My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


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Monthly Update - May 2008 ($885,297, +$12,932)

Contributed by mm | June 3, 2008 8:26 PM PST

networthicon.jpgWhile our portfolio barely made an inch, we continued to save a substantial part of our take-home pay and this ultimately drove home a 1.5% net worth addition in May.

Should I feel good that Our net worth winning streak is finally extended to the third months?

For the four full years between 2004 and 2007, there were only three "down" months in between. Now with our net worth changes are mostly governed by the market turbulence, our monthly performance is close to a coin toss lately -- exactly three "down" months and three "up" months in the last six months.

And this means my annual financial goal of $225,000 net worth growth is probably out of reach now -- our net worth actually retreated about 10 grand so far this year compared to where we ended 2007.

Now I actually don't feel too bad. If anything, the market condition and ensuing sea change in our net worth growth trend is a good wake-up call on how important it will be to manage the financial risks after our peak earning years. We are still fortunate that we are able to save more than 50% of our pre-tax income month after month, so we can definitely ride through this hurricane and come out stronger (both financially and mentally).

BALANCE SHEET

networth-08-05.jpg

NOTES

- The family had a good time in Seattle and LA in our annual U.S. trip.
- My grueling double-duty day job life since January is finally over, for now. I am looking forward to spending more time with the family this coming summer.

NEXT STEPS

- The 2007 tax organizer has been on my to-do list for too long and I am committed to knocking it off this month.
- Now that I can take a breadth from the work, I will look at my portfolio management and take changes as appropriate.

More PFBlog Articles You Might Find Interesting ...


This Post Has Received 65 Comments. Share Your Opinions Too.


Financial Planning Services Commented on June 5, 2008

Good work....


LegalTherapy Commented on June 5, 2008

So, are you still on track to hit your $1M goal by 36?


AndyS Commented on June 6, 2008

Great achievement and you are close to becoming a millionare. One thing which I recently wrote about was having a passive income goal (ie how much are your savings and investment generating for you), as this is really a key barometer in determining when you will be financially free.

Nice to discover this blog as well!

Andy


Harrington Brooks Commented on June 10, 2008

Well Done. Quite an achievement!


Joseph @ Debit versus Credit Commented on June 15, 2008

Congratulations! Any change toward the positive is great news. Also wake up calls are nice to get at an early point where you have time to change things around.

I'll keep checking back in!


Cindy @ Financial Tips Commented on June 20, 2008

I just found this blog today. I don't know how long you've been working toward this goal, and how long till you are supposed to reach it. I would love to know what you started with and when you started with this specific goal... but tell me, at nearly 23, with a net worth of nothing because I'm in debt about 30K because of school, do you think I could make it to $1 M in 13 years?


Mo Commented on June 22, 2008

Another Congratulations to you. $1M by age 36 - awesome! ATB.


Odd Lot Commented on June 28, 2008

Very nice, almost to $1mil! You'll reach your goal very quickly as soon as we get past this recession. It's been very entertaining to watch your progress, you provide great detail on all of your portfolio tracking sheets.
Best of Luck!
Odd Lot


Chad @ Sentient Money Commented on June 28, 2008

Sounds like you are doing very well for a market that has gone done 20% since the October high.


UK Debt advice Guy Commented on June 29, 2008

Just found this website. Very interesting. I managed acure 500k in debt by 36, which i found extremely easy.


ddmannn Commented on July 1, 2008

fakepaycheckstubs.com helping you help yourself!


bad credit loans Commented on July 3, 2008

God speed! Sanity comes in short supply these days.


bad credit loans Commented on July 3, 2008

God speed! Sanity comes in short supply these days.


Amit C Commented on July 9, 2008

Hi MM,

If I may ask, which brokerage do you use for your mutual fund investments?

Thanks
Amit


Amit C Commented on July 9, 2008

Hi MM,

If I may ask, which brokerage do you use for your mutual fund investments?

Thanks
Amit


Amit C Commented on July 9, 2008

Hi MM,

If I may ask, which brokerage do you use for your mutual fund investments?

Thanks
Amit


Amit C Commented on July 9, 2008

Sorry about the multiple comments. The post comment page results in an error, so I hit refresh a few times.

