Last month I created a net worth spreadsheet for myself, to help me keep track of my asset-to-debt ratio and my net worth – eg. how much I’m worth after taking into account assets vs. liabilities. I was exceptionally pleased with the result!
In the past 9 months, Deidre and I have managed to accumulate about +$118,000 worth of assets. Helping us do that has meant accumulating a level of debt. However, this has only amounted to about -$75,000 worth of debt, leaving a net worth of +$43,000.
This is what I’ve meant in the recent past when I’ve referred to having more debt than we’ve ever had before, but how we’re in a position where it’s easily sustainable. As a result we’re actually planning on increasing our debt in the near future by investing in property. My goal, however, is to ensure there is equity so that the asset value will always exceed the debt value.
Each month I’ll provide an update on my net worth, to help me keep track of it, and to invite conversation from you guys on how you think I can improve it. (Or you might have some questions on how I can help you improve yours.)
From September to October:
- our assets increased by 0.64%. This included increased savings and extra income (from Deidre’s tax return) that offset the depreciation on the value of some of the assets.
- our liabilities decreased by 4.26%. This included the paying off of some debt, as well as ongoing loan repayments.
- our overall net worth increased by 10.59%.
The reason our assets increased only by 0.76% was because the growth was lessened by the fact that we paid some of our savings in September to pay off some of the debt. While this decreased the amount of our asset growth, it importantly reduced the value of our liabilities, which is our ultimate goal.
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