Here we are again. End of the quarter. Net worth time.
As I indicated last quarter, we have had a busy time in the SxSW household. We completed on a property purchase in the last few days of March, so the makeup of where our money is has changed dramatically.
We are going to live in the new home, and rent out our old one. We achieved this by remortgaging our home onto a buy-to-let mortgage, and essentially taking out the majority of the money we originally put into it (got to love some good old fashioned market appreciation and home equity growth). We essentially bought the new house with only £9,000 of cash.
(As an aside, we're without internet for two weeks. While this is great for doing all of the moving in jobs, it's not great for watching tv, posting on a blog or some of the internet based moving in jobs).
While the amount of wealth we have tied up in property has not changed dramatically, the amount tied up in our home has shrunk dramatically, from approximately 72% of our net worth to 28%.
Additionally, I received a small inheritance from a relative who passed away last quarter. This money hasn’t been put to use yet, since our cash held has shrunk and we have not yet experienced what a ‘normal’ month looks like in cash flow terms with the new setup.
Anyway, without further ado, here’s the money (screen)shot.
I count this quarter as my ‘year end’ and take the opportunity to make a number of annual adjustments. Even though this blog has only been going for a short time, I have been tracking my net worth for a few years, and retrospectively put together a few comparative years at the year end point.
Annual adjustments
At this point in the year I revalue all property held. Usually I do this with reference to a what houses around me have recently sold for, what they’re on the market at and what Zoopla/Rightmove suggest. This year also have a recent valuation from when we remortgaged, which confirms my suspicions.
In terms of investments, all growth this quarter is based on contributions, as I actually lost a small amount of capital value here. My portfolio is more volatile than most, since I hold a few large shareholdings in individual stocks (I know, i know...)
Looking forward.
As is now a familiar refrain, I think we hold maybe too much in cash. I am looking to make a serious dent in my car loan in the next quarter with a large overpayment, to give me maybe 8 months of loan left to pay. I can see the end of this loan on the horizon and want the extra cash flow.
I suspect we’ll also look to overpay our mortgage. Having had a very large amount of home equity and a very low amount of mortgage, it feels a little odd to have this reversed. Any amounts put into this should help us when we remortgage again in 2 years. (we are allowed to overpay 10% per year, but I imagine we’ll look to overpay by a few thousand each year before dumping the rest into broad based market investments.
Life Related, Non-FIRE Announcement
On a non-financial note…we’re going to have a new addition to the family. This bundle of joy is expected at the end of July (and is one other reason we moved house). At this point we will be down one income for a while and up one mouth to feed, so this may curtail some investment/repayment plans a little, but we’ll look to make progress even then.
This is one more reason why I’m looking to increase our monthly cash flow by paying down my car loan. Anything I can do now to make this transition a little easier will pay dividends down the line (pun intended).
Anyway, that’s enough from me and the SxSW household. Till next time folks!