I Have More Money Than I've Ever Had in My Life!

How often can you say that? My goal is to be able to say it every month, and the last few months, I haven't been able to do so. But although I haven't yet pulled together a full monthly wrap-up, my net worth at the end of April was around $373,000, which is higher than it's ever been. It's a nice feeling!

March Recap

I've been so busy lately I haven't found the time to sit down and do my monthly numbers. I haven't entered my investment transactions into Quicken, so I'm just doing a quick guesstimate this month based on the numbers I have at hand (in Pocket Quicken on my Treo).

Net worth 3/31: approx. $357,000

Notable expenses:
Dining $743
Clothing $407
Gifts Given $456 (includes plane ticket for mom)
Household $403 (includes new dining table & chairs for $300)
Miscellaneous $2,329 (includes new computer for for $2,012)

Fortunately my income was quite high this month, as I got my NY State tax refund and my bonus, so despite the big expenses and lackluster investment performance I had a nice gain in net worth, somewhere in the neighborhood of 4%.

Other activity of note: I transferred $5,000 to my FNBO online account. That is a good chunk of my after-tax bonus going into savings, not to be touched. I left some in the account I use day to day, as I have a huge credit card bill hitting this month due to some vacation expenses I've paid in advance. Next month should be a bit more normal in terms of expenses and income.

Explanation of Credit Card Balances in Net Worth

Each month, I post my net worth, which includes various lines for assets such as bank accounts and investments, and also lines for liabilities such as credit card balances. Quite often, I get a question from a reader asking "why do you carry a balance on credit cards when you have all that cash?"

I always respond in the comments, but I thought it was worth explaining in a separate post.

When you're calculating your net worth, it's important to look at where you stand at the current moment, in terms of what you have, and what you owe. If you are dead broke, and somehow manage to borrow a million dollars that you don't have to pay back for ten years, is your net worth be $1 million? No-- you're still be broke. You have the million dollars-- that is an asset. But you owe $1 million-- that is a liability. They cancel each other out, so your net worth is zero. Even if it's not due back to the lender for 10 years, you owe that money, it's not yours free and clear. (Someone who knows more than I do about more complicated methods of accounting might point out some nuances here having to do with interest, etc. but the basic point still holds.)

As I've pointed out in my Rule #1, I always pay my credit cards in full every month. The bill is usually due sometime mid-month. I am charging things constantly throughout the month. Although I never "carry a balance," as in carrying it month to month, the balance on my card is never zero. Even if I took a break in using it, and the balance was zero right after I paid my bill, it might not still be zero by the end of the month when I calculate my net worth. Any time there is a balance on my credit card, that is money that I owe to the credit card company at the moment when I am calculating my net worth, so it has to be shown as a liability. I am using my credit card to get an interest-free loan for a month, but it's still a loan. The money I'll use to pay it back may still be in the bank, but I have to account for it in calculating my net worth.

So I hope everyone is remembering to include whatever they owe on credit cards when calculating their net worth-- even if it's only $50, even if you're going to pay it off tomorrow, it's still a liability today.

February 08 Recap

My net worth increased a wee bit in February, an almost negligible +0.2%. My federal tax refund was deposited, which was a big plus, but I spent a large amount on some plane tickets, which was a big minus. There were a few other odd one-time things, but otherwise my spending was more or less in line, and the stock market continued to be its ugly self.

Assets:

• Cash and Bank Accounts total $35,689
• Condo Equity $86,707
• Retirement $207,128
• E*Trade $15,771
• Treasury Direct & Bonds $4,583

Liabilities:

• Amex $185
• Visa $6,293

Net worth $343,400


Expenses:

• Housing $1,944 (this is just my maintenance charge and a prepayment of principal made in error so it's really going more towards home equity rather than being a true expense)
  
• Business expense $414 (will be reimbursed)
• Charity $230
• Clothing -$105 (returned some stuff bought last month)
• Dining $923 (bought Rolaids for the first time in my life. But at least they were the cheaper Duane Reade generic version.)
• Entertainment $23
• Gifts Given $57
• Household $113
• Misc $520 (includes tax prep fee)
• Taxes, Self $2,029
• Subscriptions $61
• Travel $3,942 (includes Metrocard, a family visit, and part of vacation cost)
• Gas & Electric $38
• Telephone $78

Total Expenses $10,353

Next month will look weird due to two mortgage payments, and hopefully, another tax refund and a bonus... and let's hope the market does a little better too!

