I hope everyone had a great Christmas. We drove down to the Bay Area to spend time with family and friends, and we had a really nice Christmas. It was a bit crazy with 3 kids in the house because someone was always crying. The kids had a lot of fun playing together, though. RB40Jr was sad to go home because he enjoyed playing with his cousins so much. It was really great to see old friends from college, too. Now it’s time to wrap up 2015 and get ready for the New Year!
I have been keeping track of our net worth since 2006, but I haven’t shared it much here on Retire by 40. While our net worth isn’t that big, it still feels a bit like showing off. For those of you who are just starting out, I hope you take this as an inspiration and use it as a motivation to work hard while you’re young. We started out with nothing and were able to build our net worth over the years. We never won the lottery or had a big windfall. We did it the old fashion way by saving and investing a little at a time. Even if you have some student loan debt, don’t get discouraged. Keep building your wealth every year and you’ll reach financial independence someday.
Anyway, 2015 actually was a very good year. Our net worth increased about 14% in 2015. That’s much better than I thought. Here is the spreadsheet.
Let’s break it down in detail.
Net Worth Update
Dividend Portfolio (+$10,668)
The stock market was pretty volatile in 2015. I reinvested our dividend income and purchased Philip Morris, Omega Healthcare, and Caterpillar. I didn’t add much extra cash in 2015, though. We’ll have to remedy that in 2016 and increase our dividend income.
Joe’s Retirement Portfolio (+$24,996)
My retirement portfolio is invested in various Vanguard index funds. I have REIT, bond funds, international funds, and US stock market funds. In 2015, I added $24,500 to my i401k. That’s basically where the $24,996 increase came from.
Mrs. RB40’s Retirement Portfolio (+$12,863)
Mrs. RB40 added about $18,000 to her 401k this year. Her accounts didn’t do as well and only increased about $13,000. A significant portion of this portfolio is invested in emerging markets (VWO) and those funds struggled in 2015.
Individual Bonds (+$156)
We started with $10,000 in 2013. I haven’t added more money here because we didn’t have much liquidity. Currently, the rate is pretty low at 1.64%.
I used 90% of Zillow’s Zestimate as the value on all our US properties. The duplex’s value increased from $522,000 to $656,856. That’s a huge increase. Portland’s real estate market has been great for property owners in 2015. Of course, it’s all paper value until we actually sell it. Currently, we have $195,531 left on the mortgage for this duplex investment.
The number in the spreadsheet is value minus mortgage ($656,856-$195,531 = $461,325)
Rental Condo (+$20,893)
I co-own this 1 bedroom condo with my brother. This unit is cash flow neutral so I don’t mention it much. The property finally increased in value this year. We picked it up in 2010, near the bottom of the real estate crash. This value of this condo increased from $162,000 to $201,384 in 2015. We owe $97,597 on this property.
Thailand Properties (+$15,000)
I’m a part owner of 2 condos in Chiang Mai, Thailand. My dad lives there and rents them out. I sent him $15,000 earlier this year to help purchase another property. That’s where the increase comes from. I’ll get the money back at some point. Or we can go live there for a few years when we fully retire.
Our liquidity is very low at the moment. One of our tenants left the duplex and we did some expensive remodeling. That’s one of the reasons why we are low on cash. This will be our priority in 2016. We need to build our cash position back up to around $15,000.
*I just received a $7,000 check from the high tech anti-trust settlement! That will go a long way toward building our cash position back up.
P2P Lending (-$2,216)
I withdrew $3,000 in April 2015. The money was sitting around in the account because the automatic screening only picked up a few new investments. I’ll probably leave this alone in 2016.
I haven’t checked on my pension since I left my job in 2012 and it grew a little bit. As far as I can gather, I’ll get $16,048 if I take the whole thing now. If I wait until 2039, I will get $356/month until I die.
RB40Jr’s 529 (+$4,364)
The stock market didn’t move very much in 2015. The increase is basically due to the new money we put in.
Primary Residence (+$53,419)
This is our 2 bedroom condo in Portland. The value increased from $288,000 to $336,012 this year. Actually, I think Zillow prices this condo a bit too low. I’m pretty sure we can get more for this property. We have a great view of Mt. Hood and Willamette River. These units don’t come up for sale very often. We owe $232,593 on this property.
The value of our 2010 Mazda5 plummeted a few days ago when a Californian driver backed into it. I honked and he kept backing up. What the heck! Anyway, the condition went from exceptional to average and reduced the value quite a bit. The other driver is clearly at fault so I should get a check from their insurance company at some point. I’m not sure if I’ll fix this dent or not. It’s pretty minor so I might just keep the money.
Art work (+$1,650)
We have a few pieces of art work. I’m sure we won’t get this much if we need to sell them. Mrs. RB40 would be really upset if we ever needed to sell as she is quite attached to them. This is just a place holder for now.
Net Worth (+$242,112 or 13.56%)
Our net worth did extremely well in a volatile year. The stock accounts were basically flat and increased about as much as we added. The big contribution to the increase came from our real estate holdings. The Portland real estate market has been on a tear for a couple of years now and our net worth reflects that. We might sell the 1 bedroom condo next year if the price is right and redeploy the money elsewhere. I’m not sure how long this real estate boom will last in Portland. I don’t see how our employment market can support this level of increase. The price always plummets whenever we have an economic hiccup.
Anyway, 2015 was a great year. Our net worth increased quite a bit more than expected. I was hoping for 8% and I didn’t think we were going to get that. The stock market has been in the doldrums and I was focusing on that when I updated our monthly cash flow. I only update our real estate value once a year so I didn’t realize how much it would affect our net worth.
It took us 15 years to accumulate a million dollars, but just 5 years for the second million. The last 5 years were great due to the stock market, though. My goal is to hit 3 million dollars by 2020. Theoretically, it should be doable, but it really depends on how our investments perform over the next 5 years. 2020 might be a big correction year, who knows. That will be fine too, we still have 20+ years in our investment timeline so we’re not too worried. I’m pretty sure we’ll hit 3 million eventually. Mrs. RB40 plans to retire in 2020 so it would be nice if we get there before she quits her job.
How did you do in 2015? Is your local real estate market as hot as Portland? Actually, I think all the big cities on the West coast did better than Portland.
Sign up with Personal Capital to help keep track of your income and net worth. Personal Capital is geared for investors and have many great tools. See my review of Personal Capital and how they helped me reduce my investment fees.
Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.