My February result of $6,000 net worth increase reflects very positive performance on the operating side but subpar showing on the investment side.
On the operating end, we landed a few big deals at our small family business -- the net income from the business in February almost matches my day-time job a couple years back. (However, this revenue spike is very unlikely to persist since many contracts we landed are of annual nature, meaning we will only see the money again when people decide to renew 12 months down the road). At the same time, we also cut back our monthly spending to barely over $6,000 -- the lowest since we moved to this continent. All in all, we achieved a positive cash flow of $12,000, the second highest monthly savings record (only after November 2005 during which we benefited from a massive relocation allowance.)
Our investment results are not as impressive. While S&P 500 stayed almost flat for the month, our portfolio of over $400,000 reported a before-tax loss of $2,100. On top of that, MSFT dropped $1 from its late January/early February peak of $28, knocking our employee stock option account balance off by $8,000 -- this is only mitigated by the vesting of another batch of options worth about $4,000.
Anyway, I found I've gotten used to the month-to-month fluctuations of our investment accounts now -- the 0.5% loss on our own portfolio is not that much a red flag, and for the stock option holdings, as long as Microsoft stays as a technical powerhouse (which I believe it is), significant monthly changes should offset in the long run. The stock market (which opens at 10:30PM my time) does not keep me awake at night :-)
IMPORTANT BALANCE SHEET MOVEMENT DISCUSSION
• Cash and Savings: The increase includes the aforementioned regular savings, and the shift of money from money market mutual funds at brokerage accounts to ING Direct to exploit the 4.75% winter sale.
• Brokerage: The $26,000 drop comes from re-parking cash-like investments to banking accounts
• Stock Option: This reflects $4,000 newly-vested options and $8,000 in option value decline.
• Receivable: I received reimbursement for $3,000 for personal-paid business expense and medical expenses.
• Tax Liability: This reflects lower tax exposure due to the decline in investment and employee stock option value.
IMPORTANT PERSONAL FINANCE ISSUES IN MONTHS AHEAD
(Legacy from last month ...)
• Tax Document Collection: It is tax season again. As an expatriate benefit, KPMG will prepare and file my tax, but I still want to prepare my own tax just for practice -- the international relocation offers tons of opportunities to implement different tax strategies, and I can surely benefit from more tax knowledge.
• Investment Tracking: Since investment performance is becoming a larger portion of my monthly net worth movement, I will soon introduce a monthly scorecard to keep track of investment results.