Thursday, March 26, 2020

February 2020 Net Worth Update

February is usually our highest income month, and this year was our best yet. This year I used most of my annual bonus to make our final payment on our house! The market started to slump in the end of February, but we still managed to end the month with an increase in net worth of $9k to $1,028,625. 


CASH


Our cash balance is up to a much more comfortable level now, especially now that the house mortgage is paid off. Our fixed monthly expenses are down by quite a bit, so what was once a ~5 month emergency fund all of the sudden became a ~9 month emergency fund. As of the end of February, storm clouds appeared to be brewing for my job and the economy as a whole, so we're comfortable not deploying this cash right away. 


HOUSE / MORTGAGE


Did I mention that we paid off our house? I've gone through some rough economic times, including being a financial advisor throughout the 2008 crisis. I know that people who work for me may be worried about their jobs and the market, and I do what I can do provide advice and comfort. What I was not expecting was how calm I feel through the midst of uncertainty knowing that I not longer have a mortgage. I never realized how much stress it caused me to have a mortgage until I paid it off and it truly is a weight lifted off of my shoulders. 

INVESTMENTS


Even though we aren't ready to invest all of our excess cash, we have started to automatically invest monthly outside of our retirement accounts and started adding back into our 529 savings accounts. I'll be showing a different breakout of our accounts in future months, but until this point almost none of our investments have been outside of retirement accounts. 

There is a part of me that has wanted to be opportunistic and buy into a down market with large chunks, but we've decided to stick with our plan to automatically invest monthly and not allow emotions to cause us to deviate from that set schedule. The difference in days between investing when we think we see the right opportunity and our normally scheduled purchases won't make a difference in the long run, so I'm keeping this hands off. 

In February I also did a Roth Conversion, something we try to do at the beginning of each year. Sadly, the amount we converted is already down in value and we'll still be responsible to pay taxes on the value at the time of the conversion. Prior to 2018 it was possible to undo a conversion to avoid this exact situation, but that is no longer an option. I'm still happy with did the conversion, and will continue to do them as quickly as we can afford.

OTHER


Similar to January, I also read 10 more books in February. Here are some of the best ones:

The Rosie Project by Graeme Simsion. I don't read much fiction, but this one came recommended by Bill Gates, and I have always enjoyed his recommendations (I also wish I could read as fast as he does). The main character in this book is a very quirky professor of genetics whose methodical routines are ruined when Rosie enters his life. 

Dopesick: Dealers, Doctors, and the Drug Company that Addicted America - by Beth Macy. The opioid crisis in our country continues to destroy thousands of lives and this book goes into the story of how Oxycontin spread so rapidly and then how addicts have gone from popping pills to injecting heroin. I've read a few books on this topic, I like the way this was one written, following the lives of multiple users and learning each of their own unique paths.

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