Each year on FMF I post a review of my net worth and detail the ups and downs of the previous year. Here are my 2013 net worth highlights:
- Net worth ended 2013 at another all-time high, up 19.5% versus the previous year. This was well below the S&P 500 return of 29.6% because a good portion of my net worth is in investments or categories that are not designed to grow quickly (or even at all.) For instance, my real estate holdings are designed for income, not growth. I could assign them an appreciation amount (based on current market conditions, they are up 20-40% since I purchased/improved them), but have chosen not to. And assets like my house, cars, and cash investments either don't gain value (at least any I recognize) or lose it (I have one car completely depreciated and the other will be done this year).
- In addition, I continued to add a liability to my net worth. My kids are in high school and college isn't that far off. I have always included the value of their 529s in my net worth, but now that those dollars will be spent within the next several years, it's time for me to recognize the expense side. So I created a liability for college costs in 2012. I added $60,000 in "debt" in 2013, dragging my net worth down further.
- On the plus side, I am a strong saver and the index fund investments I did have performed very well. And a 20% gain on what is now a fairly sizable net worth is a substantial amount of money in itself.
- I had record net worth highs for eleven of the twelve months in 2013. That certainly made for a nice year. :)
- This year's performance brings the compound annual growth rate of my net worth to 14.79% over the past 17 years (I started tracking it in 1996).
- I should hit my crossover point in a year or two. That said, I have re-done my retirement plan and upped my goal significantly. My current plan is to work for 10 more years (I like my job, so why not?) and retire at 60. That said, I may get there and decide to work another 10 years. :)
- My rental income was low as I made substantial investments in the properties. I also had several months where units were not rented because they were being remodeled. I should have all the major efforts completed by the end of May and all units at their max earning capacity by summer. I will give a more-detailed update once the smoke clears, but first I need a post on the third property I have purchased.
- At the end of the year, I bought a new (literally) house in my new city for roughly twice what my old one cost. It wasn't my preference to sink so much into a non-performing asset, but it was the best option we had given our location, preferences, etc. FYI, we paid cash for it and continue to have no debt.
- I've already shared many of my resolutions for 2014, but I'll add a couple more: 1) invest all the cash from my 401k rollover into appropriate index funds (I'm about half way done) and 2) Add another $60k in "debt" for college costs -- which should get me "fully funded."
In addition to the information above, here are a few fun facts I thought you might enjoy:
- 88% of my 2013 income was from my career (which this year was two jobs split almost in half.) I expect this percentage to go down as my rental units come up to speed.
- Of my income, 39.6% went to taxes. This includes payments for 2012 taxes in April, payment of quarterly estimated taxes in 2014, and "regular" deductions from my paycheck. I'm expecting a refund this year as I paid Social Security taxes twice at two different jobs (and paid the max on each of them.) In addition, I sold some securities last year to buy rental units and that drove my income artificially high, so I'll actually have a lower income this year.
- 25.7% of my income went to giving. This was split between my church and three major charities we support. We used to give a small bit to 25 or 30 charities and now we give a lot to three.
- The remaining 34.7% went to spending and saving. There was roughly an equal split between the two.
That's it for this year! How did your net worth perform on 2013?