Net Worth Breakdown - From Real Estate to Retirement

Now that we are approaching a half million in net worth I have been asked the question of how do we calculate our net worth (i.e. what do we include).  So here is my stab at answering that request:

Total Assets: $641,676.80

$346,696.20 Retirement Accounts (401k, Roth IRAs, Pensions - age requirements)
$128,990.77 Cash, Savings, CDs, Taxable Accounts (i.e. Betterment and Individual stocks)
$123,000.00 Real Estate (primary house)
$  37,381.00 Personal Possessions, 2 vehicles, and 1 Boat (harder to access or liquidate)
$    5,608.83 Medical HSA [Health Savings Account]

Total Liabilities: $147,002.16

$54,018.78 Chapter 13 repayment plan
$92,983.38 Mortgage on Primary Home

Net Worth: $494,674.64

So that is our breakdown.  At one time, about 7 years ago, we had over $1 million in assets but over $700,000 of that was in Real Estate, since then due to the housing bubble, loss of jobs, we have had to file Chapter 13, and now we just have our mortgage on our primary home.  It was a huge shock to the system to watch our Assets go from over $1 million to less than $300,000 at the time.  Our Net Worth was negative due to the mortgages, which let to part of the reason we had to file Chapter 13.

Right now, we are probably a little heavy in cash/savings, which are only making between 0.5% to 1% on average but once the Chapter 13 is paid off we plan to increase our investments.

I don't include Life Insurance policies (no fun, since I won't be around to spend the money anyway!), and currently Baby Breeze's college fund is a part of our Cash/Savings category since it is pretty insignificant, but I will probably separate that out as it grows.

Ultimately if we are going to live off the dividends that our investments make, then we are really only looking at the top two asset categories, which are around $475,000.  Based on our spending needs, we need to double that number.  Our goal is to do that over the next 5 years.  This is where I got the goal to increase our Net worth by $100,000 each year.  I love playing with the numbers and hopefully we will blow this number away, but knowing that life happens, we are just going to track it year by year and continue to  . . . follow life's breezes!

Monthly Update - April 2014

 Time for our Monthly Update:


Here is our Net Worth Standing for April 1, 2014:

Assets: $641,676.80 - Liabilities: $147,002.16 = Networth: $494,674.64

Net Change = increase of $23,586.13

Thrilled to see an increase in our Net worth, especially since March was an expensive month.  Between both Baby Breeze and I being very very sick, and therefore not cooking the healthy meals we had planned, we ended up buying more food than planned and threw away a lot of food. Mr. Breeze ended up eating out a lot at work as there were no healthy lunch options for him.   Other than food, we really kept our spending to a minimum.  (Of course, being sick and not shopping probably helped that).

The big increase in our Net Worth has to do with the fact that I became vested in a third of the match the I receive for my retirement fund.  I haven't included this in my net worth until now since I wasn't really eligible to take advantage of those funds.  Now that I have 5 years in my current retirement plan, I am eligible to take 33% of the matched funds if I were to leave.  If I make it to 10 years then I get 66% vested match.

We also filed our taxes, and while we owe locally, we are getting a rather large return from our Federal taxes.  Our adoption of our little guy is a huge benefit to our lives and our taxes! ;)

This will allow us to pay more on our debt as we agreed that any return we would put towards debt, so you will probably see that next month when we get our return.

Here's to paying down debt and working towards that early retirement goal!