Welcome to my monthly net worth update! Here is how my assets, liabilities, and net worth have changed over the past month:
Net worth: Bottom line up front, my net worth increased by $59,639.57, or 4.23% this month due to net cash inflow ($17,705.50, 1.26%) and marked-to-market investment return ($41,934.07, 2.97%).
Below is the breakdown of my balance sheet:
Below is the breakdown of my balance sheet:
Cash: Most of this sits in my savings and brokerage accounts, with a little bit in checking account just enough to pay the bills. My cash balance increased this month as a few Groundfloor bonds matured and I wasn't finding much good investment opportunities to deploy my cash. The moving target is around $10-25k cash for dry powder in case of a market downturn.
Bonds: Most of my bonds are in Groundfloor limited recourse obligations (LROs), which are senior secured balloon loans for house flippers. I earn low double digit returns on these loans, which is pretty good, considering that most of these loans have a short term of one year or less. Most of the cash inflow this month was from adding to this account. I still have a few hundred dollars in LendingClub loans, which I'm slowly winding down (no new investments and withdrawing any cash from interest and principal repayments). I also started an investment of $2,400 in Upstart unsecured P2P loans in July 2018.
Stocks: This is the bulk of my net worth, held in taxable accounts to fund my early retirement and store wealth. Most are held in brokerage accounts with the rest in direct stock purchase plans (DSPPs). The goal here is to maximize after-tax growth.
Tax-deferred retirement account: This is my retirement account associated with my work, not to be touched till after age 59 1/2. Currently it is invested all in an index fund that tracks the EAFE. I could also have invested in US stock indices and bonds, but these latter options offer poor return prospects compared to foreign stocks at this point, so I decided to keep it simple and just do 100% in EAFE for overall diversification, given that foreign stocks tend to be less tax efficient to hold in taxable accounts.
Roth IRA: This is currently all invested in IJR to keep things simple. IJR is probably the best investment with all the desired characteristics: diversified, small cap, growth, quality, low cost.
Home: Home value is from Zillow's Z-estimate, taken at the end of each month. My home value has been in a steady decline since I bought it in cash for $40,000 in March 2018, but saw a slight rebound this month. My purchase price and recent comparable sales seem to have brought it down.
Gold: I currently have 10.77 troy oz of gold coins as part of my coin collection. Each month I multiply that by the spot gold price. I do not plan on adding to this any time soon, unless gold breaks below $800, then I will likely add some. If below $500, I will almost certainly add some. I do not plan on ever selling (transaction costs too high, and I do like to look at the shiny yellow metal from time to time).
Other non-current assets: None at the moment to be conservative. I could include assets like furniture, car, clothes, books, stamps, coins, etc. However, since these assets are not income-producing and can also be a liability as some of them require cash expenditure to replace them, I choose not to include them here.
Current liabilities: These are accounts I owe and due within 12 months. I took advantage of interest free loans from 0% APR promo credit card offers, which I will pay in full when they expire. My credit score suffered a bit from the "high" balances, but I don't need credit right now so I don't care.
Student loan: This is loan I took out for college, now consolidated at a low 2.5% fixed interest rate. I had a variable interest rate until I consolidated my student loans last year and locked in a fixed 2.5% rate for 10 years in a graduated repayment plan. I am certainly in no hurry whatsoever to pay it back given such low interest rates. Stocks are expected to generate much higher returns. The extra leverage this affords helps to grow my money faster. My currently monthly payment is only $35.70, of which the cash (outflow) shown is applied toward principal which lowers the loan balance.
Other non-current liabilities: None at the moment.
Below is a chart of my net worth since I started tracking on a monthly basis. Due to my aggressive stock allocation, my net worth has mostly mirrored the stock market.
My monthly performance against the S&P 500 is shown below:
January started well for me, but February saw me underperforming the market by a little bit. YTD, I am still beating the market by a hair. It is a tight race.
My monthly performance against the S&P 500 is shown below:
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