Last month, I decided to be part of Suburban’s Personal Finance Blogger Net Worth List. There is a list of some great PF bloggers and their progress on their own net worth. In order to be part of it, we are required to update on our net worth on a monthly basis. I thought it would be a great idea to share how it goes from month to month. So while my December net worth update was done with rounded numbers, I’ll use more precise figures from now on.
|EMPLOYER STOCK ACCOUNT||$4,910|
|LINE OF CREDIT||$19,335|
Total Net Worth: $107,722
For this very first month where I am using exact numbers, I will not compare it to December. This is more a starting point for me than anything. This will also show you how I manage my personal finance from a closer vantage point.
You will notice over the months that I will not pay down my line of credit or my home equity line of credit. This is not because I can’t, but because I pay a privileged rate of 1.125% (which is prime divided by 2). Since I have this awesome perk, I prefer to concentrate my efforts on making more money rather than paying off my debts (call me Mr. Leverage 😉 ).
The debt owned to my parents is less than stated in December as the full $31K is due in November 2010. It works like this: each month my debt increases by $100 (I originally borrowed 25K at 4.80% with no capital or interest payments and the interest is not compounded).
In order to be fair, I will also decrease the value of my car according to the balance of my loan. While my car obviously will be worth something in 6 years, I do not believe in boosting my net worth with a the value of a car. It is just in my balance sheet so I don’t penalize myself for having a car loan.
One last point is that I will also use a part of my bonus to pay off debts. Therefore, next month, the 7K credit card will completely disappear 😀 (and this is why my net worth was bigger in December… I’ve had calculated my bonus in already…)
While I will be concentrating on paying off my parents’ loan in November 2010, I would like to have your thoughts on how I should do it. Thx!!
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