Networth = Total Assets – Total Liabilities
April 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 March 2019 and 30 April 2019.
EXPENSES
Dad went to A&E again this month, it is the same problem as last month. There is no huge medical fee incurred. There are two significant expenses this month – Integrated Shield Plan premium of $294.36 (changed premium payment to annual and this is the amount I need to top up) and a medical expenses of $350 (brought my mum to Johor to consult a TCM).
PERSONAL CASHFLOW
I mentioned last month that I started tracking my cashflow as well. I did it diligently in April too. There is an inflow of 47.20% – very healthy and it meant I did not spend unnecessarily on dumb stuff.
Once again, I would love the net cash inflow (Net Inflow/Net Income) to be consistently above 30%.
INVESTING
Shiller PE Ratio for S&P 500 is now 31.10, higher than previous month’s ratio of 30.50. Things are getting crazy, it seems like the market is getting more and more crazy. As the market gets crazy, I need to stay calm and rational.
I mentioned that I bought 1 stock last month, and it went up more than 20% in 1 month. That is how crazy things can get.
But I also made the mistake of not investing heavily during the December-January period when many of the markets went down 15% to 20+%. I was waiting and waiting for the stocks to keep dropping. The market eventually recovered. This is a HUGE mistake on my side. It is important not to repeat this mistake again.
Example of Compounding
The total cashback (from credit cards) accumulated for this month is $38.15. This amount has been transferred to my investment account.
Compound $38.15 at 10% per annum for 30 years = $665.69
This is the magic of compounding.
FINAL THOUGHTS
Debt/Networth Ratio: 3.26%
Investment/Networth Ratio: 30.12%
Networth Month On Month Growth: +2.58%
Interestingly, I took up a small interest free debt and placed the money into a higher interest rate savings account. Hence, there is an increased in Debt/Networth Ratio from last month’s 2.29%. Since it is “free money”, why not? It seems like a good arbitrage to me.
Overall, I think it is still considered a healthy networth growth.
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.
Would you elaborate on the small interest free money?
Hi Chee song, thanks for reading and noticing the “free money” part.
You can think in this way. There are people who borrow money from banks to start their business, take up loan to buy their flats and housing, borrow from banks to invest in stocks etc. However, an interest payment is required.
I simply go around finding/seeing where can I find interest free loans or money, take it and put it into a higher interest saving accounts. These are usually short term loans.