Good morning, money lovers!
Welcome to net worth report #14!
Every month, my process is the same… I log into all our investment and bank accounts (both mine and wife’s) and tally up the totals for all the assets we own, as well as credit card balances and any liabilities. The total at the end is our current “net worth” — It’s one of the most important numbers to track regularly on the path to financial independence. 🔥
The reason I share all this stuff publicly is to a) give you a transparent view of how investments grow over time in real life and b) encourage you to stay on top of tracking your own stuff! The specific numbers in any single report don’t matter too much (sometimes they’re up, sometimes down), it’s more about the continual monitoring of your financial health and making sure it trends upwards over time!
If any of you have questions or need help figuring out how to calculate your net worth — check out this mega post — or hit reply to this email with any questions. The more we help each other stay on track, the richer we grow together!
Without further adieu, here’s how we kicked ass last month…
Nov 1, 2021 Net Worth: $748,111
Woohoo! Look at all that GREEN! Almost $37k of growth from rental income, dividends, stock growth and personal income. We are firing on all cylinders!
Unexpected Income & Stand Out Expenses
Here are some irregular things that happened in October:
- Our real estate syndication paid a quarterly dividend ($875) as well as an early capital return ($6,000)… More details on this below in the asset breakdown.
- We received another stimulus check ($600!) from the State of California. Honestly, I had no idea this was even coming and almost threw the letter away without opening it! *gasp!* Any of y’all still getting stimulus checks!?
- We had a “perfect” month at the rental property with zero repairs or maintenance 🏡🤑
- Wife and I spent about ~$200 on new beds/cribs for our spare room to pass yet another home inspection as part of the LA foster/adopt process (I’ll give you all a longer update on all that stuff another time. In short: No, we haven’t been matched with kids yet.)
- Got wifey’s bike professionally serviced for $110… Can’t put a price on safety! 🤓
- We invested into a private start-up company (more details here). The reason I’m not sharing/tracking this one publicly is because a) it’s a private partnership and b) it could literally be worth nothing and there’s no good way to accurately value equity in start-ups.
- Lastly (and sadly), we made zero dollars from side hustles last month. This is the first month in a while that I haven’t spotted a flip deal or pulled some extra income from work. Oh well, I’m gonna just have to bust my ass twice as hard in November! :)
Detailed Account Breakdown
Cash Accounts: $18,455 (+$3,730): This is the total cash my wife and I have in our checking accounts. It serves as a small emergency fund and float for monthly cash flow. Looking into November and December we typically have higher expenses due to travel and gifts so it’s ok that this is higher than we need. If we can keep a high balance through the end of the year, we might be able to fund our Roths from this account come Jan 1st!
Rental Property + Reserve Account: $241,022 (+$2,188): This is the total property value and reserve account *without* accounting for mortgage. (The mortgage is tracked as a separate liability below.)
Here is how the rental made money last month:
$1,975 — Incoming rent
(-$140) — Property mgmt fees
(-$661) — Mortgage principal + interest
$1,174 — Total rental gain this month
We also received a +$200 refund for overpayment on an A/C replacement in Septmeber. And an additional $814 from an insurance claim we’re working on which will wash out in November.
Real Estate Syndication: $50,000: It’s been ~7 months since owning this asset and it’s already paid out $1,750 in dividends (equal to a ~7% annual preferred return). This should continue in the coming year as rental rates remain extremely strong. Reports say the complex is sitting at 99% occupancy, with a waiting list for new available units. Woot woot!
Because the project is overperforming so much, in addition to rental dividends, the management company issued a return of 12% of investors’ original capital. Since I invested $50k, this meant a $6k return to me — with no dilution of share ownership. It’s pretty rare that this happens so quickly after purchasing a new investment, so we’re thrilled.
You might be wandering, “If you invested $50k, and they returned $6k, shouldn’t you track this asset now with a value of $44k going forward?”
Technically, the answer is Yes, because the payment to me was a “return of capital.” But, since the apartment complex didn’t drop in value at all (in fact, it’s only risen in value), my equity position hasn’t really gone down. If the entire asset were to be sold today, I would receive our $50k back, as well as some growth on top probably. So I’ll keep this placeholder value at $50k for now until we get any other exact figures from the partnership.
IRA – Rollover: $191,027 (+$12,038): Hot dang! This was a ~6.7% return for last month, which made up for all the September losses, and then some more goodness on top!
IRA – Roths: $101,399 (+$6,262): We crossed the $100k mark for our favorite tax-free accounts! Can’t wait to fund these again in January. :)
Joint Brokerage Account: $261,823 (+$11,706): The increase this past month was all organic growth. This account has less volatility than the IRAs due to some bond positions, but it’s still mostly invested in VTI.
HSA: $4,814 (+$304): No contributions or withdrawals for this account last month, just some sweet sweet growth from the market climbing.
Breakdown of Liabilities
Rental Property Mortgage: -$119,828 (+$249): Sweet! This month we broke under the $120k debt barrier. Only 23.5 more years to go and this mortgage will be paid off! Haha. Just kidding, we’ll probably refi or pay the full debt off before then.
Credit Card Balances: -$601 (+$506): This is our current balance, not a rolling balance carried from month to month. We pay our credit cards off each month (auto-pay!) before any interest kicks in.
My wife and I have no other debts at this time. 😎
How’d you all do for October? Anyone cross any big milestones last month!?!?!