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Welcome to my monthly net worth report! Since July 2017 I have logged into Personal Capital around the 15th of each month to update our net worth. I really look forward to this time of the month so that I can see how much it has increased (or decreased).
On September 1 we started our new goal of saving $100,000 to purchase our first rental property in cash, putting an end to our seven-month spending spree that we enjoyed after paying off our mortgage. This little spree involved replenishing the emergency fund we drained to make our final mortgage principal payment (I guess that one is not really spending), cash-flowing a trip to Russia to attend three games of the FIFA World Cup, updating a few rooms of our home, buying new furniture and lots of decor, buying a new lawn mower and finally buying a new-to-us truck.
Through it all, our net worth continuously increased each month with the exception of April 2018, but I am glad that those months of spending are over. I have been so excited to start this new savings goal and am looking forward to watching how much our net worth increases now that we have no mortgage and aren’t spending any of our monthly savings until it comes time to purchase a property.
I’ll take a moment to explain net worth and what Personal Capital is in case you’re new to all this, but if you’ve been around a while, feel free to scroll past this information.
According to Investopedia, “Net worth is the amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure of how much an entity is worth. A consistent increase in net worth indicates good financial health; conversely, net worth may be depleted by annual operating losses or a substantial decrease in asset values relative to liabilities.”
Or to keep it simple, your net worth is the value of your assets minus your liabilities.
Assets may include your home, vehicles, investments and money in your bank accounts. It can even include art, jewelry, furniture, etc., though I don’t include any of those things when calculating our net worth simply because beyond checking the value of our cars each month, I just don’t want to take the time to figure up the value of every little thing we own.
A liability is the amount of debt you owe on these things. My husband and I no longer have any debt, but you could take a look at January 2018’s report (which I may add is extremely short for some reason). This is the last month where we had a mortgage balance, so when calculating our net worth, I subtracted our balance of $7,945 from our home’s value of $144,000.
Other than Debitize, this is the only financial tool I frequently use that I haven’t come up with myself (such as my free zero-based budget template). I could design a spreadsheet to track my net worth, but Personal Capital is so quick and easy to use that I just don’t see the point. Plus it’s free.
Personal Capital is an app that updates your net worth upon sign-in by connecting to your bank accounts, investment accounts and even Zillow, though I found that Zillow’s estimated value of our home fluctuated wildly almost month-to-month. Connecting your accounts is optional, so this is not something you have to do if you don’t feel comfortable with it.
It is good to keep in mind that some companies do not allow third parties to have this sort of access to their information, and because of this, I have to log into my husband’s retirement account and manually update the value on Personal Capital. Also, to get a good idea of the value of your vehicles, I recommend checking kbb.com and manually updating those amounts when you log into Personal Capital.
Alright, bringing it back to September. Since we have no liabilities, below are the value of the assets that make up our net worth.
- Cash: $11,259
- Investments: $83,470
- House: $150,000
- Vehicles: $13,252
Net Worth: $257,981 (+$5,881 from last month)
Longtime readers may notice a significant spike in the value of our vehicles, and this is because we now have another one sitting in our driveway. We have been needing a truck for a long time, and since we were about to start our new goal and would no longer be spending any money outside of our monthly budget (see how we do our budget here), so we decided to pull the trigger now instead of having to wait a couple more years.
All we wanted was a truck that does truck stuff. Nothing fancy, just a four-wheel-drive truck that drives well and doesn’t need anything other than cosmetic work done to it. My husband diligently searched every time he touched his phone for a month, and it finally paid off when he was the first to ask about a new listing and the first to look at the 1999 Dodge Ram that is now ours. It had been meticulously maintained and babied by a man who was so much like my dad – down to the impending knee replacement surgery that was the reason for the sale – that it was scary. We talked him down to $3000 from the $4500 listing, and my husband has been in love with it ever since. It’s huge and perfectly redneck, and he and my dad have big plans for it.
The car my husband was driving is up for sale, so when someone finally decides to buy it, the value of our vehicles will go down a couple thousand dollars or so.
Our net worth has increased by almost $50K in the last year even after all the spending we did. And since that first report in July 2017, it has increased by $63,500. I’m excited to watch as it increases by over $100K over the next two years!
Most people don’t track their net worth every month like I do and choose to do it quarterly or every six months. Using Personal Capital turns this into a pretty passive process, but some people find logging into their accounts and manually tracking their net worth to be a somewhat therapeutic experience.
However you choose to do it, I highly suggest tracking your net worth if you’re not already. It’s so motivating to watch your numbers increase as you pay down debt and save money, and I really wish that I had started much sooner to see how far my husband and I have really come since getting married.
Thanks for reading. See you soon!