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 $126,514.34, or 8.63% this month due to marked-to-market investment gain (+$112,281.68, +7.66%) and net cash inflow ($14,232.66, 0.97%).
Here is the breakdown of my balance sheet:
Net worth: Bottom line up front, my net worth increased by $126,514.34, or 8.63% this month due to marked-to-market investment gain (+$112,281.68, +7.66%) and net cash inflow ($14,232.66, 0.97%).
Here 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 is replenished somewhat this month as the market moved much higher leaving little buying opportunities. The moving target is around $10-25k cash for dry powder in case of a market downturn, so I will need to continue to rebuild my cash reserve.
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. The Upstart and Groundfloor loans are both doing pretty well so far.
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. Near the end of the month I changed my allocation from 100% in an index fund that tracks the EAFE to 50% in the EAFE index and 50% in a small stock index. I have meant to do that for a while since the poor performance of EAFE for many years has made me soured on this, and the bearish trend on EAFE seems structural and unlikely to change soon. 50/50 split also offers more opportunities for dollar cost averaging each month. 50% allocation to EAFE here is still the bulk of my foreign stock investments overall, 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 had been in a steady decline since I bought it in cash for $40,000 in March 2018. Surprisingly, this month Zillow increased my home value estimate by a whopping 17% compared to last month, to $42,816, the first time it is valuing my home at higher than what I paid for. Is this due to a new algorithm, much higher sales prices in my neighborhood, or a conspiracy with the county to increase my property tax? Just joking.
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. The increase in my credit card balances this month was due to paying my taxes using credit card to get cash back rewards, which I will pay off next month.
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, but scheduled to increase to $46.41 starting next month, 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.
The last two two months have been a roller-coaster ride for my net worth, down 6.11% in May, then up 8.63% in June. This is the second most volatile couple of months since I started tracking my net worth monthly, the most volatile being Dec 2018 and Jan 2019 when I was down 7.45% followed by up 9.12%. The recent increased volatility may mean a bear market is coming. Who knows? I sure don't, so I'll stay invested and use any downturn as buying opportunities.
My monthly performance against the S&P 500 is shown below:
June was a good month for me in terms of absolute and relative return. I beat the market by 61 basis points, but YTD I am still trailing by 167 basis points, a deficit that is pretty difficult to make up.
The last two two months have been a roller-coaster ride for my net worth, down 6.11% in May, then up 8.63% in June. This is the second most volatile couple of months since I started tracking my net worth monthly, the most volatile being Dec 2018 and Jan 2019 when I was down 7.45% followed by up 9.12%. The recent increased volatility may mean a bear market is coming. Who knows? I sure don't, so I'll stay invested and use any downturn as buying opportunities.
My monthly performance against the S&P 500 is shown below:
No comments:
Post a Comment