$$$ KPO and CZM $$$: 2018 Net Worth

Monday, December 31, 2018

2018 Net Worth

Let me start by wishing everyone a happy 2019!


Time flies! Another year has passed in a blink of an eye, did you manage to achieve your 2018 new year resolutions? If not, it is ok (I have been trying to lose weight every single year and finally did it this year. Hahaha), just set new resolutions today and work towards them starting tomorrow!

Net worth is easily one of the most important financial numbers one should know. It is like your personal balance sheet.


This is the classic comic where everyone is actually poorer than the beggar who has a net asset of $2.73. Your friend/colleague may be living in a huge condominium, driving some fancy car but it could all be financed by debts. There is absolutely nothing wrong with that as long as their income allows so. You can refer to the following articles/google on the importance of net worth.

InvestmentMoats - Don’t Track Your Expenses or Budget First. Plot Your Net Worth Instead

Cash
This is all the money we have in our savings accounts. You can read how we maximize the interest we are getting from our savings accounts here - DBS Multiplier + SSBs + Joint Account = Higher Interest! We are starting to build up our cash holdings for multiple reasons - our BTO house will be ready next year and we probably need a large sum of money for renovation. As you know, the market has been pretty volatile and hopefully, when it really crashes, we will have some cash to buy cheap :)

Our Cash: ~ $48,000

CPF
Every month, I will try to show CZM her net worth in order to motivate her to work harder towards financial freedom. However, she would always say I inflate her net worth because I included CPF. lol. I am sure some of you may have the same mentality but like I always tell her, CPF is our money and should be included as our retirement planning.

I am pretty excited to see the interest (estimated ~$7,000+) which will be credited soon!

Our CPF: ~ $219,000 (OA + SA + MA)

Investment
I have yet to blog about our portfolio performance (still in draft mode!) but it definitely underperformed the index :( Overall, we are still on the positive side (+0.18%) as of 28/12/2018. Not so positive if we were to look at the time-weighted return of -1.99%.


Our Investment: ~$352,000

Property
No change as compared to last year.

I believe that property should be included in the computation of net worth. If one excludes the value of the property, the money (cash/CPF) you use to pay for the loan/mortgage will be no different as disappearing into the thin air or throwing it into the sea. However, I would be conservative by valuing the property at cost/purchase price.


We have only paid the first 5% downpayment so far and yet to start paying for the housing loan (still building). So I will just assume that the remaining $402,420 will be financed by the housing loan/mortgage. That would mean the value of our property is purchase price ($423,600) - loan ($402,420) = $21,180. If you are wondering, it is a 4 room HDB at a matured estate. What is the probability of us being your future neighbour? lol.

Our Property: ~$21,000

Total


Our Net Worth: ~$640,000

Here you go! Our net worth pie chart, it looks pretty yummy to me :) CZM was asking if it is possible to hit $1 million by age 30... Shall try to estimate and forecast it another day.

Are you tracking your net worth?

You might be interested in these blog posts too:
- 2017 Net Worth

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2 comments:

  1. While Net Worth should include property as an asset, but if we're looking at financial independence, then the property we live in is not going to be particularly meaningful to be included as it is not going to generate any returns for retirement. Unless, you are renting out a room or the entire unit?

    ReplyDelete
    Replies
    1. Hi Lizardo,

      Yes you are right! I am including it purely for the computation of our net worth. The property plays no part in our planning for retirement/financial independence :)

      Delete