Net Worth Update #1 – December 2018

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So this is my first net worth update. Here we go!

Index Funds


Figure 1: Investment value and market value of my index funds

In figure 1 you can see my index fund value as of 1. dec. 2018. It wasn’t before I sold my apartment in july (and then bought a new one 50/50 with my spouse) it got serious with the investing. In august I used leverage/gearing to buy index funds for aprox. 35.000 $.

The interest rate I got for this stock loan is 2,19 %. That’s really low, and I’m letting the inflation “eat” up my loan costs. And as long as I expect 7 % annually interest rate for my index funds, I consider this as a good choice. To get 2,19 % interest rate, I have to fulfill some conditions in my brokerage account:

-My funds have to be diversified. None of my index funds can contain over 60 % of the total value. (The biggest index fund I have to this date is 49 % of the total).

-The stock loan has to be lower than 40 % of my total loan value (the loan value is 80 % of total value). My current stock loan is 30 % of my total value.

If I meet these criterias (which I do), I qualify for 2,19 % interest rate. If some of the criterias isn’t met anymore, I’ll head up to 4,44 % interest rate.

Figure 2: The connection between my earnings (income), spendings and my monthly FI money

Monthly FI-money

In figure 2 you can see the connection between what I earn, what I spend and how much I can safely withdraw every month according to the 4 % rule. 2018 has really been a flat market, but anyway it’s motivating to see that I can safely withdraw 448 $ every month for the rest of my life. And I will do everything I can to raise this dollar amount in the future. As you all know my goal is to save up 600.000 USD. This means my monthly FI money goal is 2000 USD each month. I’m aprox. 1/4 to my goal and it feels great!


Table 1: The connection between my earnings (income), spendings, value of my funds and my monthly FI money

This table shows the same as figure 2, but I thought it would be interesting for all the money nerds out there to see the details.

Net worth index funds: 134.408 $

Mortgage / pension / student loan / stock loan

Mortgage

We own an apartment 50/50 that has a total value of 515.000 $. That means my share is 257.500 $.
While this sounds good, my share of the mortgage is 199.000 $. The interest rate is 2.15 %

Net worth housing: 56.500 $

Pension

My current pension is 45.130 $. This is of course a really iliquid asset class, because I can’t hit withdraw the amount before I’m 62 years old. But I think I should include it, it’s what J Money call a “benefit pension”. That mean I can see my present pension value. Read more about that here. Do you include your pension in your net worth?

Net worth pension: 45.130 $

Student loan

After nine years with different studies I got 55.000 in student loans. In my country the university has no fees, so this is a loan covering basic living expenses while you’re at the studies. The interest rate is 2.09 %.

Net worth student loan: 55.000 $

Stock loan

My stock loan, which I consider good debt (2,19 % interest rate) is currently at 32800 $.

Net worth stock loan: 32800 $

Total net worth

Index funds: 134.408 $
Housing: 56.500 $
Pension: 45.130 $
Student loan: 55.000 $
Stock loan: 32800 $
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Total net worth: 148.238 $


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