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July ’08 Net Worth Monthly Review

July was a month of peace and it was wonderful. No roof to replace, plants are flourishing, and life was nice and relaxing. Net worth increased 7.7% this month despite retirement accounts falling 1.93% this last month (yesterday’s nearly 3% increase in the DJIA will help correct that), mostly because we didn’t have any major expenses to record for the first time in what feels like a long time.

The only significant expense of the month was a wonderful wedding up by the Finger Lakes region of New York where we had a wonderful time. It was a Friday wedding so we drove up early to stay with a college friend. Her family has a cabin on Lake Canandaigua [3] and she graciously let us stay there the night before. We’ve been up there before for holidays and it’s absolutely beautiful. The weather was wonderful, the water looked refreshing, and we were so glad to be able to have a nights sleep after a six hour drive. The wedding the next day was on Lake Seneca [4] and the weather cooperated wonderfully. Afterwards, we stopped by Cornell [5] as one of our friends showed us around his old stomping ground.

All in all, it was a great little weekend mini-vacation.

Irregular Income

As a full time blogger, I pay taxes on a quarterly basis. This means that my income will seem abnormally large for a few months, then drop down significantly for a month, then seem abnormally large for a few months… you get the picture. This is the case for all independent contractors, which is technically my employment status, and I don’t see a need to adjust earnings to account for this. To smooth things out I could adjust my earnings by a suitable withholding amount, say 25%, to make the number seem smoother but that seems like a lot more work than its worth. At the end of the day, the actual number doesn’t matter as much as the meaning behind it and I’ll know the meaning.

If you have irregular income and track your net worth, how do you manage it for your planning purposes? At the moment my income, while irregular, is still pretty stable within reasonable single digit variances. I think of seasonal contractors or teachers as the ones who face this most often when there is a lull in work, how do you, or if you even do, factor this into your net worth tracking?

Laughable Rollover Story

I’ve rolled over my 401(k)s from my two previous employers into Vanguard Rollover IRAs. With the first employer, I wrote about how you should liquidate your funds and then rollover [6], because otherwise you might find yourself with some dividends left over. Well, I cashed out the dollar or two in the 401(k) and took the 10 cent hit. Three days ago I received another letter, notifying me that my account still had forty cents in it. Unbelievable.

That, and the 401(k) at my last employer had a dollar or two left in them. Argh.

Oh, and the taxes you pay on the withdrawal isn’t even recordable on your return because it’s less than a dollar (and gets truncated).

The Future

Last month we talked about some super-long-term items and then some not so long term, one of them being a pet. That’s still on hold (along with the tankless water heater!) as we’re going to try enjoying life with what we have now rather than adding to it, but they’re still ideas floating around in our mind. Our dishwasher stopped draining so that’s the current minor headache (don’t know if it’s the solenoid, though we don’t hear the thud, or the actual drain pump failing) on the brain right now.

Update: I ordered the pump assembly from AppliancePartPros.com (I chose economy delivery, 4-7 days but it arrived the next day because their distributor is located in Williamsport, PA) and discovered a piece of plastic stuck in the old pump assembly when I removed it. We are lucky the motor didn’t burn out. I put back the original, turned on the dishwasher, and it drains perfectly! I’m going to keep the part around for a few days (thirty day return policy) just in case but it sounds like this mini-disaster was averted.

Until next month!