A nice change from last month’s $3k decrease :) And almost all the increases come strictly from the stock market going up up up… But always better than down down down!
(Unless you’re on a buying binge – in which case you celebrate!)
You hardcore readers might also notice one of my old categories is gone now too – that of the “gold and silver” variety. At first it made sense to include it as I had planned on picking up more and more silver and gold rounds over time to diversify more into the real “physical world” vs. electronic stocks and all that (if an apocalypse hits, what would you rather have – gold bars or stocks that were wiped out?) but it seems my interests are getting deeper and deeper into “coin collecting” now over “bullion hoarding.” So it doesn’t seem right to keep these in there unless I wanted to start tracking my basketball card collection and stamps too ;) All of which are somewhat valuable, but not worthy enough to be included in these updates at least to me. Maybe you’re different?
(Actually, that’s an interesting thing to think about, eh? If any of your own collections should or shouldn’t be included in your worth? Even if they’re valued at, say, $5,000 or $50,000? Hmm…)
Anyways, that’s the biggest change going around here with these updates… Everything else was pretty much taken care of by the stock market :)
Here’s how it all broke down for January:
MONSTER CASH (-$502.82): Not the best, but not the worst. Usually when this happens I try to cut back on an extra debt or savings payments I may be scattering across my accounts, but I’ve been on such a great roll with paying our mortgages off more and more every single month, that I didn’t want to scale back and lose motivation just because of an off business month. So I paid as close to the $2k extra as I could, and took a small loss of savings to keep things on track.
GOLD & SILVER As I mentioned, this little guy will be going bye-bye now while I concentrate more on collecting as a hobby more so than investing. It doesn’t mean I won’t PICK UP some sweet gold aor silver coins in the future – I most certainly will! – but just that I’ll be doing it more for the “coin” value over the metal inside. So for now it doesn’t seem like it should be included in here anymore…
529 College Savings (+$166.63): A nice recouping of some losses recently in this department! I wonder how large this would grow if I just left it alone for 18 years ’til my boy needs it? I bet that would be fun to watch! :) (And also sooooooooooo slowwwwwwwwwww, haha…)
IRA: SEP (+$2,226.62): Haven’t touched this guy at all lately, but I will soon once my taxes are done! The only part I actually enjoy about tax season – not having to pay thousands of extra dollars just by INVESTING more! It’s awesome! I usually put in $15,000-$25,000 a year, and in return save $5,000-$8,000 from leaving my nest :) That’s some good incentive right there!
IRA: ROTH(s) ($3,675.53): Same with these funds too (the “no touching” part). Later this year I’ll work on my goal of maxing them both out so the wife and I continue building up these taxable wins as much as the law allows us too. Someone once told us that we better do it now before our income raises too high to be able to (a good problem to have, of course!) and ever since then it’s kinda stuck with me. We’ll see if we reach those salary caps any time soon ;)
IRA: TRADITIONAL(s) ($9,146.05): Nothing new added in here either – and realistically nothing WILL be either as long as I’m self employed and have that SEP IRA running as it is… There’s no tax benefits at all for us here when we’ve got the Roths and SEPs going, so for now these remain all my xfered over 401(k) funds from back in the corporate world… which I do admit I miss! I loved my 401(k) FREE money!! (You guys better be milking it if you have the option!)
Here’s the breakdown of my three accounts here which are still undergoing our IRA Test.
- IRA #1 (NOT Managed): $67,301.60 **Still winning
- IRA #2 (Managed, USAA funds): $64,531.63
- IRA #3 (Managed, ALL funds): $65,449.45
AUTOS WORTH (kbb) (+$249.00): We better sell our cars while they’re hot! Haha… I really don’t know why these numbers ever go up, but it is what it is so we just jot down the numbers the Kelly Blue Book tells us, and we continue moving right along… Here’s what each of them are worth:
- Pimp Daddy Caddy: $2,179.00
- Gas Ticklin’ Toyota: $8,176.00
HOME VALUE (Realtor) ($0.00): This is still set at the same $285k as when we adjusted it in the middle of last year. I don’t know if it’s fluctuated that much since, but it’s not super important until we go to sell or rent out our place anyways (or my refinancing plan comes to fruition). So for now we just leave it as is and count our blessings the market is a lot better now than it was 4-5 years ago, ugh.
$1,600 less to worry about in the future! It’s not the $2k I set for myself every month, but I’m not gonna allow myself to stress out too much about it and still consider it a win :) We can’t be 100% on our game every month, right?
