The Sun's Financial Diary » Net worth

June 2008 Score Card — Part I: Net Worth

Sun — Tue, 01 Jul 2008 14:20:03 +0000

U. S. stock market fell hard in June 2008, so did our paper wealth (because most of our assets are stocks with only value on paper). When the Dow closed the month at two-year low, there isn’t really anything good to expect and that’s exactly what happened to our net worth.

After two consecutive monthly gains in April and May, our net worth last month returned to the “usual” theme of this year: down along with the stock market. On June 30th, we lost $37,125.69 in the past 30 days from our investments. That’s a 6.13% drop from previous month and more than half we gained in the past two months. At the end of June, our net worth is at $568,395.28.

Here’s a quick look at each element in our net worth:

Credit card balance(-): The total balance on our credit cards was $862.70 (4.72%) less than that of last month at $17,429.29. Every day expenses was almost identical to the previous month, though gas price has gone up quite a lot recently. Right now, we have to spend more than $110 on gas every week
Cash(+): This is the only positive part in our net worth calculation. At the end of June, we have $64,440.04 in our savings accounts totaled, up $3,554.82 (5.84%) from a month ago. In the past, when stocks dropped big ones like we saw last month, I usually took the opportunity to buy a little bit more. Not this time, though I maintain our regular monthly mutual fund purchases. I just didn’t get any extra. Seriously, it’s not fun to watch my newly purchased shares worth less and less every day, though I know that some time down the road what I bought today could bring me more. Now, I feel a little more comfortable with our money in the banks than in the markets.
Taxable accounts(-): We lost big in our investment accounts in June. At $258,725.06, we are $26,075.38 (9.16%) less now than a month ago. I am not going to get into details of what contributed to the big loss as I usually did because, basically, everywhere I look, I see red :((
Retirement accounts(-): Though we didn’t have any individual stock in our retirement accounts, the performance last month was pretty bad too in our retirement accounts such as 401(k)s and IRAs. At the end of the month, we had $231,945.98 in all retirement accounts. That’s $15,162.66 (6.14%) less than what we had at the end of May.
529 plans(-): Even our daughters’ 529 plans could stay positive, despite the new $600 monthly contribution. In June, the total market value of 529 accounts declined $524.51 (3.38%) to $15,012.15. And those new money only contributed to the loss because the money was invested at the beginning of the month.
Bonds(+): Our investments in I-bonds increased by $100 (0.73%) to $13,414.08.

Though our net worth has gained two months in a row, we are still slightly below where we were when 2008 began. YTD, our net worth dropped $39,727.07 (6.53%).

Now I can only hope we will have a better second half, given how bed the first six months have been to investors.

June 2008 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

May 2008 Score Card — Part I: Net Worth

Sun — Mon, 02 Jun 2008 14:55:17 +0000

It’s that time of the month again to see how we did in May.

After seeing a robust 9.25% growth in April, our net worth changed modestly last month, gaining 2.11%. That’s the second consecutive monthly increase. As of May 31, our net worth is at $605,520.98, up $12,489.11 from April, thanks to another month of gain in stock markets.

Here’s a quick look at each element in our net worth:

Credit card balance(-): Our total credit card balance at the the end of May was almost identical to what we had on April 30th. At $18,299.89, the balance was only $157.60 (0.85%) less than last month. Excluding balance from 0% APR balance transfer, we charged about $2,570 on our credit cards, nearly $400 more than previous month. Part of that increase, like everybody else, is due to the even higher gas price. Good thing is that my wife’s employer just started to let them work at home once every week. That should help a little bit.
Cash(+): Our savings in bank accounts totaled at $60,885.22 on May 31st, up $3,792.92 (6.64%) from a month ago, which is the biggest gain percentage-wise among the six categories. Last month, I opened a Capital One Online Savings Account and moved most of cash from IGoBanking (3.28%) to the new account to earn a better interest rate (right now at 3.75% APY). In addition, I also setup a bi-weekly transfer from our checking account at Bank of America to Capital One. And as I did last time when moving from FNBO Direct to IGoBanking, I increased the auto-transfer amount from $500 every two weeks to $600. The reason for increasing our cash portion is not that I don’t have anywhere else to invest the money (I do have a couple of stocks I want to buy), but we are saving for our house downpayment. I hope we can double the amount we have now in next spring to buy a bigger house.
Taxable accounts(+): We were virtually break-even last month in our taxable investment accounts. On May 31st, we had a total of $284,800.45 in various brokerage accounts, losing a meager $159.30 (0.06%) in a month in our investments. The biggest dragger last month was China Life Insurance (LFC) which happened to be the biggest gainer in April. The loss was offset a little bit by gains from other stocks such as Visa (V). In May, I didn’t add any new money in our taxable accounts and made only four trades with my play money at Zecco.
Retirement accounts(+): Unlike our taxable investments, May was a good for our retirement accounts as the total market value of our 401(k) and IRA accounts added $6,915.55 (2.88%) to $247,108.64. The gains were from price appreciation and new contributions in our 401(k) accounts. Speaking of 401(k) accounts, my employer switched bookkeeper last month, so I will soon have more and better choices in my 401(k).
529 plans(+): This part of our investments has always been quite stable, because we mostly use balanced funds (a mix of equity and bond funds) in our daughters’ 529 plans. In May, the total market value of 529 accounts rose $781.65 (5.10%) to $15,536.66.
Bonds(+): Our investments in I-bonds increased by $147.50 (1.10%) to $13,614.08.

Though our net worth has gained two months in a row, we are still slightly below where we were when 2008 began. YTD, our net worth dropped $2,601.38 (0.43%).

