Sunday, September 20, 2020

August 2020 Net Worth Update

Led by continued increases in the stock market, our net worth hit another all-time high in the month of August, ending the month at $1,149,900. 


CASH

Our cash balance dipped a bit, but this was expected since we had several things hit in August that were either one-time or won't come again for a while like our annual homeowners insurance bill and several things to get ready for the new school year. We still would like to get it up over $40k and we should be able to get there soon. Our property taxes are due this fall, but should be able to stay at or above $40k even after that is paid. 

People often ask me where to park their extra cash since savings accounts pay so little. We keep the bulk of our savings in an online savings account. The rates are historically low, but better than you'd get at your typical bank and emergency funds aren't meant to be put at risk. The Federal Reserve recently came out and indicated that rates will stay at these low levels until at least 2023, so I suspect that more and more people will be looking for higher interest on cash. To anyone looking to do that, I simply say "BE CAREFUL". I suspect we will see more and more people out pitching 'risk free' investments that come with strings attached and heavy commissions to the person selling them. 

INVESTMENTS

Our investments went up with the market, and grew by about $35k. It's hard to believe that my first job out of college less than 15 years ago paid me as much in a year as we now regularly earn in a month. The power of compounding is real. We continue to invest primarily in index funds, and haven't made any remarkable changes to our allocation. While I don't consider our paid off house as part of our portfolio, knowing that we have that gives me additional comfort being invested heavily in equities. 

We skipped adding to our taxable investment account this month but plan to resume that as soon as we pay of our property taxes since we didn't want to tap into our savings account to cover things like that. While there is not upper limit on our accounts at this point, we are watching for when our taxable investment account balance can hit $100k and $200k and may make some large purchases with a portion of it when it reaches those milestones. 

OTHER

We are getting close to finishing our bathroom renovation and will then push pause on large home project until at least 2021. Overall we will have saved more than $10,000 by doing the work ourselves but we are getting to the point where we're just ready for it to be done. Cosmetically it looks mostly done, but we still have a few faucets and drains to hook up. We have a few other large projects in mind next but we need a breather to build up cash and to get some other things done that we've been putting off.