August 2016 Net Worth

chalkAugust is in the books and it’s time for our monthly Net Worth update!  It’s time to see just how close we have come to the $140,000 goal we have set for ourselves.  The Net Worth is an important metric to the TOL’s, as it is a measurement of our assets, reduced by the debts we owe on those assets.  We believe that as the bottom-line number grows, we get closer and closer to Financial Independence.

During August we saw the summer come to a close as we ushered in a new school year.  We were excited as our youngest started his journey as he began Pre-K!  As far as Net Worth, we think we did very well contributing to out bottom line.  August was the second month of my (Mr. TOL’s) 4% raise on the job, so let’s see how well we put those funds to work and how well the markets were to our assets.

Here are the numbers for August:

august-networth

I am very satisfied with realizing more than a $2,100 increase in our Net Worth.  This is our largest increase since March! This very exciting, as April was the first month our finances reflecting living on one income.  Now let’s get into the numbers:

Debt:

Total debt eliminated for August totaled $718.46, which consisted of our regular monthly mortgage and car payments.  Though this was a bit less than last month’s total of $836.16, we are still moving in the right direction.

On a positive note, the loan balance on one of our cars has finally dipped below the $10k mark!  Just as important is the fact that we are close to the intersection where our cash exceeds the loan balance, giving us the ability to pay the car off in one lump sum payment – should we choose.   A paid off car would greatly improve our monthly cash flow and free up funds that could be used to build up the New Life Portfolio and our Net Worth.

Assets:

CASH:  Our Cash position increased by 5.7% after last month’s reduction which reflected a car repair costing almost $1,000.  That $10,000 month-end cash mark has been very elusive, but we are closing in on it!  Dividend income is increasing, which will start to substantially add to our cash balances.

PORTFOLIO:  The value of our New Life Portfolio continued its growth in August, jumping 1.5% in value.  During the month of August the Dow Jones average barely moved, opening August 1 at 18,434 and closing August 31 at 18,400.

During August, the portfolio value increased $160.71.  The increase in the value of our portfolio is related to new capital invested in Flower Foods (FLO) and adding to our position in L Brands (LB).  These purchases totaled about $197.  Excluding purchases, our portfolio value would decrease by a very small fractional amount.  To be honest, our portfolio value is not very important to us, as long as the income stream is solid.

RETIREMENT:  Our retirement accounts saw a slight increase in value of $398.38, or 0.6%.  This is the result of my (Mr.TOL’s) 401k and retirement pension contributions.  I am currently depositing 1% into these accounts, but will bump that up real soon.  We don’t like retirement accounts that lock your money up until you are almost 60 years old…but even more than that, we hate paying taxes!  Therefore, I will increase the contribution amount in order to decrease taxable income.

OTHER ASSET ACTIVITY:

  • Our vehicles saw a slight 7% decline in value, not as bad as the previous few months. Depreciation and valuation changes are non-cash transactions; therefore, it has no effect on cash flow.
  • Our home value saw a small 4% increase, based on Zillow, less a 15% estimate reduction.
  • Paid vacation leave increased 7%. I include Paid Vacation Leave because, in the event I leave my current job, I will get paid an amount based on current salary and accumulated hours.  Also, this balance is a liability to my employer; and their liability is my asset.

For the 2nd month in a row, we saw a 4-digit increase to our Net Worth.  Assets have also increased for the 2nd month, as we close in on $230k in assets.

We will continue to push forward and build on this positive momentum in August as we see what the remainder of 2016 brings us!

 

How’s your Net Worth looking this month and what strides have you made? We’d love to hear about it! 





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