Tuesday, August 02, 2005

Monthly Review & Net Worth Report - July 2005

Net Worth as of 8/1/2005

My net worth baseline is from 7/18/2005 so the change is for the last 13 days of the month. However, that doesn't mean I saved almost $5820 this month although that would have been nice. It just means that I pay all my bills at the beginning of each month so typically my net worth sees a sharp decline around the 6th or 7th and then climbs upwards after that.

The biggest movement this month was between my savings and investment accounts as I decided to invest some of the cash that was sitting around in savings. At the beginning of the month my brokerage and Roth IRA balances were at $0. Over the last 4 weeks I transferred $77k in from my savings and slowly set up a globally diversified portfolio. I am really glad I did this because even after three $75 transaction fees and two $8 trade fees I am up $364.11 on my brokerage & IRA accounts for a total gain of $605.11 (364.11+3x75+2x8). I am not sure what rate of return that is since I invested $5-6k at a time throughout the month but it's definitely better than the $3.08 interest I earned on my savings account this month!

My 401k also appreciated $267.60 in the last couple of weeks in a surprising show of solidarity (I am being rewarded for my newly found sense of money maturity!) helping my net worth out a little more.

Unfortunately, I didn't start tracking my spending until a couple of weeks ago so I don't know how much I spent overall but I can do the math.

A) Total Income = salary + credits + 401k employer match = 7541.66 + 52.20 + 226.25 = 7820.11

B) Savings from Income = net worth gain - (capital appreciation + interest income) = 2910.42 - (605.11 + 267.60 + 3.08 + 6.33 + 46.05) = 1982.25

C) Taxes paid/withheld = 1750.75

Total expense for the month of July = A - B - C = $4087.11

The good - I saved about 25.3% of my total income. The bad - I went over on expenses. After deductions and tax withholdings my net take home pay as of July is $3580 and I spent $507.11 more than that. However, I also had a couple of big expenses this month. I was in a car accident at the beginning of June. I was in the hospital for a few days and my car was in the shop for what seemed like weeks and weeks. Last week I had to pay the extra days on the rental car, the deductible on the hospital bill and tests etc so that pushed me over by a few hundred. Fidelity brokerage and transaction fees also added up to an extra $241 in expenses this month. The 3 $75 funds I picked though had a much lower expense ratio compared to the NTF funds in the same category. If I had picked the NTF funds I would have paid $225 less upfront but would have ended up paying that much in operating expenses. In fact, over 40 years compounded 8% annually the NTF funds would have actually cost me an extra $26,308.81 in lost earnings so I am happy with my decision to pay the fees although I'd much rather have not paid any fees at all.

July score: B (behind saving goal mitigated by manic Seattle bus driver)

To do for August: Start tracking expenses (incidentally I am still soul searching over Quicken vs Money so if anyone else wants to share their thoughts and help me out I will appreciate it)


At 8/03/2005 11:27 AM, Anonymous Anonymous said...

Good Job!
Why don't U have a 3.30% emigrant-direct savings account.

At 8/03/2005 11:45 AM, Blogger mmb said...

Up until a few weeks ago I didn't even know that 3.3% savings accounts existed. :( I transferred most of my liquid savings to investments though. The rest is in 2 1 yr CDs.

At 8/03/2005 12:05 PM, Anonymous Anonymous said...

How does one save up all that cash?

At 8/03/2005 12:52 PM, Blogger mmb said...

By not eating. Ha! Just kidding. I graduated without any student loans, thanks to scholarships and several part time jobs. Plus I have been working for 8 years so that's a lifetime of savings.


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