We broke the ground of 2007 with an inspiring monthly net worth growth of almost $30,000 -- a great start toward our goal of $230,000 net worth improvement in 2007. Behind the number, though, is the combination of record business income and record expense, making January a very eventful month.
MONTH-END BALANCE SHEET
HIGHLIGHTS OF THE MONTH
• We had a record-breaking (and jaw-breaking) month at our sideline business, with monthly revenue topping 150% of our previous monthly record, and delivering more than 15% of our annual business revenue target. While this monthly spike is driven by the concurrence of several big quarterly and annual contract renewals, and therefore is surely not sustainable in February, the mere fact that January is the first month during which our sideline income exceeded my salary from the daytime job will make this month an important milestone of our pursuit of financial independence in retrospect.
• Our expense also shot up substantially, driven by nearly $5,000 vacation expenses for prepayment of next month's Bali trip and incidental charges in our recent family visit to Hong Kong. At about $11,000, January is so far our highest spending month -- the last time we spent more than $10,000 was in November 2005 when we relocated to Asia. After next month's vacation, I do expect our monthly expense will stabilize at $6,000-$6,500 until we will vacation again in late summer.
• The performance of my self-managed portfolio is lukewarm at best. While my mutual fund holdings followed the general market optimism, the value my stock holdings actually declined by $2,000, leading by sharp decline of my largest holding of COP (ConocoPhillips) thanks to the softness of crude oil price.
• On the other hand, my employee stock option plan (ESOP) account continued to shine by a monthly increase of over $10,000 (which is partially helped by the vesting of a new batch of 2002 option grants. Since the nadir of May 2006, the ESOP account has consistently deliver sizable returns every single month in the last eight months for a total of $67,000 improvement (including $6,000 from newly vested options). While Microsoft is certainly in the honeymoon again with Wall Street analysts, this monthly income source will dry up one day.
• As disclosed in late January, I'm booking a tax refund of $6,000 for tax year 2005. I haven't received the refund yet, so the effect of the tax refund on my balance sheet is to reduce my Tax Liability bucket (which would otherwise grow by about $3,000 to account for tax liabilities associated with portfolio appreciation).
• About $9,000 of my 0% APR promotional balance transfer will expire next month, so I will make the payoff next week.
• My portfolio grew to almost $750,000 now ... time to spend some quality time on portfolio management.
• Time to collect the tax records and prepare the 2006 tax organizer.
• The family is looking forward to the Bali trip!