Comments on: Jan 2010 Net Worth Update (+4.43)

By: cannon_fodder

cannon_fodder — Mon, 01 Feb 2010 21:26:35 +0000

FT,

My NW increased 4.56% so very similar results compared to yours. The last week of the month was definitely not good for my portfolio. Overall the month of January was a down month for all major indices around the world.

By: Forex Intraday Trading

Forex Intraday Trading — Sun, 31 Jan 2010 21:41:45 +0000

Very nice 4.43 in a month, very nice.

By: FrugalTrader

FrugalTrader — Wed, 27 Jan 2010 21:49:29 +0000

Hey Nick, funny, that is the first time I noticed that the balances are the same. :) So yes, it is a coincidence. I am lucky that the markets have come back, my portfolio was in bad shape in 2008!

By: Nick

Nick — Wed, 27 Jan 2010 21:46:13 +0000

Congrats FT!

I just had one question. You show the SM investment acct balance to be exactly the same as the HELOC balance on the liabilities side. Did I miss something or is this just a coincidence, an oversight or some special logic you apply?

Not sure if it would have a large bearing on your NW but, my balances in these two accounts are never the same. And, of course, the idea is to grow the investment balance significantly beyond the HELOC balance, correct?

Just curious about that one. Thanks!

By: Brad

Brad — Tue, 26 Jan 2010 20:08:50 +0000

Good stuff!

I know it’s a matter of opinion here, however revaluing your residence at historic inflation seems to be an incorrect approach. Housing prices haven’t historically followed inflation from what I can tell and really don’t reflect your local reality. It seems like you’re a bit resistant to have your house drastically affect your net worth, as it would have done over the last few years. The reality is once you are close to the $1M mark, your house(s) are still going to be one of the major components in having you reach your goal.

Since you track on a monthly/yearly basis, I’d suggest using some other barometer – I typically use our city tax assessment; it’s usually off by a considerable amount IMO, however the city has much more insight into the price of my house than I do.

I’ve also tinkered with the idea of having a realtor do a market value assessment every year, which may help take into account work being done (or not) on the property.

Best of luck!

By: canucktuary

canucktuary — Tue, 26 Jan 2010 20:04:44 +0000

4.43% is mostly due to the accounting adjustment that FT has incorporated this year in how he values his house. I agree that valuing it at just inflation is prudent of you.

Removing this accounting adjustment and his monthly increase is a still respectable 2.36% monthly increase in net worth.

Kudos.

By: nobleea

nobleea — Tue, 26 Jan 2010 19:37:58 +0000

inflation rarely goes negative and when it does, it a small amount (-1%) for a short period. housing prices can drop 15-30% after the end of a hot market.
i have just stuck with our purchase price and when the time comes to sell, I can make the adjustment once the money is in the bank.
if you wanted to follow a more market based value, i’d use the city’s assessed value. just be sure to follow the assessment down if it does go down. a lot of people are keen on the increased value, but think their place is worth more when the city decreases the value.

By: Big Cajun Man

Big Cajun Man — Tue, 26 Jan 2010 17:29:57 +0000

Wow, your honesty is quite refreshing, but I would caution you to maybe be a little less open about WHERE you bank (but I am also accused of being paranoid, so take this advice with whatever grains of salt you wish).

Keep up the hard work.

By: Nelson

Nelson — Tue, 26 Jan 2010 17:14:29 +0000

Wow, 4.43% in one month. Excellent. I can’t even make 2% accross a whole year and you do more than twice that in one month. I don’t know how you do it but well done!

By: FrugalTrader

FrugalTrader — Tue, 26 Jan 2010 16:11:37 +0000

If you go through the archives, I typically do wait until the end of the month, but I posted this one today due to post scheduling for the rest of the week.

With regards to the house valuation, I agree with you in keeping housing values conservative. Even with the inflation adjustment, it’s still a fair bit below what I could get for the house after all fees.

By: travellingone

travellingone — Tue, 26 Jan 2010 15:57:07 +0000

Curious about why you wouldn’t wait till the end of the month before tracking your net worth calculations? I have seen a variance in mine of 5% during this month alone depending on when I look at it.

On another point, I have also been looking at adjusting my income and primary residence valuations. I am not completely sold on the inflation increase, I have kept mine at a conservative market evaluation from 2008 less all closing costs, commissions – if I needed to liquidate. However, I am not certain if that is the best approach. I am looking at adjusting it based on market valuation in 2010.

Been a long time reader, and thoroughly enjoyed your postings, and the various guest writer posts. Keep up the great work!

By: FrugalTrader

FrugalTrader — Tue, 26 Jan 2010 15:44:45 +0000

Lakedweller, there are a lot of apps that can do this for you, but I simply use a google spreadsheet. I like how it’s easily accessible as I’m often online.

By: Lakedweller

Lakedweller — Tue, 26 Jan 2010 15:43:02 +0000

Ok, I’m ready to start tracking my net worth…is there an app for this?

By: FrugalTrader

FrugalTrader — Tue, 26 Jan 2010 14:24:13 +0000

Future money bags, congrats on the huge savings for the month!

Varun – it must have been an old post with the 5.95% rate, my current rate is prime – 0.85%.

By: Varun

Varun — Tue, 26 Jan 2010 14:14:48 +0000

I noted in your porfolio that the mortgage rate is 5.95%. This seems a bit high with the current market rates (Assuming 5 year fixed). There could be an opportunity to negotiate lower even with the penalty.

By: Future Money-Bags

Future Money-Bags — Tue, 26 Jan 2010 13:16:48 +0000

Hey FT,

Almost +4.5% in a month, very impressive.
I will continue to follow your 7-Digit-Journey!
I really appreciate all that your blog gives, especially showing everyone how much you have accomplished and saved!

Although January has not counted as an ‘average’ months earnings, I was able to save 80% of all that I earned this month; Meaning my net worth has increased 9% this month.

I make a very low income by any means(low hourly wage) but plan to have $100k Net worth by age of 25.

Good luck to everyone in February!