May 2008 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

April 2008 Score Card — Part I: Net Worth

Sun — Fri, 02 May 2008 01:30:03 +0000

After five straight monthly loses, we finally saw some meaningful increase in our paper wealth in April, thanks to a strong showing in the stock markets. Our net worth has suffered huge losses since last November when stocks peaked and started trading lower and lower amid financial market turmoil. In the past five months, our net worth has shrunk more than $116K, largely due to falling stock prices. Though it’s a pain to watch our money evaporated in stock markets, I didn’t make any dramatic change in our investments. I am still holding those once high-flying stocks that have lost some 50% value in a few months. I just kept telling myself to hold on and wait for a rebound. It looks like my patience paid off and that day I have been waiting for finally arrived

On April 30th, our net worth, excluding housing, is at $593,031.81. Comparing to one month ago, we had a net gain of $50,225.11 (9.25%), reclaiming nearly half of the losses! Though I am very happy with the net increase in one month, the total number only put us to where we were between August and September of last year. Still a long way to go, but hopefully this is the beginning of a positive change.

Here’s a quick look at each element in our net worth:

Credit card balance(-): The total credit card balance at the end of April was $18,449.59, down $593.58 (3.12%) from previous month. Of the total balance, $16,340 is from a 0% APR balance transfer from Citi Driver’s Edge card. Excluding that, we charged nearly $2,100 on our credit cards last month, inline with our monthly spending.
Cash(-): We have a total of $57,092.30 in a number of bank accounts (mainly in IGoBanking and Bank of America) on April 30. That’s a decrease of $2,769.13 (4.63%) from a month ago. The main reason for the drop is taxes, both federal and state, we paid last month, as well as quarterly contributions to our IRA accounts.
Taxable accounts(+): As before, here’s where the big gain came from. Last month, stocks and mutual funds we own performed very nicely as broad markets recovered from deep losses in the first quarter. The gain in our investments pushed the total market value of our taxable investments to $284,959.75, a net increase of $37,553.76 (15.18%) from March. Big contributors include China Life Insurance (LFC) which gained $13.54 in a month, and Visa (V), which added $21.09. These two stocks alone contributed more than $22,000 to the overall gain. Last month, I also bought shares of Baidu.com (BIDU), but only two: one with Zecco ($204/share) and one with TradeKing ($238/share). I sold the share with Zecco and made some $50, but still hold the stock with TradeKing. Now BIDU is around $370 If only I have had the money to buy more than two shares …
Retirement accounts(+): Like our taxable accounts, our retirement accounts, including 401(k)s and IRAs, also rebounded nicely. Gaining $13,370.87 (5.89%) in April, the total market value of our retirement accounted reached $240,193.09 at the end of last month, though part of the net increase came from our own contributions (we didn’t add new money to our taxable accounts).
529 plans(+): Our daughters’ 529 plans also got a boost from the stock markets, gaining $1,374.76 (10.27%) to $14,755.01 in April. As far as I can tell, this probably is the first double-digit gain month for accounts that don’t usually fluctuate a lot.
Bonds(+): Our investments in I-bonds increased by $142.80 (1.07%) to $13,466.58.

April 2008 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

March 2008 Score Card — Part I: Net Worth

Sun — Wed, 02 Apr 2008 00:53:31 +0000

Just when I thought maybe the worst was over last month after seeing a negligible drop in our next worth in February, we were hit again in March as the stock markets continued to struggle, though the amount lost on paper isn’t as bad as the first couple of months of 2008. In fact, except our brokerage accounts which hold our investments in individual stocks, we managed to get some positive numbers in all other categories. But the losses in stocks were big enough to offset those gains. So we ended up having another month in the red, the fifth consecutive month. At the end of March, our wealth on paper is close to the level we had at the end of July 2007 That’s pretty bad, I guess.

The stock markets ended March mixed. The Dow is the biggest loser among major indices with a decline of 3.06% to 12,262.89. The S&P dropped 0.60% to 1,322.70 and the NASDAQ actually gained a little bit (0.34%) to close the month at 2,279.10. As for our money, we had $542,806.70 on March 31st. That’s $7,936.13 (1.44%) lower than a month ago. Somehow I wish I do the tally today instead of yesterday. Given the rally we had today on the April Fool’s Day, we could very well break the losing streak Well …

Here’s a quick summary in each category I am tracking:

Credit card balance(+): We have a total of $19,043.17 on our credit cards, which include $17,000 0% APR balance transfer. The overall balance is $240.18 (1.25%) smaller than last month. It’s quite consistent that we charge about $2,000 on our credit card every month.
Cash(+): Our cash grew a little bit last month to $59,861.43, $1,193.56 (2.03%) higher than a month before though we paid our annual life insurance premiums in March. Our cash will take a hit this month as we will have to (again) write a fat check to Uncle Sam on April 15 Actually I started to pay estimated tax since last December so the process (the pain I mean) will be gradual. But looks like I may need to start it in the summer.
Taxable accounts(-): Here’s where things got ugly. Overall, our taxable investments lost $12,311.88 (4.74%) last month to $247,405.99. Most of the losses came investments from Chinese ADRs. Also last month, I sold two of my stocks, Taiwan Semiconductor (TSM) and Nortel Network (NT), in order to buy Visa (V) on its IPO day. The stock is currently a little higher than the price I bought. In the long-term, I hope it can do well (though may be not as well as MasterCard). In March, I also started to use a small fund in my Zecco account to do active trading (I will talk about it more later). At the end of the month, I made more than $110 in that account. BTW, I am glad I finally got rid of NT, which has been a major pain for too long.
Retirement accounts(+): A little gain in our retirement savings, which is at $226,822.22, up $2,439.40 (1.09%) from previous month. Obviously, the reason for this part being positive is because of our own contributions. Without the new money, it would be another big hole.
529 plans(+): Our daughters’ 529 plans rose $479.03 last month to $13,380.25, that’s an increase of 3.71%. Since all investments in 529 accounts are index funds, this part is by far the least affected by the market volatility.
Bonds(+): The boring but safe part of our investments added $100 (0.76%) last month to a total of $13,323.78.