Here’s how both our mortgages break down right now:
- 1st Mortgage: $280,964.06 – 30 year conventional @ 5.5%
- 2nd Mortgage: $32,827.42 – Maxed out HELOC @ a variable 2.8%
And that’s it! Another month down on the books, and another fresh one to come and work on again. I love that :) Especially when you have $hitty ones and you get to start with a clean slate again for those next 30 days! Haha… as long as the overall trend is moving in the direction you want though, you can just consider those off ones as little bumps along your journey… You can’t appreciate the ups anyways without having those downs!
Here’s hoping y’all had some of those UPs too last month! A.B.H. baby – always be hustlin’!
PS: Check out this couple who covered their entire bedroom floor with pennies… Exactly $596.70 worth. Do you think they counted THAT in their net worths? ;).
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Personal Capital account instead.
Personal Capital is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Personal Capital - check it out here: Why I Use Personal Capital Almost Every Single Day.
(There's also Mint.com too btw which is also free and automated, but its more focused on day-to-day budgeting rather than long-term net worth building)
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You are right to drop your hobby from your net worth. People, although I am sure you are more realistic, overvalue things that they have emotional attachment to. That old car that was lovingly restored with thousands of hours in time spent or the home renovations that they did themselves.
Things are worth what people will pay for them when you sell them. I do not include my 8 year old car or house full of stuff in my net worth because I would not get very much for them if I was forced to sell.
My net worth is $190,000. That is mainly the value of my house with my HELOC taking a big bite out of the sale value of that.
Oh yeah – but how fun would it be seeing how much we COULD make from selling all our house stuff we have? :) I bet we’d have thousands and thousands! Not that we’d want to get rid of it all quite yet ofcourse, but I I agree – def. doesn’t belong in my updates. Though I do disagree w/ the cars since you can fairly accurately guestimate how much they would sell for using KBB.com/etc. Though not your “lovingly restored” one haha…
The stock market was definitely on a tear in January! I wonder how much it will return the rest of the year… hopefully it keeps going :)
I think it’s fine to start counting physical things into your net worth when they top $10K in value. Until then, I do think it’s more hobby stuff. HOWEVER, you could convince me either way.
I wonder if there are IRS guidelines for physical investments. For example, if you buy fine art and the artist dies, and the value skyrockets, do you have a form of capital gains that need to be tracked?
Yeah, that’s an interesting thought? I wonder that too :) I know for coins people have said that it’s not counted the same as art and other valuables (which is pretty cool!) but I’m unaware of the reasons why, or how you deal with other collections. Maybe the IRS has a “collector unit” just for that? :)
A big congrats man! YOu are kicking some serious butt. Thanks for all the updates.
For us, hobbies don’t count unless you’re willing to part with them at some approximation of their current worth.
We were up in January, too… but I want the stock market to go down! We’ve got $10K waiting to go into our Roth IRAs and I’d have loved to do it on the fiscal cliff drop that never materialized =)
I like that way of looking at things! Cuz if you’re never getting rid of anything, then you can never realize any financial gain from it. Good one :) Which means my house is DEF staying on this list then, haha…
I guess I would agree with dropping the hobbies from you net worth calculation, unless you are talking about over $10,000 or more. I mean, somebody who collects fine art for a living would probably include that in their net worth. You can certainly insure your collections, so they do have value.
Good work my friend! Keep it up!
(do you have any fine art I can have? preferably over $10,000? :))
That is a serious increase again!! Well done… Here’s too sustaining it throughout 2013! :)
That is great. Keep it up. It if fun to have that kind of cash handy, it is a great feeling to have that kind of freedom.
I think it’s right to drop a hobby from the net worth calculations, unless it’s something of some serious value. Nice growth from the stock market as well, I’ve seen that myself and it’s always nice. I’ll be interested to see what’s in store for the market this year.
The price of your caddy probably went up because it’s freaking ballin’. That’s the only explanation I can gather.
I tend to agree with most the commenters about hobbies being off the list. I also kinda like the idea of my baseball cards or old cell phone collection (don’t ask) being a rainy day payday at some point that’s not on the books.
I think you’re right. It out beats all other cars according to 9 out of 10 baller professionals ;)
Awesome! I’m glad I’m not the only one that tracks their net worth. When counting my net worth I do not add any hobby related assets or other assets (TV’s, jewelry etc). I prefer to count the hard assets that I know have a tangible market value and not a value that I might arbitrarily (and emotinally) assign to them
I only count cash, stocks, and retirement accounts in our net worth. The likelihood of selling our cars is low, so they are not a liquid asset.