January 2008 Monthly Recap

I flipped out when I ran my 1/31 net worth in Quicken-- for some reason, the balance on my 401k appears weirdly low on that day. At first I thought it must have been when the recent market ups and downs really bottomed out, but when I checked it against my actual statement, I wasn't really down 18% for the month!! So with a little adjustment, I think I can confidently say that my net worth was NOT $317,455, but rather $342,763, a loss of 4.8% for the month.
It's disappointing, of course, but with the stock market the way it's been, what can you do? You can try to save money, and I did manage to save a little.

My expenses for the month were $6,331 vs. a budget of $6,572. Most of the reason I look good vs. the budget is that I overestimated my taxes at $2,394 vs. an actual of $2,029.
In other areas, I didn't fare as well:

• Dining: though I felt like I was eating dinner at home a bit more, I did have a couple of nice meals in restaurants, so I spent $776 vs. a budget of $600.
• Clothes: I bought a few things on sale, so I spent $426 vs. a budget of $167, but I've already returned a couple of things so I should be in better shape next month.

Other assorted actual expenses:

• Utilities $219
• Education $48
• Entertainment $5
• Household $26
• Misc. $305 (this includes a new portable hard drive, a protective skin for my ipod, a haircut and stocking up on some hair products that should last several months)
• Internet $20
• Newspapers $75 (2 months of the NYT subscription happened to fall in this month)
• Travel $576 ($76 Metrocard and $500 deposit on extremely exciting vacation!)
• Housing $1,944 (still no adjustment to escrow for property taxes)
• Charity $0. Zippo. Nada. And it's because I'm a horrible person, ok? I don't give a shit about anyone less fortunate than me! I am an evil, greedy bitch who likes to dance on the graves of starving children! (Actually it's just timing. There will be some items in this line next month.)

The bottom line for income vs. expenses was about $2,000. $1,395 of that was due to payroll deductions going straight into my 401k. If you factor out some miscellaneous investment income and gifts and the payment towards the principal on my condo, I only saved $24 of my net paycheck, which is less than I'd like but will hopefully be made up for in other months. Now if only that pesky stock market would cooperate! Onwards and upwards!

Goals for 2008

Ok, how am I going to figure out some goals for this year? As I've mentioned, a net worth goal alone now seems a bit too simplistic. But it's still a handy way of tracking my progress.

From 04 to 05, my net worth increased 24%
From 05 to 06, it increased 22%
From 06 to 07, it increased 15%

Should I set a goal for another increase of a similar percentage? A 10% increase this year would put me at about $396,000. A 15% increase would put me at about $415,000. 20% would put me at $432,000. Should I play it safe at set myself a modest goal of $400,000?

Or should I delve into this a bit more, by looking at each piece of what makes up my net worth and projecting where it could go this year? Here's how I thought it through:

A couple of assumptions:

• I think my level of spending will be somewhat consistent with last year, with a couple of exceptions. All this will be factored into my 2008 budget.
• I'll get a small raise and a moderate bonus

Unknowable factors:

• Market performance
• Home value: I'm going to assume it will stay flat, and just account for paying off the principal on my mortgage.

I can project how much my cash will increase due to savings and interest earned. Let's say I average 4% on what I have, at a minimum. Then as an upside, let's add about $2,000 in cash savings (not counting retirement)-- that effectively increases my cash by about 10%.
I can project the increase in the value of the bonds as those have a pretty steady interest rate. I think it's a little over 4%.
I can assume my credit card liability at year end will be in the usual range of whatever happens to be outstanding between paying it off in full each month, so basically 0% difference there.
For home equity, I'll put in an increase of about 4% again, as that is about how the principal payments worked out this year.

Then I can put in a range of how much I think my investment accounts might increase. So far this year they are down. Yuck! I can be optimistic and assume that they will at least recover enough to stay flat for the year, and as a maximum, I'll assume that they could increase as much as they did in 2007, so let's say 0-7%, for both my E*Trade account and my retirement accounts. Then I have to add the $15,500 I'll put into my 401k to the projected amount for the retirement account, and I'll round it up to $20,000 to include Roth IRA contributions. This may be missing the impact of dividends, etc. as my actual retirement increases from year to year have been much higher. What if I just use a percentage in that range instead?