March 2008 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

February 2008 Score Card — Part I: Net Worth

Sun — Tue, 04 Mar 2008 02:30:06 +0000

The harsh reality that the Dow lost more than 430 points in the last two trading days of February didn’t help when it comes the time to count our nest eggs. In fact, the benchmark held a little gain when the market closed on February 27th. But all three major indices sold off on the extra day of this February, thanks to the once-every-four-years-leap-year, after government reports showed slowing economic activities (durable goods orders) and increasing employment pressure (weekly unemployment rate).

For the month, the Dow dropped 384 points, or 3.04%, to 12,266, the S&P lost 48 points, or 3.48%, to 1,330.63, and the DASDAQ declined 118 points, or 4.95%, to 2,271.48.

Despite another bloody month for the stock markets, I was pleasantly surprised when I found that we almost broke even in February. After three consecutive months of decline, our investment account actually bounced back a little bit, though overall we are still in red last month. On February 29th, our net worth was at $550,742. Comparing to a month early, it dropped a mere $779, or 0.14%.

Here’s what it looks like in each category:

Credit card balance: The credit card balance at the end of February was almost identical to the previous month. At $19,293, the overall balance was $64, or 0.34%, less than what we had at the end of January. Last month, I paid off balance transfer from one card, but took another one for 12 months to pay our car loan.
Cash: Our cash reserve took a hit last month as we 1) made first quarter contributions to our IRA accounts; 2) paid our semi-annual auto and home insurance; 3) returned the remaining $15,000 from a Citi balance transfer that expired last month, though my wife also received her 2007 bonus. Also, I started to contribute to my 401(k) plan last month and that helped slow the growth of our cash. Overall, we had $58,667 in our bank accounts, down $7,292, or 11.06% from a month early.
Taxable accounts: As bad as February was for the stock markets, we managed to gain a little bit in our taxable investment accounts, though the gain was no where close to the massive losses we have suffered in the past four months. At the end of February, we had a total of $259,717 in a number of brokerage accounts. The increase of $3,616 in our investment accounts represents a 1.41% positive change in February. Despite the gain, I am not sure whether the freefall is over. Things can still go bad in the next several months as the uncertainty in the stocks market is expected to continue.
Retirement accounts: Our retirement savings also rose a bit last month, largely due to the $2,500 new contributions to our Roth IRAs. As of February 29th, we had $224,382 in our 401(k) and IRA accounts. Compared to what we had one month ago, our retirement accounts added $1,308 to a total of $224,382. Without the new money, we could be in red again Since most of investments in retirement accounts are index funds, the performance reflected the general market condition.
529 plans: Our daughters’ 529 plans have been the the lone bright spot in our investments for a while and February was no exception. The total market value of our college savings accounts grew 3.05% to $12,901. That’s a net increase of $381 which is equivalent to a 3.05% gain.
Bonds: Last month, the bond portion added $139, of which $100 came from new purchase of I-bonds. On February 29th, we have a total of $13,223 in I-bonds.

February 2008 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

January 2008 Score Card — Part I: Net Worth

Sun — Mon, 04 Feb 2008 16:04:04 +0000

What used to make us, now broke us.

For a third time in a row, our paper fortune dropped after the broad market suffered deep decline in the first month of 2008. Our calculation showed that at the end of January 2008, our net worth, excluding house and vehicle related items, was at $551,521, down $56,600 from previous month. The loss of nearly 9.31% was actually the largest monthly loss since I started tracking our net worth in August 2006. Since reaching the peak at the end of last October, we saw our wealth on paper shrank by $107,983 in three months

Am I worried?

Not really! I am not the kind of person wake up in the middle of night worrying my portfolio. I did make some bad decisions on our investments and am usually not willing to take profits off the table when I should (a.k.a, being greedy), but in general, I feel the investment plan we have is solid, well-diversified. Despite the big loss recently, I have no plan to make any major changes, especially in our retirement savings.

Anyway, the breakdown of our net worth at the end of January is the following:

Credit card balance: Our credit card balance went up quite a bit last month, mainly because of the holiday shoppings as well as some last minute donations I made at the end of 2007. On January 31st, the total credit card balance was $19,218, up $924, or 5.05%, from a month ago.
Cash: Cash balance seems to be the only bright spot last month, gaining $2,258, or 3.55%, to a total of $65,960. This is a little surprise as I am not so sure where the gain came from because in January we started to make our 2008 Roth IRA contributions. The growth of our cash will slow from now as I began to contribute to 401(k) plan last month,.
Taxable accounts: The biggest loss of the month, as previous two months, came from investments in our taxable accounts as all the Chinese stocks I bought dropped like a rock (check out the monthly Chinese ADRs update). The total loss last month was $45,973, which was a decline of more than 15% from December. At the end of January, we had $256,101 in various brokerage accounts.
Retirement accounts: Money in our retirement accounts (401(k)s and IRAs) were mostly invested in low-cost index funds, therefore the performance in this category was much better than what happened in our taxable accounts. For the month, our retirement savings suffered a $11,820 loss
529 plans: January was marked as the first time that our daughters’ 529 plans returned negatively, despite the net $600 contribution. Comparing to December, the market value of the 529 accounts saw a drop of $278, which was about 2.18% less than previous month. On January 31st, the balance of 529 plans was $12,519.
Bonds: Well, there’s no way we can lose money buying bonds (on face value of course). Last month, our bond value gained $138, or 1.02%, from interests and new purchase to reach a total of $13,084. Even though the return of this part is always positive, it’s still the least exciting category.

