At the start of the 2021 I would never believe that we would be so close to achieving a net worth of 1 million dollars. This year has been incredibly generous to us, and it has rewarded our consistency and hard work with positive growth month on month. That said it’s important to put this into perspective with last year in 2020 where that same consistency and hard work didn’t always result in positive growth. Whilst positive growth is great it’s not guaranteed even when you are consistent and put in the hard work. It’s during these “bad” months that you need to block out the negativity, keep up the hard work and consistency, and remind yourself that this is a marathon not a sprint. With the right attitude you can weather out the bad months, and set yourself up to be ready when those good months come back around.
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Net worth July 2021 – $965,633 (up $3,906)
Assets July 2021 – $1,332,781 (up $12,399)
Our asset increase in July was made up from our retirement funds (called superannuation here in Australia), and our investments.
So what did we do right?
We consistently invested thanks to Pearler’s auto investment feature and invested $4000 this month (as per our investment strategy). We continue to invest at a rate of $2000 every two weeks so depending on the number of pay periods in the month this amount will fluctuate. In addition to our regular investment amounts July was also a distribution income month, and we reinvested $3,867.75 back into purchasing more ETF’s (if you want to read more about distribution reinvestment click here).
Our retirement funds also continued to grow thanks to our generous employment benefits (My husband receives 17.5% employer superannuation contributions, and I receive 10% but also have deferred tax benefits for any super contributions that are made to my account).
So what did we change?
We changed nothing this month and just let our investments do their thing. Our crypto portfolio continues to fluctuate crazy amounts, and I avoid looking at it except for the end of the month to do these updates. Please note that crypto makes up less than 0.6% of our net worth.
What assets do we include?
Often I see a lot of chatter around what should be counted towards your net worth. I don’t believe there are any hard or fast rules, and as you know I’m a huge believer in the saying ‘You do you and I will do me – it’s a no judgement zone here‘.
For us we like to keep things simple and don’t count our depreciating assets like cars and the boat (otherwise we’d be constantly changing the prices every month).
I also count our primary place of residence towards our net worth as we intend on selling it as part of our financial independence plan. We will be updating the value of our home in August as we are waiting on the results of a formal bank valuation.
Additionally we count our retirement accounts (called superannuation in Australia), taxable share/brokerage accounts, and our crypto (yep I know super controversial to add this one in but what the hell).
Liabilities July 2021 – $367,148 (increased $8,493)
As you can see our home loan increased this month after we withdrew even more money for our Airbnb renovations from our savings.
The good news to report in this area is that we have now withdrawn all the money we have set aside for renovations, and have placed these funds in a high interest account. We will use this account to continue paying our trades until the renovations are finished. Any leftover funds will go back into our redraw account to offset the mortgage after the refinance has been completed.
Next month our liabilities may increase if our refinance is approved. We have decided after much thought to start debt recycling, and do an equity transfer to move more of our assets into ETF’s rather than our primary place of living. I’ll keep you posted as to how this goes.
What liabilities do we include?
For liabilities we keep things simple and include anything and anyone we owe money to.
Total Net Worth Increase in 2021 (to date) = $205,413
End of 2021 Goal 1 million dollar net worth: $34,367 to go!!!!
How do I track our net worth?
I’ve tracked our net worth since mid 2019 and enjoy seeing it grow over time. I strongly believe that tracking can assist you on staying the course, because lets face it this getting wealthy business takes time (and it’s easy to feel like you’re not making progress and lose interest).
Being a bit of a spreadsheet nerd I track our net worth in a custom made spreadsheet which is available here for $5.50.
I also track it on a day to day basis on a free IOS app called ‘My Net Worth’ so I can see how I’m going over the month, and then I enter the details from the app into my spreadsheet.
How do you calculate net worth?
If you don’t want to download the free IOS app or use a spreadsheet you can calculate this manually.
- Writing down all of your assets and liabilities separately.
- Then add up all of your assets together to get a figure (write this down).
- Then add up all of your liabilities together to get a figure (write this down).
- Then take the sum of your assets and deduct the sum of your liabilities.
- This is your net worth.
Net Worth = (Sum of your Assets) – (Sum of your Liabilities)
Happy Calculating !!!!! If you don’t want to do the calculations yourself the Net worth Tracker I use is available in my Etsy shop for $5.50 (click on the image below for the link).
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Frank on FIRE 