Net Worth, Year 2

A year ago I wrote a post about my net worth and the convenience of having it automatically calculated in an online financial tracker. net17

Since then, my net worth has increased by over $140,000—from about $706,000 to about $850,000.

About 80% of the increase (~$117,000) has been in the investments category.  This is mostly the result of the mutual funds in my retirement account going up along with the stock market over the past year.  Also, all the dividends that those shares have earned have been used to buy more shares.  Of course, I’ve made additional contributions during the past the year.  Breaking it down, the amount of the increase in investments from appreciation and reinvesting dividends was between $90,000 and $100,000 and the rest was additional contributions.

About $13,000 of the increase in my net worth is an increase in the (estimated) value of my house.

Another $8,000 of the increase is the reduction in the amount I owe on my home mortgage.

The remainder of the increase is a temporarily large amount of cash in my checking account.

Last year, I included my old used car (which was worth only about $2,000) in the “Property” category.  I have removed it, after recently buying a “new” pre-owned car.  However,  I have not added that car nor the debt which I will temporarily incur.  The value of the car and the debt would more-or-less offset each other.  I will probably pay off the car debt next month by borrowing roughly $15,000 from one of the retirement investment accounts.

This may be the first time that my net wealth has shown an over-the-year increase that is larger than my annual income.  (I wasn’t watching closely in previous years.)  This seems like quite a milestone on the road to retirement.

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