Here's a picture of the spreadsheet I used to work all this out:


In the end, I'm actually going to stick with a number based just on slightly less than a 14% net worth gain: $410,000. It's about mid-way between my high and low estimates. And to achieve that goal, I'll have sub-goals of:

• Fully funding my 401k with contributions of $15,500
• Saving enough money to fully fund a Roth IRA at $5,000 (we'll see if I'm still eligible)
• Saving an additional $2,000, at least. That doesn't seem like much, but it's in line with the kind of expense budget I'm working on.

That leaves the rest of the goal to be reached via investment performance. I worked it out that if my E*Trade account grew by 4.3% and my 401k had returns of somewhere around 9-10%, I could get there. (It's a little weird trying to properly do this math and factor in compound interest, etc., so I'm probably off a bit!) Based on what I've already said about not expecting great things from the market this year, that might not be all that realistic. But maybe it will work out once all the dividends, etc. are factored in, as the overall gain is less than I had this year.
So that is the plan! I like breaking it out this way, as it will let me see if I met my goals on things I can control, and give me some idea on whether I am estimating reasonably on things I can't control. Wish me luck!

Year-end Net Worth

It was a squeaker, but I made it!
I was so depressed the other night when I was looking at my net worth in Quicken and seeing a figure of about $349,300. I knew all my salary and credit card transactions had been entered for the year, and the interest on my main bank accounts. I was bummed out that my net worth was below my $350,000 goal, and nowhere near my $370,000 revised goal that I set mid-year. When I got to work the next day, I remembered to check Paypal and another bank account, and sure enough, I had a little more interest but not enough to save the day. My last hope was that my investment accounts would be showing some pretty nice dividends in December, and sure enough, they managed to save the day! Here's how things ended up:

ASSETS:

Cash and Bank Accounts

• Cash $119
• Chase CD 6 mo. $3,054
• Chase Checking $179
• Chase Savings $5,018
• E*Trade 2-Yr CD $5,972
• E*Trade Money Market $5,021
• E*Trade Savings $12
• FNBO Direct Savings $11,104
• Laundry Quarters $6
• PayPal $152
• Misc foreign currency $30

Retirement

• 401k $195,613
• E*Trade Roth IRA $23,453
• Chase Roth IRA CD $3,037
• Chase Roth IRA CD $2,639

Investment

• E*Trade $17,255
• Treasury Direct & Bonds $4,583

Other Assets

• Condo equity $84,620

LIABILITIES:

Credit Cards

• Visa $1,859

Net Worth as of 12/31/07: $360,008
+$7,331 (up 2%) in December
+$47,237 (up 15%) for the year.


A few notes:
As usual, I am showing the equity I have in my condo, rather than breaking out its value and the balance owed on my mortgage. I haven't adjusted the value of my condo up or down since I initially determined the number last year after I moved in. Despite the rocky real estate market, I think my valuation is probably slightly conservative, but I'm going to sit tight until I see more condos similar to mine being sold in this area. The rest of the accounts are pretty self-explanatory, I think.

Overall, I feel okay about my result at the end of this year, but now that more and more of my net worth resides in assets other than cash, it's hard to use net worth alone as a goal. If I wanted to, I could reasonably assume that my condo is worth $10,000 more and say I'd met my goal of $370,000 net worth. Or I could look at the peak prices of my stocks and mutual funds this year and say that if they hadn't fallen from there, I "would have" made my goal. Neither of these things would change how much money I managed to save or spend or earn this year, which is more important.
I can't just compare the total for my "cash and bank accounts" group to try to break out the investment fluctuations, since I moved some money between that group and the retirement and investment groups. So where did the gain in my net worth come from? Here's a few factors:

• My 401k statement says my rate of return was 6.8% for the year.
• My main E*Trade account was up 8.4%, and my Roth IRA at E*Trade was down 9.5% for the year. (The S&P 500 was up about 3.5% for the year.) I think have to make some changes in that Roth IRA portfolio-- it's never done all that well, but this is ridiculous.
• I had a little more than $20,000 of interest and investment income from all accounts for the year. This includes dividends and capital gain distributions which were reinvested. I was kind of amazed at this number, and it really shows you how important it is to build up capital! It's not like I'm anywhere near the point where I could live off my investment income, but it's encouraging to feel like I'll get there someday! And to put this in perspective, it was only 16 years ago that my gross salary was less than $20,000...
• I had about $5,500 in "other income" this year, which is mainly 401k matching contributions from my employer.
• My "savings," as defined as salary and bonus earnings minus my expenses, not counting what went into equity on my condo, was about $18,500. (Of that, $15,500 was from payroll deductions for my 401k.) 2007 may mark the first time I ever made more from investments than I saved in cash!

