Year In Review – 2020 Net Worth

Continuing on with the year in review series, next up is net worth. This year I wanted to make a small change to my net worth calculations. For the last 2 years I have included my US stocks (employee stocks) as part of my net worth. That has caused a lot of confusion to my readers. While my company stocks in the US are worth something, I am planning to keep it out of the reviews. That corpus is supposed to be used for my international (mostly US) vacation. So no point dragging it into net worth calculations.


Another confusion was about the house that I live in. Should it be considered as part of net worth? Some readers think it should not be part of net worth because it is not really an investment if I am living in the house. While I agree that a house that you are living in does not count as investment, it also does not mean it is not part of the net worth. Lets say I sold my house today and go for a rented accommodation. Say I invested the proceeds from the sale of the house in debt funds. Then the amount becomes part of my net worth won’t it? So I am continuing to keep my house as part of net worth.


The Growth

I also wanted to stop showing cash component since it is a small slice and almost constant. Enough chatter, now lets get to the numbers shall we? The fixed income and equity values are real numbers. However, for real estate the numbers are all estimates either using the information from magicbricks or what I hear from people. So real estate numbers are really imaginary. Did you see what I did there :)?



As you can see the net worth is still going up into the right. That is a good sign. What is not so good is that the real estate value did not grow as much as before. I intentionally change the fixed income and equity allocation based on what I think the market condition is, so they are moving all around.


Asset allocation

The asset allocation hasn’t changed much since last year though. Still no loans or any other debt obligations.



The asset allocation as of end of 2020 is shown below. Basically equity is 12% of my net-worth. Where as real estate and fixed income take the lion’s share. I am still leaning pretty heavily on real estate, but there is nothing much I can do there until I sell and move into a smaller place. The equity component is also quite troublesome. I’ve been unable to get back into the market for quite some time thanks to unfavorable valuations. May be that will change this year. Lets see.




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