September 2007 Score Card — Part I: Net Worth

When the stock markets had the best September in 34 years, it’s hard not to make money, big money and that was indeed what happened to us last month. In fact, we saw so far the biggest jump in our net worth since I started the tracking in August 2006. For the month, the Dow gained 4.03% to 13,895.63, the S&P 500 rose 3.58%, and the NASDAQ increased 4.04%. Compared to one month early, our net worth added $52,385, or 9.30%, to a total of $615,458 as of September 30, 2007.

The details of our investable assets at the end of September are as follows:

• Credit card balance: I continued to trim our credit balance in September by charging a little less on the plastics and making larger than the minimum required payments for the balances from 0% introductory APR offers, which make up nearly 90% of the entire balance. For the month, our overall credit balance was reduced by $2,608, or 2.64%, to a total of $96,360.
• Cash: As of September 30, we have a total of $142,244 in a number of bank accounts, mainly online savings. Compared to a month early, the net increase in our cash reserve is $5,816, or 4.26%. Right now, most of our deposits are still with FNBO Direct. After the recent wave of interest rate cuts at online banks, the offers are less appealing now and alternatives are very limited. It’s most likely that I will move our cash to IGoBanking in November whose rate is the highest among online banks I am using.
• Taxable accounts: The reason we could achieve a 9.3% increase of our net worth in September was the extraordinary performance of the investments in our taxable accounts. Particularly, China related issues were very strong in September, led by China Life Insurance (LFC) which gained more than $13/share. My investment in E-House (EJ) also had a good month, adding $4.82 per share. Another big contributor is CGM Focus Fund (CGMFX) whose NAV rose $7.68 in the past 30 days. With everything going in our way, we can expect a big boost in our investments and that’s exactly what we got. For the month, our taxable investment accounts increased by $30,206, or 10.73%, to reach a total of $311,671.
• Retirement accounts: Though not as spectacular as that of the taxable accounts, our retirement accounts’ gain is also solid. The net increase in our retirement accounts last month was $12,487, or 5.63%. The gain pushed the market value of our retirement accounts to $234,167. I still haven’t made any contribution to my 401(k) with the new employer, so the gain is mostly from appreciation.
• 529 plans: Percentage-wise, our daughters’ 529 plans is the biggest winner of the month, with a net addition of $1,123, or 11.1%. Half of that, however, is from our regular monthly contributions. At the end of last month, we have a total of $11,247 in 529 plan accounts.
• Bonds: This is probably the least exciting part of our net worth calculation. The now ridiculously low 4-week T-bill rate (3.333% APR) means I won’t look at T-bills as an alternative to online savings accounts any time soon. Nonetheless, I continue our $100 regular purchase of I-bonds, which contributes to more than 2/3 of the $141, or 1.15%, gain in our bond investment which was valued at $12,488.