Roughly Two-Thirds Of All Months Are Good (Financial) Months

I track my net worth via a spreadsheet.  The original purpose was to track investment gains and losses (I used to do some day trading back in the day) and quickly became a mechanism by which I track financial progress.  It’s grown and changed over time, but I’m now in my tenth year of having tracked some of the basic elements of my net worth.

One of the things I started tracking, that I thought was rather interesting, was number of months in which net worth goes up.

It’s a simple thing and just a running total, but what I’ve found is that roughly two-thirds of all months (since I started tracking this in the beginning of 2002) have seen positive net worth gains.  The other one-third are obviously months where net worth has gone down.

Here are some interesting year by year history which I found looking at net worth ups and downs:

  • 2002 – Only seven of the twelve months saw net worth gains, but some of the months were pretty strong as total net worth for the year ended up 25% (Positive gains to date: 58%)
  • 2003 – This is the first and only year where every single month saw positive net worth gains.  I don’t remember what was going on here, but I think the housing market was strong so I was adding value to my condo each month.  Net worth for that year ended up 27% (Positive gains to date: 79%)
  • 2004 – Another strong year as eleven months had positive gains, with net worth for the year ending up 17% (Positive gains to date: 83%)
  • 2005 – Total net worth for the year ended up 18%, though nine of twelve months saw gains.  Before the three month stretch of down months  in the middle, I had seen positive net worth in 86% of months.  That was the highest it’s ever been. (Positive gains to date: 81%)
  • 2006 – This also had nine months of positive net worth gains, but overall the year was down.  In reality, this was simply an accounting issue, as my then-fiance’s finances were merged in with mine, and since she was a college grad with student loans, the merger caused net worth to drop. (Positive gains to date: 80%)
  • 2007 – Seven months were positive here, which is the lowest total (since the first year) but net worth did go up 17% for the year (Positive gains to date: 76%)
  • 2008 – This was the year where home values and investments got slammed.  Only three months saw positive gains, and our net worth was wiped out by 35% this year.  Ouch. (Positive gains to date: 69%)
  • 2009 – The road to recovery began here with nine months in the positive and a 22% gain.  (Positive gains to date: 70%)
  • 2010 – Only seven months were positive for us, but the good definitely outweighed the bad as we saw another 18% net worth gain.(Positive gains to date: 69%)
  • 2011 – We’ve only recorded two months so far, but both have been positive, and we have a year to date increase of 3% overall.  Hopefully that trend continues for the year, and even gets more positive!  (Positive gains to date: 69%)

This is pretty interesting and telling.  It has shown that, over time, things have moved up for us, but when they go down, they seem to go down hard.

I’d like to see the number get at least back to 75%.  Hopefully we continue to move back up and not the other direction!

3 thoughts on “Roughly Two-Thirds Of All Months Are Good (Financial) Months”

  1. I think this goes to show quite well how the best way to invest is to continue adding money routinely, and how the long-term perspective always wins out.

    If you ran those number again ex-new investments who knows how many more years would be down years.

  2. Was there a trend at all showing which months gave you the best increases, and the worst increases?
    It would be interesting to see if Christmas has anything to do with it, or perhaps Summer where you're taking the most vacation and trips.

  3. @Dan – I've found that changes to real estate / investments drive a positive or negative change more often than spending, unless it's a really high expense type of situation.

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