I’m curious to know about your approach in stock investing. Do you prefer individual stocks or index fund like mutual fund or ETF? And what are your thoughts of the idea of Filipinos investing abroad and in the Philippines?
It’s Labor Day in the U.S., isn’t it ironic that I don’t get to work? I don’t see a lot of pregnant women hanging around the emergency room when I drove my R.N. wife to the hospital this morning either.
Kidding aside, the holiday meant I have extra time to write my first net worth update since I started this blog. I should have been doing this more frequently, but it’s easy to get carried away by other topics that I wanted to cover on the blog. I’ll try to keep this as brief as possible.
Total assets up by 17%
- Our banking assets are up by roughly 18% from last year. These are assets that barely make any money due to the Fed still keeping interest rates next to zero. The increase was due to our savings rate plus my sister partially paying me $5,000 for the loan that she took last year. I also automatically deposit $400 every month to our emergency fund to make sure the account keeps growing.
- Retirement and other savings are up by almost 22%. I actually lowered our 401K contribution rates from 20% and 16% to 15% and 15%, respectively. With the stock market at an all-time high, I figured I’d use the money to pay off our mortgage earlier (new target date is early 2021). There’s a big debate in the personal finance community about the merits/demerits of paying off your house early but I’d tackle that as a separate post in the future.
- My Bank of America (BAC) stock is up by almost $10,000 since last year. That’s the only individual stock that I own outside of my retirement accounts. The other individual stock, Microsoft, is also doing extremely well. You don’t see it in the table below because it’s in my ROTH IRA account. If you’ve been following my blog, I’ve sold my loser SNAP INC. just in time at around $20. It’s currently trading around $14.
- Our primary residence’s value is up by around 7% as per the Zillow estimate.
Liabilities down by 15%
- We continue to pay off our credit card bills in full once they’re due. Our spending is always under control.
- I’ve been paying an extra $1,000 a month on the mortgage principal. As I’ve already mentioned, the personal finance community is divided when it comes to this. Some argue that you’re better off investing the money than pay off a house with an ultra-low 3% interest rate like mine. However, what’s important to me at this point in time is to be debt-free before I retire. I’m trying to pay it off not because I’m maximizing the returns, but because I’m trying to simplify my life. Who cares if this is good debt? I still want it gone because owing the bank money sucks.
All in all, total net worth is up by 22%
We’ve been blessed that our net worth continues to go up by 20% on the average for the past 13 years. That can be attributed partly to strong stock market returns and more significantly, high savings rate.
We’re also less than $100K shy of becoming an SEC accredited investor who by definition could be an individual or a couple with a million dollar net worth not counting the house. That in itself opens a lot of opportunities to explore other investing options.
But for the time being, there’s nothing sophisticated about my investment portfolio. My strategy is very simple– invest in quality stocks or stock mutual funds inside tax-advantaged retirement accounts.
I hope you’re also doing well in your journey. We hope to be an inspiration to other people on a similar path to financial freedom.