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Net Worth Report - End of 03/06

The most significant thing to report this month is that I've finished funding my retirement accounts for the year: $15,000 to my 401(k) and $4,000 to my Roth IRA. I've mentioned a few times in recent months that I'm studying finance so that I can become a better investor. For my retirement accounts I get advice from a financial advisor, but for my non-retirement accounts I'm on my own. It made sense to fund retirement accounts first because of that advice, and wait until I'm done studying to contribute to non-retirement investments.

My heavy focus on funding my retirement accounts has been depleting my short-term holdings, as it was intended to. I've decided to make $10,000 a permanent floor for my short-term holdings, both because it's useful to have an emergency fund and also because liquidity is very useful when transfers from one account to another usually take several days. For liquidity's sake, I plan to keep a baseline of $5,000 from my short-term holdings in my checking account. The remainder of my short-term holdings can move around to chase yields.

Without further ado, here are the numbers:

Net Worth Figures
Category02/0603/06
Total$356,167.72$359,910.20
Short-term$24,171.59$19,153.33
Medium-term$75,247.76$76,238.67
Retirement$144,417.22$152,016.97
Property$112,331.15$112,501.23

My property figure didn't rise very much because I recently took an 800-mile road trip that. According to KBB, that extra mileage reduced the value of my car by a few hundred dollars. (It only had 1300 miles on it before the trip.)

I'm a little uncertain what to do about the appreciation of my home. When I started tracking numbers, I decided to use my home's market value as stated on my property tax assessment — about $200,000 — which I already knew was below its actual market value. Zillow estimates it's worth about $250,000 and a very similar home nearby recently sold for $275,000. The bottom line is that I believe I'm undervaluing my home by $50,000-$75,000 but I haven't decided what to do about the accounting for this, yet.

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 in order to meet the following month's ANW target. 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
Item02/0603/06
Adjusted Net Worth$329,440.10$335,018.70
Next Month's Target$333,251.45$337,620.57
Estimated Contribution$739.74$711.52

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$31,570.44
Balances @ 1.9% APR$14,431.52
Total Balances$46,001.96
Monthly Payment$920.04

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

Tiny Island