Net worth tracking and reporting has been a staple of this blog since 2003, and therefore it should be no surprise that our Act II begins with a long overdue recap of our financials since our last report two years back.
Let's start with a table showing our year-over-year net worth changes in the last two years.
A technical note: compared to prior years, we are now reporting our balance sheet in a simplified format with three major components: Cash & Investments (a.k.a. "liquid assets"), Properties and Loans. In the past, we had been itemizing our investments by asset class including domestic equity, foreign equity, fixed income and alike, but since this blog is much less focused on investment decisions and more on broader personal finance topics, this simplified approach will better serve the purpose.
A lot had happened in 2012 and 2013. First off, our net worth continues to blossom thanks to the confluence of living below our means and investment gains. Especially, with the growth of our asset base, investment returns have consistently exceeded our savings in past two years.
Second, we chose not to buy house or cars during our assignment in Asia between 2006 and 2012. Since we came back to the States in December 2012, we have bought a house and two cars. On the house side, our timing was right -- we snatched our dream house in January 2013 before bidding wars became commonplace, and we were able to get an ultra-low-rate mortgage before rate started to rise. For the wheels, we, being value-based shoppers, grabbed two 2012 Hyundai vehicles on the cheap over the winter. We have been very satisfied with both cars since.
For a longer time span, here are a couple of charts on our annual net worth growth over the past 10 years.
With the exception of 2008 when our net worth declined over prior year due to financial crisis and ensuing stock market crash, we have consistently delivered annual net worth gains in 9 out of the 10 years since the birth of this blog. Thanks to benign market conditions, our investments thrive in the past two years and contributed a lion's share of book value increase. Besides investment gains, we saved about $100K in 2012 and $60K in 2013, the latter affected by a couple of home improvement projects as well as filling up the new home.
Our annual net worth growth as a percentage, however, is showing a trend of decline. This is somehow to be expected, since the same absolute amount of savings will represent a smaller percentage of our asset base over time.
Thank you for reading this quick summary covering the two years' gap of this blog. Now the Act II has officially started, I will report our progress toward financial independence much more frequently. Please stop by often!