Friday, January 15, 2010

December 2009 Net Worth

I am finally getting around to posting my year-end net worth. Drumroll please...


Yes, I finally crossed the $400k mark! That is a good feeling... though it is slightly diminshed when I remember that in January 2008 I was hoping to hit $410k by the end of that year!

During 2009, my net worth increased by 37%-- a pretty nice recovery from last year's dismal performance. The NetWorthIQ graph says it all:

December 2009: $408,490, up 37% from '08, up 13% from '07
December 2008: $298,700, down 17% from '07
December 2007: $360,008

If you just extrapolate the trend I was on until 2007, I'm still not quite back on track, but the economy isn't the only factor affecting that, as I've had higher housing costs since then. And who knows, if I hadn't bought my condo, I probably would have been even more exposed to the crash in the stock market-- I think my home value has actually held up better than some of my investments.

Here's the breakdown for year-end 2009:

Cash & Bank Accts $56,442
Retirement $241,708
Stocks $20,898
Bonds $5,091
Home Equity $86,318

Credit Card -$1,967

My cash and bank accounts are almost $18,000 higher than they were a year ago, so it's not just investment performance that has bounced back-- I've saved cash, too. One thing that's actually lower than in December '08 is my home equity, as I took that down by $10,000 a few months ago due to sales data on comparable apartments in my area. My credit card balance is slightly less than it was a year ago, which I guess means I spent less on holiday gifts!

I'll post my 2009 expenses and income soon... and after I get my head around that, I will have to tackle setting some goals for the rest of 2009. Stay tuned!


My Frugal Miser said...

Congratulations on bouncing back, Madame X. 2008 was bad for just about all of us.

It's amazing just looking at where you were in 2003 (under $150K) and where you are today. I wonder- what was going on before then? Did you change any habits to accelerate your net worth? Did you start a higher paying job?

Anonymous said...

2009 was good for me too, also up 37%
after dropping 19% the prior year.
It was my 3rd best year so far,
behind 2003 and 1999. With those big
swings I guess your retirement is
mostly (maybe all?) stocks. So I
guess that's my question-- are you
balancing your retirement differently
now than two years ago?

Madame X said...

@ miser, I've had pretty much the same job since 2003, where I've gotten mostly small raises and one bigger raise/promotion, but even that was under 10%, as it was kind of just a title change. But I've kept my spending pretty steady so I guess I save a little more each year! I'll have to do a long-term income vs. expense analysis...

@ anon, my retirement savings have been pretty aggressively invested all along, which is why I took such a big hit. I adjusted a few things that made it a little bit more conservative and will continue to try to do that as I get older. I'm 40 now, so it's probably a good time to check the overall allocation to make sure it's appropriate for my age.

Anonymous said...

Thanks, I notice you and I have similar asset breakdowns-- very aggressive on tax-deferred but very conservative on taxable accounts. My 401k has been a mix of international and smallcap and I'm not changing it. I plan to draw down taxable money first and save that 401k for last, so its time horizon runs longer than for most folks my age. Today's ultralow interest rates are pathetic, but I think you can't beat the peace of mind from having a supersized emergency fund (like you I work in a relatively high-risk sector).

Where we differ is in the balance between retirement and non-retirement accounts. For me retirement is a quarter of the total, while it's close to 60% for you. Have you thought about whether it might actually be a good idea to defer less of your wages? Maybe like spending it on some low-dividend growth stocks, etc.

Sorry about the unsolicited advice, but that's what you get when you open your wallet!

Super Amazing Savings said...

Wow! I'm going to have to come back and read up on what you've done to change your financial status. What an amazing thing to open your wallet to everyone. Thanks.

frugal zeitgeist said...

Well done! Very happy to hear it.

I'm curious about a couple of things, and I hope you don't mind me asking: I never count my home equity in my net worth because I think of my home as a home, not an investment. What's your rationale for counting it as part of your net worth? Also, is your equity figure measured against the purchase price or the market value? If it's the market value, how do you arrive at that figure?

Pastor Jim Kibler said...

It might be a good idea to take some of your cash on hand and pay off your credit card to save on the interest.

bklynchick said...

I am very late to the party and have just recently found your blog but I am enthralled. I find the honesty and extreme personal approach / personal example to be a welcome nuance to the otherwise dry and holier-than-thou feeling that other commentators have.

I am looking forward to following you through 2010 and beyond.

Madame X said...

@ pastor jim, I do pay off my credit card balance in full every month and never pay interest on it.

@ Frugal zeitgeist, I see the logic of not including a home in net worth, and I do think of mine primarily as a residence and not an investment. But it's also a significant asset that I can sell or rent out if needed, so I don't ignore it the way I would the much smaller value of personal property like clothing or books or my computer. And since I only bought it a couple of years ago, it seems weird to see my net worth as dropping by $90k the minute that happened. I arrived at the value by considering the purchase price I paid, plus some extra closing costs involved in a new construction sale that wouldn't apply to whoever bought it from me, minus an adjustment of $10k for recent market conditions. I try not to think of it as a hard and fast number and should probably express my total net worth in rounded off terms to be more realistic about that!

@anon 8:17, it's a tough call but my thinking has been that since I can't predict my future tax bracket, I'd rather get the "bird in the hand" of tax-free income now by maxing out my 401k, so I have a little bit of extra income now that will compound over the years. I also max out my Roth IRA each year, to play the other side! I invest in other stocks and mutual funds too-- less so more recently due to my home purchase and trying to let my cash savings recover a bit from that. I try to put my eggs in all baskets!

Marie said...

You're almost a half millionaire!

Good job Madame X. The first million always the hardest

Online Payday Loans said...

This is an inspiring story of a woman's shrewd financial management skills over a decade to raise her net worth from $50,000 in the year 2000 to $401k this year by spreading her investment among different kind of assets, and regular savings from the monthly income.

Diane @ Investment Club Education said...

I haven't been here in quite a while, but see that you've made significant progress with your net worth. Thank you for sharing. It is so inspiring to see. I really need to get more serious with my finances. I think reading your blog more frequently will help keep me motivated.

Anonymous said...

1 point could be If you sell your home you still need to live someplace else and the equity would be quickly put into another home of similiar value (unless you move to a different region where home value are signifigantly less). second point could be you sell and rent someplace to live. Point 1 is why it's hard to see someone include home value in there net worth.

Anonymous said...

I also noticed that you are counting your equity figure into your overall net worth. If so, wouldn't it be fair to also include the mortgage amount still owed? I guess everyone has their own system. Regardless, you have a very good number. I tabulate both my husband's and my net worth but we do not include the equity of our house and of course a hefty mortgage balance. As of today, we have a bit over $200K worth. We are both 31.

Madame X said...

@ anon 6:20, I am counting my mortgage owed-- that's what equity is, the home's value minus what you owe on it.

Ruthanna said...

Not too bad considering you hadn't planned for a recession.