January 2008 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

November 2007 Score Card — Part I: Net Worth

Sun — Mon, 03 Dec 2007 15:45:41 +0000

It’s that time again and what I am looking at is not pretty, as expected.

November turned out to be a very tough month for investors as both the S&P and the Dow had the biggest monthly decline in five years. Despite the second rate cut by the Fed in as many months, concerns over subprime mortgage related losses persisted and consumer confidence took a hit amid record oil price, slumping home value, and falling stocks. For the month, the Dow dropped 4.0% to 13,371.72, the S&P 500 lost 4.4% to 1,481.14, and the NASDAQ tumbled 7.0% to 2,660.96.

Our paper fortune also suffered a big loss last month from the stock markets, which literally knocked our net worth back to where it was at the end of September. Comparing to October, our net worth declined $44,787, or 6.79% to a total of $614,716, excluding house and automobile related items, the first month-to-month lose since I started tracking one and a half years ago.

At the end of November, our investable assets look like the following:

Credit card balance: The credit card balance went from more than $94,000 at the end of October to $19, 367 last month as I paid off two 0% balance transfer offers (one from Bank of America and one from Chase). Among the total balance, more than $16,000 is from a Citi card 0% BT offer which will expire in February. Last month, our spending went up quite a bit after several big-ticket purchases though we didn’t buy anything on Black Friday.
Cash: As our credit balance shrank, our cash balance went in the opposite direction as the equal amount was removed from our bank accounts to pay for the credit card dues. On November 30, out total cash balance is $65,646, down $71,483 (52.13%) from a month ago. I am thinking of getting another bank account (probably from AmTrust Direct) as both IGoBanking and FNBO Direct, the two that I am using, now lags in rates. The problem is current rates may not last as another rate reduction is increasingly likely in a week.
Taxable accounts: Our taxable investment accounts received a one-two punch last month as Chinese stocks performed even worse than general markets. What used to be the engine of my net worth growth for months became a big drag in November. China Life (LFC) alone lost nearly $20 in a month, contributing more than half of the total loss in market value last month. As of November 30, our taxable accounts had $308,145, down $40,360 (11.58%) from $348,506 at the end of October.
Retirement accounts: Since we use mostly diversified index funds in our retirement accounts, the drop in our 401(k)s and IRAs was rather moderate. At the end of November, our retirement accounts had a total of $235,193. Comparing to one month ago, the market value of our retirement accounts declined $7,943, or 3.27%, to $235,193.
529 plans: Well, the only bright spot on my spreadsheet is our daughters’ 529 plans. For the month, the change in 529 accounts came out a positive $183, or 1.52%, though we contributed $600. At the end of last month, we have a total of $12,291 in four 529 plan accounts.
Bonds: Since all our bond holdings are currently in I-bonds, which we are still buying $100 every month, it’s not surprising that this category also saw positive growth in November. For the month our bond investments gained $179, or 1.42%, to a total of $12,807.

As 2007 enters its last month, I hope the stock markets can bring all investors some Christmas cheers in the end

November 2007 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

October 2007 Score Card — Part I: Net Worth

Sun — Thu, 01 Nov 2007 15:10:52 +0000

The Federal Reserve gave investors a Halloween treat yesterday by cutting the key lending rate a quarter-percentage point. The second rate cut in two months gave the stock markets a boost, pushing major indices up more than 1% Wednesday to finish the month on a strong note. For the month, the Dow gained 0.3% to 13,930.01, the S&P 500 rose 1.5% to 1,549.38, and the NASDAQ surged 5.8% to 2,859.12.

Our net worth also saw a robust growth last month, though the gain was smaller than last month. Comparing to the end of September, our net worth added $43,944, (7.14%) to a total of $659,403.

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

Credit card balance: The credit card balance was reduced by $2,356, or 2.45%, last month to a total of $94,004. This month, about $77,000 will be returned to two credit cards from which I borrowed money for free early this year. Once that part is gone, the total credit card balance will be much smaller, but so will be the cash savings. Currently I still have about $17,000 from Citi at 0% APR, which will expire next February.
Cash: As of October 31, we have a total of $137,129 in a number of bank accounts. The cash amount actually decreased by $5,114, or 3.60%, last month as I moved $7,000 to my E-Trade Global Trading account for the upcoming Alibaba.com IPO. After the latest rate cut, the interest rates for online banks will soon be lowered again (ING already dropped its rate from 4.30% to 4.20%).
Taxable accounts: Our stock investments again performed very well last month, thanks to the strong gains from Chinese stocks in our holdings. For the month, our taxable investment accounts increased by $36,824 (including $7,000 uninvested money in E-Trade), or 11.82%, to reach a total of $348,506. Particularly, China Life Insurance (LFC) and E-House Holdings (EJ) both gained more than $10 in October. The PowerShares China ETF (PGJ) also had a very good month, adding more than $5. Losers in October include NJ, BX, and XFML.
Retirement accounts: The net increase in our retirement accounts last month was a moderate $8,968, or 3.83%. On October 31, the market value of our retirement accounts is $243,136.
529 plans: Our daughters’ 529 plans’ market value increased by $759.11, or 6.75% last month, including $600 monthly contributions. At the end of last month, we have a total of $11,247 in 529 plan accounts.
Bonds: For the month our bond investments gained $140, or 1.12%, to a $12,628. Most of the increase came from our monthly purchase of $100 I-bond. After dropping to 3.333% APR one month ago, rates of 4-week T-bill rebounded last month. The latest rate is at 4.049% APR. Still not a good option for short term investments.

