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Personal Balance Sheet, May 2010 ($344,474, -2.7%)

This article was written by in Monthly Update. 17 comments.

After the end of each month, I take a closer look at my personal finances. Although I’ve moved away from tracking every cent I spend, I still look at most of my purchases and expenses to ensure I’m not doing anything I consider financially unreasonable. While my spending wasn’t excessive this month, my reports do feature one major non-discretionary purchase.

As I’ve written before, I’ve been learning more about photography. This month I picked up a used medium-format film camera in great condition. I won’t be developing the film myself, so it won’t exactly be a frugal hobby. The expense of film requires a photographer to give more thought into using the camera. With digital, it’s easy to get into the habit of shooting hundreds of photographs and reviewing them before moving onto the next step, like printing. With film, you don’t have immediate feedback, so if you’re not careful, you could end up spending more than you expect on development.

In terms of my finances, my overall “modified net worth” is down. This is attributable to poor stock market performance. I took advantage of stock market dips to invest in my retirement account, a process that will hopefully pay off more than investing by the calendar each year.

This is a modified approach to dollar-cost averaging where rather than investing at the same time each year (or month, etc.) insensitive to price, the investor chooses to invest in the face of public panic or other downturns, where the chance of seeing an increase is higher. While no one can fully predict the stock market, I believe that returns revert to the mean eventually, so worse-than-average performance will eventually be followed by better-than-average performance.

As of the end of May, this strategy hasn’t paid off, but I still have time.

Here are all the numbers followed by a quick analysis.

Net Worth Balance Sheet, May 2010

My major spending this month includes a used (but brand-new condition) Mamiya RZ67 medium format camera with some accessories as well as reservations for a vacation in August. Business income was at its lowest point since the same month last year; perhaps this is a cyclical lull.

While my investments performed poorly as they are mostly linked to the total stock market index, the balance in my bank accounts has increased.

I’ve been publishing these net worth reports on Consumerism Commentary for almost seven years. For most of that time, I’ve been tracking my finances with Intuit Quicken on my desktop or notebook computers. To create the reports I publish online, I export a custom net worth report to Excel and copy the spreadsheet into a graphics editing program.

Feel free to leave any questions about my finances.

Updated January 2, 2018 and originally published June 3, 2010.

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About the author

Luke Landes 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 Luke Landes and follow him on Twitter. View all articles by .

{ 17 comments… read them below or add one }

avatar 1 Anonymous

Congrats Flexo on keeping it sturdy through a volatile period in the markets.

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avatar 2 Anonymous


One problem with your argument is the assumption that there exists a stock market mean. Ok, maybe there is, but calculating it can be a challenge. Even when one says “the market historically returns X%” over what period of time are you looking back? 10-year look-backs give a different calculation than 20-year look-backs, which are different than 30-year look-backs… and well, you get the idea.

To me, this is a BFD because one of the most sensitive factors in portfolio growth is rate of return… get it wrong, even by 1%, and your calculations are going to be way off.

That said, if you think the stock market is on a dip, take advantage of it. When the DOW hit 6500 at the worst of the recession, I so wanted to move some money in the market, but I didn’t have any available funds to do so.

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avatar 3 Anonymous

“This is a modified approach to dollar cost averaging where rather than investing at the same time each year (or month, etc.) insensitive to price, the investor chooses to invest in the face of public panic or other downturns, where the chance of seeing an increase is higher”

I’d like to her how you do this. For your work contributions (I think you have a 401k or 403(b)) do you put them in a money market and then purchase when a low happens? I don’t think I have this type of choice in my 401(k) and even if I did, it would be difficult to implement due to the lag in trades. Do you only do this in your IRA/SEP-IRA?

Some details would be great!

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avatar 4 Luke Landes

With my 401(k), I’m at the mercy of my company’s biweekly pay schedule, though I could fairly easily direct all new contributions to a money market fund and rebalance whenever and however I like (in any offered investment other than company stock funds). But this is mainly what I do with Roth IRAs and SEP IRAs. When I transfer money once a year into these retirement account at Vanguard, they start off in a money market fund and I transfer to stocks to take advantage of dips. Most of the time I getter better prices than I would have, had I invested in stocks from the first day.

