As expected, we wrapped up 2005 with over $400,000 in our book. This month's $6,250 net worth improvement is driven by the following factors (in approximate amounts):

• $10,000 from regular savings (earned income - expenses)
• $3,800 from investment gains
• ($9,600) loss from employee stock option value
• $2,100 tax benefit from stock option value decline, offsetting by investment gains

After two months' of neck-breaking growth ($90k in October and $40k in November) due to a series of one-time events, December is comparatively a normal month. For one thing, the $10,000 from regular savings is a result of largely normal income stream and spending pattern, which I expect to extend in the next 12 months. In addition, since I am moving more and more of my cashpile to more serious investments, I do anticipate investment gains (or losses) becoming a meaningful part of my monthly scorecard.

IMPORTANT BALANCE SHEET MOVEMENT DISCUSSION

• Cash and Savings: I made several mutual fund and stock purchases this month as an ongoing effort to make better use of our cash from recent home sale.

• Brokerage: Deprived of more tax-efficient investment accounts (both 401(k) and Roth IRA), most of my net investment increase sits in after-tax brokerage accounts. (More details on my portfolio will be revealed in a separate post.)

• 401(k): Our 401(k) accounts benefitted from heavy exposure in international equity funds.

• Stock Option: MSFT declined more than $1.50/share in the month of December, wiping out almost a third of my option value -- it is a reverse of fortune compared to hefty gains in November.

• Receivable: Receivable increase represents accumulation of certain reimbursable medical expenses.

• Tax Liability: $2,100 decrease reflects less tax liability with decline in future income from employee stock options, slightly offset by my investment gains in after-tax accounts. As of 2005 close, the liability includes $500 "incurred" part, which I expect to pay to IRS with the 2005 tax filing, and $7,300 "floating" part, which will only materialize should I decide to cash out options or some of my winning investment positions.

IMPORTANT PERSONAL FINANCE ISSUES IN MONTHS AHEAD

• 2006 Plan: My 2006 financial plan is almost 80% done. I am looking at mid-six-figure net worth increase for the coming 12 months, thanks to sizable regular savings, as well as (expected) improvements in investment income.