October 2007 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

September 2007 Score Card — Part I: Net Worth

Sun — Mon, 01 Oct 2007 14:12:16 +0000

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.

September 2007 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

August 2007 Score Card — Part I: Net Worth

Sun — Tue, 04 Sep 2007 14:01:56 +0000

I just realized that I have been tracking the growth of our net worth for more than a year already. One year ago today, we had a total of $369,550 without including house and car related items. Here’s a picture of our net worth at the end of August 2006.

How are we doing one year later? From my own calculation, it’s quite good thanks to the strong showing of the equity markets, which performed better than what they appeared last month.

August was again a tough month for investors as credit crunch continued. However, all major US indexes posted gains for the month. The Dow added 146 points to 13,357, the S&P increased 28 points to 1,474, and the NASDAQ rose 50 points to 2,596. The strong performance in equity markets helped push our net worth to a new high. In fact, the gain in August was the largest so far this year. As of August 31, 2007, our net worth, excluding house and car related items, was $563,073, a net gain of $22,144 or 4.09%, as compared to a month early.

The breakdown of the month is as follows.

Credit card balance: The overall credit card balance was reduced by $1,269, or 1.27%, in August to a total of $98.969. While the credit card balance seems at a dangerous level, there’s nothing alarming as all but about $3,000 are borrowed at 0% APY from three credit cards (check out my post on how to make money from credit card arbitrage). I deposited all the money in my FNBO Direct account which runs a promotion rate of 6.0% till the 28th of this month. Last month, the borrowed money earned me $485 in interests.
Cash: We also managed to increase our cash in August by $2,179 to $136,427, a gain of 1.63%, because I received three pay checks instead of two in the month. Since I move to this new job, my payday does not coincide with wife’s anymore. So now we have a check every week, making the management of cash a little bit easier.
Taxable accounts: Once again, our stock investments came out as the biggest contributors to our net worth growth in August. As of August 31, the total market value of our taxable accounts is $281,464. Comparing to a month early, the net increase was $13,577, or 5.07%. And once again, China Life (LFC) was the main driver for the growth as the stock gained more than $8 per share. There were, however, also disastrous as well. For example, Xinhua Finance Media (XFML) lost nearly $1.35/share and Nortel (NT) kept dropping like a rock, losing more than $4 in a month.
Retirement accounts: Though I didn’t participate in any 401(k) plan right now, I did receive more than $1,300 of company match from previous employer. That helped add a total of $3,236, or 1.48%, to our retirement accounts last month, which had a market value of $218,443 on August 31, 2007. I can start to contribute to 401(k) next month.
529 plans: Our daughters 529 plans saw a huge jump in August as I opened a new 529 account for our second daughter and immediately contributed $1,500. Now, we invest $300 a month to each daughter’s 529 account. At the end of last month, we have $10,123 in 529 plans.
Bonds: Nothing really happened in our bond investments except the $100 monthly purchase of I-bonds, which are valued at $12,346 at the end of August. When the month began, I thought 4-week T-bill was getting attractive as the rates bounced back from recent lows. But that didn’t last long and the rates tumbled again in the past couple of weeks. I am in no rush to get back to T-bills as I still have about a month to keep my money with FNBO. Hopefully, there will be other options available at that time.

August 2007 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

July 2007 Score Card — Part I: Net Worth

Sun — Wed, 01 Aug 2007 14:06:59 +0000

I am glad a tough month finally came to a close. Actually, July started quite nice, with the Dow hitting record high of 14,000 and S&P 500 crossing 1,550 for the first time. The first half of the month was very promising. Then things started to turn from bad to worse as credit worries weighed on stocks. For the month, the Dow lost 197 points, or 1.47%, S&P 500 skidded 48 points, or 3.19%, and NASDAQ dropped 57%, or 2.19%.

When I pulled all the numbers from our savings and investment accounts and put them together last night, it was a pleasant surprise that our net worth of July still came out positive, despite the huge market decline in the past 10 days. Without including house and car related items, our net worth in July grew $9,064, or 1.7%, to $540,929 compared to a month early.

For each category, the changes of the month are:

Credit card balances: After I took another $49,000 from Chase early this month, our credit card balance bloomed to $100,238 on July 31st, an increase of $47,945 (91.74%) from last month. The overall number seems scary, but more than $97,000 is borrowed for free from three credit cards (Chase, Citibank, and Bank of America). Thus, nothing is really alarming here.
Cash: The increase in credit card balance is reflected in the gain in our cash savings accounts, which grew from $78,095 on June 30th to $134,248 on July 31st. That’s an increase of more than 71%. So all the money I borrowed from credit card were not spent or invested. They are sitting in online savings accounts at FNBO and IGoBanking to earn 5.30+% return for me.
Taxable accounts: The reason we could get a positive result for July is due to the appreciation of investments in our taxable accounts. For the month, our taxable investments added $15,684, or 6.22%, to $267,887 compared to a month early. Among the gains, $2,058 is from stock option with my previous employer. The rest then is entirely from the increase of the share price of China Life Insurance (LFC) which jumped $11 in July.
Retirement accounts: We were not very lucky with our retirement accounts which are all invested in mutual funds. As the broad market declined, it’s almost a sure thing that these index funds suffered. At the end of July, our retirement investments lost $2,996, or $1.35%, to $218,443. The magnitude of losses is manageable. The fact that I didn’t contribute to 401(k) with my new employer also affected this part a little bit.
529 plans: Our daughter’s college savings accounts continued to do very well, adding $83 to $8,384. That’s good enough for a 1% gain, which entirely came from our $300 monthly contribution.
Bonds: Last month, I emptied my Treasury Direct account as I totally stopped the 4-week T-bill purchase, though I continued to buy I-bonds. However, the interest rates of 4-week T-bills have recovered in recent weeks. The latest investment rate (APR) is at 5.16%. If the trend continues, I will have to give it another chance. On July 31st, we have $12,204 in bonds.

