Trying to build wealth without tracking your net worth is like not checking the road map because you’re too busy driving. How do you know if you’re headed in the right direction?
My wife and I check our net worth monthly, and it takes a measly 5 minutes to calculate. It’s just a simple tally of all the assets we own, minus all of the debts and liabilities we have. Each month we try to increase our assets while paying down our debts.
Here is our net worth report from Jan 1 2022 (minus a few private partnerships tracked separately). We share these reports on the blog each month to show how different assets grow and change over time, as well as spark conversations about money and investing – something we all need to talk about more IRL!
Jan 1, 2022 Net Worth: $854,865
MASSIVE increase this month – mostly due to the sale of another partnership rental property that closed in December! 3 down, 1 more to sell!
The sale from this property gave us about $67k in cash, and the other $20k of growth this month came from stock market gains. 😎 In total, our NW grew $87,971 since last month’s report.
Here are the irregular money moves we made last month:
- As mentioned, we sold a partnership rental property and cashed out with $67k. This wasn’t part of our original tracking, so we’re adding it now because the funds will be put into our brokerage accounts. 🏡 → 📈
- Wifey received a teacher appreciation gift of $435! THANK YOU to all the parents out there who gave their school and teachers a Christmas bonus. Teaching is sometimes a thankless job, so little gifts and appreciation goes a looooong way. Thank you. 🥰
- My employer had some additional contract work for me, so I earned an extra $750 in side income from December hustling. 👨🏻💻
- We signed up for the new Capital One Venture X credit card! This cost us $395 for the annual fee (but in a few months, we hope to reap ~$1200 in bonus travel credits!). 💳
- Gifts and presents set us back about $400 in December, money well spent! 🎁
- We also traveled to Boston for Christmas. Flights were paid for with points, and we stayed with family while there … so it only cost us about $300 for Ubers and groceries/booze! 🎄🍗🥂
(I love wrapping presents and choosing fun wrapping paper!)
Detailed Account Breakdowns
Cash Accounts (+$9,010): We’ve been beefing up our cash reserves but only because we plan to invest $12k into our Roth IRAs at the beginning of 2022. Our ideal cash balance is about $5-10k, as we want as much money invested and working for us as possible.
Rental Property + Reserve Account (+$1,148): All was quiet at the duplex last month (just the way we like it!) with no irregular maintenance or issues. Here is how the rental duplex made us money last month…
$1,975 — Incoming rent from units
(-$138) — Property management fees
(-$28) — Pest control regular service
(-$661) — Mortgage principal + interest
$1,148 — Total rental gain this month
Real Estate Syndication (no change): We’ve owned this building for 3 full quarters and are beating projections on all fronts. Our next quarterly investor distribution is set to come in January and is likely to be $800 – $1,000. Based on our $50k equity, this is a 7-8% annualized return.
IRA – Regular: (+$7,162): The stock market had an awesome run in December, and we finished with just over a ~3.5% increase. This IRA is invested in a total stock market index fund.
IRA – Roths: (+$3,426): Same as above, all our Roth money is invested in a total stock market index fund. This month we’ll be funding both our Roth accounts for 2022 with the maximum contributions ($6k +$6k) which will be reflected in next month’s report!
Joint Brokerage Account: (+$61,428): After the sale of our rental property, we moved $53k into this after-tax brokerage account. The additional growth came from rising stock prices. It’s kind of scary buying stocks in large quantities at all-time market highs… But I’m still convinced that lump sum investing is better than dollar cost averaging when you’re sitting on a large pile of cash and have a long investment time horizon.
*NEW* Solo Roth 401(k): (+$9,641): A couple months ago I opened a Solo 401k with TD Ameritrade, as well as a Roth 401k account. Since I have no work benefits currently (I’m paid as a contractor) I can host my own retirement plan. I decided to go with *Roth* 401k contributions instead of regular 401k because I can roll these directly into my Roth IRA later. This gives me a lot of flexibility with early withdrawals and such before I reach full retirement age. More to come on all this… I’m hoping to max out this Solo Roth 401k with 2022 contributions – this year’s max I believe is $20,500!
HSA: $4,743 (+$180): Since my wife and I don’t have HDHP health plans currently, we aren’t able to contribute to this HSA account. The $180 gain this month was from market growth only.
Breakdown of Liabilities
Rental Property Mortgage: (+$250): I’ve reached out to a mortgage broker to investigate refinance options (again) for our rental duplex. Since we have more than 50% equity in this property we have room to leverage a bit more. Still not convinced it makes sense right now, but it never hurts to explore options! Until then, our tenants are paying down the mortgage balance little by little, month by month.
Credit Card Balances: (+$4,856): We hammered the credit cards this month, but we have the cash to cover all purchases in our checking account. Each month we pay our CCs off in full before any interest hits.
My wife and I have no other consumer debts at this time. 😎
How did your 2021 finish up? Which accounts are you prioritizing this year?
Happy Friday and have a great weekend!
Joel is a 35 y/o Aussie living in Los Angeles and the guy behind 5amjoel.com. He loves waking up early, finding ways to be more efficient with time and money, and sharing what he learns with others. Rise Early | Retire Early!