Net Worth Update (October 2016)

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Previous update here.

Hey there! I feel a bit like the late kid to the party this month. I’ve taken my sweet time sitting down to write this net worth update for two reasons – i) I’ve been busy starting my new job and ii) the numbers aren’t too exciting.

October tasted pretty sour in some respects; after being told by a senior bank manager my loan application would ‘easily’ get approval and spending almost 6 subsequent weeks jumping through the application hoops, it didn’t get approved. The reason provided was that my business is technically a ‘start-up’. I felt angry with the bank manager, who then strung me out for another few weeks saying he would negotiate with the credit department. My sense was that the loan was never going to get off the ground and perhaps he knew this, but wanted me to open accounts with them first (which is what I did) – the other banks I spoke with flat out declined the loan for the same reason. So, ultimately, although I learned a few good lessons I felt I had my time wasted.

 

Quick Summary: All up I shelled out $8,109.58  from my savings since August to start the business. I also borrowed a loan from my Dad to cover some costs for the first year should the business take a while to get going (so far, so good). My Dad’s a real good bloke, and although my family doesn’t have mountains of cash, he’s always been generous when it comes to setting me and my brother up at having a red-hot crack at something worth-while. Non-financially speaking, I owe him a lot. The loan should be paid back within 12-months.

So my net-worth went negative. Part of me feels like “who gives a sh!t, I’ve started a business!” and another part of me is a bit bummed about it. I think by mid-2017 things will be ticking along nicely.

Assets:
Cash: $7,652 decreased 34.98%
Superannuation: $34,037 down 2.66%
Investments: $0 (nil holdings)
Other Assets: $11,699 down 1.20%

Total Assets: $53,388 down 8.86%

Liabilities:
Credit Cards : ($2,794)  increased 55.41%
Student Loans: ($31,539) steady
Other Liabilities: ($21,999) steady

Total Liabilities: ($56,332) increased 1.8%

Net Worth: ($2944) down 190.83%

Oh, and I made a cool new chart below!

october-net-worth

How was your financial October?

As always, thank you for following along!

Notes.

  1. Cash consists of online savings accounts. I moved away from carrying cash in Q1 2015 and make 95% of my transactions electronically, for more accurate and up to date record keeping. I have a small transaction account holding around a tenth of my cash funds with the balance held in an ’emergency fund’ and a smaller account for rent savings/payments, both in modest interest bearing accounts (2-3%p.a.).
  2. Superannuation is the Government mandated retirement savings system in Australia
  3. Other Assets consists of one car at market value, depreciating monthly.
  4. Student Loans consist of the HECS/HELP debt provided by the Australian Government,  indexed to inflation. The loan repayments are based on taxable income, with repayments required from taxable incomes of $54,126p.a. or more in 2015.
  5. Other Liabilities consist of two loans which are interest free and don’t require repayment until I finish my Masters degree.
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3 thoughts on “Net Worth Update (October 2016)

  1. Grrr, how frustrating! I’m so glad that you were still able to proceed, and that you project things will work out. Good on your dad for all the types of help he is willing and able to give you. He’s obviously raised a son he can trust, and who is grateful. Go dad!

    As to the negative net worth, if you keep graphing for 20 years, the dip will eventually be so small it won’t even register off the bottom of the graph. It marks a point in time, the start of something new. I certainly don’t have anything I can point to and say “that’s the point where I started my own business”, and to be honest it’s not something I am ever likely to do. Own that drop, be proud of it, but also use it as a tool to spur you on through the hard times that will inevitably pop up.

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    1. Hi there Mrs. ETT, thanks for the very kind words. I like your view to use the negative net worth as a motivatoin and a marker in time…I think working for youself is just one way to do the financial independence thing – but it’s the path I’m on. Glad to see you here again!

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  2. I feel like this is a good update WFT – you have to take a risk to get your own business started. The banks seem stupid and that they didn’t want to help, which is a shame. How is a business meant to start without being a start up? Ridiculous.

    Anyway, your net worth hasn’t taken a big dip. In 2 years time it could be much higher, which will make all of this effort worth it 🙂

    Tristan

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