Thoughts Before Calculating: Think it is going to be a rough month. Two reasons, the first is out of my control and the other is well within my control. The first is that the market is in a tailspin:
Since I am highly correlated to the market this just brings everything down. I believe I am on the correct path so I am not at all panicking, it is just really, really frustrating. The second reason is my debt levels (and way more important, their growth) have gotten to a point where I am uncomfortable. Think I need a clean reset and will outline a plan below.
Calculating my Net Worth
My Family’s Assets
While I have a number of asset categories, I don’t think they are particularly complicated.
- Cash Equivalents – I got to a comfortable place, and then I thought to myself I could I be a little bit more aggressive with my “emergency fund.”
Specifically, I wanted to move a small amount of my emergency fund towards my rental property’s HELOC. At worst, if I need liquidity I could take back the “loan” to myself, and at best I shifted some part of an asset earning .50% to reduce a debt paying 3.75%. If I ever feel a lack of liquidity this is my first item to hit up. May be at a place where I put some more of my cash reserves to this account.This is where I am going first to get some excess cash to attack the debt.
- My Trading Account – This one account is both where I invest in my dividend growth companies and risky speculative option trades. Easily my favorite asset, despite not being the biggest (by a long shot). During the recent downturn I have been very active with this account rolling puts. The volatility has been crazy. Notwithstanding, I have accumulated too much cash earning zero, so this is going to be the second place I grab some cash for my debt plan.
- My 401(k) – My 401(k) has some terrible investment options that have ridiculous fees, but since I am getting a match at work I fund it to a little bit above the match. This has been hurt the most, probably because it is completely correlated with the market and is my largest non-real estate holding.
- My Traditional IRA – Just some companies that have caught my attention at some point or another.
- The Wife’s Roth IRA – Again, some companies that have caught my attention at some point or another.
- The Wife’s SEP IRA – The Wife was talking to my father in law early this year who told her that she should have a SEP IRA, and since she is funding it with business proceeds, I was not going to argue. Just going to be sending $100/week to the account. The original plan was to just buy a broad based equity ETF (VOO) and a smaller position in a dividend-focused ETF (NOBL), but I have taken very small positions in individual companies along with those broad ETFs.
- Crypto Currency – This account was basically started for FOMO purposes. It is a shitty reason, but it is mine nonetheless. With Crypto down hard this account has basically given back all the gains that once existed.
- Life Insurance Cash Surrender Value – As described I own a number of permanent, cash value whole life insurance policies. Since the cash is accessible I include it in my net worth statement. This money is also accessible via a loan against the cash value. These values now have a loan against the cash. This is another debt item that I would like to retire sooner than later as I am throwing a nice chunk of free cash flow back at it monthly and I would like to have that back.
- Physical Gold – A few years back I decided to start buying physical gold, I am hoping one day to be that crazy guy with a stack of gold I can swim through. I accidentally deleted my gold amounts a few months back. While I believe I have the right number I need to audit my vast reserves.
- My Rental Property – Every month I update a spreadsheet I keep for the minority owners of my rental property.
- My Main Residence – My Family’s home!
Currently, I do not include my investment clubs in my net worth.
My Family’s Debt
- Law School Debt – Refinanced a few months back at 2.6%, probably going to ignore the account for a while. While it would be nice to finish these off I haven’t done so to date.
- Mortgage and Home Debt – I have a mortgage on each home and a home equity line of credit on the rental property.
- Revolving Credit Card Debt – I usually keep a small revolving debt, but they have gotten way too big at this point.
My Net Worth Change
- Month over month my net worth decreased by 1.88%!
- Year to date my net worth is now down over 7%!