Amit


MoneyEnergy Commented on July 14, 2008

Congrats on your tough savings program. I see from your chart that you're mostly in your 401 and Roth IRA, though. I hope you're holding some metals somewhere too... or some foreign currency. Just a thought. You probably have some metals-related funds in there?


pj Commented on July 14, 2008

Another down month in the market, another non updated net worth report?


Dave Commented on July 14, 2008

I remember in October getting mocked for saying he was too heavy in financial stocks.

My portfolio is up 63% since then.

Ho hum.


Dave Commented on July 14, 2008

I remember in October getting mocked for saying he was too heavy in financial stocks.

My portfolio is up 63% since then.

Ho hum.


john galt Commented on July 14, 2008

Dave - I remember! You were getting bashed by everyone that supposedly knew better than you... too funny.

If somebody was totally in cash now, what would you suggest they put their money into at this point?


Amit C Commented on July 15, 2008

Dave,

Probably true about Financials, however it is worth learning.

Do let us know, if you keep your portfolio in some place public, many including me would be interested.

Amit C


Ryan McLean Commented on July 16, 2008

This is great, you are well on your way. Me I am just starting my wealth creation journey and I have the goal to be a millionaire by age 25 (2013).
Check out my personal finance website if you have time www.smarterwealth.net


fl Commented on July 16, 2008

This is a personal message to you since you didn't post my last comment. I realize it is your blog and you are trying to make some money but don't make it seem like you are so sure of yourself and that you know what you are doing in terms of investing relative to the rest of America because the bottom line is that you DONT KNOW WHAT YOU ARE DOING! You are gambling with your own money and it was an illusion that you were making money the past few years with your portfolio. The fact is most of the monies gained is from your own savings and will not be from investing appreciation because you SUCK. Sorry to be so blunt! Part of learning is to have the fortitude to post negative comments about your lack of investing knowledge so that other readers can be informed of how uneducated you are. Do you honestly think that people are going to follow your investment philosophies? NO. This blog is pure entertainment. The way you are going with your investments, all I see is DOWNHILL!


fl Commented on July 17, 2008

I will give you credit for posting my comment. However, what were you thinking heavily weighting your portfolio in the financial sector? Insight into your mindset would be enlightening....


fl Commented on July 17, 2008

I will give you credit for posting my comment. However, what were you thinking heavily weighting your portfolio in the financial sector? Insight into your mindset would be enlightening....


york Commented on July 18, 2008

This is also a personal comment to you since you have not posted my prior posts as well. I used to actually enjoy ready your blog, it was one of my favorites. Now it is nothing more than a page of advertisements on which you post something every other month. You don't even post your monthly net worth updates anymore. Very disappointing...I am not taking this page off my list of bookmarks. Good luck to you in the future.


Anon Commented on July 21, 2008

I used to read this blog on a regular basis, but the updates are too infrequent now.


deborah Commented on July 23, 2008

Nice work even with the market downturn. I just discovered your blog here and am going to take a look around. =-)


deborah Commented on July 23, 2008

Nice work even with the market downturn. I just discovered your blog here and am going to take a look around. =-)


mortgageleadsguide Commented on July 24, 2008


Hey, Thanks for this great bit of research !This is such a great post - thanks for thinking of the concept and putting it together.

thanks!


mortgageleadsguide Commented on July 24, 2008


Hey, Thanks for this great bit of research !This is such a great post - thanks for thinking of the concept and putting it together.

thanks!


Mark Nelson Commented on July 26, 2008

I have enjoyed watching your progress. You are doing a great service to your readers. It would be interesting to know how many of your readers do their own net worth statement.


chentong Commented on July 27, 2008

I just thought the fall of the market was so foreseeable.

The Asia financial crisis in 1997 - 1999 gave me the experience of questioning my assumptions of market bottom and vitality. In Malaysia, it went down as low as 20% of its peak. A long the down way (for one and a half year), we assumed a layer and a layer of bottoms only to see the index falling further down.

BUT, the recovery is swift and quick. The index went up four times higher than its bottom from Oct 1998 to end of 1999.

Such major fluctuation opens up a window of opportunities. Despair not, be ready for the upturn.

Be ready means, have cash and cash inflow to buy (stocks with good dividend)if the market fell further, BUT also to have stocks holding in hand too if the market went up. You will gain both ways, though not maximizing your return of assets.

