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May 2008 Net Worth Update: +1.4%

Madison — Tue, 03 Jun 2008 13:29:11 +0000

May is slowly, but surely getting us back on track with our portfolio. Our portfolio increased 1.4% and brings us to 1038% total increase since the beginning of our dollar plan. The all time high for our portfolio was 1069% back in October.

In addition, our year-to-date return is now only -1.7%.

Reflections on my portfolio this month

Since I decided not to take the early retirement my pension plan had a significant drop. Luckily some of our other investments made up for that.

Last month, Nickel wanted to know:

Do you have data going back through the bubble burst? Or does that pre-date your investing?

Since I started investing in 1996, I was working on putting together a graph for 1996-2002. Unfortunately, it looks like all the old data is stuck in an old version of Microsoft Money somewhere in storage!

Maybe someday when I’m feeling adventurous I’ll try to dig it out, because now I’m interested to see what it would look like!

May Performance Highlights

Individual Stocks

Best: Harley Davidson
Worst: Aqua America

Mutual Funds

Best: Spartan Extended Market Index
Worst: BGI US Debt Index Funds (Bond Index)

Previous 2008 Net Worth Updates:

Check out how others did in May:

Personal Balance Sheet, May 2008: Net Worth +42.15%! at One Caveman’s Financial Journey
May 2008 Score Card — Part I: Net Worth at The Sun’s Financial Diary
Personal Balance Sheet, May 2008 ($158,793, +7.8%) at Consumerism Commentary
May 2008 Net Worth Update (+3.12%) at Million Dollar Journey
Net Worth Update – May 2008 at Lazy Man and Money
Net Worth for May 2008 – I Feel So Stimulated at My Family’s Money

Written by Madison

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April 2008 Net Worth Update: +3.8%

Madison — Mon, 05 May 2008 13:29:37 +0000

April was a wonderful month for us. Nothing special, but we finally have an increase in our portfolio after negative returns the last three months. I’m usually more focused on the long term, but reporting it each month to you made me start to notice. As my two-year-old would say, “I’m a happy camper!”

During April our portfolio increased 3.8% and brings us to 1031% total increase since the beginning of our dollar plan.

April Performance Highlights

Individual Stocks

Best: Exxon
Worst: Procter & Gamble

Mutual Funds

Best: Vanguard Emerging Markets Index (Was the worst last month!)
Worst: BGI US Debt Index Funds (Bond Index)

Action Plan

I’m still debating how to handle the change in my pension plan. It will affect our dollar plan either way.

Previous 2008 Net Worth Updates:

Check out how others did in March:

April 2008 Score Card — Part I: Net Worth at The Sun’s Financial Diary
Net Worth Review at Single Guy Money
Anyone Loving the Market in April? at Free Money Finance
Personal Balance Sheet, April 2008 ($151,079, +5.3%) at Consumerism Commentary
April 2008 Net Worth Update (+1.65%) at Million Dollar Journey
Net Worth Update – April 2008 at Lazy Man and Money

Written by Madison

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March 2008 Net Worth Update: 0.0%

Madison — Thu, 03 Apr 2008 12:44:27 +0000

After two months of portfolio declines, we finished March at no change! Yes, you read that right. Our portfolio value finished the month with less than $100 difference from February. I think that is the first time ever! Our year to date total remains at -7.0%.

Our total percent increase since the beginning of our dollar plan is 972.7%.

March Performance Highlights

Individual Stocks

Best: Paychex
Worst: Fifth Third Bank

Mutual Funds

Best: Vanguard REIT Index
Worst: Vanguard Emerging Markets Index

Action Plan

I plan to finally sell the Fifth Third Stock. I have consolidated the certificates into one account. In addition, I’m considering giving our kids the rest of the individual stocks. It will depend on the final result of our taxes after the recharacterization.

Previous Net Worth Updates:

Check out how others did in March:

Written by Madison

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February 2008 Net Worth Update: -1.8%

Madison — Mon, 03 Mar 2008 13:44:03 +0000

Our portfolio declined by 1.8% in February. It brings our year to date total for 2008 to -5.6%.

The total percent increase (not to be confused with total return) of our portfolio since the beginning of our dollar plan is 989.6%, dipping under 1000% for the first time since last July.