Looking at all the factors that contributed to my net worth increase has been helpful-- it's made it easier for me to start thinking about goals for 2008 in terms of things that I can actually control as well as outside factors like market performance. But that is a topic for another post! Until then, onward and upward!

November 07 Recap: Net Worth

How did I fare in November? Not all that well, but I guess it could have been worse. Here's how my net worth stacked up at the end of the month:

Cash, CDs and Bank Accounts: $29,216

Investments:
E*Trade $16,583 (this is almost $2k less than last month)
Bonds $4,583

Retirement (401K and Roth IRA): $220,290 (this is about $12k less than last month)

Misc. Foreign Currency: approx. $30 (maybe less. I haven't updated exchange rates!)

Home Equity: $84,339 (home value less mortgage balance)
Credit Card: -$2,364 (always paid in full each month)

Total Net Worth: $352,677

At the end of October, my net worth was $365,383, so I'm down $12,706, or 3.5%. My investments took a slight bounce back up at the end of the month, which is why I say it could have been worse! And my losses for the month were entirely in my stock and mutual fund investments. I did save some cash during the month, which I'll detail in the next post. Obviously this is disappointing, but you've got to roll with the punches. I will hopefully still meet my original goal of a net worth of $350,000 at year end, even if I miss my revised goal of $370,000. And soon I'll have to figure out my goals for 2008! Onward and upward!

Ugliness.

I'm not sure I can face doing my next net worth recap. As of today, my net worth is about $20,000 lower than it was at the end of last month.

Ouch. (This is the polite translation.)

At this rate, I may not hit my original year-end goal, let alone my higher revised one. This is the downside to vigilantly tracking one's finances. It's also what goes with trying to invest aggressively: most of the time, you can feel like your money is growing, but it hurts like hell when the market goes down and you see your gains evaporate. In some ways it's almost worse than the feeling I get about over-spending. If I had SPENT that $20,000, I'd have something to show for it, even if it was only in my own memory of having had a really good time.
But of course, I do still have something to show for it: I still have the same number of shares in all those investments, plus a few more from the last of my 401k contributions and reinvested dividends. Those shares have lost some value, but they can regain value too. I just need to grit my teeth and wait it out. And I need to keep saving as much money as I can in the meantime.

Cooperative Snooping

I'm not always a nosy person but when it comes to this blog, sometimes I just have to dig into things! I was hanging out with a friend of mine who recently started serving on the board of the co-op apartment building she lives in. We were having dinner a day earlier than we'd planned because she would be interviewing the prospective buyers of an apartment the next night, and when she mentioned that she had all their documents in her bag, I said, "OOH! How much money do they make?"
My friend laughed but actually did quote me some figures. (Yes, this probably a bit unethical of her, but I wasn't told what the people's names were or which unit they were buying in the rather large building, so I suppose no harm was done.) The husband, a lawyer, had income of about $500,000 according to his last tax return, while the wife only made about $45,000 (I'm not sure what her job was). They are close to retiring and their net worth is a little over $3 million including home equity. They own their other home free and clear, with no mortgage, and no other debts.
Of course I had to sigh and rue the fact that I will probably never make $500,000 and never be in the position to buy a little pied-a-terre in New York City when I retire. (Not that I'd need one, since I already live here, but you get the point.) But I also thought "Shouldn't a $500,000-earning lawyer in his 60s have a higher net worth than $3 million? If all my savings projections, which are usually a little on the conservative side, work out, I expect or at least hope to have a net worth of about $3 million when I retire. And I'll be lucky if I ever make $200,000 a year, let alone $500,000!"
Given that this couple had been living in a less expensive area than NYC all these years, you'd think they could have saved more... but on the other hand, maybe they didn't think they'd need it, and were happy to just spend more money along the way. Their current financial position, plus a couple more years of working, will probably allow them to live a pretty sweet life. And they'll collect social security, and who knows, perhaps a pension too. Of course the apartment they are trying to buy probably costs over $600,000, with over $1,000 a month in maintenance costs... maybe the $3 million was their net worth not counting what they'd be putting into the new apartment? I don't know... now I wish I'd been even nosier!

