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$3.5M Net Worth – EOY 2016

Here’s a bit of a catchup post.   So I can compare year over year, I wanted to put together the year-end numbers.

We had a relatively uneventful fourth quarter.  Financially, that is.  It was chock full of family goings-on… mainly good stuff.   A successful surgery, holiday events, new nephew, time with kids , etc.  During all this, we increased our net worth by almost $100k to $3.5M.  Percentage-wise, that’s about 3%.

We straightened out our finances previous to this last quarter by selling two houses.  So no big dispositions in Q4.  We’ve let our expenses grow a bit, or the net worth increase might have been more.  But I have a hard time in justifying an expense lockdown to create a 3.1% rather than 3% increase.  So I’m ok with where we came in.

Investment Assets (net worth less primary residence) stood at $2.9M on Dec 31. Our loose goal for financial independence inflated from $2.5M to $4M. So we’re gaining toward our new finish line. I think we’re still about a year out. I said that last quarter.  I don’t know if I recommend believing me anymore.  My crystal ball doesn’t seem terribly clear.

We capitalized no projects at work.  Meh.  First time in a while for this.  We’re still progressing on some deals, but closing financing is taking longer.  Capital flow has slowed a good bit across most of the real estate market nationwide.  I wonder if we’re nearing the end of the cycle, or another blip.

Highlights

Here are the variances from last quarter’s net worth, followed by a table of all the assets/liabilities:

Cash on Hand ($81k: $46k increase) Things looked pretty boring, but in an good way.  We constantly built up our cash amount throughout the quarter.  Mainly from saving operating distributions from stable projects.  That’s exciting to me – building up somewhat passive annuity-type revenues.

Stocks/Bonds ($999k: $28k increase) We added to 401ks, and the market helped a bit.  I guess the market didn’t implode when Trump won.  Seems like assets are valued on the high side.  Since I’m terrible at market timing (like almost everyone else!), we’ll just stick to our allocation strategy.

Rental House
($161k: $20k increase) Being end of year, I’ve counted some of the value appreciation that’s been going on in this neighborhood.  I could probably sell the lot to a new-home builder at this price.  And I think (?) there’s a little more value in that house than just as a lot.

Commercial Real Estate ($1.67M: Flat) Like I mentioned above, the capital side has been a little slower.  Since future-me is writing this update, I can tell you the first half of 2017 is continued slowness on new projects, but some refinances of stabilized assets that closed will give a little lift in 2017.

Our Primary Residence ($616k: Flat)  Nothing on the house right now.  We’re still enjoying it.  Some cap ex for maintenance and upgrades coming in early 2017.

Details

Net WorthSubtotalTotal Comments / Change from Q3
Cash/Short Term$81,511
Up $46,000
Bank 1$45,500
Bank 2$41,011
Credit Cards($6,000)
Stocks/Bonds $998,937
Up $28,000
401k 1 $215,000
401k 2 $42,755
IRA 1 $88,660
Roth IRA 1 $58,235
Roth IRA 2 $49,586
529 Plan 1 $81,539
529 Plan 2
$72,666
Restricted Stock $5,663
Taxable Account $318,833
Charitable Trust $66,000
Rental House$161,000
Up $20,000
House Value$310,000
House Debt($149,000)48% LTV
Commercial Real Estate$1,668,500
Flat
Property 1$445,000Retail
Property 2$0Hotel
Property 3$12,500Apartments
Property 4$254,000Apartments
Property 5$185,000Office
Property 6$76,000Apartments
Property 7$196,000Office
Property 8$325,000 Apartments
Property 9$85,000New Construction: Hotel
Property 10$10,000Land: Apartments
Property 11$10,000Land: Apartments
Property 12$10,000Land: Office/Apts
Property 13$60,000Hotel
Net Investment Assets$2,915,948
Up $94,000
Primary Residence$616,376
Flat
New Home Value$616,376
New Home Debt$0
Total Net Worth$3,526,324
Up $94,000

Wrap Up

Forward looking guidance is easy.  The next half year after this update is almost done.  We’ll continue doing fine, with only small fireworks in our financial world.  Generally positive, some home improvements, investment growth, and spending gets under control.   A good bonus to be eaten up by higher than expected taxes.  I’ll do another update in July for Q1 & Q2.

I’ve gotten past most of any frustrations I had with pushing our savings goal back to $4m.  It took me awhile, but I remembered that money isn’t the goal anyway.  And maybe more pertinent for me, “the goal” isn’t the goal either.  Meaning, the goal shouldn’t become an idol unto itself.  I don’t need to save a certain amount just for achievement’s sake.

Most importantly: What is the reason for the goal?  Answer: I want to enjoy life more freely and have stronger relationships.

I want to do this both short and long term.  So keep saving towards long term goals & life flexibility, while also enjoy today’s moments!

Remembering this concept has put work in a better perspective to me, and I’m better and happier at my job (and home).   I’m a little less antsy to get to full retirement.  And being more thoughtful as to what ER will look like for me.  Hopefully my own personal version of it is still upcoming soon!

6 thoughts on “$3.5M Net Worth – EOY 2016

    1. Thanks! Unrelated sales. First was our previous primary residence…had been trying to sell it for 9 months or so. Second was an opportunistic sale of a rental we’d held since 2008. In that time, our real estate holdings have gone up substantially so we’re trying to diversify some. Also it simplified life and was a very easy sale.

  1. Great breakdown. Do you have any posts that you could point me to regarding your commercial property strategy or breakdown. Some of the numbers look interesting and I was wondering what they represented. For example the $10k land figures. Are they literally cheap greenfields sites or a share of something. Hope I am not being too nosey? Thanks.

    1. Each net worth post explains any new real estate holdings, but I haven’t done an overview post for all the real estate. Each of these #s represents my small portion of a relatively large deal. Our company will typically co-invest a small % (5-35%) of the equity in a deal, then we divvy up that % between our principals – myself getting a minority %.

      I’ve been planning to write a post about how large scale private real estate deals are structured – I’ll try to get that put together.

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