Net Worth Update #2
Hello FOGA Readers!
Welcome to Net Worth Update #2. Due to popular demand (aka a poll on twitter), I will be doing these monthly for the foreseeable future. 🙂
For anyone who is not aware, your net worth is your total assets minus your total liabilities. Also known as everything you own of value minus everything you owe.
I have decided not to put our specific income into this, but I am sure you will be able to tell the good months from the bad ones. I get paid twice a month if I have closing. If I don’t, I do not get paid. It tends to make things interesting around here.
Of course, there is not always going to be a lot of change with some of the sections here (like our house), but it will be helpful to see the fluctuations overall.
Onto the Net Worth Update #2!
Assets
Home
I don’t consider our home to be an investment. We live here, and that’s all. However, it does it have a value, so I’ve added that as part of our net worth.
Not to mention, since we have to note the mortgage, we might as well note the value of the home. Otherwise, our net worth is incredibly negative and that’s no fun.
We use the lowest amount between realtor.com ($279,000) and Zillow ($252,000) to get the home value. We also look at the sales in our area to see if either of the two are off. Homes in our age and size range have been rare and selling at crazy pricing (anywhere from $250,000- $289,000). We don’t want to count on that, so we have been aiming low on our estimate.
Investments
We increased our percentages to our 401Ks in January so there is more money going here over the year. This has been going quite well since our 401Ks are accounting for nearly all of the increase in our assets.
The IULs always go up since they are designed that way. We always make at least 1% on these. The downside is we never make more than 14%. It’s a trade-off, but that’s why we put the minimum in those accounts. I used to put much more into mine which is why there’s such a difference between my account and Mr. FOGTA’s.
Emergency Fund
Ally has been doing well. Watching the interest grow with this is impressive. I told Moriah over at Our Table for Two that we earned enough in interest last month for me to buy a book I wanted. Hopefully, that sold her on getting an Ally (or a high interest) savings account.
The goal is to get this account to $50,000 by the end of the year. That would be a total of one year’s worth of expenses. With everything being up in the air with Mr. FOGO’s job and my career being in a constant state of flux, having this emergency fund is crucial
I wanted to keep it separate for a few reasons. First, Ally earns more interest. Second, it’s out of sight, so it’s out of mind. Finally, it takes a while to access, so we’re not going to use it in a pinch.
Savings
Here is where we keep the rest of our savings. We got the accounts figured out now, so we keep $5000 in this account. This way if something comes up, we have easy access to some money, but not ALL the money.
This is also the funds we will use for projects around the house and vacations. The goal is that we can use this fund without too much worry and replenish with my paychecks.
Due to to the craziness that was March, this has gone down to cover for pest control, termite warranty, vet visit, and my not getting paid. Hooray! (sarcasm)
Total Assets
Liabilities
Mortgage
The mortgage. My mortal enemy. It is going down. Slowly, but going down. After our back and forth in Only the Mortgage Remains, we have decided to make a bulk payment on this every year to watch this get smaller.
Our goals in the meantime are to fully fund the emergency fund, get Mr. FOGO a new car, and save enough for a decent down payment on a rental property. This is a 2-3 year plan.
Total Liabilities
Net Worth
All in all, this is awesome. 🙂 We had so many things come up in February and March that I am happy (and a little surprised) it went up at all. I thought for sure that all the expenses we have had recently would have made it go down.
We are looking forward to watching this number go up as we get closer and closer to Financial Independence.
Side Income Possibilities
I think we are looking more into rental properties over any other type of side income. If the past two months have taught me anything, it’s that I need to give myself some room to breathe and some space. Going crazy trying to create a side business is just not in the cards. Plus, with rentals, we can also get a management company if we want to be 95% hands off. It s
In Summation
So that was Net Worth Update #2. Next one will be at the end of April/beginning of May. By then I will be out of the no paychecks slump and should have at least one paycheck. Then we can see some more movement here.
Do you have a net worth update? If so, I would love to read it. Please put a link in the comments below.
Otherwise, what did you think? Good? Bad? Any thoughts? Please share below. 🙂
Until Next Time!
-G
Photo by Katie Harp – Pinterest Manager on Unsplash
You two are killing it. Great job! I keep on going back and forth on what the heck we are going to do about our mortgage. I’ve got a 4500+ word post that comes out in April that talks about what we’ve decided.
I’d be interested in hearing your thoughts on why you are focusing on rental property. Part of me likes the idea, but I also think it has the potential to add more stress in my life. But I guess I will probably be stressful from the stock market when it comes down too. What makes me nervous about real estate is the possibility to have it cost more than the money you put in if you get into a bad situation. But maybe this is less likely if your rent out the property?
Thanks! I keep going back and forth even though I wrote the post saying what made sense. Being 100% debt free is incredibly appealing. 🙂
Rental property can definitely add stress, but so would any form of side hustle. What I like about rentals is that it can be more hands off if you hire a property manager (which we would do), and we don’t have to do too much extra. My problem with side hustles is the time they take. My job is not concrete in how much time goes in (it’s all over the place), so anything that takes more time doesn’t work. Good post idea though.
Thanks for reading.
I think it’s smart to use the lowest estimated value on your home for your net worth, rather than hoping you can get top dollar for it if you needed to sell. I like to be conservative in my numbers as well, and I think that plays out well when thinking about future investments and savings.
Hi Liz! Yes, it does. I see a lot of people estimate high on their homes (especially with zestimates) and it’s not worth that much. I always err on the side of caution with that stuff.
Thanks for reading!
Six figure net worth! So awesome. I’m also saving up for a rental property so I’ll definitely be following if you beat me to the punch in your first purchase. This year will mostly be dedicated to saving with our first purchase in 2020. Our big debate is if we save up enough to purchase with cash or put down 20% and then eventually pay it down.
That is a hard debate with pros and cons on both sides. The main worry would be the marketing going up and pricing being higher once you had all the cash. We’re looking to do 20%- 25% down and to avoid that.
Pretty sure you will beat me if your goal is 2020. We wouldn’t be able to move forward before 2021. We have one big ticket item (replacing Mr. FOGOs car) that comes before rental property happiness.
Thanks for reading!
You’re doing a great job, keep going! Hopefully April will bring in some more income for you guys, but honestly you’ve been doing great!
I’m interesting in reading more when you decide to take on the rental market, so I’m following along for sure!
Thanks! 🙂 I get paid for two homes in April (thank the heavens!!!). March sucked.
Probably won’t be until 2021, but focusing on it heavily now.
Thanks for reading!