This is one of the interesting things about living in a co-op building in New York. If you serve on the board, which I've done in the past, you basically know everything about your neighbors' finances. I didn't live there long enough to have to interview any new buyers, but I had access to records that at least showed me what some of my neighbors had paid for their apartments, and if I'd really dug through the archives I probably could have found everyone's original board packets which usually include tax returns, bank statements, letters of recommendation and a full recap of assets and liabilities.

Sometimes I wish I'd bought a co-op instead of a condo. I love my apartment and in some ways I'm glad not to have restrictions on being able to rent it out if I ever need to, but I wish I could have a say in who my neighbors would be. Also, by Brooklyn standards at least, I was a pretty good candidate for passing a co-op board interview: my income is steady, I had a good cushion of savings, I don't have pets, I'd been on a co-op board before, and I'm good at playing the part of a demure, quiet, responsible, professional young woman, rather than the freak I actually am-- a freak who likes snooping into other people's finances!

October Net Worth

Ok, time to do the monthly numbers again. Quicken tells me that my net worth on Oct. 31st was $365,383, an increase of 2.6%. This is excitingly close to my year-end goal, however, it's a bit suspect as when I was looking at it the other day, my 401k showed a higher balance in the net worth report than it did in another screen. Anyway, for now, I'll take it. It makes me feel a little better given how much lower it is today after the recent stock market slump.
A commenter asked me to explain the composition of my net worth in more detail, so here is the full scoop:

Cash & Bank Accounts:

• Cash $37
• Chase CD 6 mo. to 3/08 $3,034 @ 3.92%
• Chase Checking $160 @ negligible interest rate
• Chase Roth IRA CD 48 month to 4/09 $3,020 @ 4.16%
• Chase Roth IRA CD 60 month to 2/09 $2,627 @ 3.25%
• Chase Savings $3,400 @ 0.8%
• E*Trade 2-Yr CD to 10/08 $5,899 @ interest rate 4.75%?? hard to tell, for some reason E*Trade is making it very difficult to see what my actual interest rate is! But it must be in that range given what my recent quarterly interest payment was (see Rule 17 about doing the math).
• E*Trade Money Market $5,001 @ 2.5%. I will leave this here for a couple of months, probably, but I plan to close this account soon and invest the money elsewhere. This may result in my being charge a higher fee per trade in my E*Trade brokerage account, but I hardly ever do any trades, so no great loss.
• FNBO Direct Savings $11,000 @ 5.05%
• Laundry Quarters $7

Investments:

• E*Trade $18,142 Return on this portfolio was 11.7% in 2006
• E*Trade Roth IRA $24,813 Return on this portfolio was 7.69% in 2006
• 401k $202,314 Return on this portfolio was 11.5% in 2006
• Treasury Direct & Bonds $4,482 This is all I-bonds, rates 3.63-4.18%

Other:

• Credit card balance -$2,646
• Home Equity $84,059

So that means about 60% of my total net worth is in stocks & mutual funds earning 7-11% last year, 17% of my net worth is earning in the 3-5% range or less, and 23% is home equity. If you look at it just in terms of my investable assets, about 77% is in stocks and mutual funds, and 23% is in cash/CDs/bonds, etc. At my age, I suppose I could nudge myself a little further into risky investments like stocks, but not too much further. I like knowing that I have secure, steady investments balancing things out-- but I do need to make sure I pay attention when my CDs mature to make sure I get the best rates available, and also watch my bank accounts to make sure I am maximizing my interest there too. I did some work on that this month, by opening the FNBO Direct account with money I'd had in the E*Trade money market account.

September Net Worth & Expense Recap

My net worth on September 30 was $356,095. It's nice to have finally crossed that $350k mark, after a couple of months where stock market setbacks prevented it from happening! But from here on, I'll be lucky if I can make it to my revised year-end goal of $370k.

