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April 2007 Net Worth Update (+3.53%)

It’s time again for my monthly net worth update – The April 2007 edition.

I’ve been asked by a reader on why I include my cash accounts in my net worth. The cash amount is the bare minimum that we keep in our accounts, even after paying all our bills at the end of the month. We keep these balances to reduce our bank fees to my favorite amount… free.

Assets

Cash: $4,500 (+0.00%)

Savings: $31,900 (+14.1%)

Registered Investment: $44,400 (+6.61%)

Pension: $16,900 (+1.8%)

Non-Registered Investment Account: $46,708 (+1.76%)

Real Estate: $ 264,500 (2 properties) (+0.00%)

Vehicles: $17,525 (2 vehicles) (+0.00%)

Total Assets: $426,433 (+1.86%)

Liabilities

Mortgage Debt(from 2 properties): $175,000 (-0.28%)

Other Liabilities: $8,000 (-0.00%)

Total Liabilities: $183,000 (-0.28%)

Total Net Worth: ~$243,433 (+3.53%)

Started 2007 with Net Worth: $224,000

Year to Date Gain/Loss: +8.67%

As you might have noticed, I’m trying something new with this net worth statement where I’m indicating the percentage gain/loss. The percentage indicated is the gain/loss comparing this month to last month.

The big jump in savings is due to the fact that we’re socking away as much cash as possible due to the planned move in the very near future.

As indicated above, we’re 4 months into the year, and I’m up 8.67%. Perhaps a 20% net worth gain in 2007 would be a healthy goal to aim for.

Do you financially savvy people set net worth goals?

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FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 11 comments… add one }
  • Q Cash April 30, 2007, 7:11 am

    Hey FT

    Good job.

    I used to set annual net worth targets. I tried (and usually achieved) a 10% increase in my NW.

    Since 2007, I have been trying to decide what rate my net worth should increase/decrease/maintain. At the end of each month I fill out my chart and see where I am. I will be doing that tomorrow for April and I will give you an update.

    I have been trying to focus on cash flow verses net worth as I want to make sure my bills are paid, so I will see how that works too.

    Q

  • traineeinvestor April 30, 2007, 7:46 am

    I would not describe myself as “financially savvy” but I’ll post a reply anyway.

    I do set targets: both a savings target and a total increase in net worth target. While I can usually exercise a reasonable degree of control over my savings rate, the total return depends on movements in the markets for things like equities, foreign exchange and real estate prices. I set annual targets but while I will monitor progress from month to month I will not get excited if there are large variances from month to month. Some months I spend or earn more than others.

    Also, although we can chose what to invest in we have no control over how those prices will fluctuate from month to month or even year to year. If we get bear market that goes for several years than losing money becomes a given (unless you happen to be a lot smarter than I am).

    Q’s point on cash flow is a good one especially if you have borrowed money for investments. While I do not monitor this each month, I do try to make sure that all my investments are either break even or positive cash flow.

  • The Money Diva April 30, 2007, 11:32 am

    Hi FT,

    I definitely set net worth targets, and they usually turn out to be too low. My experience has been that when you are earning and actively saving it is not unusual to see increases of 20% or more per year, especially if your savings rate is agressive and the stock or real estate markets help you out.

    Q’s comment interested me. I haven’t posted on it for a while, but cash flow is my next area of interest once I have a bit of free time. :)

    MD

  • Blain Reinkensmeyer April 30, 2007, 11:41 am

    FT,

    Where do you want to move to? Any cool house prospects yet?

  • Financially Motivated April 30, 2007, 12:31 pm

    Hi FT

    Nice work on the positive net worth growth!

    One of our financial goals is to grow our net worth by 10% per year. However it is only one of our metrics.

    Like Q, I think cash flow is a great measurement and is just as, if not more important than net worth. Specifically, when looking at passive vs. active income on the way to financial freedom.

    Financially Motivated

  • FrugalTrader April 30, 2007, 12:46 pm

    Good idea guys, I haven’t posted about passive cash flow in a while now. Perhaps i’ll post about it again soon.

    Blain: Yea, we’re looking at building this year, basically moving to the other side of town. We actually had a bid on a house last week, but it fell through.

  • Blain Reinkensmeyer April 30, 2007, 12:56 pm

    Sweet, well bad beat on the bid falling through, but it sounds like you guys are making good progress though :p

  • broknowrchlatr April 30, 2007, 3:17 pm

    Nice work. Were those investment/pention gains due to pure gain or did they include contributions?

    I do not set official net worth goas but do like tracking the milestones. I just crossed $150k and would love to hit $200k by Jan of next year.

  • FrugalTrader April 30, 2007, 4:08 pm

    broknowrchlatr: Retirement account gains are a combination of contributions and organic gains.

  • HalOtis April 30, 2007, 8:01 pm

    Tracking my net worth is something that I’ve just started doing. In fact I wrote my first update this morning! I think that doing this once a month will keep me a little more focused on where I put my money.

    I like the idea of doing a cash flow analysis. It would definitely paint a fuller picture of where my money goes every month. I think I might try do a cash flow statement tonight.

  • Mike April 30, 2007, 11:05 pm

    I used to keep track of NW a long time ago when I started keeping a budget. At the time I had a negative NW and watching it go up each month was very motivational.

    Later on I stopped keeping track mainly because I didn’t need the motivation anymore plus things like real estate are extremely hard to value without actually selling. RRSPs are hard to value because of the taxation. The last reason is because some of my larger assets, rrsp & house are large enough that any changes with those two assets will outweigh any savings or spending I may have done that month.

    Currently I keep track of my budget and try to keep track of our savings which I feel is an important number.

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