Net Worth Update: May 2016

Happy May!  I hope April treated you well and tax day didn’t crush you like it crushed me!  Even though taxes came due, our net worth still went up $6,379.32!! I’ll take a $6K jump every month…

April Financial Breakdown

House: $383,728 – $321,484 $62,244.  I’m just using zillow.com as the baseline here.  They give their estimate for how much they think you’re home is worth.  I’m not saying it’s accurate but it’s a decent way to keep track without bringing an appraiser in every month to help you track your net worth. This month it said the value of my home went up $4,197.00.

My 401k: $18,689.37.  Right now 5% of my salary is going into my 401k via my employer. Nothing crazy here.  According to my account at personal capital, my portfolio only increased 1.79% over the course of April.

Pension Fund: $8,215.40.  I’m one of the few remaining workers in America that contribute to an employee pension fund and if I decide to stay with my employer and retire 24 years from now I will receive a pension.  I DO NOT PLAN ON DOING THIS!  I’m all about early retirement!!!

My Old 401k: $8,497.11.  This 401k is from an old employer.  I need to roll this over into a Roth IRA.  Hopefully I get to this very soon…


Wifey 401k: $4,682.47. Same situation as my 401k.  5% match from her employer.

Wifey Old 401k: $3,300. Also in the same situation as my old 401k.  We also need to roll this over to a Roth IRA very soon.

Car: $13,174.00.  Well, I don’t know what to say on this one.  According to kbb.com, the value of my car actually increased by $174 over the past month.  I won’t expect an increase on a vehicle ever again but it’s a nice surprise.

Jeep: $10,763.00.

Emergency Fund: $8,016.98.  The emergency fund took a hit this past month due to taxes.  I owed over $3k and was able to cash flow over $2k of it, but I had to dip into the emergency fund for just over $1,000 of it.

TOTAL NET WORTH: $137,582.33 (+$6,379.32)

So 2nd post of my net worth in the books.  I’m not expecting to see gains of over $6,000 for a while, especially since over $4,000 of it was due to gains on the value of my home.

Keep in mind, the first few years of beginning to build your net worth are slow but once you get some momentum it’ll shoot up faster than you can imagine!

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Net Worth Update: $131,203.01

Welcome to April everybody!  I hope March treated you well and you were able to take advantage of a market that wasn’t losing money.  The S&P 500 increased 3.98% over the last 30 days.  It wasn’t a great month for investments but at least it wasn’t like January!

Since this is my first post on my net worth updates, I’m just going to list everything out and I won’t really have any detailed explanations about what’s going on like I will in future net worth posts.  You can also see in the “My Net Worth” excel pic that there is nothing there for “last month.”  That’s because this is the first month I’ve started using it.

I’m currently not investing in any 401k’s or other investments.  I do have balances in 401k’s but the only changes in those investments are from my employers contributions and the ups and downs of the market.  Right now I’m in Step 3 and I’m just building up an emergency fund of 6 months worth of expenses.

So, here we go…

April Financial Breakdown

House: $379,531 – $322,085 $57,446.  I’m just using zillow.com as the baseline here.  They give their estimate for how much they think you’re home is worth.  I’m not saying it’s accurate but it’s a decent way to keep track without bringing an appraiser in every month to help you track your net worth.

My 401k: $17,660.16.  Right now 5% of my salary is going into my 401k via my employer.

Pension Fund: $7,975.  I’m one of the few remaining workers in America that contribute to a pension fund and if I decide to stay with my employer and retire 24 years from now I will receive a pension.  I DO NOT PLAN ON DOING THIS!  I’m all about early retirement!!!

My Old 401k: $7,991.85.  This 401k is from an old employer.  I need to roll this over into a Roth IRA.  Hopefully I get to this very soon…


Wifey 401k: $3,779. Same situation as my 401k.  5% match from her employer.

Wifey Old 401k: $3,300. Also in the same situation as my old 401k.  We also need to roll this over to a Roth IRA very soon.