It is not about maximizing return, anywhere, it is about balancing risk and return. Such a platitude, but it is solid wisdom. Those who went through asia financial crisis and subprime loan crisis will understand this. ;-)


chentong Commented on July 27, 2008

I just thought the fall of the market was so foreseeable.

The Asia financial crisis in 1997 - 1999 gave me the experience of questioning my assumptions of market bottom and vitality. In Malaysia, it went down as low as 20% of its peak. A long the down way (for one and a half year), we assumed a layer and a layer of bottoms only to see the index falling further down.

BUT, the recovery is swift and quick. The index went up four times higher than its bottom from Oct 1998 to end of 1999.

Such major fluctuation opens up a window of opportunities. Despair not, be ready for the upturn.

Be ready means, have cash and cash inflow to buy (stocks with good dividend)if the market fell further, BUT also to have stocks holding in hand too if the market went up. You will gain both ways, though not maximizing your return of assets.

It is not about maximizing return, anywhere, it is about balancing risk and return. Such a platitude, but it is solid wisdom. Those who went through asia financial crisis and subprime loan crisis will understand this. ;-)


Rizzo Commented on August 5, 2008

It is so true..... these rough times really remind you to manage risk, especially when you start inching closer to retirement, or to your net worth goal.


PICO Commented on August 10, 2008

WHAT IS UP WITH THIS WEBSITE? IT IS DEAD.


mymoneypf Commented on August 13, 2008

Where are the updates?


JD Commented on August 14, 2008

Is this blog officially dead? I agree completely with the poster who commented that this blog has really gone downhill. Not only is new content rarely (almost never) added but all it has become is a page full of advertisements.

But to fl who posted his harsh criticism about MM's investing skills I have to say it isn't deserved. I agree that mm is not a great investor but I don't remember him every suggesting that he was. This is about HIS OWN personal finance. Granted he has lost a lot in his portfolio but so have many many people. I was one of the many posters who criticized him for buying into financials last summer when they first started selling off, in fact I think right now is still the wrong time however if you got in about a month ago I think you're pretty safe (most financials are much higher from their July 15th lows). We may see those lows again and even more but I don't think much more. Same goes for his pretty heavy emerging market exposure.


fl Commented on August 16, 2008

This is in response to JD...I realize that this blog is about his own personal finance however, if you read through some of his earlier blog posts he comes across with a certain hubris about his investment acumen. That in itself I suppose is also okay as there were many other novice investors who also lost a lot of money in this latest economic downturn however, if you are going to post positives then you should also maintain your blog and post your negatives. Like I've said earlier, since the inception of this blog he's never suffered losses of this magnitude and he's gleefully posted one update after another forecasting how much money he's made and isn't it ironic now that he hasn't posted at all for the last several months when his portfolio continues to crumble around him. He's stated that he's been busy with work but you know what? To maintain credibility in the blogosphere he needs to post when his portfolio tanks also. I mean it doesn't take that much time to post a few sentences once a month. This blog is finished.


pj Commented on August 16, 2008

I agree with FL, it's a shame MM stops posting when things go south. This ie exactly the kind of economic environment that makes net worth updates informative.

On the other hand; I don't think MM is alone is his ego protective attitude. Millionaire Mommy Next Door, for example, also stopped posting her net worth after the market, and especially her momentum strategy, went south. Combine this with the fact that her husband owns half the assets (you got to love early-retirement.org for being critical to her ego posts) and she isn't actually a millionaire...


AC Commented on August 16, 2008

MM might make a million by 36, but we won't ever know at this rate.


MM2 Commented on August 16, 2008

Back of the napkin calc shows a -$200K year so far from the start of year. So, that might make the goal of $225K this year but to the downside.

For the portfolio alone, another calc shows down -$94k since MAY. This is assuming the portfolio was not sold at the bottom in mid-July & held to today. If everything was sold on July 15th, would have been down $113k. So, recovered somewhat.