Here's my net worth broken down in way too much detail:

Assets:

Cash
Cash 73.26
6-month CD 3,003.12
Checking 214.34
Savings 4,268.65
2-Yr CD 5,826.67
Money Market 17,320.99
Laundry Quarters 12.00
PayPal 61.09
Miscellaneous Foreign Currency 35.47

Retirement
Roth IRA CD 2,984.67
Roth IRA CD 2,603.16
Roth IRA 20,495.06
401k 195,805.44

Stocks & Bonds
Treasury Direct & Bonds 4,482.40
E*Trade 17,217.74

Home Equity 83,779.17


Liabilities:

Overdraft Line of Credit -7.40
Visa 2,096.00


As for my spending last month, my total expenses were $6,403. A few notable items that contributed:
$378 business expenses (which will be reimbursed)
$1,908 payroll taxes
$264 gifts given
$843 food
$250 clothing
$1,944 housing
$165 household
$55 gas & electric
$117 telephone

I certainly did some damage in the food area, as I went out to dinner a lot. But aside from that, and a wedding gift, and some new clothes, I didn't spend too much on other controllable expenses, and I managed to save about 13% of my gross income. I would like to have saved more, but oh well... c'est la vie...

August Wrap-Up

Time for the latest monthly recap. First let's look at my net worth.
My total net worth is $346,143 as of the end of August, up just a hair from the end of July, but down from where I was at the end of June. Here's how it breaks down:

Miscellaneous Cash Accounts:
Cash $115
CDs $8,829
Checking $123
Savings $4,422
Money Market $17,085
Laundry Quarters $2.25
Paypal $61
Misc. foreign currency $30

Stocks/Mutual Funds:
E*Trade $15,999

Bonds:
Treasury Direct $4,482 I haven't updated the value in a couple of months, so this might actually be a wee bit higher.

Home Equity:
Estimated home value minus mortgage balance: $83,502 I have not changed the value of my home since buying it, but based on what I've seen going on in my neighborhood, I don't think I need to adjust it downwards.

Retirement:
$204,588 in stocks & mutual funds in 401k and Roth IRA accounts
$8,590 in Roth IRA CDs

Credit Cards:
Visa $-1,694 as always, my credit cards are paid in full every month.


As for my monthly expenses, August wasn't the greatest month, but it wasn't too bad:

• Housing $1,944. Boy does that seem like a lot, especially compared to my old rent of $850. I keep reminding myself that some of it is going to equity, and also that my property taxes still aren't reflecting an abatement that is supposed to have kicked in, and on top of that, they've raised the escrow amount assuming that the taxes will increase. So fingers crossed that this will all work out someday and my normal housing costs will be a couple hundred dollars less.
• Bank Charge $3.50 very annoying fees for one use of the wrong ATM!
• Business expense $30.85 this will be reimbursed by my company
  
• Clothing $272.98 I had that end of season desire to buy cheap summer things on sale, which turned into buying new fall clothes not on sale. oops.
• Dining $838.33 this is where I was bad. But I had fun! Just had a much more social month than usual and ate out in restaurants a lot.
• Entertainment $107.03 this again is due to a bit more social activity than is typical for a hermit like me.
• Gifts Given $27.94
• Household $192.55 lots of drycleaning & laundry, and a few small household purchases at Home Depot
• Medical $130.67 basically just insurance and my FSA
• Misc $88.75 of which $80 is a haircut
• Payroll Taxes $1,908.36
• Subscriptions $60.75 internet and daily newspaper delivery
• Travel $431.40 includes the hotel room for a wedding I went to in late July
• Utilities $271.55 telephone was under budget, but the electric bill has been high with A/C running fairly often.

The end result for the month was that I did save about $1,400, but that was almost entirely due to my deductions going into my 401k. I barely saved any cash out of my net paycheck. My goal is to save at least a couple hundred dollars a month on top of what I put in my 401k, so I'd like to be doing better, but a lot of the problem is due to my property tax problem, so I actually won't be in such bad shape if I can get that resolved. Until next month... onwards and upwards!

Net Worth June 2007

My net worth at the end of June was $349,426, just a hair under my year-end goal of $350k. The money I saved was basically my 401k deductions, and the rest of the increase is due to business expense reimbursement received, and investment performance, and the very gradual chipping away at my mortgage balance!

So now it's mid-year, and I really do need to revise my year-end net worth goal. Factors to consider:
-- I will continue to contribute to my 401k, up to the total maximum allowed this year, $15,500.
-- I should get a raise between now and the end of the year.
-- Some of my major expenses for this year should be behind me, such as my gym membership and a lot of "new home" stuff.

