Thursday, November 1, 2007

Six months in, how far have I come?

Wow, I don't think I've ever had to "fix" a post as many times as I had to tweak this morning's month-end update. After at least five edits, the numbers are now all correct, and the goals are official.

The issue was that I got mixed up as to the "effective" date of my balances. Today is the first of three paydays in November, and my initial posting incorrectly included some of today's debt payments in my October net worth calculation. This resulted in over-stating my net worth and debt reduction progress. I've sorted it all out, and the numbers are accurate: the goal bars and NCN chart reflect November 1 status, whereas the month-end update and NetworthIQ profile reflect October 31 status. It's splitting hairs, I know, but I want to keep a consistent methodology for tracking my progress. To be clear, here is the "official" update schedule:
  • Goal bars and NCN chart: updated every two weeks, on payday

  • Month-end update and NetworthIQ profile: posted on the first business day of the month
Just wanted to take care of that housekeeping issue...

I posted a month ago that I had accumulated six months' detailed financial history, and gave a break-down of the progress that I had made since April 30. With today's update, I now have six months' progress since I began tracking my performance, so I thought I'd touch on my first six months.

The following are the financial highlights:
  • My net worth has almost tripled in the last six months. I've seen an increase of 197%, or $16,444.79, in six months. Very encouraging.

  • My net investable assets have increased by 49%. That's an increase of $12,197.57 since April 30. The difference between this number and the net worth figure is the mortgage principal paid, since NIA includes only liquid and retirement assets, and non-mortgage debt. It's good to know that only 26% of the net worth increase represents home equity growth; the rest is all from savings and debt reduction.

  • My net liquid assets have increased by 9%. That's an increase of $5,466.21 in six months. The difference between this and the NIA is retirement savings growth. Most of the improvement in NLA represents debt reduction.

  • I have an Emergency Fund of over $1,000. For the first time in my life, I have $1,000 sitting in a savings account, with no strings attached. This money will sit there, earning interest, until something unforeseen (and, ideally, unfoeseeable) happens. That feels great.
In addition to this financial progress, I have a few other milestones:
  • My retirement investments are diversified across a number of low-cost index funds. This is a major change from earlier in the year, when I had over 80% of my investments in two stocks. My new, re-allocated portfolio is now worth more than $2,500 more than the old, concentrated portfolio would be today. I know this gap will fluctuate greatly over time, but it feels good to have my eggs in a few more baskets.

  • My net worth is now roughly equal to the amount of my revolving debt. This isn't particularly meaningful, but psychologically it's a big boost to know that, if I were to throw all my assets at my liabilities, I would come out ahead by the current amount of my "bad" debt. This point serves as a huge encouragement to continue my debt reduction. I really feel that I can eliminate this debt, and correct the mistakes of my former self.

  • I have a blog that I enjoy maintaining, with a small but loyal readership, and more than twenty RSS subscribers. It is a great feeling to be part of the PF blogging community, and to see that someone is actually reading the stuff that I put out there. Thanks to everyone who has visited the site even once.
That's a snapshot of how I've progressed over the last six months. I'm excited to see what the next six months bring.

1 comment:

The Bright Side said...

Great job!! Keep it up.