The Good News
Despite the declining balance we have a few items that are worth celebrating:

Our 457 plan lowered the expenses. For our current balance it will result in .03% less in fees. As our balance grows the savings will be even larger because they also implemented a cap on the fees.
Our decision to add bonds to our portfolio during our overhaul last fall is helping offset some of the decline.
Now that I’ve returned to work I will resume contributions to my retirement account. It will now be directed towards my Roth 401k.

February Performance Highlights

Individual Stocks

Best: Exxon Mobil continues to lead the pack.
Worst: Fifth Third Bank. I’m ready to sell this stock and take the loss. It took forever to get our certificates added to the DRIP plan so that we could sell everything in one transaction.

Mutual Funds

Best: Vanguard Emerging Markets Index
Worst: EAFE Index Fund

Here’s some of the YTD returns for the US Market for comparison:

The S&P 500 is down -9.38% for the year.
The Dow Jones Industrial Average is down -7.53% for the year.

Action Plan

While it’s disheartening to see our portfolio drop by over $25,000, I’m still comfortable with our decline. Our contributions are very small in relative value to our portfolio value at this point so there isn’t much I can actively do to change the impact of the market. I am comfortable with our asset allocation and plan to sit tight, as we are investing for the long term.

Previous Net Worth Updates:

Check out how others did in February:

Written by Madison

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January 2008 Net Worth Update: -3.7%

Madison — Mon, 04 Feb 2008 14:29:06 +0000

Our portfolio declined by 3.7% for the month of January. The total percent increase since the beginning of our dollar plan is 1010.9%.

Factors

Since the total market was down in January, so is our portfolio as we use a total market approach to investing. As always, 2 plans in our portfolio have not reported results yet. I have updated those accounts for December 2007, which dropped the year end results for 2007 to 18.8%.

I received a match in my 401k plan in January, although it was very small due to poor 2007 performance at my company and a lower amount to match on because I have been on leave since last fall.

Finally, we have made very few contributions to our accounts in January. Those should pick up in February once I return to work and we begin some of our investment snowflaking.

January Performance Highlights

Stocks

Best: Home Depot 10.28%
Worst: Harley Davidson -15.05%

Mutual Funds

Best: Vanguard Reit Index 0.64%
Worst: Vanguard Emerging Markets Index -10.72%

Action Plan

It’s still very early in the year to worry about any declines in our portfolio. However, I’m working on our 2008 financial goals (which you’ll see later this week) and I will be including at least one initiative to contribute some additional funds to our investments.

Previous Net Worth Updates:

Check out how others did in January:

Written by Madison

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2007 Net Worth Update: +19.7%

Madison — Wed, 02 Jan 2008 11:29:40 +0000

We finished the year with a 19.7% change in our accessible net worth. We fell just short of our 21.6% goal for the year.

Our total net worth change since January 2003 is 1062.5% just missing our dollar plan goal of 1080%.

Highlights

Our top three individual stocks held all year were:

Exxon Mobil
Procter & Gamble
Johnson & Johnson

We have been slowly eliminating all individually held stocks with only 9 remaining. I would like to eliminate these positions in 2008. (Exxon may be the sole exception). I would prefer to use all index funds and limit individual stocks to our holding in my investment club.

Our top three mutual fund sectors held all year were:

EAFE International Index Fund
Investment Club
Total Bond Fund

This list is somewhat misleading as most funds were exchanged when we adjusted our asset allocation. I thought I would list them anyways.

Why We Were Short

The Total Stock Market index returned 5.49% for 2007. It accounts for a large portion of our portfolio. In addition, I have been on maternity leave since the birth of our second son in September. I haven’t been contributing to my company plan since then as the majority of my leave is unpaid. While it isn’t very significant in terms of our overall portfolio, every little bit counts!

Accessible Net Worth

Only our investment accounts are included in these updates. I exclude home equity and assets because I do not plan to convert them to an income stream in the future. I refer to the modified number as accessible net worth so as not to confuse it with a true net worth (total assets – total liabilities).

Estimates

One fund does not update until about 2 months late with deposits reported 4 months late. In addition, six DRIP plans have not updated. I have estimated these positions with conservative numbers. The total returns will be adjusted as they report in future monthly updates.

Action Plan

While I’m slightly disappointed that we didn’t meet our goals for the year we are close enough that I don’t feel the need to make adjustments to the plan or our 2008 goals. I may consider adding some additional funds to one of the accounts towards the end of 2008 once I see how the upcoming year plays out.

