Suffering the biggest-ever loss in our portfolio -- a total of $60,000 -- our net worth took a nosedive again in January. That is, the second month in red in the last three months. For the month, our net worth declined by 4.8%, or over $42,000. I would be lying if I say I don't miss the good old days when we can count on consistent net worth improvement month after month.

On the other hand, it is probably not a bad thing if one takes a long-term perspective. After all, it could be much worse if this happens after I finally bid good-bye to my corporate life -- that extreme early retirement scenario has been in our plan for many years and all we wait for is we hit a certain net worth number. If anything, the recent market turbulence serves as a timely wake-up call in our last stretch toward millionaire club that early retirement is only the means to an end, and risk management is more important than ever in our ride toward financial independence.

Fortunately, our core income streams are still well-oiled machines. My daily job is still generating five-figure monthly cash flow even after paying all taxes and living expenses. Our sideline business also delivered a big surprise in January with monthly net proceeds topping $10,000 again.

All together, our family is little affected by the paper losses (or gains) in our portfolio. Bottomline is, even with the market slide in recent months, we still added more than $190,000 to our net worth in the last 12 months.

BALANCE SHEET

NOTES

- We took another 0% APR fee-free balance transfer offer from Citibank, and this added to our credit card balance. On the other hand, we paid off our Christmas vacation expense before it starts to incur interest. Our $30,000-strong credit card balance is 100% on either 0% APR balance transfer deals or charges in the last 30 days.

- Tax liability is reduced due to shrinking portfolio value and floating capital gains.

WHAT'S AHEAD

- My work/life balance is disrupted when I was called to take over a big business in addition to my current duties in January. While it is professionally fulfilling to take big challenges, it absorbs a lot of my energy and brought the sudden halt to my one-post-one-day streak since December. I won't have more bandwidth until June, but I do, still, intend to spend more time researching and writing on portfolio management.

- I'm starting to collect tax forms for the 2007 tax season. It will be fun to crunch the numbers and maximize tax savings with my tax preparers.