Net Worth October 2020

It’s been a while since my last Net Worth update.

That was back in December 2019! Can you believe it?

But I did not stop tracking my Net Worth…I just did not post about it.

2020 is a year that will be in our memories for a long time and NOT for the best reasons.

While I’m writing this and when everyone thought the worst is over, the second wave of COVID is hitting most European countries.

There is not much we can do about it! All we can do is hope for the best and that the global economy does not collapse into a major recession.

Now let’s cut to the chase, shall we?

Why Should You Track Your Net Worth?

Our Net Worth is a personal finance indicator that tells us how poor or rich we really are.

Many of the people that you know may not be as rich as you may think. Remember that looking rich does not necessarily mean being rich!

It all comes down to assets and liabilities.

Net Worth = Assets – Liabilities

Assets are what we own, such as a house or equities, and liabilities are what we owe, generally associated with debt.

Having a big and expensive house or driving an expensive car, just means we are most likely falling into the trap of lifestyle inflation, carrying with us a huge amount of debt.

So if we owe too much and if we are not able to pay for it anymore, we would be left with nothing.

Take that into consideration!

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What Are My Assets?

Nothing has changed dramatically with my assets. While I keep investing every single month and therefore more exposed to the financial markets, my assets are still the same.

Here’s my short list:

  • Real Estate
  • Cash
  • Savings
  • Equities

The biggest portion of my Net Worth is in Real Estate as expected! After all, you may have read that real estate prices in Luxembourg are one of the highest in Europe.

Evaluating real estate is not 100% accurate and the real price will always be different. Possible fees/taxes have not been taken into account.

Total Assets = 780041€

The key aspect of tracking our Net Worth is to understand it’s direction and evolution. We all want a Net Worth that keeps growing with time.

The (Not So Pleasant) Liabilities

At the time of writing, I’m not debt-free but I would prefer to be 🙂

It’s no surprise that the main contributor to my total liabilities is my mortgage loan. While this might be seen as good debt (linked to assets that appreciate with time), it never feels right to owe so much money.

Hopefully, my liabilities will continue to decrease.

My plan is to reduce my debt in the next 3 years in about 75k€ starting in 2021. This is roughly 25k€ that I will need cut per year.

Total Liabilities: 474085€

For the plan to actually happen, I will need to be extra disciplined with my spending and keep paying myself more. A lot of the effort will come from consistent budgeting and new income sources.

Net Worth – The Big Number

So we come down to the big number. The current Net Worth stands at:

Net Worth = 305956€

To grow our Net Worth we should increase our assets and decrease our liabilities month after month.

COVID and the delay in a real estate project have caused an impact. But this is adult life. We have to deal with the bumps on the road and stay the course.

Hopefully, my post motivates you to start tracking your Net Worth. Thank you for reading and have a nice day!