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June ’08 Net Worth Monthly Review
Posted By Jim On 07/03/2008 @ 6:15 am In Monthly Review | 4 Comments
Wow, June was a little rough. Net worth fell approximately 5.0% on account of two major reasons: quarterly estimated tax payments and retirement accounts. Outside of those two, which really consists of not much else, everything is progressing as expected. Neither income nor expenses, outside of the roof, had drastically changed. We don’t track our expenses as closely as we probably should but we have, at least qualitatively, gone out to eat less.
We’ve gone out to eat at restaurants less frequently for numerous reasons. First, gas prices have increased the cost of my wife’s commute, which is mitigated by my commute. Second, it’s far healthier to eat home on all accounts. You eat less and what you eat is healthier for you. Third, we need to learn how to cook better which only comes with practice. Eventually, whenever we have kids, eating out will no longer be an option (again, from the health and cost perspective) so it’s better to learn how to cook now than learn under the gun.
Estimated taxes are paid quarterly, for the most part, and so the month in which those payments come due will be times when my net worth will see an “artificial” drop. Technically, that’s not accurate, it’s the other months that are artificially inflated, but you know what I mean. This is one of those cases where understanding the underlying cause explains away any concerns I might have, at least with this reason. Retirement is a totally different issue.
Everyone knows that retirement accounts are long term. I know that when I log into my IRA’s, I can’t touch that money, unless I wish to pay a penalty, for another 40 years. However, it’s really difficult to look at the Dow drop 300+ points and not think about how one of our largest account balances is in an account pegged to that metric.
Retirement accounts took a 4.41% cut across the board, the largest single month change in my short adult life. I will do exactly nothing in response, though Todd Harrison, founder and CEO of Minyanville.com, who was a former trader at Galleon Group, Cramer Berkowitz, and Morgan Stanley, is in all cash . (there’s more to it but that’s the headline idea) A lot has happened in the last 10 years, there’s a lot more that will happen in the next 40.
The one thing I won’t be doing is adding to positions outside of the regularly scheduled retirement contributions. I think we already have enough invested in the stock market for our comfort level and unless we settle on our other long term investment goals (kids, college, home), we won’t be adding to our taxable brokerage account.
In May I listed three “action items,” I merely said it was looking towards the future, and I think it’s important to revisit them to see where we’re at. Think of it like my own little checklist of important things to do and where we’re at with them. I want to thank everyone who leaves comments with advice, suggestions, etc. because it definitely helps me out in many of these areas. I don’t have experience in a lot of these things and your insight, even if it’s what you did or what you’ve, is a tremendous help.
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 all cash: http://finance.yahoo.com/tech-ticker/article/30795/Pro-Trader-Harrison-Why-My-Long-Term-Account-Is-100-Percent-Cash?tickers=AXP,WB,YHOO,MSFT,^GSPC,^BKX,^IXIC
 jewelry insurance for my wife’s engagement ring: http://www.bargaineering.com/articles/engagement-ring-appraised-insured-finally.html
 read the comment Tim left: http://www.bargaineering.com/articles/engagement-ring-appraised-insured-finally.html#comment-256047
 Dedicated said: http://www.bargaineering.com/articles/does-marriage-affect-car-insurance-premiums.html#comment-257534
 roof replacement is complete: http://www.bargaineering.com/articles/lessons-learned-replacing-our-roof.html
 Citi CashReturns card: http://www.bargaineering.com/articles/cards/citi-cashreturns.php?tag=june08
 high yield savings account: http://www.bargaineering.com/articles/top-5-online-banks-savings-or-checking-accounts.html
 we bought those Series I bonds: http://www.bargaineering.com/articles/buying-paper-savings-bonds.html
Thank you for reading!