HomePersonal SituationNet Worth Update February 2016

Net Worth Update February 2016

Ouch.  I knew even before calculating my net worth this month it was going to be particularly terrible.  To put it lightly the market took a complete shit, and in terms of my net worth I am almost completely correlated to the market.  When the broad market moves one way so does my net worth.  I am obviously  not 1 for 1 as my largest asset is my house, but all the same, I knew it was going to be painful writing this post.  My hunch was correct. The only thing that made me feel better this month was a post written by fellow blogger, Lazy Man and Money, titled “Investing Tip: Focus on Accumulating Shares”  in which he shared,

The stock market is down nearly 7% to start the year. For the first time since 2008 it looks like the bull market will give way to the bear market. I imagine a lot of investors are nervous. I get it. It’s scary to see a large loss of money in such a short time.

I try not to look at the money. That may sound silly considering that money is the whole point of investing.

Instead of looking at the money, I try to accumulate shares of index funds and, occasionally, individual good companies. This focus leads me to react differently to a market downturn.

He goes on to discuss about picking up stocks when they are on sale a topic I have discussed a few times.  The post gave me a quick kick in the butt to stop feeling sorry for myself.  Who gives a shit if the net worth number is an ugly abomination?  I didn’t stop investing in my 401(k), in fact and like LMM points out – I picked up more shares!  It was a quick gut check that made me feel a little bit better.

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.  This cash account is a bit under where The Wife and I would like, as such, we try to increase it a little every month.
  • My 401(k) – Just keep throwing part of my paycheck at my 401(k) even though I sort of hate my 401k.  I do not actively trade this account, but every time there is a sharp decline (like we had in January 2016) I will move whatever little cash that is in the account that has accumulated over to a fund.  This is different then the  pure market timing technique I took part in a little while ago.
  • Wife’s Non-Qualified Account – This is money that The Wife had way before we were married.  It was gifts from her parents and grandparents, and thus receives its own little partition.  I like to think about it as a super emergency fund.
  • The Wife’s Roth IRA –  The Wife has zero appetite for risk, so this account hold 3 broad market etfs (DGRO, IJH and IVV) as well as a small position that I will trade when the mood should strike (this position is currently in $GT).
  • My Dividend Investment Portfolio – Easily my favorite part of my financial empire hut.  This account is correlated to the broad market, so it took a real bad hurting this past month.
  • Home Value – A lot of bloggers seem to stress over home value.  In my old place I just rounded to a number that I thought I’d sell for (I was off by less than 1%).  I am just going to keep using my purchase price through 2016 (like I did for 2015, 2014 and most of 2013 when I bought the place).  No real reason to worry about it as I am not going anywhere any time soon.
  • My Traditional IRA – I was actively trading this account also, but I made the financial confession that I was speculating in some really shitty stocks.  For the past few months I have been transitioning the holds into long term holds that I felt were undervalued ($HOG, $GT, etc.)

My Liabilities

My Net Worth Growth

  • From January 2016 to February 2016 my net worth decreased a nauseating 4.22%

To put this in perspective this is the largest month over month drop that I have ever experienced.  I guess things can only go up from here, right?



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