Net Worth Review: November 2008

Well, as expected the month of October was brutal because of the stock market. Not that it’s a consolation, but I saw many other personal finance bloggers report similar results. At least I’m in good company!
Overall net worth was down 12.2% from October. After a 17.9% drop in September, that brings us down to a net worth level that I haven’t seen in six years. Wow!
Retirement assets have dropped about 1/3 during that these last two months. Luckily we aren’t retiring for a long time, so we have time for recovery. In fact, I increased my 401(k) contribution recently. I had been contributing 6% because that’s the company match, but I increased it because I still feel that this a buying opportunity.
Our property value stayed roughly the same, so not much changed in how property values affect our net worth. For some reason, both of our cars dropped in value a lot this month (I use Kelly Blue Book). It usually goes down a couple percent per month, but this was closer to 10%. Weird.
We continued to make excellent progress in our debt, which is what keeps me positive these days. Because of the extra $2,700 we were able to apply to debt, we paid off a full 1.56% of our debt, which I define as our auto loans (currently $0), student loans, and mortgage.
In fact, we hit a noteworthy milestone this month. In terms of non-mortgage debt, our peak amount of debt was in June of 2006, which is when my wife (we were engaged at the time) purchased her new car and had a brand new loan. Since then, we’ve paid off the auto loan and have made significant progress in the student loan debt. The milestone: we have paid off 50% of the non-mortgage debt from it’s peak amount. In 29 months, we’re halfway to having only a mortgage. Pretty cool stuff!
So, it was another down month if you look just at the totals, but I still feel confident in our financial progress!

Net Worth Review: October 2008

Well, it was a brutal month if you look at the bottom line for net worth. We witnessed the largest percentage drop since I’ve ever seen since I started tracking.
Let’s start off with the bad:

  • Where to I start? Well, anything with investments was brutalized. Our retirement funds went down in double digits, as did all of our other non-retirement investment holdings
  • Our bottom line net worth was reduced down to levels not seen since 2004. I guess that sort of goes in line with the stock market since I think we’re around lows not seen since around that same time.

The positives:

  • We continued to make good progress on our debt. We paid of 0.39% of our total debt, which is good. It wasn’t as good as last month (which was over half a percent) but it still beat what was normal for us in the first half the year, which was around 0.39% 0.25% (corrected). Our debt consists solely of our mortgage and my wife’s student loans.
  • We began the move of some of our cash savings from a non-FDIC insured account to an FDIC insured account. Even though the return is lower, I think the peace of mind we get makes it worth it. As I outlined in an earlier post, we will most likely create a CD ladder in our ING Direct account to improve our return.
  • Our home value decreased only slightly. Normally this would be a negative, but according to Zillow and CyberHomes, the value only decreased by a few hundred dollars. With the way the value has been shedding off lately, this is actually the ‘best’ month we’ve had in quite a while. I guess you have to look for the silver lining in all clouds.
  • We continue to have no credit card debt, as we pay everything off every month.
  • I have $187 to allocate after winning my Fantasy Baseball league this year. I unseated the previous champion who had won for five straight years, so that was an accomplishment. I will probably dedicate a future post to what I might do with this, but for now it’s sitting in the bank.

All in all, a bad month if you look at the bottom line. But, since I made a conscious decision a few months ago to gauge our progress more on how we pay off debt, I feel we did as good as we could.