Here’s my net worth update and summary for April 2015. April was (yet) another quiet month with no major surprises which is usually good for finances. My musical tastes last month wandered over to A Fine Frenzy, kind of Tori Amos meets Coldplay; in particular her songs You Picked Me and They Can’t If You Don’t Let Them.
In other news, I started my new site, DividendChampions.UK so that’s been keeping me busy and, well that’s about it really. So was April a step forward towards FI or a step backwards?
My Score for April
|Living Expenses $||3,900|
|Security Ratio||8.74 %|
|Wet Worth $||70,688|
|Work Freedom Day||13-Nov-15|
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 3.0.
I spent a total of $4,174.27 this month which means I was $274.27 in deficit for the month against my budget. The over-spend was paying for tax filing, some medical costs and domain name renewals. While this is the second month in deficit, it’s not a problem since my budget scheme allows for these infrequent but expected expenses and in May I should be back in a surplus again.
This is the percentage of my monthly living expenses budget that my dividend income would pay for this month.
This month’s value of 8.74% is back to more normal levels after the spike from higher dividend income in March. Last month I earned $787 in dividend income, this month was $341.
Living Expenses %
The percentage of net income that’s spent on living expenses. Lower numbers are better here.
This month’s 53.56% is slightly worse than last month’s 52.19% due to the decrease in passive income this month. Any change in this number is caused by a change in either income or budget and my budget expenses have not changed.
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. I can’t wait to see the first value below 50% this year!
The percentage of net income spent on savings.
I put aside $530 every month for mid and long term goals (any large expense or purchase 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 $1,245.25 or 17.1% of my month’s income.
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 29.33% of my income.
I’ve written about my portfolio income and gains in April in a separate post, so I won’t repeat all of that here again.
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. You can read about my retirement account asset allocation here if you’re having trouble sleeping.
Wet Worth $
My liquid assets minus all debt (excluding retirement and assets).
My Wet Worth increased $6,798 in April to $70,688. There’s a more detailed breakdown of this amount further below.
Work Freedom Day
The day in the year that my dividend income could pay for the rest of the year’s expenses.
Based on my current projections my Work Freedom Day remains at 13 November 2015.
Wet Worth Detail
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||-1,127||Cash balances decreased due to giving some of last month’s tax refund to Ms. DL.|
|Debt||-$1,853||Debt decreased this month due to regular mortgage / car payments and normal credit-card spending.|
|Savings||-$880||I’m starting to re-characterize a portion of my savings as cash in my Investment portfolio – I’ll be doing this over the next 10 months. The Vanguard Wellington fund (VWELX) that I use for long-term savings also increased by $68 this month all on its own.|
|Emergency Fund||+$162||My Emergency Fund consists of cash, a stock fund (VTSMX) and a short term bond fund (VBIRX). I’m slowly converting the cash portion into the stock fund, as well as adding a little extra each month to reach my 2015 target.|
|Portfolio||+$6,790||My overall income portfolio increased in value this month. See my earlier post for details.|
|Total||+$6,798||Total change in Wet Worth.|
April 2015 Summary
April was another good month all in all. The total amount of cash I’m holding onto is decreasing and slowly being converted into investments. My income portfolio did well last month too. And April 2015 is my 16th month of continued wet worth increase since the start of 2014 which is awesome!
Quote of the Day
Don’t fear failure so much that you refuse to try new things. The saddest summary of a life contains three descriptions: could have, might have, and should have.