August 2009 Score Card — Part I: Net Worth

Another good month is in the books. Though the August performance isn’t as good as July, it’s still good enough to push our net worth to another all-time high, which is pretty exciting. The gain in August is the sixth in a row since March. Comparing to the returns of the stock market last month (the Dow up 3.5%, the S&P 3.4%, and the Nasdaq 1.5%), the gain of 4.43% in our net worth again exceeded the market performance. Overall, we added $29,424.84 in August from the previous month. The total on August 31st is $693,827.11.

The breakdown of the net worth calculation for August looks like this:

• Credit card balance(—–): We made big progress in reducing our credit card balance last month as we charged $1,028.02 less (16.50%) on our credit cards. The balance on our credit cards total at $5,201.65 at the end of last month. Actually, our spending wasn’t as much as I expected, though I have been commuting between NJ and VA every week since July.
• Cash(+++): The increase in our cash is still quite impressive last month, though the amount was only half of the increase in July. At the end of August, we had a total of $109,992.23 (not include some $40 in my pocket) in a number of savings and checking accounts. So far this year, we have been doing very well in saving money for our next house down payment. However, the pace will slow down next month as both our children will go to daycare and the tuition is much higher than what we pay in NJ. The good thing is that we sold our house so we don’t have to pay rent and mortgage at the same time. I mentioned early that I opened a EverBank Money Market account in July. Now I have most of our money in the account to enjoy the 3.01% APY promotional rate. BTW, when the sale is closed in October, this part will get a significant boost after we get the check (probably around $100,000).
• Taxable accounts(++): Though the overall gain in our net worth exceeded the return of the stock market last month, our taxable investments, including both individual stocks and mutual funds, actually lagged the market. For August, the increase in our taxable accounts was $6,538.10 (2.35%)  and the total market value reached $285,268.92. Except monthly contributions to mutual funds we have been investing for years, no new money was added to taxable accounts last month and I didn’t make any new stock purchase either.
• Retirement accounts(+++): I was surprised when I saw my 401(k) account at Fidelity gained more than 15% last month (including both new contributions and change in market value). I haven’t looked into all the details yet, so I am not very clear where the huge gain exactly came from. With every retirement accounts include, the overall gain in this part last month is $15,306.14 (6.20%) and the total was $262,330.68.
• 529 plans(++++): Somehow the performance of our 529 investments has been surprisingly strong for months, despite that we mostly buy index funds. Last month, the total market value in 529 plans increased $1,619.03 (7.39%) to $23,526.71. Of course for 529 plans, new contributions ($600 a month) is a much bigger part relatively than in other accounts.
• Bonds(+): For the bond part, the total increase last month was $152.84 (0.94%) and the total was $16,086.52.

Year-to-date, our net worth has increased $221,066.80 (46.76%). Year-over-year, the net gain is $113,576.69 (19.57%).

Following is a chart that compares the growth of our net worth since July 2006 when I started the tracking and the Dow Jones Industrial Average during the same period. If I had $1 dollar back then, now it has grown to $1.95. The Dow, on the other hand, only has 82 cents at the end of August.

I am glad that we almost doubled our net worth in 3 years.