Friday, December 01, 2017

Networth update in 2017

Another year is almost coming to a close. This year is yet another fantastic year for me. Every year seems to be fantastic to me, so either I'm delusional or I'm really happy with my life. I'm going for the latter haha! The last time I did my networth update is around the same time last year, back in 2nd Dec 2016 here. To clarify, this is my networth, not the networth of my household.

There are so many ways to calculate networth, but I've always done mine this way. It's essentially assets minus liabilities but how you define assets and liabilities makes all the difference. Unlike most people, I excluded the value of my property but included the debt associated with it. Took me a few years to reach from a negative value to 0. The assets part include:

1. Cash in my wallet
2. All the money in my various bank accounts
3. Cash holdings under mattress and milo tins at home
4. Money in my paypal account
5. All the money in the 3 accounts in my CPF
6. Money market fund account
7. Marked to market investment portfolios
8. Surrender cash value of whole life insurance plans

I do not include the value of my 5 room flat that I'm currently staying in, and also the value of the family car that I own.

The liabilities part include:

1. Credit card bills
2. My portion of the HDB mortgage loan (total remaining loan amount divided by 2)

A good friend, Azrael, finally legitimize the way I calculated my networth. He introduced the term Net Current Asset Value (NCAV), first coined by Benjamin Graham to valuate a company. NCAV basically means taking the current assets minus all total liabilities. Since property value of my residential property is not under current assets (I could be wrong, I'm no accountant), hence what I did to valuate my networth is similar to the conceptual definition of NCAV. I stand to be corrected of course. But seriously, it also doesn't matter. I'm still going to do it my way haha

2014: Assets: $226k, Liabilities: $220k, Networth: $6k
2015: Assets: $295k, Liabilities: $207k, Networth: $87k
2016: Assets: $351k, Liabilities: $188k, Networth: $163k
2017: Assets: $449k, Liabilities: $182k, Networth: $267k

At first glance, there seems to be a huge increase in networth. Nearly a 100k increase year to year since 2016. Liabilities did not drop that much, only dropping by 6k from 2016. Assets went up a lot, nearly 100k to 449k in 2017.

The assets increased by a lot, and I think it's mainly due to my dividends and the bullish stock market. This year, because of my kid, I definitely worked much lesser compared to previous years. My total income fell as I free up my weekend time slots to make more time to take care of my kid. Hence, initially I thought my savings will drop as a result. Surprisingly, it came in pretty strong at 72k. This amount must have been saved by the combination of more dividends, parental leave and child care leave added together. So even though I worked less actively, these streams of income played their role to cushion my fall in active income. In the future, I would expect my asset value to generate more and more cashflow for me, as I progressively spend more and more time towards my family instead of wealth building. Inevitable.

Liabilities is mainly from the amount that I owed for my HDB mortgage. I switched from HDB loan of 2.6% to a commercial loan. It's somewhere in transition yet, so I have not paid my mortgage since November. Traditionally, I would also do a lump sum partial capital repayment for my loan, but because it's in between lenders now, I would do it only in 2018 when things are settled down. That would explain why my liabilities only dropped 6k from 2016.

Networth went up nearly 100k, and I think it's mainly due to asset value increasing. This means it's mainly the bullishness of the stock market that causes my asset value to go up. I'm about 40% cash. That will be my option if and when the market allows me to buy. Not in a hurry to use it all, so let it rot.

My networth is finally way over my liabilities. This means that if I choose to, I can liquidate everything and pay off my liabilities. I wouldn't do that of course, but I can choose to do that now. I look forward to the day that my networth is twice of my liabilities, then my whole family will be relieved of one great debt.


KPO said...

That's very conservative! Congrats on the growth of your net worth!

Solace said...

Hi Thomas,

Congrats on the well managed net worth.

If you are a stock, you are considered a net net stock. Haha

la papillion said...


Thanks, are you going to do yours too? haha

la papillion said...

Hi Solace,

Rare guest :) Next time if I ever IPO, i'll look for you haha!

Anonymous said...

So little also want to boost. Rubbish post.

la papillion said...

Hi anonymous,

Oh you're back! How are you? Haven't seen you for a while!

Sgdividends said...


Thanks for sharing.i don't see it as u boasting but just sharing and u are very conservative to not take the value of your HDB , yet take the liabilities of your HDB.

I am curious how come u consider parental leave and child leave as stream of income?

You are in the self employed industry so how to monetise these 2 kinds of leave?

la papillion said...

Hi sgdividends,

It's not a stream of income in the sense that it comes to me all the time. It's more like a replacement income. I don't have paid leave, and my parental leave is half of what employed people get. For them, they don't lose any income by taking leave, since it's paid. For me, I suffer a drop in income everyday I'm not working. Hence, being able to claim for parental leave and child care leave from the govt is a great welcome for me, esp in the first 3 months.

I won't say I monetise the leave, but it did help to boost up my income.

sleepydevil said...

Wow! Nice jump in networth you have there! And congratulations on your progress!

Anonymous said...

Congrats! Wishing you all the best in your journey towards financial freedom!

la papillion said...

Hi sleepydevil,

Aiya, the jump in networth is because of other stuff, not sustainable one haha :) But thanks!

la papillion said...

Hi anonymous,