If I can only add less than $500 to our net worth tally every month, it will take us another five years to reach the 7-figure milestone. On the other hand, the tiny improvement in January is not exactly bad, considering the brutal market condition.
On the income side, we started the year with a positive note. Aside from our regular income, many long-term business relationships are again generating cash results, which helped our cash stockpiling. We continue to save about 40% of our regular income.
The result from the investment side is cloudy at best. After suffering some loss, we continued our flight to safety which gradually lowered our risk-taking positions. The employee stock option lost 30% of its value at the end of 2009, although we hedged some of the loss. We will have a portfolio report later with more details.
So, welcome to my net worth report for a while:
- We continue to be very defensive in our asset allocation, keeping almost 60% in cash and a sizable fixed income position in our mutual fund holdings. I am still the believer that we haven't seen the end of the financial crisis yet.
- The "Other Investments" line includes the accounting value of the "covered call" we sold to hedge our employee stock option position. (Detailed discussion is here, here and here.)
- Our receivable primarily includes our rental deposit as well as some expected tax refund.
So, we are still within a stone's throw of our seven-figure ambition. Of course, in this economy, one can never retire on a million dollar nest egg, especially we are still in our mid-thirties. What's the next milestone we should set? $2 million? Or $3 million?