Comments on: January 2008 Net Worth Update: -3.7%

By: January 2008 Site and Net Worth Review (-7.35%) | Moolanomy

January 2008 Site and Net Worth Review (-7.35%) | Moolanomy — Wed, 16 Apr 2008 14:36:38 +0000

[...] January 2008 Net Worth Update: -3.7% at My Dollar Plan [...]

By: Lost Cause

Lost Cause — Wed, 06 Feb 2008 05:00:11 +0000

OK, maybe it is time for that hedging stratagy talk that we were avoiding.

By: RacerX

RacerX — Tue, 05 Feb 2008 04:07:44 +0000

Amazing growth. You really follow the “invest in what you know” motto!

3.7% down compared to others is pretty good, although I assume it doesn’t feel that way. All the best!

By: Lily

Lily — Mon, 04 Feb 2008 22:18:58 +0000

Madison, I totally get what you were trying to show. I was just curious for my own purposes because I want to drink your Kool-Aid if you really had 1000% annual returns! I think your illustration is fine – I was just a little thrown when you mentioned “total return.” The only alternative I can really think of is if you put everything into dollars, starting with a hypothetical $10,000 (or whatever value) portfolio.

I just started showing my net worth progress this month. I plan to keep using the bar graph. I don’t have problems with people knowing the actual dollar value of my net worth, but I can understand if you don’t want to put a number on your portfolio – there are many reasons why it’s a bad idea (especially if you have friends and family viewing the site and this might make things uncomfortable).

Anyway, thanks for the clarification. You’re still doing great. Keep it up!

By: Lost Cause

Lost Cause — Mon, 04 Feb 2008 19:46:13 +0000

Yeah, that is pretty impressive, but you are not a stockbroker anyway. I get it — that you have 10x more than you started with. But this month, I will double my money with my second contribution. I am trying for 10%, so my money only has to earn about $5k this year. Lazy money!

By: Madison

Madison — Mon, 04 Feb 2008 19:03:19 +0000

@Pinyo: Yeah, the whole net worth dilemma. I do not include any assets like our house, cars, etc. Not because I don’t believe they are part of net worth, but because my goals involve money that I can spend without selling my house and cars. Essentially what I track is our portfolio of money earmarked for retirement and to support financial independence.

@Lily: Good catch! Yes, it is really just total percent increase and not total return. I would love to show the actual numbers, because it makes more sense, but based on my readership of family and friends I converted it all to percentages. The total percentage increase is the easiest way to illustrate what I’m trying to show, and that is our path to our goal of a certain dollar amount.
You are correct that for total return I would need to exclude the contributions. I give a little better explanation in the first update (October 2007) of why I did it that way. I will tell you that in the beginning contributions were significant. Now, we don’t contribute as much and the monthly returns are very close to the actual returns of the portfolio.
I’m usually pretty careful not to call it total return, but I see I slipped… I’ll get that fixed!
If you have any ideas for a better way to illustrate the change, I’m all ears!

By: Lily

Lily — Mon, 04 Feb 2008 17:27:42 +0000

I’m curious – how are you calculating total return? It shouldn’t include your contributions to the portfolio, or it overstates positive returns and understates losses. If you do adjust for contributions and use a time-weighted return, then 1000%+ is indeed impressive. Even if you don’t and the number you’re showing includes your contributions, good job on building your wealth!

By: fathersez

fathersez — Mon, 04 Feb 2008 16:04:32 +0000

This is great stuff, Madison.

A 1000% over 5 years is out of this world performance by any standards.

I think a bow is in order.

Well done and all the best for the rest of 2008 and your Dollar Plan time frame.

By: Pinyo

Pinyo — Mon, 04 Feb 2008 16:00:57 +0000

-3.7% is not bad. I took a bigger hit than that. But then again, there are so many factors involved we are not comparing apple to apple.

By: MillionDollarJourney

MillionDollarJourney — Mon, 04 Feb 2008 14:39:04 +0000

Thanks for the mention. My retirement portfolios were also hit hard but the only thing that kept me ahead was my savings and that a large portion of my non-retirement portfolio is cash.