FY 2016 Goal Update: July Progress

net worth update 8.1.15-01

Beginning in July, I committed to a goal of increasing my net worth by 46% this year. This goal is ambitious, but I think it should be achievable with some careful budgeting and a little bit of help from the markets. Today, I’ll share how I’ve done in month one.

The numbers

Between July 1, 2015 and August 1, 2015, my overall net worth dropped by 1%. My cash savings dropped by 6% (ouch), my non-retirement investments remained the same, and my retirement investments increased by 1%. As you can see from the chart below, this puts my cash position right in line with my goal, while leaving my non-retirement investments as the area needing the most growth.

net worth update 8.1.15

Why did my net worth go down?

It might seem like poor planning to announce an ambitious net worth goal and then apparently fail at it one month later. Despite appearances, this is actually exactly what I expected to have happen, and here’s why:

  • The markets have been crazy lately. They go up a little; they go down a little more. It’s been a roller coaster, but I’m not too worried about it. While these market fluctuations impact my investments in the short term, I’m in it for the long haul and over time these fluctuations should even out. Of course I would like to see the markets go up instead of down, but there isn’t anything I can do about this and in the long term it won’t impact my investments whatsoever.
  • I spent 8 weeks in France this summer, with no income. Remember that little trip to France? Yeah, a lot of the spending for it happened in July. I also had zero income in July. Zero. Oof. So, of course, this meant that my cash position decreased. But this was a one-time thing, and I had planned for it and had the money to take this time unpaid to travel.
  • My car needed pretty serious work done. I drive an older car and I’ve been pretty lucky in the 7 years I’ve owned it that it has needed relatively little money put into it. Well, this week is was time to pay the piper. After leaving my car unused for 8 weeks while away and being due for maintenance anyway, I ended up having to fork over about $2,400 for car repairs. Which was awful, but several people who know way more about cars than I do assured me that my car should go for many many more miles after this maintenance, so I’m hoping it was a good investment.

Now that I’m back in the states, I’m focusing my energy on August and working on making it a great month for my budget. Fingers crossed that I have better news to report next month!


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43 thoughts on “FY 2016 Goal Update: July Progress

  1. Hey Ali,

    It is unfortunate that you took a hit this month, but it is pleasing to see that you identified what went wrong. I would trade a 1% setback for a month long vacation every time! Plus, life happens with your car. That is the trade off of being frugal: driving an old car will breakdown more often than not!

    Hopefully you end up better in August. Have a good day.
    Erik

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  2. I really like the way you do your graph to illustrate your net worth! Btw I listened to the entire series of the Adnad case on the serial podcast. I was addicted and listened to all of it in 3 days! Thanks for the recommendation in one your previous posts!

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  3. Love a good bullet chart. We spent down a lot of our cash last month, but since its part of our plan, it doesn’t hurt to spend it. That said, I am looking forward to the time when the markets go up, and so does our net worth. This month, our investments were pretty hot, but our net worth barely ticked up due to the renovation spending.

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  4. The markets haven’t been great so far in 2015, that always has a big impact on net worth if you have your investments in stocks. A 1% increase in July is pretty good though, I think I was closer to a 1.5-2% decline in my portfolio…

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  5. Ali,

    Yikes! I’m sorry to hear about your car, but the expense now will definitely pay off for the years to come. That’s a great attitude to have about the market! The corrections are so minuscule now, that in the long term you will see a great return. I hope you had an excellent time in France! My dad was actually born in France (his whole side of the family is from there) and I am hoping to finally take a trip to there in 2017!

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  6. You raise a good point about the markets. While I think it can be beneficial to track your net worth, when you are checking it too often it can definitely be impacted by the market movements. For a while I was checking my individual investment account DAILY. Not a good idea!

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    • You’re completely right, checking every day is just going to be depressing and frustrating. Even checking monthly, it is important to keep in mind a long-term investment time horizon and not get discouraged by short-term dips.

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  7. Nice, Ali. It looks like you’re on the right track. And a month in France sounds totally worth it! The markets will always fluctuate and it’s easy to freak out about the drops. Like DC, I’ve also been guilty of checking my Vanguard account daily. But many of us a long way to go before retirement, so we’d better get comfortable with the peaks and valleys of the market. Sounds like you’re already there 🙂

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  8. ugh the stock market.

    Seriously it’s been so annoying. US stocks are fine but Canadian ones are flat (or down, goddamn oil). As a result, my RRSP (US holdings) is doing great but my TFSA (comprised of mostly Canadian holdings) is sucking. It makes me hate everything.

    I love your chart — I think you’ll 100% hit your goal at this rate!

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  9. I don’t think the goal is to lofty. We all have these periods where things go down a bit or where we simply tread water. I try not to check in on my total net worth very often, maybe 2-3 times per year. And in my mind I don’t count on the markets to increase my net worth because they are so unpredictable. The greatest source of net worth growth will come from increases in your income and from careful spending/saving.

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    • Checking your net worth only a few times a year is a good idea. I do think that I will see substantial growth thanks to the markets, I just need to look at a longer time horizon. And of course I hope to increase my net worth through increased income and careful saving too!

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  10. Car maintenance is the worst! I have an older car and recently had to do the first real repair and it was expensive! But, it’s a small amount to pay versus a car payment.

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  11. I invest 50/50 US and international for stocks, plus about 30% now in fixed income. US stocks have been doing just fine lately, but the international ones have been doing terribly! I don’t regret my decision and I stand by it, but it is a bit frustrating to watch. I’ve been frontloading my 401(k), which helps me not notice the market swings since my contributions have been so large.

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    • Wow – 50/50 US/International is kinda brave! I have a small international holding but am mostly invested in the US. Right now that is good, but at other times international stocks have done much better than US stocks.

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      • I didn’t even think of it as brave when I started with it! I want to hold all of the world’s stocks in market share and I don’t want to have a domestic bias like most people do. I’ve had this allocation for maybe 3-4 years now I think and I’ll let you know how it’s doing once I’ve had it for 10 years!

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      • My portfolio has returned (via Excel’s XIRR function) 8.80% from 2010-2014. I started investing in stocks in 2010. Here are the annual returns:
        12/31/2010 18.95%
        12/31/2011 -5.45%
        12/31/2012 13.74%
        12/31/2013 17.93%
        12/20/2014 3.42%

        In 2014, US stocks returned really well and international ones tanked. That’s okay though because I’m in this for the long haul!

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