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

This article was written by in Monthly Update. 18 comments.


If I were to describe my finances in three words, those words would be “slow, steady progress.” I’m not getting rich by any stretch of the imagination, but if I am able to manage consistent growth at the same rate while making sound financial decisions, I should be able to live without worries. However, anything can happen, and good luck can always turn sour. I’m doing what I can now to ensure I’ll have a comfortable future while enjoying my life now.

Every month I review my personal finances by publishing my balance sheet and income report online. The balance sheet is included in this post. It shows a 5.3% increase in “modified net worth” since last month. That increase consists of a 13.7% decrease in cash equivalents and a 24.2% increase in investments. I’ll explain that after the report. Click on the thumbnail to zoom in.

Net Worth Balance Sheet, April 2008

Answers to Frequently Asked Questions

  • The 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 credit card balance is paid off every month and earns cash back.
  • My student loan interest rate is 4.25% and my savings account interest rates are mostly above 3.0%.
  • I determine the value of my car using the private party value from edmunds.com, but only several times a year.

Explanations and Details

Considering the large tax payments I made in April, I’m happy to come out ahead. While filing my taxes, I was able to determine the maximum amount I could invest in my 2007 SEP IRA. This month, I transfered about $13,000 from savings into two funds at Vanguard. I purchased $4,350 in the Total Stock Market Index (VTSMX) and $8,480 in the Prime Money Market Fund (VMMXX). I plan on using the money market fund to invest periodically in VTSMX, but I have not set up the automatic transfer yet. This should give the the best of both worlds — lump sum investing and dollar-cost averaging. I have to admit, though, that $4,350 is not much of a lump sum, and a lump sum once a year is basically the same as dollar-cost averaging over a longer time frame.

I invested $1,115 in my 401(k) in April, including contributions for my employer. The remaining $1,975 increase in that account was due to investment returns. My Roth IRA’s increase was due to performance only. This is the first year I won’t be investing in a Roth IRA throughout the year. There’s a possibility I may not qualify due to a higher income. If I determine that I won’t reach that income level, I’ll invest in one lump sum when I file my taxes next April.

As a result of the higher investment into retirement accounts this month, my retirement accounts now represent 50% of my total assets.

My student loan debt is still hanging around. I’ve been paying the loan off slowly because the interest rate is not bad for a loan and for a while my savings accounts were earning more interest than I was paying. I’ve mentioned before that I intend to increase my payments towards this debt as savings interest rates are decreasing and there’s little advantage to keeping the debt around. I was nervous this month and didn’t want to jeopardize my cash position considering my tax bill, so I increased my payment to only $500 from $125. If May shapes up to be a good month, I’ll look to double my payment towards debt to $1,000.

Look for my April income and expense report shortly.

Updated February 6, 2012 and originally published May 2, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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Points: ♦127,485
Rank: Platinum
About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 9 comments… read them below or add one }

avatar Curt at PennyJobs.com

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

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avatar Chris

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

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avatar Luke Landes ♦127,485 (Platinum)

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.

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avatar Customers' Revenge

#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.

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avatar Luke Landes ♦127,485 (Platinum)

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.

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avatar CommRE

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.

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avatar Tiffany

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.

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avatar Luke Landes ♦127,485 (Platinum)

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.

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avatar CPA1298

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?

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