Previous Net Worth Updates:

See how other personal finance writers did in 2007 (I will link to them as their net worth updates are posted throughout the day):

How did your investments do in 2007?

Written by Madison

Net Worth Update: November 2007

Madison — Fri, 07 Dec 2007 14:20:30 +0000

Our accessible net worth is down -1.6% since last month. However, it’s still up 18.2% for the year. Meeting our goal of 21.6% for the year is still possible.

Here’s our best and worst holdings in annual % returns for stocks and funds held all year:

Individual Stocks

Worst Harley Davidson -34.34%
Best Exxon Mobil 19.66%

Mutual Funds

Worst Vanguard Reit Index -12.00%
Best EAFE International Index 15.29%

We did an overhaul on our portfolio earlier this year; many of the funds with large gains are excluded from the above list because we no longer hold them. However, they are included in the total return percentage.

The 2007 goal is a step in our complete 14 year dollar plan. Three accounts have not yet updated this month. In addition, dividends for DRIP plans this month have not yet been recorded. Because of the accounts that update late, the October numbers are adjusted slightly from our October net worth update.

Check back next month to see if we meet our goal for 2007.

Written by Madison

2008 Financial Resolution

Madison — Mon, 03 Dec 2007 14:22:27 +0000

2007 is coming to a close and it is time to start making goals for 2008. New Years Resolutions are all over the place, but I think they are often forgotten by the time February rolls around. Luckily we have our finances planned out for the next nine years, making this task somewhat easier, and less forgettable.

Assuming we finish 2007 at or above the plan, which is a 1080% increase since January 2003, the 2008 goal is:

1323% total return since January 2003
20.5% return for calendar year 2008

The long run goals that these incremental steps support are the following returns:

2013: 3007%
2016: 4560%

Achieving our dollar plan is ensuring our financial freedom to pursue whatever it might be that we are interested in. So far, it has provided us many opportunities, such as taking off long leaves from work when our children were born, working part-time, and building our new house.

Accomplishing this goal has two components:

Contributions to our investment accounts
Rate of return on investments

While we can directly control our contribution levels, which are already set, the rate of return is partially out of our hands. We influence it through selection of the appropriate asset allocation for our risk tolerance and ages. When the return is lagging, we sometimes contribute more to still try to meet the goal.

It is somewhat hard to visualize total percentages, but I have chosen to track our net worth this way based on my observations in Millionaires in the Making: Pros and Cons.

Cash Money Life is giving away an iPod (I’m a sucker for giveaways) for sharing your 2008 financial resolution, as I did here. Head over and write down your own goal for a chance to win. The goal must fit the SMART Goal criteria: Specific, Measurable, Actionable, Realistic, and Timely.

Written by Madison

Our Dollar Plan

Madison — Sun, 18 Nov 2007 20:06:53 +0000

Goal setting is an important part of financial success. In 2003, the year we were married, I created “our dollar plan” which is the roadmap for our financial freedom. It is a 14 year plan running from January 2003 – December 2016. The plan details how much money we should have at the end of every year. It accounts for savings, return on investment, and taxes.

Creation of the plan

The plan was started using many of the tools highlighted in Early Retirement: How much money will you need? However, now it mostly lives by itself in a homegrown spreadsheet.

Each month and year I chart progress against the plan to see if we are on track. There have been some minor revisions in our plan, mostly when our children were born and when we built our new house. Otherwise it has remained fairly constant since 2003.

Milestones in the plan

Here’s the goals for this year, 2013, and 2016 (the end of the plan) in total percentage increase since January 2003:

2007: 1080%
2013: 3007%
2016: 4560%

We are almost 5 years into the 14 year plan. 2016 is the year that my husband will turn 40. I also added the 2013 goal because it’s the year before I turn 35.

Accounts in the plan

The plan includes accounts using the following types of retirement and investment plans:

401k
403b
457
Cash value of traditional pension plan
Cash value of money purchase plan
Traditional IRA
Roth IRA
Investment Club
Taxable account
DRIP

Future of the plan

Follow updates and progress on the plan in:

Our Net Worth Increases: October 2007

Stay tuned for an article in the future on how to create your own plan.

Written by Madison