage on primary residence (4.625% APR and no PMI.)

ASSETS: Up 0.02%
Retirement Accts.: My 401k took a 5% hit this month despite me contributing 10% of my BT salary.  Short term this hinders the growth projections.  Long term I am buying shares at a lower cost basis.  My Roth IRA is small (<$1,200) and slowly climbing.

Other investments: I am now starting to receive my dividends from my Robinhood account.  Of course I reinvest them but it would be worthwhile to post the strategy and progress of this asset separately.  The dividend payments are an integral part of my early retirement strategy as I want to have $2,000/month in dividends as cash flow in retirement.

I look forward to updating you on my progress, how I did it and what I am doing to celebrate the achievements along the way.

Cheers to happiness!

Before I get into some individual results it is a good time to pause and drop some basic facts about my financial assets and approach.  Here are a few notes:

  • My approach is a hybrid of best practices and methods.  It is NOT for everyone and is NOT the “most efficient” or “lowest cost” way.  I tried all of them individually and they did not work for me.  My impatience, family goals and absolute money ADHD just got in the way.  This plan and financial structure seems to keep me driving down debt, allows for family spending and still meets my ultimate goal.  Maybe as I get some traction I can learn to be a bit more patient.
  • I keep assets like my house and car on my asset list but at a very conservative amount.  The home has a positive net worth impact but the car will show a negative in the short-term.
  • I use some of my asset allocation and budget specifically to help my tax situation.  I allocate 10% to my 401k (4% $ match) and allocate to a pre-tax HSA.  I won’t share the extreme details but I get CRUSHED in federal taxes.
  • There are lump sum payments that I reasonably expect to receive throughout the year.  So if you notice an unusual jump specifically in assets, a bonus was awarded or my annual direct 401k contribution was paid (2% of gross salary).
  • I am married and my wife has assets as well but none of Mrs. Riding to 7’s numbers are included.
  • I also have a stock trading account at Robinhood and a peer-to-peer lending account at Prosper.  This is how I cure my financial “itch” to do something.  I take super small amounts that I receive (eg. I find a $20 bill) and split it: half to debt and half to one of these accounts.  I can buy shares at Robinhood for free and the returns at Prosper so far have been decent, ~7% after fees.

Disclaimer: Riding to & Figures is not an investment advisory website nor is this a place for the giving or receiving of financial advice, advice concerning investment decisions or tax or legal advice. No content on the site constitutes – or should be understood as constituting – a recommendation to enter in any securities transactions or to engage in any of the investment or financial strategies presented in our site content.

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