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avatar 5 Anonymous

The only way to execute this strategy in a meaningful way is to keep a significantly higher percentage of your long-term assets in cash or fixed income than you would if you didn’t try to time the market to buy on the dips. If, for example, you would otherwise choose a 70/30 stock/bond allocation, if you want to keep your powder dry for the market dips, you might have to stay at 50/50 while you wait for the right opportunity.

There are 2 problems with this strategy: 1) you are sacrificing the long-term outperformance of stocks on 20% of your asset base, and 2) you must make accurate decisions on both entry and exit: you would have needed to know to enter the market when it hit 6,500, and you would have needed to reallocate back to 50/50 again when it peaked recently. Very, very tough to do.

I don’t think there are many professional money managers who can do this consistently well. For an individual, I’d stick with dollar cost averaging and save yourself the risk, not to mention the stress.

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avatar 6 Anonymous

Holy crap! You are doing really well. I’m happy for you! Do you ever worry about people who know you in real life thinking you’re super rich?

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avatar 7 Luke Landes

Thanks! Though I don’t think I’m super rich and I don’t think people who know me in real life think I’m super rich, even the few who occasionally read Consumerism Commentary. I don’t think I act any differently with people than I did when my net worth was zero or less, though I am able to enjoy things I wasn’t able to before, like dining out more, going to baseball games, enjoying my hobbies, etc.

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avatar 8 Anonymous

Good stuff Flexo. Can you share with us in what instruments you keep your cash and what interest rate return you receive?



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avatar 9 Luke Landes

Hi, Sam. I answered that question in detail back and February and the details haven’t changed much since then. Here is where I keep my cash and the interest rates earned.

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avatar 10 Anonymous

Cool detailed post! Are you OK with making 1-1.2% or whatever the new rates are to keep liquid? Are you waiting to use the money to buy something hence why you wouldn’t lock it up in a longer term CD for more yield?

I might have an interesting guest post idea for you, as it juxtaposes your current balance sheet (which i think i rock solid). It has to do with debt & motivation. If you’re interested, let me know and i’ll send you a quick 3 point outline.

Cheers, Sam

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avatar 11 Luke Landes

I generally tell people I am keeping a large portion liquid in order to buy a house in the near future, but I have been saying that for a while. You’re always welcome to send an email if you have an idea for an article.

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avatar 12 Anonymous

Sounds good. OR, you can pay cash for the new Audi R8 V10 for $150,000! That would be sweet!

avatar 13 Anonymous

“This is a modified approach to dollar cost averaging” – known in some circles (see web link) as “timing the market.” Looks like you’re plenty liquid to mess around a bit, but doesn’t this contradict your own advice?

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avatar 14 Luke Landes

There is certainly an element of timing in play here. If your strategy is to invest your full IRA once a year — dollar-cost averaging over a long period of time — I think it might be worthwhile in a volatile market to pick a day when the market is down rather than the same date every year. If in a bullish short-term market, pick the earliest day you can. That’s the extent of market timing I would consider.

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avatar 15 Anonymous

Your balance sheet could be improved by adding real estate, life insurance, annuities, and also Social Security and Medicare. Most people forget those, but they are part of your life decisions. Also it sounds to me like you are still too short-term oriented in your investment decissionmaking.

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avatar 16 Anonymous

Hey flexo, is your blog income down? Any reason for that? I usually check in every few months (motivation hehe) and I remember that being more in previous months? Email/DM me if that’s too personal a question to answer here :-)

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avatar 17 Luke Landes

I mentioned in the article that income in May hit a low not seen for about a year. I don’t publish income reports anymore (as advised by my tax accountant for multiple reasons). The numbers in the balance sheet don’t address income. I’m still earning more than enough to support myself without a day job, if you are concerned with that type of detail. :-)

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