March 2010 Score Card — Part I: Net Worth

We are that close of reaching the goal I set last year. However, with the closing of the house we bought last month coming soon plus a big tax bill, this is probably as close as we can get in while.

March was a very good month for stocks, with the Nasdaq leading the way with a 7.13% rally. The Dow and the S&P also gained nicely, adding 5.15% and 5.88%, respectively. As it happened many times in the past, when the overall stock market had a nice run, so did our net worth. March was no exception. Riding one the stock market’s strong performance, our net worth broke a new high in March. For the month, we had a monthly gain of $61,570.65 (6.72%) and the total number reached at $978,231.73, only less than $22K from the magic number of $1,000,000. In November 2009, I set the goal at $1M before buying a house. Now it looks like that’s not going to happen. By the time when I calculate the number for April next month, it will be at least $200K less than what we have now.

Here’s a breakdown of last month’s number:

• Credit card balance(+++++): A couple of unplanned, one-time spending  in March caused the overall credit card balance to increase $1,631.06 (48.04%) from February. Most of the increase came from spending on the house, though it’s not in our possession yet. In the next couple of months, we probably will spend a lot of money on the house, including some upgrade and new furnitures, so the bill will be even bigger. At the end of March, the total balance on our credit cards was $5,026.36.
• Cash(+++): We have been saving money for the house for a long time. Now it’s time to spend it, maybe all of what we have in our bank accounts. In March, we increased our cash by $12,514.37 (5.12%), bringing the total balance to $257,167.44. Going forward, we will be lucky to see a positive sign in this category because, after the closing, the mortgage+property tax+HOA fee alone will be more than $4,000/month. It’s going to be difficult to save. The good news is that from this month, my salary will see a 2% increase, which should help a little bit.
• Taxable accounts(++++): Our taxable investments did very well in March, much better than the gains in the overall stock market. For the month, the total market value increased by $24,915.62 (7.98%) to $337,131.00. The taxable accounts again became the biggest asset for us in terms of market value. For years, I have been buying stocks and mutual funds regularly, regardless the market condition. Now that a large amount of our monthly income will go to mortgage payment, I think maybe it’s time to scale back on the investments so we can have some cash on hand. I haven’t decided whether this is necessary or not. It should be clearer after a few months.
• Retirement accounts(+++): Our retirement accounts didn’t do as better as the taxable accounts did last month, but the gain of $23,211.45 (7.40%) was still very solid.  The total market value in 401(k) and IRA accounts was $336,688.76 on March 31st.
• 529 plans(+++++): 529 accounts again turned out to be the best performer among all the categories. The increase in market value in March was $2,460.71 (8.08%) and the total was at $32,919.77 at the end of the month. Since CollegeAdvantage is running their referral program again, we probably could see some additional gains in the coming months as we did in the second half of 2009.
• Bonds(+): Our investment in bonds grew $100 (0.59%) last month to $16,884.24 due to our monthly purchase of $100 I-Bonds.

Year-over-year, our net worth has increased $491,781.87 (101.10%) from what we had at this time in March 2009. Year-to-date, the net gain was $77,758.70 (8.64%).