My net worth has increased by over $30,000 in the first 6 months of the year, but part of that is due to a $10,000 bonus and tax refunds, so I won't keep up that pace. But I think I might be able to get to $20,000 more in the last 6 months of 2007.
So my new net worth goal for the end of 2007 is now $370,000. Wish me luck!

Net Worth May 2007

As of May 31st, my net worth was $344,102.13. I'm less than $6,000 away from my year-end goal, so I think I'll have to revise that and challenge myself a bit more!

Here's how it breaks down:

Cash, including savings and checking accounts and CDs: $30,030.46
That is starting to feel like kind of a lot to hold in cash, even though about $10,000 is in CDs I can't immediately access without penalties. Assuming my monthly expenses will soon settle into more normal patterns, I think I may put some of this money into mutual funds and hopefully make it work a little harder for me.

Retirement, including 401k and Roth IRA accounts: $212,797.34

Stocks & mutual funds (that aren't in retirement funds): $16534.18

Bonds: $4482.40
This may be a little low, as it's been a couple of months since I checked the current values online.

Home Equity: $82,677.27
This is what I determined to be the present value of my condo minus what I owe on my mortgage. I haven't adjusted the value of my condo since first coming up with it after my closing: it's more than I paid, but may be less than it could sell for, if other prices in the neighborhood are any indication. But it's a moot point, as I don't intend to sell or try to borrow against it any time in the near future.

Credit Card: -$2419.52
That balance is always paid in full each month.

My net worth has increased by about $31,330 this year, despite the fact that I've been spending money like a madwoman, and am actually in the red by about $2,300 in terms of spending more than I earned in my net paycheck. How'd I pull off that neat trick? It's all the market, and the fact that I steer 18% of my gross pay straight into my 401k.
My 401k contributions total $8,528 year-to-date. Yet my retirement accounts are worth $31,388 more than at the end of last year. So that is $22,860 in interest, dividends and unrealized gains. Of course the market could take a downturn and it could all evaporate, but it does nicely illustrate the point that having money makes you more money.

So what about my goal for the end of the year, up til now set at $350,000? I'm going to think about that and post a new one when I do a mid-year recap next month.

Net Worth Update

As of the end of April, my net worth was $335,541, a nice increase of about $8,500, or 2.6%. I say "nice" because I still feel like I'm spending a lot of money on my home so I'm pleasantly surprised if my net worth increases at all! March was the month when my bonus and tax refunds hit, so I expected to do well then, but in April I took a vacation so I didn't anticipate any great progress.

Quicken shows my total outflows as $6,638:
Taxes $2,045
Household $290-- lowest that's been in a while!
Dining $472-- this includes any vacation meals paid for with my credit card, but not those paid for with cash.
Business expenses $387 (these should be reimbursed next month)
Travel $928-- includes commuting and all vacation travel, as well as some miscellaneous vacation expenses such as food.
Gifts Given $151
Clothing $40
The rest went to housing, medical insurance, and not that much else-- it was actually a pretty good month.
My net of inflows/outflows was about $2,400, so the rest of my net worth gain came from my investments. I guess it was a pretty good month for the stock market too.
I'm glad I had a such a positive net this month. My household spending spree is winding down, and my big vacation expenses are behind me, so if I can keep my other spending in line I should meet my savings goals for the year. But it's also interesting to see that as my net worth grows, my gains from investments can play a larger and larger role, as opposed to just the cash I'm able to save each month. If I earn more money while keeping my lifestyle in line, I can save a larger percentage of my income, but as the amount of money I have grows, I should earn more from interest and market gains. Which contributes more to my net worth gains? It would be interesting to trace this back and see what the trend looks like on a graph.

Net Worth Update Feb. 07

No procrastinating this month, I'm going to get the net worth wrap-up out of the way early!
My net worth as of March 1 is about $315,740. For a little while during February it was over $320k, but the stock market didn't cooperate to keep it there. On Feb. 1st, my net worth was about $316,372, so given that my investments lost about $5000 just in the last couple of days, I actually didn't do too too badly in February in terms of expenses:

