Monday, June 10, 2019

May 2019 Net Worth Update - 2nd worse month ever

Just like anyone else who stayed invested through May 2019, our net worth took a few steps back. The S&P 500 was down more than 6.5% and our net worth went down by almost $28k to $894,975. 


INVESTMENTS

On a percentage basis, our investment account didn’t go down as much as the market overall. Rather than any savvy strategies, this is only because we made additional contributions during the month. Nearly all our investments continue to be in index funds, split between US and international stocks and no bonds.

This decline wasn’t quite as big as we saw in December 2018, when we had our biggest monthly loss from a dollar perspective. Our December losses are in the rear view mirror since we remained invested and even with May’s decline our accounts are all quite a bit higher than they were at the beginning of the year, even adjusted for contributions.  

HOUSE/MORTGAGE

Over the past two months, online estimates have dropped our home value by ~$25k. Since a lot of what online home value estimators use in their formulas is the same as a home appraiser, I won’t override it. However, I do think it will revert back relatively soon.

We had someone in the neighborhood sell their house to Opendoor.com, a company that makes all cash offers, then quickly resells your house. The company hopes to make a profit because they don’t pay top dollar for their inventory (enticing sellers with all-cash offers and little hassle), but meanwhile that’s the most recent house that has sold in our neighborhood so it brings down the estimate for other homes. A few houses similar to ours have since sold for $550k+ so if I am right, our home value will jump up once those sales are included in the formula.

We again made an extra large payment towards principal and knocked our mortgage balance below $50k. We have an expensive summer coming up so will dial it down just a bit while staying on track to pay it off entirely within the next year.

CASH

We managed to keep our cash balance pretty constant for the month despite having several out of the ordinary things come up. No one thing really stood out as individually large, but collectively came up to almost $1,000 (new ceiling fan, kids summer camp enrollments, car battery, etc). Over the next few months, we’ll have to continue balancing our desire to pay off the mortgage quickly with the goal of maintaining a cash balance over $20k. 

 

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