Net Worth Update – February 2015

Despite February being a short month, it went by pretty slowly. Maybe it’s the cold gray skies and all that snow. But it’s another month closer to Spring and there’s warmer weather ahead. The Bare Naked Ladies are touring this summer so we bought tickets and that’s something to look forward to. I also received some good news as I received a bonus from work this month plus a higher salary starting next month.

My Score for February

Living Expenses $ 3,900
Security Ratio 8.85 %
Expenses 57.27 %
Investments 25.09 %
Savings 17.64 %
Retirement 0
Wet Worth $ 58,787
Work Freedom Day 13-Nov-15

Living Expenses

This is my fixed monthly budget for living expenses and it includes both essential (e.g. groceries, mortgage, insurance), and non-essential (e.g. music, travel) purchases. $3,900 is the amount from my current budget; budget 3.0.

I spent a total of $3,178.83 this month which means I was $721.27 in surplus for the month against my budget.

Security Ratio

This is the percentage of my living expenses budget that my dividend income this month would pay for.

This month’s value of 8.85% is a little better than January’s 8.15% due to higher dividend income. Last month I earned $318 in dividend income, this month was $344.97.

Living Expenses %

The percentage of net income that’s spent on living expenses. Lower numbers are better here.

This month’s 57.27% is higher than last month’s 55.6% due to slightly lower income this month. Since my living expenses are a fixed amount, any change in this number is caused by a change in income or budget. While the number is worse than last month, the positive spin is that this month should be the worst result of the year – so from now on, things should only get better!

I’m also not showing my bonus as income in these numbers so that I can better compare results month to month. I don’t assume that I will receive a bonus in my financial planning, so 100% of the money goes to Savings and Investments.

The chart above shows the trend in my Living Expenses % since the start of 2014. For the first part of 2014 I was paying two mortgages. In June 2014, I introduced Budget 1.0 after selling my first house and I made some minor tweaks in Budget 2.0 from October onwards. January 2015 is the first month following Budget 3.0.

Savings %

The percentage of net income spent on savings.

I put aside $500 every month for mid and long term goals (any large expense due a year or more in the future), as well as $547 for my car payment. Contributions to my Emergency Fund also come from this category. This month, the savings amount was 17% of my month’s income.

Investment %

The percentage of net income that I invest.

Any spare money left over after savings, retirement and living expenses are paid goes into my current income portfolio. This month it was 25% of my income.

Retirement %

This would represent the percentage of any post-tax contributions from net income towards my retirement accounts, but I don’t have any plans to do so at the moment. I’ve also recently changed my asset allocation in my pre-tax retirement accounts.

Wet Worth $

My liquid assets minus all debt (excluding retirement and assets).

My wet worth increased $17,385 (!) this month to $59,079. There’s a more detailed breakdown of this amount further below.

Work Freedom Day

The day in the year that I’ll have earned enough dividends to pay for the remaining year’s budget.

Based on my current projections my Work Freedom Day remains at 13 November 2015. There’s still a lot of room for error in this prediction so I’ll be updating it monthly as estimates become actuals.

Dividend Income

Total income from dividends was $345 this month. Back in February 2014, I earned $249 so this is an increase of 38% over the same time last year.

The following chart shows the cumulative dividend income so far this year compared to previous years.

Dividend income from stocks

9 stocks paid dividends this month: T, AXP, PG, APD, LNT, GIS, RTN, CLX & VZ as shown below.

The yield calculations are annualized, or extended forward a year based on the current dividend payment against the market value. They don’t include contributions from stocks added after the ex-dividend date so they may under-estimate the value.

Last month my dividend stock portfolio was valued at $29,546. This month it’s $32,749 – an increase of $3,173, which includes $1,800 in new investments. The portfolio now has a 17% unrealized gain, up from last month’s 14%.

$1,200 of the new investments came from my weekly $300 Sharebuilder purchases. The additional $600 came from buying 6 shares of the VPU ETF.

Dividend income from funds

I also hold several mutual funds in my taxable account that I consider part of my dividend income portfolio.

I added a total of $900 to my fund investments this month – $500 in VHDYX, $100 in VTIAX, $100 in VWESX and $200 in VWEAX. This is in addition to the $1,800 I invested in stocks.

Overall my portfolio of both stocks and funds increased by $14,407 to $189,735. My unrealized gains increased from $9,733 (5.9%) to $14,776 (8.45%). Half of this increase was caused by adding more cash to my cash reserves from my bonus payment, the remainder is from new capital ($2,700) and market growth.