Right now, I have my hobby (jeep wrangler restoration) calculated in my net worth away from my other cars because it is the only one the increases in value as I fix or add more things. I am hoping to sell it soon in order to money roll another car project. I am sure my wife is going to kill me soon!
Hah! She’d be happy during the interlude though when there are no cars clogging up her space ;)
Great job in January! Our net worth went up 3.5% (almost same as your) and I’m super happy about that. It was a great month for the stock market. Hopefully, we can keep it going for a few more months.
Nice job! I never think to run the calculations in terms of a percentage, but I kinda like that… though would be much more impressive earlier on when the numbers were lower, hehe…
This is a serious commitment and a big increase. Congrats!
Hobbies are an interesting thing to price into a net worth calculation, but so are cars. It’s especially interesting that this number went up. Especially for the Toyota, do you think that’s an accurate representation of what you could get on the open market?
I think so. The last 5+ cars I’ve sold in my life have all been based on the KBB value when I let them go, so even if they weren’t 100% accurate it’s a good number to start at the negotiation process :)
I never thought about diamonds before! Our worth would go up a nice amount if we included my wife’s diamond engagement ring ;) Not that we’d ever sell it, haha… unless I get myself in trouble!
Despite nearly every cash account having a huge change, my overall cash balance is within 50 cents from the month before!
Woo hoo for being up $14k! That’s amazing. I actually hit a mile stone at this month’s networth update personally: I’m officially at $100K :D
Holy $hitballs – congrats!! That’s one damn sexy number ;)
The stock market and real estate market were both kind this month, plus my husband’s employee stock purchase plan paid out this month, so we’re up $23k this month. Our net worth is officially at $325k!
Here’s a question. Our insurance changed and now we have an health savings account. Would you count that toward your net worth calculations? I say no, because that’s money that’s earmarked to be spent over the year. My husband says yes, because the state taxed his employers contribution & he says if it’s taxable income, it should be counted in the net worth. Would you include it in your net worth calculations?
Very tricky indeed… the old me probably would have said yes – include it, because it’s technically money you have so it should be accounted for, but the new me says nope :) Anything earmarked I leave out now – even my own cash that goes for paying bills but is still left in my accounts at the time of running my net worth reports every month.
The only exception I make is with my 529 account for my son. It’s all going towards his college (or future kids’ colleges) but if for some reason we don’t have to touch it, I know I can always pull it back out even with fees/penalties, etc… (can you pull out money from health savings if you don’t end up using later? that might change things too…)
I can see both sides of it though and honestly either one is fine :) You just gotta go with whichever one makes the most sense to your own situation. If you both can’t decide, I’d say the person who tracks it all should choose! haha…
Congrats on hitting $325k! You’re gonna pass me in no time!
What do you think about sites like Zillow that estimate your home’s worth? It may not be realistic but I always use the “Zestimate” when calculating my net worth. As a new home owner it’s certainly exciting to see that in the past few month’s it’s increased by about $6,000!
I used to track it myself, just cuz it was fun seeing it go up and down too like you said, but I’ve come to the conclusion that it really doesn’t mean much – at least in my area. Some months it would say our place went up $50k and others down like $80k. That’s just not possible, and even now it’s way off after a place in our area sold recently.
So personally I don’t bother looking anymore, BUT if you think it’s better in your area, or you just like following it to get some fun out of it, then sure – include it :) The only way you’ll ever find out the *TRUE* number is when you go to sell it, or get a realtor to run the numbers and tell you what he/she would market it for.. The problem with that is you can only do that every now and then and not monthly like we tend to want :)
Right now income limits for ROTH IRA do not matter because there is a loophole. If you don’t qualify for ROTH directly because of income, you can contribute to traditional IRA and then do a conversion to a ROTH, even as early as the next day. This is how I do it. Now I didn’t have a previous traditional IRA balance because I have a 401k but if you have existing traditional IRA’s there may be a tax penalty because the conversion is calculated across all IRA accounts. But it is possible to get around the limits – at this time now that the loophole is open.
Yup! Good point – I always forget about that one… I just hate paying all those taxes on it up front :) To convert our $180k+ Traditionals into a Roth would be some serious cash!
It’s always nice to have your net worth moving North. I’m about to top $100K in my taxable brokerage account. I’m very excited about that.
But that is an insane amount of cash you have laying around. There must be some back story hear that I missed.