July 2007 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

June 2007 Score Card — Part II: Passive Incomes

Sun — Fri, 06 Jul 2007 15:16:43 +0000

In addition to price appreciation, the other investment objective we have is to generate passive incomes from our investments. To that end, I have been investing quite heavily in dividend generating stocks and funds. Last year, our investments brought us more than $9,000 in interests, dividends, and capital gains. For the first half of 2006, we have the following passive incomes:

Name	Income	Name	Income
ING	$12.09	LFC	$14.31
EmigrantDirect	$81.63	MSFT	$40
HSBC	$399.52	PGJ	$81.35
IGBanking	$525.55	PID	$50.67
FNBO	$318.78	PHO	$19.39
4-Week T-bills	$420.55	PEY	$152.79
ADVDX	$233.38	PFM	$19.35
DODGX	$209.68	DRIP Stocks	$43.42

The total dollar amount is $2,622, of which more than $1,758 are interests earned from several high-yield online savings accounts (which is bad because of the high tax rate for interests). The overall number is far from exciting and falls short of my expectations. The reason is most of our fund investments only distribute annually at the end of the year. Thus, the whole year passive incomes will be much higher than the first six months’ earnings have indicated.

My short term goal for the next two years is to generate an average of $1,200 in passive incomes every month, which represent an increase of 50% from what we earned in 2006. While I can keep playing the credit card arbitrage game to get free money, the focus will be on increasing earnings from dividend-paying stocks and funds. Though most of our investments indeed pay dividends, the main theme is growth rather than income. Among our investments, I consider DRIP stocks (MO, PGN, PG, and BAC), ADVDX, PEY, and PFM as main income generators. However, except PEY and ADVDX, they are all in very low quantities and, thus, the incomes they generated are quite small. Currently, I buy $100 of ADVDX, PEY, and PFM every month, but only $50 for each DRIP stocks.

June 2007 Score Card — Part II: Passive Incomes

---
Check Out These Related Articles:

June 2007 Score Card — Part I: Net Worth

Sun — Mon, 02 Jul 2007 13:45:46 +0000

June turned out to be another solid month as our nest egg continued to grow in the past month, most of them coming from investments in our taxable accounts, despite a down month for the equity markets. For the month, the Dow Jones Industrial Average lost 219 points, or 1.6%, to close at 13,408 on June 29th; NASDAQ was almost flat for the month, dropping one point to 2,603; and S&P 500 declined 28 points, or 1.83%, to 1,502.

For the month ending on June 30th, our net worth, excluding items that related to house and vehicles, grew by $14,658 to $531,864, a gain of 2.27%.

The breakdown of the month of June is as follows:

Credit card balance: The overall credit card balance dropped $8,182, or 13.53%, for the month to $52,279, largely due to the expiration of the 0% offer from Discover card. This number, however, will be almost doubled next month as I took yet another free loan of $49,000 from my Chase Freedom card. Since the money will be sitting in our high-yield online savings account, I am not concerned about the high credit card balance.
Cash: What we have on June 30th in our bank accounts also increased as I gradually emptied the Treasury Direct account after canceling the weekly purchase of 4-week T-Bills. The total balance in our bank accounts is $78,096 as compared to $72,062 on May 31st.
Taxable accounts: The biggest contribution for June came from our investments in taxable account, which added $11,722, or 4.87%, thanks to a strong month for China Life Insurance (LFC). For the month, the price of shares of LFC increased more than $7 to close June at $53.67 a piece. Among our largest holdings, shares of Taiwan Semiconductor (TSM) and PowerShares Golden Dragon China Fund (PGJ) also advanced. I did make a bad move, at least it appears so far, last month when I jumped into the IPO of Blackstone (BX) and bought 80 shares at $35.50. As of last Friday, the stock was traded at $29.27 a share.
Retirement accounts: The impact of a lackluster month for the stock markets showed in our retirement accounts as we saw a gain of only $205 in total market value of our investments. The growth of the retirement accounts will slow in the next couple of months as my new job won’t let me enroll in the 401(k) plan until I complete the first three months. This, however, isn’t a concern as I can always make up the contribution once I am eligible to participate.
529 plans: Our daughter’s 529 plans continued to go up nicely, adding $340, or 4.28%, for the month to $8,30o, though most of the gain came from regular contributions (we put $300 a month into her 529 plans).
Bonds: The biggest story in the bond category last month was that I finally decided to cancel the weekly 4-week T-bill purchase. Actually, that decision turned out to be a good one as the 4-week T-bill just recorded another disappointing rate of 4.581% APR in last week’s auction. Time to say “Siyonara” to T-bills.

For the first half of the year, our net worth has gained $58,213, or 12.68%, as comparing to what we had when 2007 began. The following chart shows what the big sell-off at the end of February has down to the growth of net worth. Other than that, the pace is very encouraging.

