Monthly Archives: April 2009

Net Worth Review: April 2009

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Another month, another check of the net worth. I’m going to break it down a little differently this month, into the four major categories that I track.

Overall, we had a positive month. There was a bit of a damper because of falling property values.

Here’s a breakdown of our major categories:

Property

  • I use a combination of Cyberhomes, Zillow, and recent sales to estimate the value of our home. I also take out estimated costs that it would cost to sell our house (e.g. real estate commission) which I believe gives me a true picture of what we’d walk away with in the event we sold our house.
  • Cyberhomes dropped it over 10% this month, so we saw a significant drop. With the recent sales, it is probably pretty close to reality, but it still stings.
  • I normally would report a percentage change, but at the moment we’re hovering around even, so this would be pretty meaningless. Suffice it to say, it isn’t reporting well.

Autos

  • I know some people don’t consider autos as part of their net worth but I do. I take the Kelly Blue Book value of the car, adjust it based on ‘for sale’ of similar cars, and subtract out any auto loans.
  • We have no auto loans, and the KBB value actually went up slightly for both cars (showing the escalating demand in the new car value).
  • Overall our net worth on autos went up 2% for the month

Current Assets

  • This is where I track all liquid assets such as bank accounts, non-retirement brokerage accounts, money markets. I also track against that any non-mortgage or auto debt. In our case, this consists of student loan debt and whatever balances we have on our credit cards since last paying them off at the beginning of the month.
  • The stock market did very well, leading the charge for a 28.5% increase in this category.

Retirement

  • This consists of all vested 401(k) balances and Roth IRA balances
  • Again the stock market led the way, and this category went up 16.5% for the month.

Overall

  • Assets went up 1.4%
  • Debt went down 0.26%. This was our smallest reduction in many months. But, with my wife leaving her job, we added some additional cash on hand versus making some extra debt payments. Also, the debt payments will slow down quite a bit, since we had been using a good portion of her salary to make extra debt payments.
  • Overall net worth (including property) went up 5.3% for the month. Overall it’s up 6.2% for the year.
  • Overall net worth (excluding property) went up 16.5% for the month. I mention this because it shows what a drag property was. Overall, this is up 23.3% for the year.

Goals for the month:

  • Adjust to a full month without a second income
  • Purchase most everything left to buy for the baby
  • Make Mrs. Beagle relax more to get ready for next month, when the baby is due!

Farewell County General: How Much Has Changed In 15 Years

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Tonight is the finale of the NBC show ER, and I thought I’d take a moment to look at some of different things that have happened in the time since the show debuted in the September 1994.

Gallon of Gas
Then: Approximately $1.15
Now: Approximately $2.00

Dow Jones Industrial Average
Then: Around 3,800
Now: Around 8,000

Money Beagle’s College Education
Then: Just starting the third year
Now: A distant memory

Sitting President
Then: Bill Clinton, pre-blue-stained-dress
Now: Barack Obama

Barack Obama
Then: 33 and Lecturer at Chicago University
Now: 47 and President of the United States

Gallon of Milk
Then: Between $1 and $1.50
Now: Between $2.50 and $4

Movie Tickets
Then: $4 – $5 on average
Now: $8 – $10 on average

30 Year Mortgage Rate
Then: 9%
Now: 5%

Unemployment Rate
Then: 5.9%
Now: 8.1%

UAW Membership
Then: 750,000
Now: 490,000

Months Since Black Monday Stock Market Crash
Then: 83
Now: 257

Popular Web Browsers
Then: Mosaic (neither Internet Explorer or Netscape Navigator had been released yet, and Firefox and Opera were still years away)
Now: Internet Explorer, Firefox, Opera

Average Cost Per Megabyte of Hard Disk Space
Then: $0.95
Now: $0.0011
(that’s 863 times higher back then)

OJ Simpson
Then: Everybody thought he did it
Now: Well, OK, some things never change…

I wonder how much things will change in 15 years…one thing’s for sure, there probably won’t be too many shows currently on TV that will make it that long….though I’m counting on The Simpsons still going strong!

One Auto Company Practice That Needs Re-Thinking

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I’ve been a pretty big supporter of the American auto companies, but one practice that they go through infuriates me, and I wouldn’t be surprised to see it go away.

What is it, you ask?

It’s the buyout packages that they give people to leave.

Depending on how long you’ve been there, someone can get a buyout package, on average, of $75,000 plus a $25,000 voucher for a new car.

While I appreciate the fact that they’re just not throwing people out on the street, I don’t agree with this practice for a couple of reasons:

  1. Very few, if any industries outside of the auto companies, offer such buyouts – A former co-worker at an old job recently got let go, and he got 10 weeks of severance. Nowhere near the amount, and he’d been with the company for quite some time. I think ‘industry standard’ of one week per year, plus maybe a couple of weeks, is fair.
  2. Now is not the time – The auto industry is already under enough scrutiny. I fear of an AIG type reaction if this became a major issue, and the American industry does not need any backlash or negative press.
  3. I feel it’s counterproductive – Quite honestly, the people most likely to take this type of offer, at least at first, are those who can more quickly find another job quickly. So, you lose the most talented people and you over-pay to do so.

I’m not heartless and I don’t ever want to see people lose their jobs, nor do I want to see people struggle. But, in the times of unprecedented struggles with the auto companies, I think that the strategy to reduce headcount has to be simple:

Find the people that are rated lowest, give them a decent severence, and move on. This keeps your better people who are more likely to lead a turnaround, as well as reducing the cost to downsize.