My Personal Finance Journey

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Three Years in Five Charts

Contributed by mm | July 5, 2005 11:23 AM PST

The past June is an important milestone for me: by end of June, I have been using Microsoft Money consecutively for three years. During the period, I upgraded from Microsoft Money 2002 to 2006 (yes, I'm testing the new version now), my Money file has grown to 30 megabytes, and the 7,500+ transactions in the file captured the ins and outs of my financials throughout the 1,000+ days, part of which are shared at PFBlog.

At this reflection point, I'm taking a look at five charts that best summarized the 3 years.

Chart 1: Net Worth Growth

In three years, our household net worth improved from just above $47,000 to $231,000 at last tally. Except for two separate occasions, our net worth just keeps going up every month. Overall, good story.

2914_1_networth.GIF

Chart 2: Monthly Net Worth Increase

This chart shows the monthly net worth changes over the three years. Under this microscope, our personal finance story is actually a choppy ride. Besides abnormal events like home buying (August 2003) and car purchase (October 2002, June 2004 and May 2005), stock market causes significant swings from month to month. Especially, MSFT stock changes are often behind some of the particularly strong or weak months. (But again, MSFT today barely moved from where it was three years ago.)

2914_4_nwincrease.GIF

Chart 3: Monthly Savings

To remove the noise of stock market on monthly numbers, Chart 3 shows the monthly savings, defined as gross income minus expenses and taxes. Judging from the moving average line, my savings literally dried up in late 2003 and early 2004, but picked up significantly after July 2004, when my wife returned to the labor force. (Recent strength was also helped by PFBlog ad revenue.)

2914_5_savings.GIF

Chart 4: Monthly Gross Income

Now let's examine the income individually. Income shown in this chart includes our job income, interests, and website income, but does not include capital gains/losses in brokerage, ESPP and stock option accounts. The anual bonus in August and September caused most of the spikes; others are some one-off bonuses I claimed. For the same reasons discussed above, the past 12 months had been really kind to us.

2914_3_income.GIF

Chart 5: Monthly Expense

Now comes the expense part of the equation. Aside from the home buying in August 2003, and BMW purchase in March 2005, the spending is steady, but heading in the not-so-good direction lately, which negates most of the income increases we managed to get to.

2914_2_expense.GIF

So, what will I do with all the data? Actually, I will use it to reflect and restate the goals for my journey. Keep tuned.

(P.S. Thank you for Ye's analysis on my charts and the amusing post of How Not to Become a Millionaire. Take a look!)

This Post Has Received 6 Comments. Share Your Opinions Too.


Jman Commented on July 5, 2005

Alittle off the topic but how is Money 2006? I've been using Quicken since 1997 (now using 2003) but always thought about trying to switch. With so many poor reviews on Amazon for it and the pain of importing there seems to be too much risk for maybe not much reward. Just wondering...


Matt Commented on July 6, 2005

Having never used Quicken, but having used Money off/on for the past 5 years I think Money is very good. My big gripes...

1. Setting up on-line account sync doesn't always work and half the time Money just says the setup is unavailable. I have no problem with my Amex and Discover cards, but can't get my BestBuy, TDWaterhouse, or HomeDepot accts linked for some reason.

2. It doesn't listen to you when you tell it not to update prices on certain tickers. My 401k tracks everything in UnitValues so when Money auto-updates the tickers it of course brings back NAV's which throws the whole portfolio way out of whack.

3. On-line update seem to just not work from time to time, and sometimes they hang which prevents you from updating any acct being auto-updated. This has only happened a couple times, or else it would be too painful to continue with.

I actually tried to look into Quicken last year, but the only demo version I could find was from intuit.au and the app looked like it had been written in Windows 3.1. Intuit was trying to make me buy Quicken to evaluate it, which is ridiculous and pissed me off so I just stuck with Money. Plus, I read a couple great professional reviews of Money 2k5 and so far it's been pretty good.


mm Commented on July 6, 2005

Jman, it will take me some time to write a review on Money 2006, but in short, Money 2006 i not a big change from Money 2005. If you haven't used Money before, you should take a try (and maybe grab a cheap Money 2005 copy). For people already on Money 2005, there is almost no need to upgrade.


Jose Anes Commented on July 6, 2005

Like to see that your savings rate is almost 50% of your salary income.


Roberto Commented on July 6, 2005

Run your personal spending and income just like a business. Look to cut costs all the time and also look to make strategic decisions to keep yourself cashflow positive and with healthy margins. I know it sounds silly, but it works. If you always think how can I make $1.00 out of $0.50 you will continue to see yourself focus on letting your money work for you. Good luck!


Foo Bar Commented on July 6, 2005

30mb for 3 years of data consisting of 7500 records? Wow, that's large! I've been using Quicken since the end of 1992, and log everything, as I max my credit card rebates. I probably have about twice as many records as you, and my data files take up 7.3 mb.

Graph your disk space used for your Money data file growth into the future. That chart will look great too! Probably your best graph!

Looking at the general slope of your monthly expenses chart, you may need to work much longer than 40 year old retirement goal and your $1mil financial goal to keep those expenses at the same space. Don't forget future inflation. It appears that in 2 years your expenses will be over $12k a month.


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