There’s one massive change to our net worth this month: Our house value. Traditionally I’ve always been conservative when valuing the home we live in. I’d rather increase its value slowly overtime and undervalue it on our books so that when the housing market downturn inevitably happens I don’t have to write any value off.
Obviously there’s no benefit there other than psychological. As we’re not yet close to selling, it doesn’t matter if our property’s value fluctuates. But this week our council revaluation for rating purposes came out and it’s considerably higher than what I’d been valuing the property at. And as we’ve done a lot of improvements that didn’t require consent and are therefore beyond the council’s knowledge of the property, I know their valuation will be a decent amount less than what the property would actually sell for on the open market.
Side note: If your council revaluation ever comes in less than what you think your property is worth, don't lodge an objection. I work for a council and I can't tell you the mind-boggling number of people who call in to complain about their council valuation being too low, not understanding that it has nothing to do with what their house will actually sell for and that if it were valued higher they'd have to pay more rates! Who wants to pay more tax? Not me!
Anyway. So long story short, I’ve decided to bite the bullet and change our home’s value in our net worth calculation. Because I can’t help being conservative, I’ve still kept it $10k less than the council valuation, but that’s a lot more than what I had it at previously. I know $10k doesn’t sound like much but you have to remember this isn’t Auckland so that’s actually a pretty decent buffer and minimises the chance I’d have to write down the property on our books in a market downturn.
All this adds up to a very hefty uptick in our home equity. So without further ado, here’s our net worth for this month:
|KiwiSaver – Mr R2A||$20,122.61|
|KiwiSaver – Mrs R2A||$12,436.67|
|Eat My Lunch||$500|
That’s an increase of $71,710.64 over last month, or 62.12%! Our Harmoney investment is slowly winding down. Another loan was paid back and we aren’t reinvesting, for reasons I’ve outlined. However we’re very happy investing in Sharesies and will continue to invest there for the foreseeable future.
I expect that going forward, our monthly net worth increases will slow down even below what they were before this month’s windfall. And I’m saying that in dollar terms, not just proportionally, which would be inevitable after this massive revaluation of our house. But the reasons behind that I will save for next month’s story so I have something to say in that post 🙂
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