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A Brief Net Worth Update

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For the past couple of years, I've been keeping track of my net worth and posting about gains and losses. I've started to realize that it's typically a very boring post. I don't know if readers really get too much value in reading that I've lost $800 due to stock market fluctuations. As such, I think I'll just continue to weigh in with a brief post like this and give a couple of interesting details... if there are interesting details to give.

This month was a tough month. The stock market hasn't been doing well and my retirement plans are taking it on the chin losing $8,000 in value. The other interesting piece of note is that I had more cash this month than last month. This is notable because I'm not making what many would consider a good income while I focus on building a few businesses.

Posted on July 21, 2008.

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9 Responses to “A Brief Net Worth Update”

  1. Maybe it’s just coincidence, but it seems like bloggers are suddenly less motivated to share their net worth now that the stock market is struggling and their net worth is shrinking instead of increasing.

  2. Lazy Man says:

    There have been some tough markets in the past two years, so I’m not sure that it’s just that. Personally, I knew that my net worth wouldn’t be growing much when I focused on building lasting businesses full time last year rather than getting another 6-figure salary.

  3. jim says:

    Accumulating Money – I think that’s true, I stopped only because I concluded as Lazy just did… people aren’t really that interested in the number as much as they are interested in the ideas and plans you have.

    Lazy – I agree with you, focus on what your plans on, what you’ve done, etc. Percentages are just as informative as hard numbers but without the nakedness. :)

  4. 2million says:

    I personally like the nakedness — as a blogger its a tough pill to swallow sometimes when you have a lot of people telling you your an idiot for doing this, that, or another. However it helps toughen my resolve and have more confidence in what I am doing each month.

  5. Lazy Man says:

    I think people will still have plenty opportunity to call me an idiot ;-).

    On a more serious note, if anything is a gray area, I usually ask the readers and they set me straight.

  6. KingTut57 says:

    Lazy Man,
    As you know I am somewhat new to your site so I don’t know what you have your money wrapped up in. I had an excellent investments teacher in college and he tought us things different from the run of the mill investments.

    Number one, he taught us that a mutual fund is the most over-rated investment out there. It’s one of the few investments you can own but not insure. There is a reason for this. Insurance companies know better is the reason.

    Consider this. Mutual funds are constantly posting average yearly rates of return. Let’s overexaggerate here to make the math easy and the point obvious. Lets say you invest $100,000 in a mutual fund an 1/1/07. By 1/1/08 it has increased to $200,000 in an excellent year of course. Yearly rate of return after year one is 100%.

    You leave that money in the fund. Now, on 1/1/09 it has fallen back to being worth $100,000 in a terrible year (which some people have had recently). This would equal a 50% loss in year number two.

    So year number one showed 100% gain while year number two showed 50% loss. Average the two figures. 100%-50%=50%. 50%/2 years equals 25% average annual rate of return.

    Many funds play this game especially newer ones. It is something I learned from some very seasoned investment gurus.

    I’m sure you have had posts about it before, but some of the wealthiest people I know swear by whole life policies as the most best investment as far as risk vs. reward are concerned. Up front costs, yes. But guaranteed returns and strong running averages (close to 8% tax free which is close to 11 or 12% gross). I’m not getting off topic here, but if your money properly placed in such a policy you would avoid the rough times the market naturally goes through. I don’t have that much in it yet, but it’s actually gaining stronger than average right now as I’m being paid good dividends.

    ******I’m not starting a new discussion, just making a quick point.*********

  7. KingTut57 says:

    Oh, I forgot to say that in my example the money averaged 25% annual yield for the previous 2 fiscal years, yet the amount in the fund is still the original $100,000 which is 0% return which is obviously negative when inflation is accounted for.

  8. Lazy Man says:

    I recently read a book, Millionaire by Thirty that talks about the life insurance investment as says much of the same things that you did KingTut. Unfortunately, I have looked into these policies and they are fairly confusing.

    The book soured me on the idea as it started off with 50 pages or so about investing in real estate. In the book it seems, that real estate always appreciates and is great leverage. Unfortunately, someone trying the plan over the last 5 years would have lost money in many parts of the country (with no sign of making it back any time soon).

  9. KingTut57 says:

    You are right. The insurance policies are very confusing but if they are handled by someone that knows what they are doing, it is quite easy on us investors.

    Whoever wrote that book must have had good timing in all the real estate he had been in. It can happen. Just tough right now. Like I have said on other boards, I think that real estate will struggle for 5-10 years.

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