Net Worth Update – December 2018

Each month, I share a net worth update for the Brewing FIRE household. This brief summary of our financial standing serves as a progress report on our journey to financial independence.

In addition to giving a snapshot of our net worth, I will compare our progress to the previous month. I will also comment on any notable changes to our finances. Finally, I will share my “Chart of the Month,” which should add some color to my saving and investing strategy. 

December 2018 Net Worth

We use Personal Capital to track our net worth. Personal Capital makes it easy to track all of our banking accounts, investing accounts, credit cards and loans all in one place. Personal Capital also has numerous other functions for analyzing your investment holdings, asset allocation and performance, as well as some great retirement planning tools.

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The Brewing FIRE household used December to wind down from a busy year, relax, and spend more quality time with family. We began a new family Christmas tree tradition. Baby BF had a nice photo shoot for sharing pictures with our folks.

I took off more than half of the month, since I had too much PTO left and couldn’t carry it all over. We went for some hikes when the weather allowed, but otherwise we stayed local and enjoyed the heat from our new wood stove. The chickens enjoyed scratching through some piles of leaves.

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Month-Over-Month Comparison

Our net worth, however, was not afforded such relaxation. The market turmoil from October returned with a vengeance, and our account balances felt the effects.

Investment Breakdown

Cash: our net cash balance remained almost exactly the same from month to month, but there was actually a lot of turnover in the accounts.

Inflows came in the form of my quarterly Employee Stock Purchase Plan purchase (and subsequent sale), plus some back-due brewery pay. Mrs. BF received her yearly bonus, plus a small payout from her trust that I mentioned here. We still don’t know what the money’s being invested in, by the way.

On the spending side, the major expense was a lump sum payment toward our solar loan in the amount of $9,000. This has to do with the structure of the loan and a federal tax rebate. We’ll actually get that money back in our 2019 tax return, which will most likely fund our 2019 Roth IRAs.

Equities: surprise! Our investment accounts took a haircut in December. A 7-8% drop, though not unheard of, is a pretty substantial drop in 30 days. However, it’s nothing to really fret over yet. We’re due for an increase in volatility, and an economic slowdown and/or recession is definitely in the realm of possibility.

Currently, we’re holding ~10% cash and short term bonds in our investment accounts. I don’t plan to increase this allocation. In fact, I will probably start putting the money to use if we stay in bear territory.

Home Equity: not much to report here. We have a developing situation at my old multi-family property with some (very) late rent payments, so I’m hoping that doesn’t turn into a messier situation. Fingers crossed.

Chart of the Month: 2018 Net Worth Performance

For this month’s chart, we will look at the performance of our net worth categories over the course of the year. This will probably serve as my only ‘2018 Review’, since I didn’t set 2018 goals. Hell, I wasn’t even blogging at the beginning of the year!

I couldn’t seem to come up with a great visualization for our net worth over time, so this will have to do.

Some notes:

• Our cash balance came down a bit during the year, which I talked about a number of times. I’m actually planning on increasing our cash cushion in 2019 for a few reasons, one being that we can earn 2.0% in a savings account now.
• Our tax advantaged accounts finished up ~$50k year over year, which is roughly equal to our 2018 contributions. I guess that’s what happens when the S&P is slightly down on the year.
• Taxable accounts saw a 50% increase this year ($20k), which is good but also due mostly to contributions. As we approach our FIRE date, we’d obviously like to see a substantial growth in our cash/taxable buckets.

Well that’s it for 2018. All in all a pretty good year, with incremental growth in most key areas. I’ll take something similar to this again in 2019 for sure.

Thanks again for following along with our monthly progress reports throughout 2018, and here’s to continued performance in 2019. Cheers!