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Personal Balance Sheet, July 2007 ($102,011, +2.4%)

This article was written by in Monthly Update. 10 comments.


If you’re new to Consumerism Commentary, this may seem like a strange concept. Every month I share my financial reports down to the dollar. It is a summary of all of my account balances as well as a rough estimate of the value of my larger assets. It is not a complete net worth report because it does not include tax liability or fees for liquidation of investments, so I have been calling the bottom line my “modified net worth.”

Earlier this month, I passed a milestone as my modified net worth exceeded $100,000. Meanwhile, the market and my investments faltered. Keep reading for my balances as of July 31, 2007, followed by frequently asked questions and explanations.

Flexo’s Net Worth Balance Sheet, July 2007

Why is This Here?

I began publishing a record of my finances online about four years ago. For me this was the natural evolution of keeping track of my finances on Microsoft Money, which I was using at the time. I created this anonymous blog to hold myself accountable for my financial decisions in public.

Answers to Frequently Asked Questions.

* The report is made with Intuit Quicken and Microsoft Excel. Here’s a balance sheet Excel template.
* The credit card balance is paid off every month.
* My student loan interest rate is 4.25% and my savings account interest rates range from 4.5% to 5.05%. I’m not rushing to pay off the student loan so I can have cash on hand to eventually make a down payment on a house, and the rate is decent.

Explanations and Details.

Last month, my 401(k) surpassed $40,000. This month, despite contributing 25% of my salary, the account ended below that mark. A few months ago, I shifted to a more conservative allocation for new investment. I shifted my allocation strategy to include mostly a high-rate money market fund with a small percentage going to the more typical investments. I’m not sure if we’ve hit a bottom for the year, but I’m waiting to see if there’s a dip later this year. At that time, I’ll switch back to my aggressive allocation.

I’m still waiting for an open trading window to unload my second quarter company stock plan contributions. Our company stock is down quite a bit since the end of the quarter, but with the 15% discount awarded to employees, I still end up ahead.

I like that zero on the car loan line. I was only paying 2% interest on that loan, but since it wasn’t a standard bank loan — it was from a family member — I just wanted to finish it off. Now the only debt hanging over me is my student loan, which was a result of using several of my tuition reimbursement checks to pay for regular expenses.

My modified net worth is better than twice last year’s amount. If I could manage to double my net worth each year, I won’t complain. Obviously, just continuing my current path wouldn’t allow me to double my net worth each year. I’ll be happy just to keep the increases coming.

Stay tuned for my income and expense report for July.

Updated February 6, 2012 and originally published August 1, 2007. 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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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 .

{ 10 comments… read them below or add one }

avatar klerg

A HUGE congrats to you for getting rid of that car payment! BIG milestone right there!

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avatar Luke Landes ♦127,435 (Platinum)

klerg: thanks!

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avatar Pinyo

Flexo – a great big congratulation to you. Reaching $100,000 is a huge milestone. The next $100,000 will be easier. :-)

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avatar Luke Landes ♦127,435 (Platinum)

SS: Quicken works for me, Money is about the same level. The software can span to moderately difficult depending on what you’re trying to do.

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avatar MillionDollarJourney.com

Congrats on the net worth increase Flexo. If you don’t mind me asking, how old are you?

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avatar John

I keep track of my balance sheet much as you do. One difference is that to avoid the impact of month-to-month stock market fluctuations on my “net worth”, I fix the value of my market-based investments in April of each year. I then use (the April-based value + fixed monthly contribution) every month till April next year. (April = big IRA contribution for tax season).

The downside is that I don’t get the monthly motivation boost of stock market gains adding to my net worth. But it protects me from the demotivation (and distraction) of a temporary “market correction” affecting my net worth.

The catch is that I must believe that all market corrections are temporary, and over the long term the market will trend upwards. It’s not a perfect system, but it keeps me from “market timing” (which includes re-allocating monthly contributions based on recent run-ups in the market).

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avatar Luke Landes ♦127,435 (Platinum)

MDJ: I’m 31.

John: That’s an interesting idea. It’s a good way to take the fluctuation out of the monthly picture. I’m trying to reduce the work I put into these monthly reports, and Quicken always reports the current stock values, so editing those balances for the purposes of reporting would be an additional step that I’d rather not have.

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avatar erik

Hey Flexo,

I was just wondering why you are keeping $36k in a savings account when you have $20k in debt? Why not just pay off those debts with the $36k? You’ll still have $16k for an emergency fund. Maybe you are saving iust for a down payment on a house. Just wondering.

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avatar Lazy Man and Money

I like a little of the market timing in the 401K plan. It’s good that even if the market goes crazy good while you are conservative, you just miss out on some gains. Sounds like you are still invested so it’s not the usual market timing.

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avatar John

> still invested so it’s not the usual market timing.

The only problem with market timing is that it does not work. Especially in a long-term account like the 401k, it’s pointless.

It’s explained in Chapter 4 of this book:
http://www.amazon.com/Index-Funds-12-Step-Program-Investors/dp/0976802309/

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