Networth = Total Assets – Total Liabilities
January has come to a completion. It is time for a financial health check up! The growth percentage is calculated using the difference between the networth figures on 31 December 2018 and 31 January 2019.
EXPENSES
My half-annual life insurance premium of $1543.26 is due and payment was made. Last week, my family had a mini birthday celebration for my mother (family is important). The dinner cost about $187. As a buddhist, I offered two Deity Light Offering for 2019 which cost $200. These expenses are mainly one off and occur again only next year. This amount ($1930.26) will take a small hit on my networth but it is money well spent.
I am switching all my insurance premium payment to annual as it will help save a rather significant amount compared to paying it monthly. These “extra” bucks can be reallocated into my investment account.
INVESTING
Shiller PE Ratio for S&P 500 is still consider high, way above the median of 15.70. I choose to keep a significant amount of the stock portfolio in cash. Even though the market was volatile and dropped at the end 2018, it recovered quite well in January 2019. There wasn’t too many chances for me to deploy the cash. My portfolio lagged the month on month growth compared to the indices. But it is ok. As investors, we need to invest for the long term and not look at only one month result.
My very first investment was done via POSB Invest-Saver but I have stopped the monthly Dollar Cost Averaging. The $1000+ position is still kept and I received a dividend of $21.25. Let the Singapore 30 Large-Cap companies keep on working for me. Woohoo!
A small amount of cash was deployed/invested into a side project (not related to stock investing). I thought through it deeply, did a lot of calculations, considered various scenarios and figured that it is difficult to lose money on this investment. Rule #1 of investing is Never Lose Money, Rule #2 is Never Forget Rule #1. Hence, I went forth with it. If everything goes well, this investment should generate a nice and steady cashflow but it will not shoot my networth up into space. I need to manage my expectation properly.
Example of Compounding
The total cashback (from credit cards) accumulated for this month is $17.38. This amount has been transferred to my investment account.
Compound $17.38 at 10% per annum for 30 years = $303.27
This is the magic of compounding.
FINAL THOUGHTS
Debt/Networth Ratio: 2.91%
Investment/Networth Ratio: 29.75%
Networth Month On Month Growth: +2.60%
It is important to be healthy financially and I intend to keep my Debt/Networth Ratio as low as possible. My aim is to keep investing and keep growing my networth. Join me in this journey if you would like to.
Do you invest? Do you track your networth? Let me know in the comments section below. Thanks for reading.
Disclaimer: www.engboonhow.com is an opinion based website. I am not a financial advisor, and the opinions on this site should not be considered as financial advice.