Monthly Review 
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May ’08 Net Worth Monthly Review

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Last month was the return of these monthly net worth reviews and the first time, probably since when we bought our house (closing costs are brutal), that our net worth decreased across the month (taxes are brutal too). This month, we saw our net worth increase by a healthy 8.6% helped along by a mild recovery in the stock market (1.39% increase in retirement assets).

Last month I talked about three things in the future – roof replacement, water heater, and diversification of our investments. The roof is set to be replaced on June 16th, contingent on good weather, at a cost of $4,450. The roofing company offers a six month same as cash option but I think we’re going to put it on the Citi CashReturns card for the 1.2% cashback since interest rates are so low (it’s nearly a wash after taxes, so we figured for simplicity the credit card option was better). We knew the roof needed to be replaced so we were prepared, there won’t be any other financial impact (other than the -$4,450 to the bank account).

As for diversification, my lovely wife and I had a chat about the future on a recent walk around the lake. We plan on outlining major milestones over the next thirty years, as best as we can guesstimate, and then adjust our financial plan to meet those milestones. I’ve come to the realization that after you’ve maximized your 401(k) and Roth IRAs, you have to begin saving for specific goals. We already have a house so that’s one significant goal achieved, so we have to determine the other milestones on the list (such as education) so we can chart a path forward. One idea I had was to use target retirement funds to simplify saving for specific goals.

Looking to the future:

  • Jewelry riders and homeowners insurance. We got an appraisal for my wife’s engagement ring and need to add a jewelry rider to our homeowners. I called them up and got a quote for $100 a year for total coverage from our current insurance provider, Travelers, and a quote of $105 from an independent jewelry insurer, Jewelers Mutual Insurance Company. Why haven’t I pulled the trigger? I actually wanted to contact Erie Insurance and figure out whether it’s worth it for us to go with them for homeowners. In thinking about it, I should probably mail off the independent jewelry insurance form and then talk to Erie.
  • Auto insurance for my wife may be a little tricky. The title for her car lists her and her father as co-owners, which allows her to be on her parent’s auto insurance. The auto insurance now has four vehicles listed, which probably isn’t good. We should be on the same policy, now that we’re grown ups :) , but the sticking point is that putting the insurance in Maryland may force her to register the vehicle in Maryland – that’s a 5% tax on the blue book value of the car ($500). We will have to investigate further.
  • Water heater is still on the radar but now on the back burner with the roof. We actually just bought a really nice Fridigaire dishwasher (to replace this old Whirlpool dishwasher) for $150 thanks to a find by Fred at One Project Closer. It was a rush sale by a guy who was being foreclosed on and moving out of state in two weeks (yikes), but a great deal. Getting a new dishwasher wasn’t a priority, I had been looking around, but $150 for something worth around $500 was too good to pass up. Quite fortuitous!

One nice benefit of these net worth monthly reviews is that it forces me to think about what we’ve done this past month and what we need to accomplish in the next month. As I was writing, I was forced to think about things I had set off to the side. In looking back, the net worth portion is really a minor part (I mentioned the increase, what was a main contributing factor, and then moved on to more “strategic” level ideas) but I think that’s a good way to approach it. Please let me know what you think!

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7 Responses to “May ’08 Net Worth Monthly Review”

  1. Catherine says:

    Just a heads up on the Jewelry policy: we went with Jeweler’s Mutual because they give you cash. Our homeowner’s policy would have replaced my ring with a diamond that they determine is comparable. I didn’t want that hassle.

  2. CK says:

    Jimbo-

    So you don’t have vehicle collision insurance but you’re buying jewelry insurance?

  3. jim says:

    CK: Correct, but I’m not wearing the ring. :)

  4. DJ says:

    Auto insurance needs to be in the state where you house the car (your home). Likewise, the registration and driver’s license too. The insurer would be able to refuse any claims.

  5. CK says:

    I understand completely.

  6. Bad_Brad says:

    I agree with the practice of tracking your net worth in some fashion, but I think doing it on a monthly basis is too frequent. I have a monthly budget spreadsheet that I use, tracking every receipt to the last penny. I use that to manage my cash flow, i.e. can I afford to make an extra principal payment on the mortgage this month, how much can I move into my high-interest savings account, etc. I update my net worth spreadsheet once per quarter. This gives me a good high-level picture at my long-term outlook, i.e. are my retirement investments (401k, Roth IRA) balanced properly? Is my money working for me the way it should? For me, it’s the budget that really forces me to think through expenses before I incur them. I also map out a plan of the next six months of spending. That forces me to think about any major expenses I have coming.

  7. fred@opc says:

    That dishwasher was a great find. (He was also selling a 9 mo. old refrigerator for 45% off retail that we bought, an $1100 audio system that was 1.5 years old for 65% off, and a plasma tv stand that was 1 year old, mint condition, for 87.5% off).


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