July 2008 Score Card — Part I: Net Worth

Stock markets haven’t been friendly to us for more than a year now. And as stocks declined, so did our net worth.

July could have been a pretty good month if the Dow hadn’t suffered the 200-point lose in the last trading day of the month. But it did happen and, as a result, we finished the month again in the negative territory for the second month in a row. At the end of July, our net worth is at $565,910.47, down $2,484.81 or 0.44% from the last update, which isn’t too bad. As always, I didn’t include any house or vehicle related items because I can’t accurately evaluate those as assets. So to take it simple and measure the progress that we do have control, our net worth is essentially our investable assets. You can have an idea on what we are investing from our asset allocations that I posted early this week.

Here’s a quick look at each element that I am tracking every month:

• Credit card balance(+++): Our total credit card balance jumped 37.24% in July to a total of $23,920.11. That’s a net increase of $6,491.22 from last month due to some one-time purchases we made in July, including: 1) $3,222 on airline tickets. We are going to take a vacation in China after the Olympics. Two years ago, a round trip ticket cost around $760, now it’s nearly $1,000. 2) We bought a new mattress last month at $2,791. The good thing is we got it with a 4-year interest-free finance, so we don’t have to pay it all at once. 3) We paid $555 to renew our auto insurance policy for another 6 months. Excluding the above purchases, our daily expenses were actually a little bit lower in July than June.
• Cash(+): Our cash continued to grow in July, increasing by $1,866.50 to $66,306.54. That’s a gain of 2.90% comparing to what we had a month ago. A few banks increased their rates last month, but not the banks I am using, Capital One and FNBO Direct, both at 3.50% APY right now. Still decent, but not the highest, which is currently held by WaMu.
• Taxable accounts(-): Our investments in taxable accounts didn’t do as bad as the previous month, though we still ended up in the red on this part. In fact, it could have been positive if there were only 30 days in the month As of July 31, the market value of our taxable investments, including both stocks and mutual funds, is at $257,320.55, down $1,404.51 (-0.54%) from a month ago. The loss could be attributed to one fund, CGM Focus (CGMFX), which dropped more than $10 in a month as oil price falls. Of course, a lowered oil price is good for our wallet because we can spend less money on gas and more on other stuff or just save it. As I noticed the gas price I am paying today is the same as two months ago.
• Retirement accounts(+): Since we made our quarterly contributions to our IRA account, the gain in our retirement accounts didn’t really surprise me when the stock markets performed OK. For the month, our retirement accounts (401(k)s, where we also made new contributions and IRAs) added $2,981.71, or 1.29%, to a total of $234,927.69. Currently, we are adding new money to our IRA accounts at Vanguard on a quarterly basis. I am thinking whether to switch to monthly since there’s no additional cost involved.
• 529 plans(+): Market value of our daughters’ 529 plans also rebounded slightly last month, gaining $487.97, or 3.25%, to a total of $15,500.12. The gain, however, is largely due to our monthly $600 contribution.
• Bonds(+): Our investments in I-bonds increased by $100 (0.73%) to $13,814.08.

At the end of July 2006, our net worth was $354,495.76 and it was $540,928.08 at the same time last. So we managed to grow our nest egg by 60% in two years, but only 4.6% in one year YTD, our net worth dropped 6.96%.