April 2016 Net Worth Update
Each month I review my financial position and determine how my decisions in the past month impacted the numbers. My journey from red to riches is going to be a long one, but it’s a journey that can be done. These net worth updates are meant to be a catalyst to readers that may be in a similar position to realize it’s possible to climb out of the hole.
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My net worth increased $5,640.12 from March to April.
YTD, my net worth increased $12,942.31. As a result, I’m ahead of my goal of $25,000 goal with some help from Mr. Market, tax refund, and another year vested in my 401k plan.
However, as I mentioned in my 2016 goals, I am removing the market impact from my net worth updates to better understand what my direct contribution was during the month.
Well, Mr. Market (and vesting in my 401k) accounted for $1,167.62 of the increase in my net worth this month (for those of you that are curious, simply take Beginning Balance – Ending Balance – Contributions + Withdrawals = Market Impact for any investment accounts).
This means my net worth would have increased $4,472.50 if I remove Mr. Market and vesting another year in my 401k (ie: this is what I can directly attribute to my actions).
YTD With Mr. Market: +$10,449.26
YTD Without Mr. Market: +$12,942.31
Below is a summary of my financial position followed by some footnotes describing this past month.
Not a whole lot of action here.
I did not make any contributions so it was all market related. I own shares of six different companies in this account.
My 401(k) is mostly invested in two different Vanguard accounts. I contribute 6% to get the full employee match. This year is focused on reducing debt so maxing this out is not my primary goal. April is my anniversary for work so I vested another year in my employer’s contributions into my 401(k).
Health Savings Account
Simply putting away $50 per paycheck.
For simplicity, I am using the original purchase price. This may be slightly overvalued based on similar homes being sold in my neighborhood, but I don’t see a lot of value in trying to pinpoint it.
You’ll notice I do not list my car as an asset, but I do list the liability for my auto loan. Some may say this is technically incorrect, but it’s my preference to not list it.
My primary reason for not listing my car as an asset? If I converted my $13,000 in cash above to a $13,000 vehicle, I would say I’m in a much worse state.
Here’s another three reasons. One, I don’t feel like coming up with some sort of depreciation schedule or reviewing KBB every month. Two, I don’t include other personal property in the calculation. If I list my car, I could make the argument I should start listing my computers, lawn mower, TV, table, couch, and other depreciating personal property. Three, I consider it a conservative practice to acknowledge the debt and not the value.
Throughout the year this balance will continue to drop as I send my army of money to war with my debt. I’m ahead of my payment schedule by several months on all loans and years on the primary loan I’m attacking.
Made the minimum payment in March, but still ahead on payments by a few months.
Ms. Red to Riches and I are making the minimum payment. For those curious, my portion of the payment comes to ~$55 principal and ~$140 interest.
Total Net Worth
It’s official! I have a positive net worth for the first time since I began college!
I wish I could increase my net worth by this much every month! A few notable events happened to help me out, though.
One, I received ~$2,000 through federal and state tax refunds.
I vested to the next tier of my 401(k) plan which increased my net worth ~$1,000.
I (we) purchased plane tickets and paid for a car rental for a vacation we are taking in September (~$1,300).
April was a 3 paycheck month because I’m on a bi-weekly pay schedule. ~$1,500
When I back out all of the one time events, my net worth would have increased by ~$2,400, which is about where I target on a monthly basis.
How was your Apirl?