Net Worth Update – January 2021

Well, it’s official now, I am a homeowner. It took a few months of waiting and losing out on a few other houses, but it does seem all worth it in the end. I’m not going to include the house and mortgage in the net worth calculations for now, because I’m not really using it for early retirement purposes. The cash on hand and investment accounts are what is really driving my retirement. When the house is paid off, that will drop my monthly housing cost – but my monthly spending in retirement already has that factored in.

Net Worth for January 2021:

So obviously I had a big decrease this month, with a lot of cash coming out of checking for the closing costs and the down payment. I’m looking at this as an investment though, so here’s to hoping that it pays off in the long run. And in reality, that net worth has just been transferred to equity at this point in time.

So let’s see how far my assets would take me at this point. I will calculate that using my average spending over the last 12 months. I’ll then multiply that result by 12 months to get the total spending for the year, and then divide my total net worth by that amount. That’s how long I’d be able to live off my savings at that point in time.

$2891 average spending last 12 Months * 12 Months = $34,692 spending in a year

$254,076 net worth / $34,692 spending per year = 7.32 years worth of spending

I also thought it would be cool to see the opposite, how much would I be able to withdraw each month? I set the rate of return at 4% as a conservative guess, and the retirement time period would be for 30 years.

I’d be able to withdraw $1208 a month for 30 years which is 41.7% of my average monthly spending.

Photo by Андрей Курган on Unsplash

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