Car: $13,000.  I know, I know.  Many people don’t like counting the value of vehicles towards their net worth for whatever reason they choose, but I do because I could easily sell my car and have $13,000 in cash if I needed it.

Jeep: $11,000.  Same here…

Emergency Fund: $9,051.  I’m sad to say that I do not have my 6 month emergency fund saved up yet.  But, we’re working on it and will hopefully be where we need to be in the next 6 months or so.  GOAL? $20,000 right now.

TOTAL NET WORTH: $131,203.01

So there it is.  My first post on my net worth.  It’s obviously not where I want it to be right now but when I’m done building a solid foundation I will be able to invest a lot of money and build my net worth much faster than I can right now.

The first few years of beginning to build your net worth are slow but once you get some momentum it’ll shoot up faster than you can imagine!

**If you like talking about Money, Paying Off Debt, Building Your Net Worth and Retiring Early…This is the place for you!  Subscribe to receive emails of new blog posts, news, tips, and exclusive content!!!

 

 

How Do I Know My Net Worth?

To begin with, if you want to improve any situation in your life you need to know where you stand today.  This is the case with your finances and it all begins with knowing your net worth!

What Is My Net Worth?

I asked myself this question 4 years ago and I cringed when I saw that I was looking at a -$58,327 net worth.  That’s right, I had a negative net worth and was almost $60K in the hole!  How is that possible?  I thought that my family was doing fairly well.  I had just left the military not too long ago, had a household income of roughly $122K, and just bought a house for $340,000.  This all sounds great until you really start looking at the numbers behind the scene.  I was living a typical American lifestyle and didn’t think anything was wrong because this is how everyone lives, right?  I began to take a deeper look into my finances and wrote a detailed list of everything.  This included the money that I had in bank accounts (sadly, this was not a lot), any kind of property that I owned, and any outstanding loans that were in my name.  So let’s take a deeper look…

  • House: Purchased for $340,000 but we owed $352,000 because we used our VA loan and put 0% down.  Sadly, we even rolled the closing costs into the loan, so now we are upside down…this means that you owe more money than the house is worth.
  • Vehicle 1: We are $5,000 upside down on this vehicle because we took out a 6 year loan to keep the monthly payments down and the value of the vehicle depreciated faster than our payments paid down the loan. Obviously, we didn’t put any money down when we purchased this vehicle.  We owed $27,000.
  • Vehicle 2: We are $7,000 upside down due to the same reason as vehicle 1 but we also rolled the negative equity from our trade-in into the loan on this vehicle.  Typical thing for people to do in todays car market. We owed $32,000.
  • Credit Card 1: This card had a $24,000 credit limit and we wound up having $22K in debt on this card.
  • Credit Card 2: Had a $14,000 limit and owed $12,000 on this card.

Grand Total Debt: roughly $450,000    Total Net Worth: roughly -$58,000

Now that I look back and see these numbers on paper, it is hard to understand what I was doing!  These financial numbers happen when you simply don’t pay attention to where your money is going.  I never thought I would have $34,000 in credit card debt but the debt just kept piling up every day, a little at a time.  We moved 2 times in 1 year.  Once from Alaska to the east coast and, the other time, only 30 miles down the road.  But, we put the cost of those moves on our credit car.  Going out to eat?  Put it on the credit card.  Putting gas in the car?  Put it on the credit card.  Special occasion?  Put it on the credit card.  Next thing we know, we look up and have $34,000 in credit card debt.  This all stopped once I had the information on paper and it was staring me in the face, which is why it is SO IMPORTANT for you to write everything down and to calculate your net worth.  Once you have that number, you can figure out what you need to do to stop the bleeding and improve your financial situation.

So How Do I Calculate My Net Worth?

Calculating your net worth is very easy.  Once you have everything down on paper, all you have to do it this simple math formula:

Assets-Liabilities=Net Worth

NetWorthFormula

In simpler terms, it is: What you own-What you owe=Net Worth.

Now, go figure out your net worth.  It’s an important step in beginning your journey to financial independance and Freedom!

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