Net Worth Update as of 4 May 2016

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As I’m watching all the hoopla and mud slinging that is Philippine politics play out on social media and on TV, I try to turn to another topic that is slightly less stressful -calculating my net worth. Here goes my current net worth:

PhP 958,669.15

I’ll break it down as follows:

Cash 43.72%
Equity 26.87%
Stocks (at acquisition cost) 29.41%

Unlike my previous net worth update, I now hold majority of my net worth in liquid assets -cash. Liquid assets are those that are easily accessible or as good as cash. Simply put, they are assets that you can easily reach for when you need to pay for something. It wasn’t a deliberate move for me to put most of my assets in cash, just a happy accident. I had a lot of leftover US dollars after my Japan trip so I decided to open and keep these in a dollar-denominated account, thereby padding my cash.

Moreover, I still keep a six-month emergency fund in cash and lately I’ve padded this a little bit. I recently discovered this small bank that offers slightly higher interest rates than my last one so I’ve been trying to build a little cash here as well. I feel that my emergency fund is now at full capacity.

As I explained, holding too much in cash can eventually hurt you. In order to avoid larger opportunity costs of not investing in the current cheap market for blue chip stocks, starting next month, I plan to up my equity investments in stocks. I will no longer be adding any more to my cash accounts. We’ll see how this experiment goes.

As for my equity in condo, I’ve changed my strategy from making 2-month amortization payments, to just making the required one month payment. My mom says I Iose by paying in advance because the money could’ve grown somewhere else with interest. We’ll see how this experiment goes as well.

From being the least amount, my stock equity investments now constitute the second highest amount in my net worth. After reading The Millionaire Next Door and learning that I was nowhere near the recommended net worth (PhP 2,610,000) for my level of income (gasp!), I backtracked on my expenses and income for the past year 2015.

I found that I was already living frugally – I was able to live on only 50% of my income last year. The other 50% was invested or saved. Other than buying ONE nice bag abroad last year, I barely spent on any clothes or shoes. This is clearly apparent to me everytime I open my outdated closet haha. Either I calculated wrong or The Millionaire Next Door’s projected ideal net worth takes into account a highly speculative portfolio of investments, which may lead to fast and high growth.

I came to the conclusion that I need more growth in my portfolio of assets. Receiving cash dividends and having a safe cushion of cash is nice but I plan to invest more aggressively this time. We’ll see how this goes as well.

*I should disclose that I recently received a windfall. Rather than go shopping, my frugal boyfriend encouraged me to resist the temptation, for now. It took some willpower and I successfully barely touched said windfall and it now ended up adding to my net worth. I’m so glad I didn’t end up with a bunch of fast-fashion clothes that are essentially worthless. It really helps to surround yourself with like-minded people. How’s your experience in building your net worth so far?

To the first million!
20 something lawyer

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3 thoughts on “Net Worth Update as of 4 May 2016

  1. I agree with your mom. Once you give extra money to mortgage, you can never get it back. Better to save it, invest it or make one big principle payment later. I’d rather have that liquid in case SHTF.

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