Over the course of February, my “modified net worth” grew 7.5% despite yet another unremarkable month for the stock market. As of the end of the month, my bottom line — a variation of net worth — surpassed $200,000, but was still below my original goal for December 31, 2008.
Every month, I post several personal finance reports on Consumerism Commentary to help keep myself accountable for my financial decisions. It’s a tradition that dates back to July 2003, when my net worth was about $13,000. This was just a few months after my net worth surpassed $0 for the first time.
Take a look at the numbers first, then read some of the following explanatory remarks. You can click on the graphic to view a larger version of the report.
The above report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template. If you don’t want to go through all the trouble I do every month, but you still want to post your financial reports online, I suggest checking out NetworthIQ.
The first line, “Cash in Banks,” includes savings and checking accounts, as well as cash held in brokerage accounts. This is a lot of money to have uninvested, but I do have a reason. I expect to have large bills from the IRS and the State of New Jersey when I file my taxes. The cash will also help when I place a down payment on a house, and that is something I have been saying for a few years. I am not excited about “settling down;” I have not yet decided where I’d like to live on a more permanent basis.
“Accounts Receivable” includes money due to me by clients. I still have a significant bill outstanding from a major advertiser, which I hope to resolve this month. I’d prefer to keep Accounts Receivable low while keeping income high; this would mean that clients are paying quickly.
My investments look depressing. When I view these numbers each month, I struggle to keep in mind that I am investing for the long term. While experts say that equities will significantly beat inflation over the long term, I wonder if that is still true. There have been several period in history in which investing in companies wouldn’t have paid off, like the period of time we call the Middle Ages. Are we in store for a prolonged global economic crisis? When I ever make back the money I “lost” in my lifetime? We may never see the incredible growth of most of the twentieth century United States again.
We talk about the tech stock bubble of the 1990s and the real estate bubble of the 2000s, but perhaps we should be looking at the global economic bubble of the eighteenth through twenty-first centuries.
I also include the value of my car, a 2004 Honda Civic, as a long-term asset. In February, I adjusted the value of my car over the prior year using the value listed on edmunds.com. After over a year of no change in value, the price dropped about $1,000. I went back and split this decrease roughly evenly. So past dates in this report will conflict more with prior net worth reports posted here.
“Accounts Payable” mostly consists of outstanding credit card balances. I use one credit card for personal expenses — as many regular expenses I can charge to the card — and one for business expenses. Both cards earn cash back rewards. I find that I don’t spend significantly more using a credit card than I do with cash, so the method of payment doesn’t matter to me. I’d prefer to earn a few hundred dollars in cash back each year, particularly if my spending level would be roughly the same otherwise.
I no longer have any long-term liabilities, but that will change at the point in the future at which I decide to purchase a house.
Thanks for reading through this entire article. Please feel free to ask any questions. I’m completely open about my finances while I remain quiet about my identity. These reports are the primary reasons I do not divulge my name. I’d prefer to avoid a co-worker or future employer discovering more than they need to know.
I plan to post my income and expense report for February tomorrow morning. That report is generally more exciting than this balance sheet; well, it is as exciting as a financial report can be.