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Net Worth Report - End of 01/06

Since I'll be busy tomorrow night thinking about the State of the Union Address, I decided to roll this up a day early.

I'm going to adopt common practice and begin labeling these reports as the month they end instead of the month they begin. So this is my January report, and my other January report should actually be understood as a December report, etc. Sorry for the confusion, everyone.

The best thing about this month is that I get to stop fretting about the volatility of my employee stock options. Intel stock fell sharply so almost all of my stock options are underwater, now. They won't be influencing my net worth calculation very much for a while.

The second-best thing about this month is that I've increased my credit card arbitrage again. Only by $8,000, but I estimate it will earn me about $360 over the next year (less taxes). That's not as small as it sounds — even after the government takes its third, I still get about $20/mo, and that approximately covers my typical long distance telephone bill.

Net Worth Figures
Category12/0501/06
Total$333,527.97$342,123.69
Short-term$27,908.16$22,807.98
Medium-term$76,720.54$72,039.96
Retirement$118,934.13$135,548.96
Property$109,965.14$111,726.79

There was an unexpected jump in the retirement category because my employer made their profit-sharing contribution (in lieu of 401(k) matching) in late January instead of my expectation of early February. I tweaked my model to account for this. But not all of the jump was unexpected — I'm plowing bonuses into my 401(k) this and next month. However, I'm delaying making a Roth IRA contribution until after I do my taxes.

Recall that I'm defining "Adjusted Net Worth" as net worth excluding the value of autos and unvested stock. The "Estimated Contribution" is how much money I believe I'll need to invest outside of retirement accounts in order to meet the following month's ANW target. (I'm trying to calculate how much "non-automatic" investing I need to do.) A declining EC indicates that I'm ahead of plan, and an increasing EC indicates that I need to save more in order to reach my long-term goal.

Goal-Tracking Figures
Item12/0501/06
Adjusted Net Worth$296,842.49$313,923.77
Next Month's Target$304,567.66$317,419.81
Estimated Contribution$798.74$755.82

The primary reason I beat the ANW target by so much was because I was modeling the profit-sharing contribution to occur in February instead of in January. It was a modeling error, not evidence of an excellent month. Delaying my Roth contribution also caused an adjustment in my model. However, as you can see from the declining EC, I did have a better-than-expected month. (Ignoring the Intel stock crash, which is by design mostly invisible in ANW.)

My credit card balances are 100% backed by time deposits and/or savings accounts earning interest at a higher rate than I'm being charged by the credit card companies. The monthly payment is estimated as 2% of the balance. (Most credit cards are now using a 2% minimum payment, and due to this it is important to have a strong cash flow and/or pay with funds from your credit card arbitrage savings account.)

Credit Card Arbitrage Figures
Balances @ 0% APR$32,457.54
Balances @ 1.9% APR$14,981.05
Total Balances$47,438.59
Monthly Payment$948.77

I'll discuss the online finance classes I'm taking in a separate article; this one is long enough already.

You can keep track of other personal finance bloggers at NetWorthIQ. I've updated my entry there.

Tiny Island