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  • Writer's picturethemoneyloaf

2021 Net Worth update

And just like that, 2021 is over, which means it's time for an annual net worth update!

Compared to 31 December 2020, our net worth increased by $99,061 or 24.08%, to reach a total of $510,423. I've also updated all the numbers for 2021 on the "Numbers" page.

The increased net worth is nice, but as I've always said, I don't put too much stock in the absolute number and we don't even use this to calculate our FIRE number. Since we're nearly 3/4 invested in stocks, our net worth could easily drop by 50% very quickly if we have a black swan event.

I think the achievement for us is our current asset allocation, basically transferring 20% from cash to stocks. Personally, there's still too much in cash for my liking, but Mrs Money Loaf likes to be able to sleep at night :D

Just for transparency, a couple of notes going into 2022:

1) I'll be removing cash that has been earmarked for some use like travel or other sinking funds. The reason is they're set aside for a reason, and I don't want to feel like we're decreasing our net worth when we go on holiday.

2) We don't (and won't) include our property and retirement accounts in our net worth calculations. If we did, it would add about $600k to it. Sure, it would be nice to be "millionaires" on paper, but there's no point if we can't access the funds, which means it doesn't help us get closer to our FIRE goals.

That said, if you're including cash or property, please do whatever makes sense for you! This is just what works for us.

Thanks for reading the blog, wishing everyone a happy new year and lots of progress in your financial journey, no matter which stage you might be at.

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