Sunday, August 19, 2018

July 2018 Net Worth Update - (+$27k to $836k)

July was a great month in many ways. We were able to fit some travel in to visit both sides of our family and let the kids spend quality time with their cousins. Despite a few cross country flights and an unexpected hotel stay, we were able to boost our net worth by nearly $27k to $835,913.



CASH

January and July are the months where we pay our auto insurance, and since we also had a bit of travel thrown in, our cash balance dipped below $20k. We want to build this back up, but may not see significant progress until September or October. 

In July we spent a couple of weeks on a planned trip visiting family. My wife and kids went for two weeks and I went for the second week. This trip wasn’t extremely expensive, but since we have 4 kids and have to rent minivans or SUVs our rental car expenses can get pricey. Although this trip was planned, often our travel expenses are made spontaneously and we don’t really have a firm budget for travel every month, it just eats into the amount we’re able to save. July was a perfect example of how this happens. 

At the beginning of the July, I learned that a cousin of mine who lives far away and who I hadn’t seen in years was going to be visiting another cousin only a few hours drive away and that a bunch of other family members were also going to be there. At the last minute we decided to join in the weekend festivities and ended up spending a few hundred dollars between hotels, gas, and unplanned eating out in two days. It was totally worth it, and since I don’t have too many cousins it isn’t likely something that will happen again for a while. 

HOUSE/MORTGAGE

In July we made another big mortgage payment, reducing our outstanding balance by over $2,700. I’m really excited for the day that our mortgage is completely paid off and we continue to push to pay as much extra as we can. We could easily dial this back for a short while and bump up our cash, but a slightly below optimal cash balance is less dire to me than losing traction on our aggressive payoff schedule. I’m getting a raise near the end of the year and we’ll use a good chunk of that raise to increase what we’re paying towards the house to further accelerate our payoff. If we were to quit paying extra, we are currently 135 months ahead of schedule on our 30 year mortgage after paying for roughly 5 years. 

Our house price estimate feels accurate, and home sales are going quick in our area again. We really like our neighborhood and apparently we’re not the only ones. One of our neighbors put their house up for sale recently and we learned are only moving one street over (they decided they’d rather purchase a larger home in the same neighborhood versus doing a huge addition to their home).


INVESTMENTS

I have someone who works for me who swears the next downturn in the market is right around the corner and is going to be really bad. I just have to smile and nod and then ask why he isn’t managing money if he’s so sure (his only evidence is his gut). Everyone has an opinion, the most dangerous ones are those that come from pursuasive people who have fully convinced themselves of something. 

July marked yet another month of us not making changes to our investment portfolio. Even if this guy is right, we have no plans of making huge adjustments to our portfolio as long as our long-term goals remain unchanged. A downturn becomes a buying opportunity, but not one that I’ll attempt to time by selling at the top and to buy at the bottom. I’ve seen enough people lose that game to know I don’t even want to play.

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