Home / Net Worth / Net Worth July ’17

Net Worth July ’17

SUMMARY: A big jump this month due to a milestone bonus for meeting certain targets at work and annual growth increases for two life insurance policies –  July anniversary month. I use life insurance cash value as my bank to fund various obligations or investments because of the interest rates (see post here).  I think of the cash value in the life insurance as home equity value and the loan as the mortgage. Only the home is guaranteed to appreciate in value and the loan is charged at a simple interest rate.  This month’s increase is gearing up for 2018, wife’s nursing tuition.  No financial aid for your second time around!

LIQUID ASSETS

Checking – cash purposed for managing day-to-day and monthly expenses

  • -$2,440.07 decrease due to final semester of prerequisites for wife’s new career. Happy to not dig into our savings!

Savings – cash purposed for the next 3-5 years (wife’s tuition, house down payment, emergency etc)

  • +$171.02 $150 monthly automated deposit from my checking + 21.02 in monthly interest

Life Insurance – cash (surrender) value of policies purposed for strategic investment opportunities

  • +$73,022.39 monthly premium, loan repayment from bonus and anniversary growth on policies

Stocks

  • +$55.34 really flat market movement

Real Estate Earnings – PeerStreet monthly interest earnings

  • -$175.69 repayment of principle + accumulated interest was re-invested into a new property

NON-LIQUID ASSETS

Retirement  – 401(k), IRAs, Pension

  • +$3,686.75 market movements

Other – represents my cost basis in illiquid assets (PeerStreet principal investment, Mrs. Church’s wedding rings, apartment security deposit, and an outstanding loan receivable)

  • -$93.29 loan receivable payment increased slightly by an increase in Peerstreet basis for new investments

LIABILITIES

Credit Cards – two cards (Amex & Visa) with great rewards

  • +$1,598.89 booked some fall and Christmas travel

Other – life insurance policy loans used to fund strategic investment opportunities

  • -$46,679.23 loan decrease due to bonus check going towards balance

6 comments

  1. Nice month!

    I just got done pulling our numbers together for July, not as good as your month, but we crossed the $600K mark for the first time with a $29K increase in Net Worth or about 5.1% growth vs. last month.

    I got 30% of my annual bonus potential in our mid-year bonus payout in July, which is a driver for a large part of the increase.

    I am working to get us over $700K by January of 2018. We should reach $650K+ by end of this year, but January 2018 will be a big month for us, as it historically is our best income month. And I will be re-valuing the stock I own in my company (this is only done once a year).

    Onward & Upward!

    • Hi Dom,
      $29k (5.1%) growth is incredible! You gotta love those mid-years target bonuses coming in at just the right time. Let me ask you, what is the valuation technique you use to fair value your company stock?

      In terms of my July NW, I’ve always gone back and forth as to whether or not I should show the life insurance cash value + the loan net or gross. Obviously, I decided on gross because it is complicated enough to explain what is going on and by showing, gross, folks can see whats in the sauce. Best thing about the cash value increase is that it is all CASH. Not an “unrealized” value from the stock market. Although in 2018, I have plans to take down significant chunks of that cash value for my wife’s tuition and it is also funding other policies that have accelerated cash growth. Early on, the policies growth was all headwind, now as they have matured, it is all tailwind.

      • Church – on the valuation of company stock, it’s based on the same formula our investors use, which is based on an assumed multiple of TTM EBITDA to calculate a total enterprise value, which is then adjusted by a few factors like long term debt, loans to shareholders, option proceeds, etc.

        Obviously, the only share price that will count, is the price we can get in the next liquidity event.

        I plan to use a more conservative multiple than our private equity investors use.

        • Well let’s hope for the next liquidity event to be off the charts!

          I am always curious to understand how folks assess a company’s valuation – enterprise value, book value, discounted future revenues etc. AAaahhh….the old consulting days…

  2. Wow Net worth goals! This is awesome. I’ve never seen someone include their life insurance inside of their net worth, very interesting and it makes sense. Thanks for sharing!

    • Life insurance cash value is very much a real asset, not just a death benefit. I use it in my everyday life to subsidize expenditures and/or investments, exactly as anyone would with a savings account.

      And this is exactly why the PF community shares their most intimate financial details, so we can learn and benefit together.

      Thanks for stopping by!

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