Welcome to my monthly net worth report! Around the 15th of each month I take a few minutes to log onto Personal Capital and calculate our net worth. I’ve been doing this since July 2017 and have enjoyed watching it grow ever since!
I wish I had started tracking our net worth at the beginning of our mortgage-free journey back in September 2016, or better yet when we got married five months earlier, but it was something I just never felt compelled to do until reading The Millionaire Next Door by Thomas J. Stanley and William D. Danko. After reading the authors’ extensive research on millionaires, I realized that if I am serious about building wealth, it only makes sense to check in consistently to make sure I’m heading in the right direction.
If you’re new to the term net worth or aren’t familiar with Personal Capital, I take a few minutes at the beginning of each net worth report to go over how to calculate your net worth and explain the free service that I’ve used since that very first report. If you’re just here for this month’s numbers, feel free to keep scrolling!
To put it simply, your net worth is just the value of your assets (what you own) minus your liabilities (what you owe).
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.
As for liabilities, this is the amount of debt you owe on these things. My husband and I have not had any liabilities since paying off our house in January 2018, but when we did have a mortgage, the amount we owed from month to month was subtracted from the current value of our assets when calculating our net worth.
Some calculate their net worth manually using a spreadsheet, but I have never calculated our net worth any other way than using Personal Capital.
This is the only financial tool I use that I haven’t come up with myself. The service is so quick and easy to use that I’ve just never felt compelled to put a spreadsheet together to calculate it. Plus it’s free!
Personal Capital is an app/service that updates your net worth upon sign-in by connecting to your bank accounts, investment accounts and even Zillow, though I found that our “Zestimate,” their 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.
They are now offering an awesome referral program for their free service, so it’s a great time to try it out. If you use this link and connect a qualifying investment account (taxable brokerage, 401k, IRA, 529, etc.) with a balance of over $1000 within 30 days of signing up, you and I both will receive a $20 Amazon gift card!
Alright, let’s talk about October!
- Emergency Fund: $5,000
- Long Term Savings: $20,297
- Short Term Savings: $1,580
- Checking: $1,385
Our short term savings dropped almost 50% from last month, and I am totally good with that since we spent it exactly as we intended – as spending money in Greece during the last two weeks of September! (As for all of the hotels and most of the flights, we got those for free using Chase Ultimate Rewards points! Click here to read more.)
- Roth IRAs: $4,666
- 401Ks: $84,413
- Real Estate: $35,000
The value of our Roth IRAs and 401Ks fell by about $2,500 from last month, but considering we won’t be touching any of that money for a loonnnnng time, I don’t put a second’s worth of thought into that!
- Home: $150,000
- Vehicles: $10,286
Net Worth: $312,627 (+$614 from last month)
Though this month’s increase wasn’t as substantial as the last nine months, our net worth has increased by $118,146 since I first calculated it in July 2017, and it has increased by $87,099 since paying off our mortgage at the end of January 2018. $46,586 of that amount has been 2019’s increase so far!
From paying off our mortgage to our seven month spending spree, purchasing our first investment property to cash-flowing the renovations, I have been glad to watch our net worth steadily increase all the while. Whether you choose to do it every six months, quarterly or monthly like I do, 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, save money and invest!
Thanks as always for reading and see you guys soon!