My Personal Finance Journey

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Net Worth Trend: '07-'09

Contributed by mm | December 30, 2009 10:36 PM PST

clipart-stock.gifIt's an awful long hiatus since I last updated my monthly net worth tracker. Admittedly, I fell prey of the psychological denial when the market crashed in 2008. For quite some time, I avoided reading my brokerage account statement and refused to watch CNBC.

So I hunkered down. I wasn't in a very good mood to spend time refreshing this blog. And with the first-ever massive layoff announced by my employer, I also put significant more time to my job -- luckily it has been secure all the time and still yielding handsome cash flow.

Like many others, it's a great relief to me to see the gradual market recovery since this spring. While my confidence hasn’t been fully recovered, it is probably good time to recognize I made mistakes and re-embrace the responsibility to manage our money forward.

Fortunately, during the long lapse, I still keep track of all financial matters in Microsoft Money. So it's good time to take a look at what happened in the last three years:

6389-networth1.jpg

A quick reply: after touching the 900s in October 2007, our net worth went through a choppy downward ride for almost year and a half, until climbed all the way back to the high 900s as of today.

6389-networth2.jpg

A more revealing view with the net worth chart compared to S&P 500 trend:

Obviously, with a large portfolio, it is the random walk in the stock market that decides our month-to-month net worth moves. On the other hand, with the index returned to where it started the decade, our long-term net worth growth is more explained by our savings habits.

In retrospect, I feel blessed that this financial tidal wave happened to us when we were still in our 30s. I certainly learned a thing or two. And if the same thing happens again in our later years, I probably have some memories to refer to. After all, personal finance management is a life long sport, and we are just at the first quarter of the game.

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pj Commented on December 31, 2009

Thanks for giving the update so quickly! I hope not but I think the stock market will prevent you from reaching 1 million in 2010.


2million Commented on December 31, 2009

Welcome back!! Been a long time, but it looks like you have been doing pretty well - I assume well get updates about location - back to US? Did you purchase real estate?


Deborah Commented on January 5, 2010

I think it is a false recovery based on government spending. It seems to be that around the world governments have put taxpayers so much more deeply in debt, if it was turned around today, it would take a generation to fix. I am surprised that governements have be able to continue to borrow at the rate they borrow at. But, debt is "spending" tomorrow's jobs today and has huge consequences for future generations.

I got out of the market in Nov 2007 and I do not see any kind of foundation to encourage me back in at this point.

But, good luck with your recovery.


SR Commented on January 8, 2010

Welcome back! How are you changing your strategy going forward? Who do you trust and what is your plan this year to recover? Would be great to learn some of that.


Hazzard Commented on January 18, 2010

Our net worth has tracked very much the same way as yours. While we watched our investments shrink dramatically, we withstood the urges to bail and, in fact, bought more as it went down. We are now feeling pretty rewarded by our commitment and are seeing our net worth number come back nicely. The one area we are getting hurt most is in real estate. Owning two houses has proven to be a bit of a black eye on our net worth. The good news is, like you mention, it's a lifelong sport and we'll be reacting to this by investing even more heavily in the market (via mostly low cost index funds in the various sectors).
Hazzard



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