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February 2006 – Monthly Net Worth Review
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This is my first monthly net worth update for quite some time so these numbers lack a bit of context but I’ll present them anyway. Also, these numbers are going to be a little inflated because as of 3/1 my mortgage company hasn’t deducted my February-end payment.
Total Liabilities: $257,594.76
About $24k of that is student loans which are currently in deferrment until I complete my studies at Johns Hopkins and the balance of that amount is from my home mortgage.
Total Assets: $384,714.93
The vast majority of that asset value is in the home, appraised at $299k. Approximately $16k go towards my 2003 Toyota Celica (Kelley Blue Book value), $55k in my retirement accounts, and a little over $15k stuffed into my mattress.
Net Worth: $127,120.17
Before you say, wow that’s a great net worth for someone who is 25, $40k of that is in the form of a “gift” from my parents that went to the purchase of my home. While by all accounts it was a gift, on a personal level I see it as a loan I want to repay, even if they don’t see it that way. I’ve mentioned this in the past before and readers have said that I should count that in my net worth, but in my mind I don’t.
My February 2006-end Net Worth: $87,120.17
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I think it’s a great idea that you plan to pay back the $40k loan. If you simply took the money as a gift, it would qualify for what the authors of the Millionaire Next Door would refer to as “economic outpatient care,” which I’m sure you know they find to be a low indicator of future wealth.
A small personal story that is only loosely related to this. After my brother was married, my parents gave him and the new wife $20k to help them buy a home. My dad told me that he saw it as a gift, but said to the two of them, “We’ll call it a loan, but pay me back whenever you can.” Thank goodness for that, as just over a year later they were splitting up assets. If the $20k had been a gift it would be a part of the dividable estate. Because it was called a loan, she was responsible for paying half of it back. She mailed my dad a check in a plain envelope with no note or thank you.
I think you’ll be glad when you pay your parents back. My grandmother gave me money for college and when I paid her back five years later, she was so shocked, surprised, and happy, that it made the small sacrifices I had to make to pay it back all seem worthwhile.
I agree, paying back family is the best feeling! My mom lent us $5k for our first house. We saved a little bit every week and when we handed her that check a year earlier than we needed to, it felt great! Like FMF said, when she saw it she was thrilled and it made it all worth it.
$30,000 increase in less than a year. Congratulations!
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I thought you could only count the equity in your home as an asset, not the appraised value?
Hm, a 40k no interest loan? Nice. I say you pay interest in the form of hugs and kisses!
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