Comments on: Personal Balance Sheet, April 2008 ($151,079, +5.3%)

By: CPA1298

CPA1298 — Sat, 31 May 2008 15:06:07 +0000

Noticed that your increase in net worth was several thousand dollars, but you net income was only several hundred. Shouldn’t net income = change in net worth? Or am I being too much of an accountant?

By: Flexo

Flexo — Fri, 02 May 2008 16:05:54 +0000

I have an asset account in Quicken called “2004 Honda Civic.” Every so often I check its value on edmunds.com and enter a balance adjustment to the category Auto:Depreciation. I don’t include that on my expense reports (which are more like cash flow reports).

If this were a car I use for business purposes, then I’d be handling the depreciation differently… in line with IRS recommendations. But I’m not, so I don’t really care. I’m just looking for an estimation of how much I might receive if I needed to turn the car into cash.

By: Tiffany

Tiffany — Fri, 02 May 2008 16:02:03 +0000

What are you doing to write off the decreasing value of the car? Basically, where is it going? I haven’t put my car into Quicken because I’m not sure how to go about doing that.

By: CommRE

CommRE — Fri, 02 May 2008 14:11:08 +0000

I think what CR was saying was that you should put the whole $13,000 in VTSMX now – not DCA it in from a money market fund. I agree. If you were talking about investing in individual stocks or a more focused mutual fund, I think your strategy would have some merit. But for an index fund – if you have the cash, get it in the market. Then continue to add to it regularly.

By: Flexo

Flexo — Fri, 02 May 2008 14:04:49 +0000

CR: Thanks for stopping by. Year over year appreciation is due mainly to accumulation, not appreciation. Cash is about 33% of my assets right now because if I decide to buy a house in the next few years, I don’t want to have to sell any stock.

I’m not using DCA in a money market fund… sorry if that wasn’t clear. I plan on using DCA to invest in VTSMX.

By: Customers' Revenge

Customers' Revenge — Fri, 02 May 2008 13:57:53 +0000

#1 Awesome Y over Y gain. Where does it come from? Contributions or appreciation? If appreciation then you rock!!

#2 Why so much cash? Is it an emergency fund? Concsious asset allocation. It’s too much IMO and you’re loosing income. You can always sell stock to cover an emergency or borrow.

#3 Putting a lump sum into a money market to dollar cost average over a long period is not a winning strategy. Dollar cost averaging is what you do when you invest your paycheck each month forever. You loose out on compounding time if you spread the lump sum out too much, even if you buy at a bit of a high. Obviously though, don’t buy something that has hit the stratosphere, but you can lump sum an index no problem.

By: Flexo

Flexo — Fri, 02 May 2008 13:32:59 +0000

Curt: I think it might be longer than that. I don’t think the yearly doubling of net worth from the past few years has the potential to continue.

Chris: I have no house and no mortgage. I’m a proud renter for the time being for a variety of reasons.

By: Chris

Chris — Fri, 02 May 2008 13:20:00 +0000

Do you not own a house, or do you just not include it in your net worth calculations?

By: Curt at PennyJobs.com

Curt at PennyJobs.com — Fri, 02 May 2008 13:02:16 +0000

An impressive gain. Nice job. So, when will you hit one million? 3-4 years?