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Net Worth Report - 01/06

As foreshadowed in my December net worth report, I've decided to make some methodology adjustments to better track toward my long-term goal.

I'll continue to report my net worth in the manner I've been doing all along, including the highly volatile stock options and without any attempt at accrual to smooth the data.

In addition to that, I'll be reporting three figures:

  1. The current month's Adjusted Net Worth (ANW), which is my net worth excluding the value of autos and unvested stock (whether grants or options).
  2. The next month's target ANW.
  3. The estimated amount I'll need to add to non-retirement savings in order to reach the next month's target ANW.

These new figures will help guide me toward my long-term goal. I've modified my goal spreadsheet to compound the value of my house annually instead of monthly. This is less smooth, but allows me to use real (not estimated) ANW targets. The exclusion of unvested stock will remove the major source of volatility in my figures. (My original goal calculations already excluded autos, so that's not a change.)

More subtly, these modifications mean that I've actually changed my goal. The goal is now for my adjusted net worth, not my true net worth, to be at least $1,000,000 before I turn 36.

CategoryNet Worth 12/05Net Worth 1/06
Total$340,182.58$333,527.97
Short-term$27,354.75$27,908.16
Medium-term$86,589.04$76,720.54
Retirement$116,541.29$118,934.13
Property$109,697.50$109,965.14
  • 01/06 Adjusted Net Worth: $296,842.49
  • 02/06 ANW target to reach: $304,567.66
  • Estimated non-retirement contribution: $798.74

The big news this month — invisible in the figures above — is that I've increased my credit card arbitrage again. Discover was kind (foolish?) enough to send me another set of balance transfer checks, which I'm using (again) to make some free money. This time I don't have a 0% credit card to transfer the balance to, so it may stay at 1.9% for a while. I earn enough interest that this transaction will be basically a wash after taxes. I'm doing it on the hope that sometime before the 1.9% period ends, I'll have an opportunity to do another no-fee 0% balance transfer. If it turns out that all this arbitrage has damaged my credit score so badly that I won't qualify for that sort of offer, I won't be heartbroken. I know I won't lose money on this, so I'm merely hoping for an upside surprise.

I have $38,000 in credit card debt right now. I'm so excited. :) :) I also have another arbitrage idea I'm keeping in my back pocket until interest rates rise a bit more — it's not profitable yet, but it could be soon.

What are my plans for the next few months? To adjust my allocation away from short-term holdings. Being highly liquid was useful during the period I was ramping up my credit card arbitrage, and will be useful again in nearly a year when those opportunities might end, but I don't need all this liquidity in the interim.

Tiny Island