Net Worth

Net worth is the simplest way to track your overall financial status. It takes into account all of your assets and all of your liabilities. Your net worth is calculated by adding up all of your assets and liabilities. Finally, you subtract your liabilities from your assets. If you have more assets than liabilities, you have a positive net worth and if you have more liabilities than assets, you have a negative net worth.

I like tracking my net worth for two reasons:

1. it forces you to examine your financial health on a regular basis, and
2. it provides a good number to compare your goals against.

It’s good to know how close you are to reaching milestones such as 100k and one million, as well as the number needed to reach financial independence. Each month when I report my financial status, I will update the net worth graph on this page as well as copy my monthly financial status post.

End of November 2009 Financial Status

November was a great month for my net worth, even though I was sure it was going to be a rough month. I made some pretty big payments on my credit card for furniture. I also wrote a check for a chunk of physical therapy sessions that will hopefully allow me to run freely. To counter those larger payments, I received a rebate for property taxes that I overpaid at closing. My non-retirement savings took a major hit as I took the first step towards converting it into tax-sheltered accounts.

Cash

November saw a major increase in my cash asset for a very specific reason. I cashed out my taxable Schwab account by selling my Target stock and requesting a check be mailed. I have yet to receive the check, but the money is no longer in my Schwab account to I left it as cash, even though I will invest it into my two Vanguard retirement accounts. My cash also received a boost of about $1,200 from the builder of my condo. I large chunk of my closing costs went into an escrow account for property taxes, and only a small portion of it was used to pay property taxes. The rest of it was sent back to me, which was a welcome surprise. Next month I hope to have all of my retirement accounts fully funded and my cash back at $10,000.

Retirement

My retirement funds increased based solely on increases in the stock market. I was unable to invest the money from my Schwab account before the end of the month because it is taking forever to get the check. Once I get the check the retirement asset will increase substantially.

Non-Retirement

My non-retirement assets decreased substantially as I sold all of my Target stock to move it into a tax-sheltered account. Now my tax-sheltered assets consist of a US Growth mutual fund through Vanguard,Sharebuilder account, Lending Club account and a Prosper Account. I don’t foresee any major contributions to my non-retirement accounts. I’m going to start using this monthly post as a reminder to add $25 towards my Lending Club and Prosper accounts. I really like these peer to peer lending sites as a way to diversify my investments.

Liabilities

My car payment and mortgage decreased by the standard amount. Even though I’ve had my new mortgage for a few months now, it still feels great to decrease that liability by such a large chunk. It really makes me feel like I’m adding significant equity to my condo.

Net Worth

My net worth increased by 3.0%, even though I thought November would be an interesting month. Despite the larger than normal credit card payments and the physical therapy bill, I was able to substantially increase my net worth. The stock market helped a bit, but it was mostly the unexpected check from my property tax overpayment. Next month in addition to my monthly financial status update, I will do a annual financial status update. Sometimes it’s good to take a step back and really look at your finances on a larger scale, especially since the ultimate goal of retirement is on such a grand scale.

End of October 2009 Financial Status

End of September 2009 Financial Status

End of August 2009 Financial Status

End of July 2009 Financial Status

End of June 2009 Financial Status

End of May 2009 Financial Status

End of April 2009 Financial Status

End of March 2009 Financial Status

End of February 2009 Financial Status

End of January 2009 Financial Status

End of 2008 Financial Status