Net Worth Update – November 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. 

November 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.

November was a good month on the Brewing FIRE homestead. We spentour time raking leaves, getting outside as much as possible, and prepping our basement bungalow for a new tenant. And we ate some turkey, too.

This year, I made a conscious effort to not waste money over the Thanksgiving holiday weekend. On Black Friday, I brewed a nice Brett Pale Ale instead of battling traffic and crowds at stores. And on Small Business Saturday, we explored a park near our house and found some awesome lookout spots. 

We also busted out some DIY skills to replace the crappy, outdated light fixture in our dining room. We acquired an ugly chandelier from my relatives after I installed a new fixture for them. Mrs. BF picked up some antique spray paint, a medallion and some twine, and now we have this nifty dining room light. 

Month-Over-Month Comparison

After the turbulent swings of October, we had a return to normalcy in November. The market bounced back some, and we didn’t have any unforeseen expenditures. 

Investment Breakdown

Cash: as you can see, we started building up our cash balance this month. Part of this was by design, part is just timing. We got an FSA reimbursement check for Baby BF’s daycare expenses, and Mrs. BF had the rare three paycheck month. 

But we also have some expenses coming up. Namely, the loan on our solar system is going to be reamortized in January, so we need to make a lump sum payment to maintain our repayment schedule. We’ll get this money back in the form of a federal tax rebate, so there’s actually no net change. I’ll write about our solar investment one of these days.

We also plan to open an Ally savings account shortly. I just saw that the interest rate has been boosted to 2.0%. I never thought I’d see 2% again!

Equities: our investment accounts bounced back nicely in November, though we’re not quite back to the levels we saw during the end of the summer. 

Although the major indices did not reach levels of previous highs, it does appear that we have ‘calmed down’ a bit. I’m still cleaning up my portfolio in the event that we are entering a recession in the near future. I’m still selling high beta stocks, keeping some money in cash, and putting the difference in index funds. 

Home Equity: Housing prices seem to still be trending lower as a result of higher interest rates, but I think they will level out soon. Depends on whether the Fed keeps raising rates. It’s not overly important to us, though. We don’t need to refinance and I don’t see us moving anytime soon. 

Chart of the Month: Company Stock Ownership

I’ve mentioned a few times on the blog (here and here) that I own too much of my own company’s stock. Obviously this is a risk from a diversification standpoint. It’s also risky because my paycheck and my investment returns are coming from the same place.

It was time to stop talking about reducing my company stock exposure, and finally do something about it. In November I sold a significant chunk of my remaining company stock, and my holdings have finally reached <5% of my net worth. 

To be honest, it feels really good. 

Part of me fell into that trap where I felt like my company is doing well and I wanted to profit from the hard work I’m putting in. But at the end of the day, I’m just gambling. There’s no reason to believe that my company will outperform any other comparable company, so I shouldn’t risk my assets on such a bet. 

By divesting most of my company stock, my overall weighted beta (volatility vs. total market) is much lower now. I can sleep easier, knowing that my net worth doesn’t hinge on the market performance of one small corporation.

I still own some shares in my taxable account that I bought as part of our IPO. I’m planning to hold on to them for now and think of them as a potential ‘accelerator’ on my path to FI, in the event that the stock does well.

I’m still, of course, maxing out my Employee Stock Purchase Plan. I collect the free money afforded by the discounted stock purchase, and sell the shares on the first possible day. Rinse, dry, repeat. 

Thanks again for following along with our monthly progress report, and please let me know what you think in the comments. Cheers!