Here’s my net worth update and summary for July 2015 – this part follows on from my July income summary. July was another quiet month in terms of surprises, but I was kept busy with work deadlines…another reason to look forward to being financially independent!
My Score for July
|Living Expenses $||3,850|
|Security Ratio||9.07 %|
|Wet Worth $||76,234|
|Work Freedom Day||10-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. $3,850 is the amount from my current Budget 3.5.
I spent a total of $3,375.76 this month which means I underspent my budget by $474.24. This is planned though since I budget on an annual basis and the months in surplus are offset when large annual payments for insurance are due.
This is the percentage of my monthly living expenses budget that my dividend income would pay for this month.
This month’s ratio of 9.07% means that my dividend income paid almost 10% of my expenses this month. Last month I earned $1,083 in dividend income; this month was $349.
Living Expenses %
The percentage of net income that’s spent on living expenses. Lower numbers are better here.
This month’s 53.43% is back to more normal levels after last month’s record result! While it’s higher, it’s comfortably down from the year’s maximum level of 57.3% back in February. Any change in this number is caused by a change in either income or budget; dividend income was lower this month but my new (reduced) budget helped improve the score.
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. In January I started Budget 3.0 which I updated to Budget 3.5 in July.
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 and added an extra $100 into my Emergency Fund. This month, the savings amount was $1,177.25 or 16% 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 30.23% of my income.
I’ve written about my portfolio income and gains in July 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 $2,434 in July to $76,234. 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 advances one day to 10 November 2015! As an interesting point, that $50 a month reduction in my budget accounted for the additional day.
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||+$408||Cash for living expenses increased on the whole due to the budget surplus this month.|
|Debt||-$2,191||Debt decreased this month due to a large insurance payment which I charged to my credit card that I’ll be paying next month.|
|Savings||-$727||I’m continuing to re-characterize a portion of my cash in my savings to cash in my Investment portfolio.|
|Emergency Fund||+$258||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||+$4,686||My overall income portfolio increase in value this month. See my earlier post for details.|
|Total||$2,434||Total change in Wet Worth.|
July 2015 Summary
July was a solid month on the whole. 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. Hopefully July starts a new streak of continued wet worth after last month’s drop.
Quote of the Day
I am definitely going to take a course on time management… just as soon as I can work it into my schedule.