Quarter-End Financial Update
I just finished calculating my second quarter net worth, and I’m less than pleased with the numbers. As you can see, my net worth has actually decreased since first quarter end.
Here’s how my mid-year financials have shaped up:
| Q1 & Q2 2008 |
12.30.07 |
3.31.08 |
6.31.08 |
$ ∆ QE |
$ ∆ YE |
| Total Debt |
268,162.17 |
265,553.60 |
263,747.75 |
-1,805.85 |
-4,414.42 |
| Credit Card Debt |
17,050.40 |
15,669.88 |
14,298.95 |
-1,370.93 |
-2,751.45 |
| Savings |
1,709.07 |
7,330.96 |
9,393.00 |
+2,062.04 |
+7,683.93 |
| Net Worth |
-40,517.00 |
-26,860.00 |
-31,928.00 |
-5,068.00 |
+8,589.00 |
There are a few of things going on here. First of all, my retirement savings took a substantial hit due to the fun stuff that’s been going on with the market. Second, I wasn’t able to save quite as aggressively this quarter - my tax return and my work bonus were both paid out in Q1, which helped boost my savings and pay down debt.
It’s disheartening to see the market erode the value of my 401(k) so significantly, but as I have mentioned before - I’m in this for the long haul and taking advantage of dollar cost averaging. The silver lining is gthat my net worth is still trending upward for the year, and there is an outside chance (if the market would cooperate) that I could end up even for the year.
Stumble it!
July 6th, 2008 at 5:38 pm
I see positives in your report. Thanks for the update.
I think that you have the right attitude about your 401k’s. Sure, it makes you sad to see their values drop. However, if you are well diversified for your age and retirement horizon, and if you keep adding dollars to your plan as you are doing, time will work its magic.
I am into retirement, so it is much more difficult to make up those market dips - except by having cash at the ready and to believe that the market will come back before my 5 years’ cash reserve for living expenses runs out.
Finally, your wages will probably keep up with inflation whereas I can only rely on my portfolio earnings to help keep my head above inflation level. Let’s hope the Fed will do its part to keep us near full employment and keep the inflation expectations low.
Is the first column supposed to be labeled 12.30.07 rather than 12.30.08?
July 6th, 2008 at 7:06 pm
@Joe - thanks for the supportive words - and for pointing out my typo. I made the change to the date in the chart.
One of the greatest risks retirees face is unfavorable market conditions in the first three to five years of retirement. As you point out, it’s very difficut to make up market dips once you are taking regular distributions from your retirement savings. And it’s a catch 22 because you need market exposure to keep up with inflation.
Thanks for the comment!
July 7th, 2008 at 3:04 pm
Great Job!
Don’t beat yourself up that you could have taken 10 positive steps when you only took 7. 7 is better than 0..or -10!
Keep at it! Real progree, and the bike ride as well!
You get an official “Awesome Possum” as my daughter says