Yes and no. We do have plans for parts of the cash (I’m going to contribute $15k-$20k of it into my SEP IRA once I finish my taxes this season to save money), but outside of that it’s all there to make my wife super comfortable :) I promised her we can keep a year of expenses in cash ($66K) but only if I can use all extra on top of it towards increasing our net worth – either by investing or paying off our mortgages/etc. She gets freaked out sometimes about me having non-steady income w/ my online projects.
Here’s a post on it: Our New Monster Cash Account
So it does suck sometimes watching it all sit there, but on the other hand I have a happy wife and I have boundaries to follow so I don’t go overboard in any direction :) It’s a nice compromise.
Good job! You’ll be mortgage free so soon!
You soon won’t be able to have a penny floor here in Canada- yesterday was the last day of production! No more penny for us, sorta sad….also isn’t putting a penny floor in sort of defacing mint?
I know!!! I’m so sad to hear that – I love the penny :( It never gets any love!
The debate on defacing currency is always a gray area in my mind, but most people will say yes – it’s probably illegal. I say I’d be surprised if someone came a knockin’ to pester you about it ;)
Congrats on an amazing month! It’s definitely interesting to see KBB prices going up on a car — very strange. :)
Super impressive growth so far in 2013!
Thanks Joy! I hope your month and year is going really well too :) Keep on pouring your heart into your blog!
I wouldn’t include the coins and I don’t include our cars in our net worth, but I know some people who do and as long as you’re consistent in how you track your net worth from month to month it doesn’t matter. Congrats on a great month.
New here. Listened to your podcast on YNAB which was great.
Great progress in a month. I’m curious though on why your mortgage rate seems so high with today’s rate in the 3’s. Are in the process of doing a refi?
Oh cool! Thanks for stopping by – I didn’t realize that was out now?
As for refinancing, yes – it’s a constant battle with me right now ;) Long story short, we’re too underwater to refinance unless we pony up $100,000 to get under 80-20% loan-to-value. Which I’m currently scheming a plan for…
You can read about it here:
I see you probably can’t convert your old IRA into a Roth due to contribution limits. But would you recommend this generally? I am early thirties and I have a nice chunck rolled over into a managed IRA. Should I convert some or all of it into a Roth? I don’t have any free cash to pay the tax liability so I’d have to withhold from the conversion. But all the calculators seem to say you can save a lot of tax money by converting. On the other hand, it looks like the realy payoff doesn’t come till years after retirement, based on the conversion graphs I’ve seen. Any recommendations here?
Everyone I talk to pretty much thinks it’s a good idea to convert it too – it’s just the big hit you get up front that usually persuades people not to :( I’ve thought about it myself, but the benefits don’t outweigh the cons at this given point in time… Maybe consider converting small chunks at a time and see how that feels? There’s really no right or wrong with it in my opinion, just a matter of what you’re comfortable with and what you believe will be best in the future.
AWESOME MONTH (MUCH MUCH better than mine)!
Question that I am SURE you have answered in the past. Why throw that much cash at the mortgage each month? Why not hoard it and try to do a cash in refinance down the line?
There’s a lot of variables that determine our decision here, but mainly it’s cuz I HATE MY MORTGAGE and just want it gone as fast as possible :) So I can live an entirely debt-free life and then not have to bring home as much money every month if I didn’t want…
That being said, yeah I’m always working on a plan to refinance or find some other way to speed up the process here, but so far nothing’s come to light all the way except for just paying it off as much as possible every month. Since we invest or save all the rest of the “extra” money we make each year, it doesn’t hurt as bad paying off debt like this. If we weren’t doing any investing of the sort, then our plan here would be different. Know what I’m saying?
All this is subject to change though… I go wherever the flow takes me at any given point in time :)
J. Money – Where are you keeping your big wad of cash? If you aren’t already, I would recommend checking out a rewards checking account. You can earn a better than average rate of interest just by meeting some easy requirements like 10 debit card purchases a month and accepting online statements. Check out https://www.kasasa.com/ or http://www.depositaccounts.com/checking/reward-checking-accounts.html and plug in the info for your area. The accounts are FDIC insured so your money is safe. If you felt like spreading the money out, you could earn close to an extra $2k a year without lifting a finger. That’s an extra mortgage payment!
This is true! But unfortunately I’m too addicted to my one fave bank (USAA) so I can have everything under one roof :) I literally have like 15 accounts with them and it’s made my life incredibly easier (though I don’t make much off my cash savings). Guess it’s a trade off I’m willing to accept at this point, but I appreciate those links you sent over! Will still go and check them out to learn more :)