The stock market found a way to trash my net worth goal last year. Had the S&P index and my company stock increased in 2008 like they did in 2007, I would have surpassed my net worth goal for the year. Investments have a way of being volatile over short periods of time, and that was the case in 2008. Rather than finishing the year with a “modified net worth” of $220,000 or so, I ended with $186,237.
For more than five years, I’ve been tracking my financial progress live on Consumerism Commentary. I don’t do this to brag; when I started this website, my situation was not as good as it was now. I track my finances publicly to keep myself accountable and to learn from others. You may notice I didn’t put my numbers in the title of this article. This will allow readers to skip articles about my financial success and failure if they desire.
Despite the stock market’s performance, and despite not achieving some of my goals, I’m happy with my progress this year. The year-end balance sheet includes the closing balances going back seven years. At that time, I had just left my job at the non-profit arts organization and trying to put my life in a new direction.
This graphic is wide, so in order to zoom in and read the numbers, click on the thumbnail.
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.
Current Assets includes cash in bank and investment accounts, like savings, checking, and money market funds. It also includes “Accounts Receivable,” invoices I send to clients and advertisers. Accounts Receivable is a mixed blessing. It’s good when it’s high because it means my business is doing well, but it also means that I have invoices out to customers or clients, and I’m waiting for payment. I’d rather have the funds in my account quickly. I’ve never had an invoice not be paid, but I’m now looking at a few that are overdue.
Any assets other than cash are included in Long-Term Assets, even if I plan to use the money in a few years. This is primarily my retirement funds, but I also include the value of my car and my other investments. My car has surprisingly been the best long-term asset in terms of holding value this year. According to edmunds.com, the value of my car has increased this year. I chose not take a conservative approach and not to reflect an increase in its value.
I’ve mentioned that at the end of last year, I’ve been using a strategy of buying the Vanguard Total Stock Market Index (VTSMX) on dips. There haven’t been any attractive dips lately, however, at least not when I was paying attention. I’m waiting for VTSMX to go below $18 before dollar-cost averaging down again. So far, the strategy has been a losing one, but the story isn’t over yet.
“Accounts Payable” includes unpaid business bills and credit card balances. While I’m not as diligently staying away from my credit card as I was during the November cash experiment, I’m still hardly using my credit card. I’m finding that I’m having a hard time tracking cash expenses as well as I track credit card expenses, while I’m not using my credit card to spend on anything I wouldn’t purchase anyway. I think it’s time for the cash experiment to come to an end.
December 2008 was the month I became debt-free. That is, I eliminated all my long-term liabilities. The last of these was my student loan, which I paid off in full this past month.
If you look at the bottom line, you might notice that the numbers on the report above don’t match what I’ve reported previously. This month, I changed the way I report some numbers. I’ve taken my “cash” line out. This is supposed to reflect the cash I have in my wallet, but as I haven’t done a good job of tracking my cash spending for the last four years or so, this number has grown so high that it is too inaccurate. My reports now do not include my “cash” line.
All in all, my net worth increased 50% in 2008. This coming year will be a test of whether running Consumerism Commentary and the few other web projects in my portfolio is a sustainable endeavor. I have some big plans for behind the scenes here, and much of it can only be accomplished by dedicated myself full-time. On the other hand, I seem to be poised for some growth at my day job as well. With a turbulent economy predicted for this year, it’s going to be difficult for me to predict the best course of action, so I’ll see how things go — and how long I can hold onto my sanity working almost constantly.
Later this weekend I will post my income and expense report, which will provide more insight an analysis to my monthly and yearly progress.