August was a very interesting month as my net worth decreased for the first time since I started tracking, but I’m not even mad. It’s like in Anchorman when Baxter ate a whole wheel of cheese and pooped in the refrigerator, and Ron Burgundy wasn’t even mad. The stock market went up in August, but my cash position decreased pretty drastically as I finally refinanced my mortgage. The closing costs are the only reason my net worth didn’t increase. I’m extremely happy to have that whole situation behind me. I’m even happier with the rate and 15-year fixed mortgage as I will be paying significantly more per month on towards principal. Hopefully this will be the last month for a while where I experience a decrease in net worth.
My cash asset dipped below $10,000 because of the closing costs associated with my mortgage refinance. The closing costs covered all of September’s interest payment, which means I have no housing payment next month. Next month all of my cash above $10,000 will go into my retirement accounts. Despite the closing costs, I barely dipped below $10,000, which means I should have a good chunk to put towards my retirement accounts. I plan on entering a nice round $10,000 in the cash box for September, which will act as my emergency fund. The emergency fund will be even more important now that I have a 15-year fixed mortgage rather than a 30-year fixed mortgage. I had a hiccup with regards to my high interest rewards checking account, but I have found other suitable options. I hope to open a high interest rewards checking account this month.
My retirement accounts continued to push to new watermarks. I haven’t even added anything for 2009. I fully expect to do so in September as my mortgage payment has already been taken care of for September as a part of my closing costs. Now that I have my closing costs out of the way, I have no reason not to invest in my retirement accounts.
My non-retirement accounts consist of my Target stock through Schwab, US Growth mutual fund through Vanguard, Sharebuilder account and Lending Club account. I don’t foresee any major contributions to my non-retirement accounts, but I am thinking about contributing $25 to a new note at Lending Club.
My car payment decreased by the standard amount, but my mortgage liability decreased by a larger amount as I had to take my mortgage down to $224,000 to prevent paying PMI. Now that I have refinanced, I will be paying off my mortgage at a much faster rate. Instead of paying around $220 towards principal, I will now be paying around $850 towards principal (check out my new Amortization Schedule). That feels good just to type.
My net worth decreased by -0.9%. I hope this is the last month for awhile that I have a decrease in my net worth. I will accept the one month hit in my net worth to refinance into a new mortgage that will have me drastically escalating my principal payments. I can now focus my efforts on investing in my retirement accounts and making more money through my self-employed projects to drive my net worth even higher.
- End of February 2009 Financial Status
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- End of July 2009 Financial Status
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- End of November 2009 Financial Status