The education as I see it is as follows. Hedge your long positions with covered call options or buy some puts. Also, be flexible in selling like in March when market recovered from Jan. selloff. Buy & Hold can crush a portfolio without any hedging esp. one that is overweight a one sector.


nickle young Commented on August 17, 2008

Thanks for this great bit of research !Like I've said earlier, since the inception of this blog he's never suffered losses of this magnitude and he's gleefully posted one update after another forecasting how much money he's made and isn't it ironic now that he hasn't posted at all for the last several months when his portfolio continues to crumble around him.


nickle young Commented on August 17, 2008

Thanks for this great bit of research !Like I've said earlier, since the inception of this blog he's never suffered losses of this magnitude and he's gleefully posted one update after another forecasting how much money he's made and isn't it ironic now that he hasn't posted at all for the last several months when his portfolio continues to crumble around him.


nickle young Commented on August 17, 2008

Thanks for this great bit of research !Like I've said earlier, since the inception of this blog he's never suffered losses of this magnitude and he's gleefully posted one update after another forecasting how much money he's made and isn't it ironic now that he hasn't posted at all for the last several months when his portfolio continues to crumble around him.


JD Commented on August 19, 2008

fl and pj you make good points. I guess I haven't been following this blog as long as some of you but I have been following for at least over a year and do remember that MM was very quick to post his net worth updates when things were going well, now he's essentially abandoned the blog. And I guess I do see what you mean by that certain "hubris" and "ego" he used to display. I just shrugged it off though as another finance blogger who thought he was some sort of pro stock picker. They are a dime a dozen.

pj its funny you mentioned Millionaire Mommy Next Door. I was actually trying to remember what that blog was called a few weeks ago. I remember finding it around a year ago and reading through it and being hugely turned off by her ego as well as very skeptical about some things. For instance her numbers didn't make sense unless she wasn't paying her taxes or she had some big investment gains which I would ascribe to luck since she didn't know much about the markets. I find it funny to learn that half the money was her husbands, that explains a lot of it. And I'm not surprised she has disappeared just like MM when her portfolio has started heading south. I posted a very critical post back then on her blog and to her credit she did respond to me but she didn't really answer the questions.

As you guys say, they lose any credibility in the PF blogging community when they disappear as soon as their finances go bad.


genetrix Commented on August 19, 2008

Very good job ..
Congrats


CPA1298 Commented on August 22, 2008

I'm surprised MM wouldn't hire someone to keep this blog breathing, given that he has over 100,000 readers.

In its heyday, wasn't this thing making MM something like $50,000/yr, as a sideline business? Surely his plethora of advertisers aren't too keen on paying for ads on a site that hasn't been updated in 10 weeks.


AC Commented on August 25, 2008

Remember when this blog used to be updated? Ah, those were the good old times.


CPA1298 Commented on August 26, 2008

MM - if you want to pay me to write guest posts just let me know. You can contact me at the email address I provided when I posted this comment.


John Commented on August 27, 2008

in the trading world, we say "he down size..."


Rafael Commented on August 28, 2008

Are you feeling OK?


Mike Commented on August 30, 2008

RIP PFBLOG 8/2008


Todd A Commented on September 2, 2008

Regardless of what is happening financially, there probably are lots of readers who liked the blog before all of the advertisers. And, there may be points of learning that could be passed on to the readers, which is probably a lot of why they read in the first place. Either way, a blog can't survive without regular updates. Take care.


Stock Research Commented on September 9, 2008

Is this where the story ends? We gotta hear how you're navigating the current market conditions.


fl Commented on September 14, 2008

I wonder if he still owns AIG it is now around $12 a share and he onced owned 402 shares at $62


Wealth for investors Commented on September 15, 2008

Excellent this site is great watching you get your goals.. What stocks are you looking to buy during this time of bumpy-ness ;)


dd Commented on September 15, 2008

After the big hit on the financials today, MM definately isnt comng back. who wants to bet?


Kit Kat Commented on September 17, 2008

I shall set up my own financial goal, hopefully it will work out something like yours.


JD Commented on September 17, 2008

Even though he seems to have abandoned his blog I hope he wasn't ignoring the market and sold out of his AIG position with at least a little something. He bought it at $62 and its now essentially worthless.


JD Commented on September 17, 2008

Even though he seems to have abandoned his blog I hope he wasn't ignoring the market and sold out of his AIG position with at least a little something. He bought it at $62 and its now essentially worthless.


Boyd Commented on September 17, 2008

I made a copy of his portfolio with where it stood in May and since then it has lost about $148,000 from those May prices.


dan Commented on September 18, 2008

Only down $148k, not bad. Is that down about 20%? The market is down 20-25% for the year so he is in line with where everyone else is.



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