Saturday, February 8, 2020

2019 Year End Net Worth Update

2019 was a great year for the DIY$ household finances. We had our highest income year ever (thanks to a promotion and two pay raises), saw huge gains in our portfolio, and banked a lot of our income towards paying off our mortgage. We got soooo close to paying off the house, but still need a couple of more months to get it completely paid off. 

For the month of December, our net worth went down a bit, mainly because Zillow shows the value of our home down a lot. This happened a year or so ago and quickly went back up, and I'm using the their figure to stay consistent.  

Even with a $33k reduction in home value, we still ended the year at $1,016,351

The end of the year is also a good time to take a step back to see the progress we've made over a longer time frame. 

In 2019, our net worth grew by nearly $200k, our largest annual gain ever. This is more than I earned in 2019 so it's really nice to see the impact of our investment earnings added to our regular savings. 

A few observations:
  • I know we've been putting a lot of money towards paying off the house, but seeing that it was $65k in a single year was little surprising. We'll have it completely paid off soon, and it's crazy to think that we could increase our other investments/savings at that rate once the mortgage is done.
  • Once the house is paid off, I'll be viewing our net worth slightly differently. The plan is to look at our liquid assets separately from our other assets (house, cars, etc) as we focus on the next goal of reaching $1M in liquid assets.
  • Our cash balance is creeping lower and will get even lower before it jumps back up at bonus time. I would much rather be in a position where I am waiting for a bonus to replenish my cash than to need the bonus to pay off consumer debt. When I was a financial advisor, we were paid quarterly bonuses and some co-workers would consistently rack up credit card debt each quarter, relying on their bonus to dig out of the hole they dug.
  • 2020 is off to a good start for our finances, but not without uncertainty similar to any other year. Our spending habits are mostly the same, but we do have some celebratory spending planned shortly after paying off the house. 
  • Most of what I've put on this site has been 'money stuff', and not very much 'DIY'. This year we'll be starting a pretty major DIY project at our house and I plan to document more of that. 

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