July 2009 Score Card — Part I: Net Worth

What a difference one month has made!

Given how much better the overall stock market has performed in July (the Dow up 8.6%, the S&P 7.4%, and the Nasdaq 7.8%), I expected a good month for our net worth. However, I am very surprised, and pleased, after finishing the calculation that not only it increased fifth straight month in a row, but also the rate exceeded the gain of the stock market. I am even more impressed that after reaching the peak in October 2007 before the market crushed and recession began, our net worth is now at a new high.

However, while the overall number looks good, we are still far away from where we were two years ago in our investments. For example, the total market value of our taxable investments was nearly $70K more then than now, despite tens of thousands of dollars new money we had put in those investments in the past 21 months. So the gain in our net worth came more from our new savings than returns of investments, even though the market has recovered a lot since reaching multi-year low in March.

Comparing to the month of June, our net worth in July rose $63,155.58 to a total of $664,402.27. The gain equals a 10.50% increase from the previous month.

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

• Credit card balance(++): Our total credit card balance increased for second straight month in July, even though not by much, as I started to commute back and forth between VA and NJ last month. At the end of the month, we had a total of $6,229.67 balance on our credit cards. That’s an increase of $308.10, or 5.20%, from last month. A few one-time charges, such as our car insurance premium, also contributed to the overall increase. I expect our credit card balance to keep increasing in the next few months as we settle down in Virgina.
• Cash(+++): Our cash savings has been a bright spot for quite a long time and it shined once again in July as we saw our savings in checking and savings accounts increased by $9.552.85, or 10.01%, in July to a total of $105,014.18. Of the increase, $5,000 came from a tax-exempted lump sum payment from my wife’s employer to help us relocate. Other than that, there’s no other assistance from her company. Right now, most of our cash is in a new bank account I opened last month. No, it’s not Ally Bank. Actually, I was so disappointed that I moved all my money out from Ally Bank. With the new bank, I am enjoying a much higher return, but I have to say that the rate chasing isn’t fun at all.
• Taxable accounts(+++++): Well, our stock and mutual fund investments have finally ahead of all other categories in gains last month, both the dollar amount and the rate. As I mentioned above, July was a decent month for the overall stock market and that helped our taxable investments tremendously. The increase in market value last month was $32,001.93, or 12.97%, even though I didn’t put any new money in any broker account in July. At the end of the month, the total market value of our taxable investments is $278,730.82. The largest gain, percentage wise, came from E*Trade Global Trading Account, which registered a gain of 17.74% thanks to the stronger rebound of Chinese stocks. Going forward, I expect those stocks I bought at cheap early this year to contribution even more as the recovery continues. Last month, I opened a new broker account at OptionsHouse, but I was so annoyed by some of its requirements after tying it that I don’t plan to use it any more.
• Retirement accounts(++): July is one of the months when we make our quarterly contributions to our IRA accounts. So with more new money going into the retirement accounts, the gain was also quite significantly. For the month, gains in our 401(k) and IRA accounts reached $19,580.69, or 8.61%,  bringing the total market value to $247,024.54.
• 529 plans(+++):  It turned out that our college savings accounts were the second best performer last month, gaining $2,074.33, or 10.46%, to end the month at $21,907.68. Even though $600 of the increase came from new contributions, I am still happy with the performance since we use only index funds and target-date funds in 529 plans.
• Bonds(+): For the bond part, the total increase last month was $200.04, or 1.27%, to a total of $15,933.68.

Year-to-date, our net worth has increased $191,641.96, or 31.49%. Year-over-year, the net gain is $98,491.80, or 17.40%.

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