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Net Worth Report - End of 04/06
As I mentioned last month, I haven't been valuing my home accurately. I've been using the estimated market value from my property tax assessment, which I knew was undervaluing my home based on recent transactions among similar homes in my neighborhood. I originally decided to use my tax assessment because it was the only objective number that I easily knew how to find. I've decided to change this because I believe Zillow's figures are reasonably accurate in my neighborhood. (I don't think the numbers are great, but they're better than my tax assessment.) This caused a giant leap in my home equity and is the main reason why this month's figures are so much higher than last month's.
There are a few other adjustments to be aware of. (Sigh — I wish there wasn't so much noise in my figures…) Kelley Blue Book now provides used car values for 2006 vehicles, so I can properly estimate my car's value as a 2006 instead of as a 2005. Another thing to note is that this month's report reflects some stock options and restricted stock I got as part of this year's raise (but these are not included in my "adjusted" net worth.) I've also changed how I'm modeling the appreciation of my home, reducing the rate from 4% to 2%.
One-time adjustments aside, it was also an excellent month for my investments.
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.
Due to this month's large one-time adjustments, month-over-month comparisons aren't useful. But I'm reporting the numbers anyway.
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.)
You can keep track of other personal finance bloggers at NetWorthIQ. I've updated my entry there.