My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


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Monthly Update - July 2007 ($762,141, +$5,217)

Contributed by mm | August 4, 2007 6:45 PM PST

The month of July is quite a drama. For the first 20 days, we were bathed in the best financial sunshine we had in recent memory: I received a couple rounds of unexpected bonus from my employer, and our sideline business was defying the gravity of slow summer seasonality and logged impressive sales. Moreover, with the Dow setting the all time high in July 19, our stock option account and self-managed account were, at one time, worth $30,000 more than they were at the end of June.

But it ended pretty fast too. With the final confirmation of the burst of housing bubble once supported by easy lending practices, and the ensuing credit squeeze and massive asset revaluation in all financial markets, our portfolio suffered massive losses. So, in the end, July was quite a disappointment -- we were only able to add a disappointing $5,217 to our net worth in this chaotic summer month.

Still, I'm positive of our capability to grow our net worth much faster for the rest of the year. For one thing, August and September are when I will see more bonus and the annual vesting of employee stock award shares, so if nothing else, I will expect more cash flowing to our bottom-line.

Also, although our July investment loss of over $13,700 is only dwarfed by a slightly heavier monthly loss back in May 2006, we are still committed to staying in the market. Even with the July loss, our investment gain in the last twelve months is in six figures. If the price is right, we are ready to move a good chunk of our cash positions to equity.

MONTH-END BALANCE SHEET

net-worth-07-07.jpg

Notes:

1) Our credit card balance of $37,000 is almost solely from 0% or low APR balance transfers. Long-time readers probably remember I took almost every offer I could get in last summer, and the arbitrage of borrowing at almost no cost and earning interests at about 5% APY is quite profitable in the past year. However, many deals will expire in the next 30 days, and I will of course repay these loans before credit card companies can get a dime of interest from me.

2) Our receivables are piling up but it is not a window dressing. The $18,000 receivable row includes over $10,000 in expected tax refunds for tax year 2005 and 2006 (believe it or not, a technical issue prevents me from receiving 2005 tax refund after I filed the return in early 2007), $4,000 in the after-tax value of the announced but not yet received unexpected bonus (on top of the regular annual bonus in September, which I don't know the amount yet and therefore haven't accrued for it), and some business expense waiting to be reimbursed.

WHAT'S AHEAD

- I still need to mail my check of over $10,000 for 2006 tax year Self Employed 401(k) contribution. I can only file my 2006 tax return after that, and claim my tax refund (and employee tax assistance).

- As mentioned earlier, I will repay about $15,000 in credit card balance that will soon cost me much more than the current 0% APR I have been enjoying for almost a year.

- I anticipate the vesting of one final round of stock option grants and another four rounds of stock award shares (i.e. restricted stock) in the month of August. Also, I'm waiting for a big paycheck in September that includes the annual bonus.

- Last but not least, you probably noticed the massive face-lift of the PFBlog website. It is 90% done now, but apparently I still need a bit more time to complete the work. With the completion of 6 weeks of travel in the last two months, I will have more time to read and write more content (and spend more time with the family).

This Post Has Received 17 Comments. Share Your Opinions Too.


t Commented on August 4, 2007

slick new site layout, much better


Brian Commented on August 5, 2007

Who do you use/recommend for a Self Employed 401K?


2million Commented on August 6, 2007

Hats off on your investment return performance -- you seem to have done much better than the market indexes.


william nixt Commented on August 6, 2007

Normally a net worth statement includes additional items such as FMV of art, hobbies and collectibles, Funiture and fixtures. jewerly, cash surrender value of life insurance, auto etc. You may be shorting your net worth by as much as 50K. You still are in need of a little spec stock to round out your investments. Do DD on Frpt will double your investment by year
end. Won,t be long till you hit the first million. Enjoy your trip. Bill


william nixt Commented on August 6, 2007

Second though. The FMV of your side business is a bona fide asset. Should be included on balance sheet. Your worth more than you think, on a conservative basis. Think about the real value here. Great month . Bill


sharemysite Commented on August 6, 2007

Its an interesting strategy to use the 0% offers ($37,000!), I might have missed the previous discussions but did you put the money in a CD or in investments?


MM Commented on August 7, 2007

Brian, I use Fidelity for my SE 401(k) accounts.

William, good point. I actually do not own a car and life insurance other than term life. Yes, I can account for the furnitures and jewelry but it will be too trivial to count them.

"Sharemysite", yes, I put them to online savings account that usually yields 5% or so.


Mark Commented on August 20, 2007

Ok, several rounds of bonus? I don't even know what that means. Anyone who claims their net worth grew in July 2007 is just a liar.


OldFriend Commented on August 22, 2007

First time visiting here, impressive, I have to say.
Just from curiosity, up to now, how much of your total asset comes from salary/bonus/business (like this site), and how much is from investment?


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