Charity $75
Clothing -$75 (I returned a pair of shoes)
Dining $507 (still doing well in this category, at least compared to my budget!)
Entertainment $5 (that is just Netflix. I guess painting my apartment has been my entertainment lately!)
Gifts Given $70
Gym $999 (annual membership renewed)
Home Improvement/Decor $585 (mostly $450 worth of framing)
Household $26
Miscellaneous $122 (this includes a haircut at $80, and a clock I bought, that I suppose could have been categorized as Home Improvement or Household)
Subscriptions $97 (incl newspaper, internet, magazines)
Travel $335 (commuting and one family visit)
Utilities $155 (that is all telephone, including the installation fee. I didn't pay gas or electric during this month.)
Then there were my housing costs, which totalled about $2510 this month. That is higher than the usual amount, because I paid for a couple months maintenance charges that hadn't been billed before. My mortgage payment is also still a little wacky, as they are still escrowing more than they should be for property taxes, which I'll need to get changed eventually once the tax abatements are all settled and I know what my actual tax bill is.

I still have a few major expenses to come, such as buying a bed. My bedroom is all painted and ready, but I haven't found a bed I like yet. I guess being picky can help you save money! Or at least postpone spending it. But other than that and a few other little things, I'm hoping that I can soon settle back into a pattern of relatively normal spending... and saving.

June Wrap-up

My net worth at the end of June was $285,653, up almost $30,000 since the end of last year but still pretty dismal over the last couple of months. If I hadn't cashed out all those stocks and mutual funds in April, it would have been worse, though!
My net worth includes:
about $155,200 in retirement savings
about $13,500 in stocks and mutual funds
about $4,300 in I-Bonds
a credit card at about -$2,000
the rest is cash, CDs, and a 10% deposit on my condo


My expenses for the month were quite high:
Clothing: I finally bought some! $291, though some of that will show up as a return next month
Dining: really high at $984, due to going out a lot, mostly while my friend visited
Entertainment: high at $177, again due to friend's visit
Travel: $1,151-- this is high for the month, but I'm still well under budget for the year.
Other categories were pretty much in line or under budget.
My total non-tax, non-business expenses were $3,836. Year to date, my average monthly expense amount works out to about $2,700. I like to compare this expense amount to my take-home pay, which is just under $4,000 a month (not counting 401k, flexible spending account, etc.) I aim to save at least $1,000 a month out of my paycheck. Then any interest I earn is gravy on top of that. This month was an "ouch" because I only saved about $89 out of my paycheck. The next few months will also probably be "ouches" as I start getting into moving expenses, etc., and higher housing costs that will take a bigger bit out of my paycheck up front. So I'm going to grit my teeth and try to get on the austerity program for a while!

Net worth 12/31/05

I finally added up all my dividends and closed out the year. Great news: my net worth on 12/31/05 was $256,348... and that doesn't count $611 worth of business expenses due to be reimbursed. (Tracking these kinds of recievables as an asset begins to get a little too anal even for me.)
I was surprised it was this high, I really blew past my goals this year! It must be the blogging, and the supportive, encouraging comments from my beloved readers! (except for the one who said I was "psychotic".) Thanks all!

More net worth analysis

I noticed that Brian at Personal Finance for the New Age had some really impressive increases in his net worth from month to month, not only in terms of dollars, but by having double-digit percentage increases from month to month!
I hadn't looked at my own net worth changes this way so I decided to try it.
Here's a chart showing the monthly percentage change.












The most my net worth ever increased in one month was $9,479, or 4.3%, from May to June. This actually seems really weird to me-- I didn't have any big inflows of cash other than some moderate expense reimbursements, and I thought I had spent a lot of money during the summer, but perhaps the stock market was really strong that month. My bonus and tax refunds hit in March and April, so I would have expected those months to be the highest.
From Jan. 1 to Dec. 1, the overall change in my net worth was $45,995, or 22.3%. I tried to figure out how much of this was due to investment returns, and how much due to savings. After backing out contributions and withdrawals from my investment accounts, my return on those seems to have been 12.7%. My cash savings on hand also increased by 15%, factoring out transfers to and from my investment accounts, but including interest earned. Factoring out the interest earned, it seems that I added $8,775 to my cash savings. Backing out tax refunds and bonus, this would mean that I saved only 6.6% of my take-home pay each month, not counting 401k deductions.
This is a bit alarming, as I had been thinking my monthly cash flow was better than that. I am going to have to check all these numbers again before I do my budgeting for next year, as my housing costs are going to be going up and I don't want to find myself in the red! When you live by the spreadsheet, you can also die by the spreadsheet-- all it takes is one typo!