Retiring Early

Saturday, September 01, 2007

August Net Worth Update (up 1.87% to $988,082)

growth chartIt's been a few months since I've done a real monthly update here on the blog, so I thought I'd take the time to provide an update.

First off, I've been busy as all heck on all of my other projects and writing the blog has taken a bit of a second priority, but do expect me to chime in every now and then over the next few months.

On the surface, this month looks like a great month, but let's dig into the details a bit further. First off, this was an absolutely brutal, brutal month in the market with huge swings, hedge fund redemption selling, periods of low volume and economic stories.

All told, I lost nearly 9% of my portfolio value (or $51,000 if you're playing along) from mid-july to the low in mid-August. Paper money? Yes. Was I nervous? Heck yeah.

Thankfully, it wasn't worse because I was holding a fair bit of cash and even though I was starting to buy into the market as it was dropping, I never committed my full amount of sidelined cash. Also, from mid-August to now, the market has rebounded nicely, although it's still off the highs. With ongoing help from the Fed and now Bush on the sub-prime issue, I can see the market ending the year higher over the next four months and ultimately the correction and following consolidation was a good thing for a move higher.

Although it looks like the portfolio has come back almost entirely from the lows, it really has only regained about $26,000 of that $51,000 lost. The other gains that make August look like an "up" month, were due to a) three prior stock awards in the amount of about $15,600 after taxes, b) 401k and c) ESPP contributions.

Three other points about the current month:
  1. Although I have bought a few equities during the correction, I continue to hold nearly $65,000 in cash. I'll continue to look for opportunities to put this cash to work and I think the time is pretty ripe right now.
  2. I continue to pay down the mortgage and am on track with my mortgage goals for the year. As a reminder, the plan is to pay double mortgage payments for the next few years with the result being a fully paid off home. Double payments are being made possible by reducing expenses, not through savings withdrawals. The ending mortgage balance goal for this year is: $144,000 (stretch goal of $135,000), and I'm still on track.
  3. On the Prosper.com front, I have $3000 principle invested into 22 loans, and this month, I had one loan go into default. The Proper collection agency was able to recover about 15% of the loss making my net loss only $80 after all was said and done. All other loans are current. Although I am still making over 16% on these loans, I stopped funding new loans in June. If sub-prime folks (same folks getting loans on Prosper) can't pay their mortgages and keep their homes, does anyone really believe they'll have enough money to pay back these loans? There's definitely much more risk for Prosper loans now and I'm not jumping out in front of that truck. There's nothing I can do about the current loans, but at least they are being paid back methodically and don't appear to be in trouble (yet).
Anyway, that's the update -- Things are still good and it looks like I'm only $12000 away from my first Mil mark. Hopefully I should be able to meet that milestone by the end of the year.

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13 Comments:

  • At 9/01/2007 11:06 AM, Blogger mOOm said…

    Great to hear from you. My net worth was also down around $50k at the worst point this month. About half of that was due to the decline in the Australian Dollar though. Ended the month with a 4% investment loss. In Aussie Dollar terms the month looks much better. A 1% gain. Look forward to you reaching $1 million.

     
  • At 9/01/2007 6:10 PM, Anonymous indio said…

    I took a beating too. Unfortunately, I can't blame it on currency fluctuations. We were running neck and neck on net worth but after last month you pulled ahead. I didn't have as much cash on the sidelines. Why don't you depreciation your car in your calculation? I don't change house value because I'm in a rock solid east coast neighborhood but the car I do take off.

     
  • At 9/01/2007 6:14 PM, Anonymous finance girl said…

    ooohh...just....12k more!!! dang....well hey that's still awesome!

    august = no fun for the balance sheet

    welcome back btw!! :-)

     
  • At 10/03/2007 11:20 AM, Blogger Moneymonk said…

    I happen to see your NetworthIQ

    You are officially a millionaire ! Congrats !

     
  • At 11/22/2007 2:52 AM, Blogger liza said…

    Hi fin_indie,

    I have landed up on your blog and found some valuable content on retirement and savings. I want to review your blog at my community. Can you please allow us to do so? Please write to me your response at liza.jolie@gmail.com

     
  • At 11/28/2007 5:04 PM, Blogger pfstock said…

    I was expecting that you would give us an update sometime now that you're a millionaire. Actually, since you haven't posted much on your blog recently, I am guessing that you are probably occupied with other interests outside of blogging.

     
  • At 11/29/2007 11:48 AM, Blogger fin_indie said…

    Hey all -- I have certainly scaled back on blogging for a number of reasons, but I'll get back on the horse here soon.

    One thing that I really need to write a post on is: the psychological effect of market ups and downs. The market has definitely weighed on me lately.

    Anyway, expect an end of month update over the weekend.

     
  • At 3/04/2008 5:27 AM, Blogger tracyho said…

    Great post , love it


    Tracy Ho
    wisdomgettingloaded

     
  • At 3/26/2008 10:24 AM, Blogger tuftey said…

    Hi,

    I run a finance related website and I was interested in advertising on your website. If you are interested then please email me
    Regards Henry

     
  • At 10/22/2008 9:33 PM, Anonymous Andrew Knight said…

    Hi Fin_Indie,

    I'm emailing you in regards to an email I sent to you last month about a partnership, have you had a chance to think about it?

    If you have any questions or would more information, please advise me and we can go from there.

    Kind Regards,
    Andrew Knight.
    Website Manager
    Banking & Finance Division
    Asia-Pacific Region

    Online Marketing Group Pty Limited
    Email: andrew.knight@omg.com.au
    Web: http://www.omg.com.au

     
  • At 11/04/2008 8:55 PM, Anonymous financial freedom said…

    Wow. Just 12k more. Cheers to you! Thats pretty awesome I must say. I am no where near you yet. But it inspires me to know that thru savings and investments, this goal of being a millionare is achievable. Thanks!

     
  • At 9/23/2010 12:41 PM, Anonymous Gary B said…

    I agree need to have a plan and still that's not working form many so many have to work during retirement I say learn how to make money online: http:blog.yourownsuccess.info

     
  • At 12/24/2013 4:26 PM, Blogger Aaron Grey said…

    Hi, I came across your site and wasn’t able to get an email address to contact you about a broken link on your site. Please email me back and I would be happy to point them out to you.

    Thanks!

    Aaron Grey
    aarongrey112 at gmail.com

     

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