Thoughts on net worth calculation

As you can see from this and all other net worth posts I have published so far, I didn’t include any hard assets, such as house and cars, in the calculation. The reason is quite simple: I don’t know precisely how much they are worth, so including them will skew the number, positively or negatively. If I use the following net worth formula,

Net Worth = What We Own - What We Owe

then everything in the house that has value should be considered as part of “What We Own” to reflect the true value of the assets. Unfortunately, those assets contribute little, if at all, to the growth of our wealth because they are most likely to depreciate over time (our house may be an exception). Thus, I’d rather focus on the “grow our money” part of “What We Own” and include only investable assets in the new worth equation. Make sense?

As of June 30, 2007, “What We Owe” include $150,137 of mortgage and $20,784 of car loan.

June 2007 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

May 2007 Score Card — Part I: Net Worth

Sun — Fri, 01 Jun 2007 14:38:09 +0000

Reporting time again!

The momentum we saw in April continued in May as we experienced another record-setting month. This time, the S&P 500 Index joined the Dow to close at the highest level in its history. For the month, the Dow gained 491 points, or 3.74%, the S&P 500 rose 44 points, or about 2.96%, and the NASDAQ added 73 points, good for about 2.88%.

With the cooperation from the markets, we managed to grow our net worth in May at a moderate rate. As of May 31, 2007, we have a net worth, excluding house and car related items, of $517,206, a gain of $13,172, or 2.61%, compared to what we had a month ago.

Here’s how the number adds up:

Credit card balance: The credit card balance is almost flat as compared to April. Actually, it grew a little bit ($282, or 0.45%) in May, which was largely because of the nearly $1,000 charge I put on my credit card for the car repair. At the end of the month, we have a total of $60,462 on our credit cards. Though the number seems to be very high, about $58,000 was borrowed at 0% APR from several credit cards. Nothing to be alarmed here.
Cash: Our cash dropped $8,129 or 10.14% in May after I moved $5,000 to my Firstrade account to buy some Altria (MO) shares and another $1,000 to Zecco. Last month, I opened online savings account at FNBO Direct and moved almost all the cash to the newest account to take advantage of the 6.00% APY promotional rate. On May 31, we have about $72,062 in a number of bank accounts.
Taxable accounts: These are our regular investments outside retirement savings accounts and we invest in stocks and mutual funds in these accounts. As compared to a month ago, the increase in market value in our taxable investments is $11,425, or 4.99%, to a total of $240,481. The biggest story in the past month to me was the sharp drop of XFML shares. For the month, the stock lost $4.30, or nearly 40%, after the company was hit by scandals and law suites. Hopefully, XFML will be cleared soon to remove the cloud.
Retirement accounts: The net gain in our retirement accounts (401(k)s and IRAs) is $9,538 (4.51%) in May. I have planed to open a traditional IRA account and move the excess IRA contribution to it for some time, but didn’t really get time to do it yet. Hope I can get it done this month so it won’t drag too long. As of yesterday, the total assets in our retirement accounts are $221,234.
529 plans: Our daughter’s 529 plans continued to be the biggest gainer for the month as the market valued changed from $7,487 in April to $7,960 in May. That’s a 6.32% increase. Out of the $473 net change, $300 came from our regular monthly contribution.
Bonds: After the recent drop of T-bill rates, I have thought about canceling the weekly purchase, but didn’t pull the plug. Though the rates have rebounded a little in recent weeks, they are still about 30 basis points below the peak reached on March 22 and far below the 6.00% APY from FNBO Direct. I should seriously consider stopping the investment for now.

Year-to-date, our nest egg has increased $58,213, or 12.58%.

May 2007 Score Card — Part I: Net Worth

---
Check Out These Related Articles:

A Half-Millionaire?

Sun — Fri, 04 May 2007 18:42:16 +0000

When I posted our latest net worth early this week, I didn’t realize that we have kind of reached a milestone until I was reminded by FMF at Free Money Finance. For the first time ever, our net worth (excluding house and cars related items) has passed the $500,000 or half a million mark. Having half a million in our late 30s isn’t really that exciting as I believe many out there have accumulated much more at our age. What makes me feel happy about is the time it took us to get there: less than 7 years!

When we came to the States as students nearly 10 years ago, we had almost nothing but several pieces of luggage. Fortunately, we didn’t have to pay for the tuitions as both of us got assistantships from schools we attended and that made us debt-free when we graduated, though we didn’t have any assets either. We didn’t make any serious money until 2000/2001 when we started to work. Though we had gone through some tough times during the telecom crash when, at one point of time, we both lost our jobs, our investments, which began in 2001, never stopped even when the market took a dive in 2001 and 2002. We just kept buying every month according to our plan and added some extras when the time was right. The market fluctuations didn’t make us hesitate to commit new money since we knew time is on our side. In fact, when I looked at the $500,000 we have, nearly 30%, about $150,000, are from price appreciations and distributions. Without those shares purchased when many people turned their backs on the stock markets, we couldn’t get to where we are now. For our case, early and consistent investments really pay off.

Now that we have passed the $500,000 mark, when will we hit the next milestone? I don’t really know, but hopefully it won’t take us another 7 years since now we have a much stonger foundation than 10 years ago.

A Half-Millionaire?