Wet Worth

I’m showing my Wet Worth in this post – this is the cost of my liquid assets minus debt, I exclude assets and retirement accounts from this number. I prefer this over Net Worth since the equity in large assets (house, car) and retirement funds is hard to get at and not always predictable. I find this is a more honest view of where I’m at on my journey.


The change in Wet Worth is caused by

Cash +$566 Positive cash flow again and no major expenses this month.
Debt -$61 Overall debt increased this month due to higher credit card spending from a new laptop purchase. This will show up as a cash expense next month.
Savings +$2,132 $500 of this was normal savings, $1,000 was additional savings from my bonus and the remainder was from market increase in the Vanguard Wellington fund (VWELX) that I use for long-term savings.
Emergency Fund +$341 My Emergency Fund now consists of cash, a stock fund (VTSMX) and a short term bond fund (VBIRX). I’m slowly decreasing the cash portion and adding to the stock fund, as well as adding a little extra each month to reach my 2015 target.
Portfolio +$14,407 My overall income portfolio increased in value this month as noted above.
Total +$17,385 Total change in Wet Worth.

February 2015 Summary

February was a great month, even without the bonus paycheck, with good increases from the market. That’s now 14 months of continued wet worth increase since the start of 2014 which is awesome! My new income levels should further improve the numbers starting next month although I am considering a small budget increase along with my raise – we’ll see about that.

 

Quote of the Day

The individual activity of one man with backbone will do more than a thousand men with a mere wishbone.

0 thoughts on “Net Worth Update – February 2015”

  1. I love these updates! It’s great to see your progress and I like the way we see a comparison with last year and your progress towards work freedom day. No doubt if I look again the same time next year it’ll be a October instead of November.

    The charts look great. Almost makes me want to go back to Microsoft products…

    1. Hi Andrew,

      It’d be great to see October instead of November for my work freedom day next year so I hope you get to see that next year! At this point any date is better than Friday 13th November though!

      Microsoft are faced with disruptive tech just about everywhere – they seem to be doing a pretty job good with Office and the new online apps / subscriptions though. Having said that, I’ve not used Google Docs so I don’t know how green the grass is on the other side.

      Thank you for the support and kind words – I really appreciate it!

      Best wishes,
      -DL

    1. Hey Henry,

      Thanks! It was a good month and I was surprised by the market gains. You’re right about the $100k – I might be able to reach that this year if there’s no major turmoil. We’ll see!

      I hope you had a great month too and I’m looking forward to seeing your February progress!

      Best wishes,
      -DL

  2. I’ll have to second Andrew’s comment. The online Excel looks great, and as an Excel Junkie, I might need to look into it. Google Docs just doesn’t have all the functionality that I am used to with Excel.

    As for your actual progress, it is been tremendous over the last year. Sure the bump from the bonus is nice, but you can really see where the portfolio is scaling to the point of growing organically. Keep up the good work and thanks for sharing with us!

    1. Hi W2R,

      Thank you for the support – I’m still amazed at how friendly and supportive the FI community is!

      The portfolio’s certainly gaining traction and contributing more each month which is great to see. I hope you had a successful February and best wishes for March!

      -DL

  3. So regarding tax refunds…you don’t show those as well? Last year I showed bonus and refund in my income. Does make the spring months a bit heavy and hard to compare year over year/or month to month. I may display like yours and just exclude one time incomes. Good month btw!

    1. Hi DFG,

      That’s a good point! I think last year I received my tax refund before I started my blog, but I did exclude it from my percentage calculations from last year. So yes, I’ll do the same this year to keep the month to month comparisons the same.

      I’ll be lucky if I get a refund this year so we’ll see how that goes – any refund or taxes owed will show still up as a change in net worth.

      Best wishes,
      -DL

  4. DL,

    Another good month in the books – well done!

    On top of a massive net (wet) worth increase, it’s great to see your dividend income slowly chugging along to and climbing ever higher.

    Keep it up,
    NMW

    PS: thank you for updating your dividend champions list once again.

    1. Hi NMW,

      February was definitely a good month for me and it looks like you had a great month too!

      There weren’t many changes in the champions list this time but each month is a chance to improve and correct it, as well as optimize how I generate the list to begin with. It’s definitely an interesting project!

      Hope you have a great March!

      Best wishes,
      -DL

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