Net Worth Update: October 2016

If you’re new here, every month I get financially naked for my readers in the form of an in depth net worth report.

Of course, I’m not just a sick exhibitionist, and you’re not just a voyeur. (Right?) This is all part of a broader plan to track my progress towards nearly one million dollars and an early retirement.

Usually these reports are a little more timely, but as it turns out, sometimes my real job and my real life can get in the way of this little side hobby of mine.

In any case, it’s time to close the books on October, even if I am a week late, and I am prepared to make quite the announcement: Fall just might be my favorite season of the year.

There’s something magical about the fall colors. As the trees make their final stand, showing off their most impressive display before a winter’s hibernation, I’m the idiot left with his jaw on the floor, scrambling to capture some of the beauty through the lens of my not-so-photographer-caliber camera phone.

I didn’t do any travel during October, unless you count a day trip to Red Wing, Minnesota, home to the famous boot company and coincidentally, this giant 30-foot tall boot.

Plus some scenic river bluffs…

Otherwise I spent the month close to home, admiring the incredible fall colors and exploring some underrated parts of my city, which happened to prove cheap entertainment as well. I found a regional park, right on the edge of the Mississippi River, with free entry year round, and this state park, also along the Mississippi:

The beautiful scenery convinced me to make the plunge, and I purchased a State Park’s Pass good for the next 12 months. At $25, I expect this criminally cheap investment to provide an even better return than my 401K.

In true October spirit, I checked out an awesome and pretty terrifying haunted house. Hey, that chainsaw monster looked real, okay?

I also realized a childhood dream in buying a GIANT package of full size candy bars, and handing them out to all the trick-or-treaters who were lucky enough to ring my doorbell. Yeah, I’m totally going to be that cool Uncle, one day.

And for the first time since I started these updates, my net worth actually decreased!  :0

Onto the report.

October 2016 Net Worth Update

Cash Savings: $8,698 (+$927) Another month, another month where I struggle to pull the trigger on a new car purchase. Why is parting with several thousands of my dollars proving so painful? Don’t normal people loving blowing money on cars?

Meanwhile, I agonize on a new car purchase. I’ve probably lost a few hundred dollars in dividend payments by not having this money invested for the last 8 months while I waver back and fourth on which car to get. Decisiveness in business is important, and I’ve been anything but on this one.

Vanguard Account: $55,989 (-3,112) The stock market fell during the last month of October, and continued its drop during the first week of November. (I’m a late slacker on the timing of this net worth report, remember?) And since this account is invested almost entirely in the index fund VTSAX, which seeks to mimic the entire US Stock market, my holdings fell right in tune.

$3,000 in losses sounds a little scarier than a 5% drop in the market over a month, which is what’s going on here. In either case, the smart investor is in it for the long haul though, so the only immediate impact this has on my life is making future stock investments even cheaper. Score one for sales!

If you’re looking for what I invest my money in, this is it. My vanguard account consists of two funds:

• VTSAX is a Vanguard Index Fund which tracks the total stock market. All of my taxable savings go here.
• VGSLX is an index fund which invests in Real Estate Investment Trusts (REITs). All of my Roth IRA savings go here. Because I don’t own a home or any other real estate, this fund gives me some exposure to real estate.

At month end, VTSAX had about $43,000 invested and VGSLX had about $13,000.

Merrill Lynch Brokerage: $44,084 (-1,133) I haven’t invested money into this account for years, so this decline is also mostly the overall drop in the market. This account has about 10% in bonds and 25% in large, stable dividend paying companies, so the drop wasn’t as severe as the Vanguard account.

401K: $40,302 (-$80) Despite around $1,900 in direct contributions from my paycheck, this account still couldn’t break even on the month due to the downturn in the market.

This makes sense, considering the majority my 401K is invested in small cap, international, and overall stock market index funds.

But I don’t care what one month of returns said, the 401K is still one of the most powerful investment vehicles for the average worker. Plus, the drop in the market just means my contributions are buying further and further discounted stocks. Today’s downturn is tomorrow’s wealth.

Rent Payable: $690 (-$11) I did a little experiment during October. I refused to turn on my heater, no matter how cold it got in my apartment. Despite a few days of indoor temperatures cold enough to make my hands go numb while typing up blog posts, I pressed on with my commitment to never fire up the heater. Total savings by the end of the month? $11 in utilities.

I’m all for being frugal, but I think I’ll run the heater stress free moving forward…

Credit Cards Payable: $1,151 (-$665) I’d like to thank our supporters for this month’s low credit card bill – no travel and lots of cheap local entertainment mentioned earlier. Who says it costs lots of money to have fun?

Calculate Your Own Net Worth

If you’ve never calculated your net worth before, or even if it’s just been a while since you’ve checked, give it a shot! Log into all of your bank accounts, dust off your 401K account information, search for cash under the couch cushions, and subtract your outstanding debts.

Analyzing your net worth can be an enlightening exercise, and you just may surprise yourself.