Remember I mentioned in one of my blog posts recently that I cleaned up the tabs and spreadsheets of our Google Sheet assets, liabilities, income and expenses tracker? Yup, we now only have 1 graph that charts the growth of our total assets and net worth. We used to have a number of graphs tracking the components separately but decided to combine them into one for easier reference. Look at how neat it is!
I considered including this Total Asset Growth Chart in the Net Worth Page but decided against it. After all, it’s going to slow down the updating of the numbers on this blog, which is something I do every month and would like to save time on. But I have to say, the graph is a powerful representation of the progress we have made since 31 Dec 2015.
I’m guessing I have to explain the time duration of the dates in the chart and why it started from 31 Dec 2015. Not only was this the point in time that I started seriously monitoring all aspects of our personal finances. It also marked the first major milestone we hit, which is achieving a net worth of S$0. We had already marked down the market value of our apartment by more than 50% then so as not to inflate the net worth artificially. More importantly, we included 100% of the mortgage.
As you can imagine, having a S$700,000 housing loan principal at the start of 2015 was not fun. I’m not saying getting the amount down by S$60,000 to S$640,000 now makes it a whole lot better. It’s just that our salaries were lower in 2015 and we hadn’t worked out how to increase our interest and dividend income yet. Plus our savings were still recovering from the renovation, moving and wedding expenses in 2014.
I reckon we underestimated the stress & pressure from having a large mortgage and overestimated our ability to manage it. Then again, having such a high debt level did light a fire under our asses and we worked hard the entire year to improve our financial situation. Which is why 31 Dec 2015 was a significant date for us. Net worth of S$0 marked the start of us finally getting on top of our personal finances.
As for the end date of 31 Dec 2022 on the chart, that’s about 5.5 years from now. I’m sure a lot can change in half a decade and that’s why I have set a medium-term time horizon for now. I expect to increase the end date gradually until I have a long-term time horizon of 10 years or a decade. Just imagine what can happen by then!
You see how the Total Asset green line and Net Worth purple line have been moving upwards linearly for the past 1.5 years. Just something I have come to realise after converting the numerical data into a graph. At the beginning, it’s all about consistency. Come up with a financial plan and keep going at it. The growth rate is going to be more linear than exponential. Be realistic with your expectations and set that straight line at the steepest upward angle you can.
The Cash blue line dipped since 31 Dec 2015 as we were investing our cash savings more aggressively in 2016 and only just recovered recently to the same level in 2017. As a result, the Investments red line has been steadily moving upwards. Its growth rate has been higher than the Retirement & Medical yellow line, which tends to plug along as long as we remain employed and not have medical emergencies.
Watch what happens in Mar/Apr 2017. As usual, nothing happens to the Retirement & Medical yellow line. However, the Total Asset green line goes up, the Cash blue line jumps up, and both the Investments red line and Net Worth purple line drops. This is due to the sale transactions/events that happened these 2 months. And the fact that we finally removed the entire market value of our apartment from the net worth calculation. We have been marking it down gradually throughout the 1.5 years and decided to remove the full residual amount this month. It’s amazing how reallocation of the assets and rebalancing of the portfolios show up on the chart.
I hope you can see this as encouragement to come up with your own graphical progress tracker. We sometimes find ourselves focused too much on getting through the daily grind, weekly routine and monthly change that we forget about the progress we have made since the start. It makes we wonder how our chart will look like in the next few years and that’s something to look forward to.