It’s autumn, the evenings are getting darker (at least where I live), our kids are growing by the minute (can we stop the time please?), and the financial markets are filled with uncertainty. We are indeed in for some interesting months ahead. Oh, and we have reached a quite important milestone this month.
In the coming months, we will have more cash available to invest. Why? Firstly, we are done renovating our house. Secondly, we have stopped paying off our loans.
In the past months, we have been busy finalizing the renovation of our new house. For now, this means that we will start investing more money in stocks and potentially a fraction in a few other high-risk asset classes. I have been excited about investing most of our savings again after spending most of it on renovating our house since we moved last year.
Historically, we have paid off our housing loans quite aggressively, but as you will see, most of our net worth is now in real estate. Thus, I do not want to be even more exposed to the real estate market. As a result of this (and a much higher credit valuation of our house), we have decided to stop paying off our loans and instead invest the difference in stocks.
Aside from this, I mentioned an important milestone. After a new credit valuation of our house following the renovation (usually conservative valuations), our net worth has increased. This means that our net worth just barely surpassed the USD 1 million threshold meaning that we are now dollar millionaires. I am not sure why this milestone means so much in a Danish context, but somehow I am quite proud that we managed to achieve this after personally being in debt with a negative net worth just seven years ago.
I know that a large number of our net worth is in illiquid assets, but hopefully, the increased amount of cash available to invest will change this balance in the coming years.
Let’s dive into this month’s numbers.
The September financials
Our savings rate remained stable for September compared to previous months as it only contained mortgage repayments as we made the final payments for renovating our house and didn’t invest anything. The savings rate should look different from next month on.
As you will see, we have crossed the 1.000.000 USD line. Also, we have nearly doubled our net worth in a single year. The stock market has performed OK, but the main reason is the increase in our real estate. The real estate value has increased substantially due to high market price increases in our area, additional square meters built in our house, and a full renovation of everything inside.
Real estate increased 27% due to the new valuation while my pension and stocks did not deliver in September. However, we have had a great 2021 so far concerning returns, and as I am a long-term investor, I don’t mind a bit of volatility in the market.
That’s it for September. Thanks for reading all the way to the end 🙂