Home Personal Situation My December 2013 Net Worth Update

My December 2013 Net Worth Update

by My Journey to Millions

On November’s Net Worth Update a commenter made note that my net worth has not increased nearly as much as the market.  My initial reaction was to think about all that was done financially this year (house purchase, house repairs, etc.), but upon further thought it leads me to the question of whether correlation is such a great thing?

If I was directly correlated to the market there could be short term drops of 10%+ (or in the case of 2008 a 30% drop) – or 30%+ positive movement as is the case this year with the market.  Not sure I could stomach my entire net worth raising and dropping with the market. Notwithstanding, I have noticed over the past few years it seems like that is an inevitability.

Alright end of this random thought lol

My Short Term Financial Goals

I finished the last of my $5,000 goals in June and gave myself some new ones:

  1. Contribute $500 to my Traditional IRA – Finished this up two months ago.
  2. Save $500 into my Son’s 529 – Went from 65% to 80%
  3. Save $1,000 in cash towards a future investment property purchase – Went from 22.5% to 45%
  4. Invest $1,500 into my Dividend Portfolio –  Finished two months ago!
  5. Save up $750 to allocate to my whole life insurance policies – Went from 23.2% to 24.93%
  6. Save $750 in the house repair fund – Went from 73.3% to 89.3%

I am very disappointed in myself on how long this set of goals is taking!  When my bonus clears (hopefully before 12/31) they will all be set and done.  I think next year I need to cut back on spending as I can control that a lot easier than my income.

I don’t really have debt that can be killed off quickly (law school loan and mortgage).  Both have significant balances and are both fixed under 4%.  Seems counterproductive to try and eliminate them quickly since they won’t affect my cash flow for a long long time.

Calculating my Net Worth

My Assets

  • My Cash Savings Accounts – I only really count my emergency savings since everything else is ear marked to be spent elsewhere.  For example, the above house improvement fund isn’t included. I had to invade the emergency fund for the chimney but as soon as I am done with my short term goals outlined above I will get going on replenishing this account asap.
  • My 401(k) – Just keep throwing part of my paycheck at my 401(k) even though I sort of hate my 401k.  This past month I made the decision to put my 401(k) contributions in cash until the markets cool down.
  • Random Non-Qualified Investment Accounts
  • The Wife’s Roth IRA – This account only holds to 2 funds. An index fund of the market and a dividend paying fund.
  • My Dividend Investment Portfolio – Easily my favorite part of my financial empirehut.  I recently undated my dividend champion watchlist and for the first time ever made a proactive move of selling a dividend champion that is overvalued.
  • Home Value – A lot of bloggers seem to stress over home value.  In my old place I just rounded to a number that I thought I’d sell for (I was off by less than 1%), I think I am just going to use my purchase price for the year and look at comparable home sales next year.
  • My Traditional IRA – Have been trading using my covered call strategy, but I have waived the white flag on the strategy and just finished up betting against my first stock.  This account is going to be pure passive by the end of the year hopefully.  I started to actively trade this account lol.

My Liabilities

  • My Mortgage – Every so often I think about putting money towards the mortgage but I always back off.
  • Law School debt – While I recently paid off the much smaller of the loans I have a while before this category makes any significant moves.
  • Credit Card debt!

While I respect liquidity way too much The Wife had different feelings.  Despite all the debt being at 0% she wanted it gone.  It gave her a sense of security and let her better focus on what was actually being spent each month since there was no balance to worry about. Since it wasn’t like I was making a bad financial move we paid off the card 3 months ago.

My Net Worth Growth

  • From November 2013 to December 2013 my net worth increased 2.14%  
  • Year to Date my net worth is up 4.22%

How did you do this month? Share your links below

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Joe 12/02/2013 - 12:05 pm

Our net worth lags the market too, but that’s only natural. We have properties, bonds, cash, and other assets. I guess if I get a margin account, I’d be able to keep up with the market, but that too risky for me.

writing2reality 12/02/2013 - 4:11 pm

Guilty as charged as the commenter causing you to think random thoughts.

Naturally, you will have ups and downs, but for someone young, the thought was that you would have seen a higher correlation with the rising markets than you did. Of course the extraneous parts of the picture such as the house down payment, repairs, and other expenses were not factored into my comment. Nor was the fact that a good portion of your assets are potentially tied up in things not touched by the equity markets, like your home.

Either way, nice job in November. I think anyone would happily take a +2% month over month increase.

Lazy Man and Money 12/03/2013 - 10:05 am

What is the market? Stock Market? Bond Market? Real Estate Market? BitCoin Market?

I’m going to assume you mean the stock market, but even then, it’s difficult to pin it down. Is it the S&P 500 or Wilshire 5000, what about foreign stocks and emerging markets.

My point here is that I don’t know what the market it is anymore. I don’t see any point in comparing my portfolio with any market index because I’m more diversified than any I can think of. When a particular index does well like the S&P 500, my portfolio will almost certainly lag behind it since the other investments I have are likely to not be doing as well.

I would suggest that if your net worth tracks a particular market index, you are doing something wrong… like not being diversified enough.

CI 12/07/2013 - 4:03 pm

If one was to follow the standard investment model, he/she would not be 100% in stocks. Bonds have been terrible this year, gold lousy too (and with no yield to make matters far worse). Therefore almost everyone would have under performed the stock market in 2013 since asset allocation is pretty standard.

With all the $$ you plopped down on your house I would say 2013 was a success.

Take care!

JC 12/13/2013 - 1:43 pm

Even if it’s smaller than you wanted or expected, it’s still an increase so you’re moving in the right direction. Given the extra expenses with house repairs and that you’re not 100% stocks, I’d expect you to lag the markets a bit. My wife and I got to experience the joys of home ownership with a water main break not long after we closed on the house. That was a $3k unexpected expense right there.

I’m nearing in on $500k in assets which is crazy. I didn’t expect to see anything close to that when I started off 2013.



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