---
Check Out These Related Articles:

April 2007 Score Card — Part II: Year-To-Date Returns

Sun — Thu, 03 May 2007 19:10:13 +0000

For the first four months of the year, our net worth has grown at a rate of 9.81%, adding more $45,000 to our nest egg. Of course, a major part of that increase came from contributions from our salaries as well as company matches in our retirement accounts. Nonetheless, our investments in various accounts (regular, tax-deferred) also registered some healthy gains as those shares, though a small number, we bought years ago at cheap give a nice boost of the total return. For the year, the returns of major indexes are:

Dow Jones: added 748.73 points or 6.01%
NASDAQ: increased 142.55 points or 5.9%
S&P 500: gained 77.62 points or 5.47%

So how are our investments doing so far this year? The year-to-date returns of our taxable investments (stocks, ETFs, and mutual funds) are listed in the following table.

Symbol	Category	Year-to-date return (%)
BAC	Stock	-3.4
GRRF	Stock	-45.0
LFC	Stock	-7.5
MSFT	Stock	2.9
NT	Stock	-6
PEY	Mid-Cap Value	-1.51
PFM	Large Value	3.42
PG	Stock	-2.0
PGJ	Pacific/Asia ex-Japan	2.65
PGN	Stock	7.5
PHO	Utilities	5.73
PID	Foreign Large Value	7.70
QQQQ	Large Growth	7.72
VBR	Small Value	5.40
TSM	Stock	-2.8
XFML	Stock	N/A
ADVDX	Mid-Cap Value	9.47
BUFSX	Small Growth	8.20
CGMFX	Large Blend	12.71
DODFX	Foreign Large Value	9.23
DODGX	Large Value	6.12
OAKBX	Moderate Allocation	7.23
TAREX	Real Estate	7.62
TGLDX	Precious Metals	3.85
PRNEX	Natural Res	13.35
PRSVX	Small Blend	7.72
TREMX	Diversified Emerging Mkts	5.86

Well, performances of most of our individual stocks are disappointing. Except Microsoft (MSFT) and Progress Energy (PGN), which stay above the water, all other seven stocks we own show negative returns year-to-date with GRRF being the biggest loser which lost 45% of its value, :((. Could this be an argument that we shouldn’t buy individual stocks? Or we just weren’t lucky to buy the right stocks at the right time? :)) Our mutual funds and ETFs, on the other hand, did pretty well, generating an average return of 6.8%. The only fund that suffered in the first four months is PEY, losing 1.51%. In addition, another four funds, PFM, PGJ, VBR, and TGLDX, lagged the broad market in performance, though not by much.

The other day I was thinking of making some changes to our mutual fund investments and one of the targets was CGMFX. Ironically, it’s the second best performer in our fund investments. It’s not going to be an easy decision when it comes whether to keep or dump the fund.

April 2007 Score Card — Part II: Year-To-Date Returns

---
Check Out These Related Articles:

April 2007 Score Card — Part I: Net Worth

Sun — Tue, 01 May 2007 14:46:14 +0000

Another month has concluded and it’s time to take a look how we did in April.

April is very solid month in general as the markets regained momentum after all the volatilities we experienced in late February and early March. It has been a record setting month (except the last day) for the Dow as the index gained 708.56 points, or 5.74%. For the month, the NASDAQ added 103.45 points, or about 4.27%, while S&P increased 61.51 points, good for a 4.33% gain.

Whenever the markets cooperates, we can expect a healthy gain of our net worth and April is no exception. At the end of March, we had a total of $482,123 in net worth. That number increased to $504,034 as of yesterday, a gain of 4.55% from previous month, matching the performance of the overall markets.

A breakdown of the number looks like the following:

Credit card balance: There was almost no change in our credit balance as we only managed to reduce $205 from previous month to $60,194. That’s a mere 0.34%. Though the overall number seems very high, most of the balance, more than $58,000, came from 0% balance transfers. Not much to worry about. Our discretionary spending in April was around $2,000.
Cash: The decrease of $9,478, or 10.57%, in our cash was largely due to the shift from cash to of T-bills in April. At the end of the month, we have a total of $80,192 in several bank accounts. The seemingly large amount of cash has some thing to with the $32,000 0% BT from BoA I got last month, which is currently in the HSBC account. Also the checks of nearly $4,000 of taxes that we owned haven’t been cashed yet.
Taxable accounts: Our regular investment accounts saw an addition of $8,948, or 4.07%, in April, mainly from price appreciation. We also contributed around $1,000 to our mutual funds and DRIP investments. As before, China Life Insurance (LFC) continued to be a major contributor as its price increased by nearly $3.50 per share for the month. The number could have been even better had LFC not lost $2.00 in the last two trading sessions. Our assets in taxable accounts are at $229,055 on April 30, 2007.
Retirement accounts: In April, our 401(k)s and IRAs grew by $9,059 to $211,695. That’s a gain of about 4.7%. The biggest change in our retirement accounts last month was that we had to withdraw almost all the $4,000 we made in 2006 due to excess contribution. We plan to convert part of our Roth IRAs to non-deductible Traditional IRAs so we can still enjoy the tax-deferred growth of the money instead of taking out cash.
529 plans: Our daughter’s 529 plans rose by $624 or 9.1% in April to reach $7,487. As I noticed, it kind of became a pattern that the 529 plans are always the biggest gainer, exceeding investments percentage wise. I didn’t really do anything to those accounts except making $300 contribution every month, but they are doing quite well, given the time I spent on them.
Bonds: The change of $12,100 in our bond investments all came from new money. I may need to bump up T-bill purchases even more this month as the 6.0% APR promotion at HSBC expires. Also with the new I-bond rate coming out this month, it’s possible that I add some more I-bonds to our holdings, depending on the rates. On April 30th, the bond investments are at $35,797.

Year-to-date, our net worth has grown at a rate of 9.81%, from $458,993 on January 1, 2007 to $504,034 on May 1, 2007.

April 2007 Score Card — Part I: Net Worth

---
Check Out These Related Articles: