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No. of Recommendations: 3
2008 Update:
Net worth down 30% in 2008 to 3.7 NW/AI (net worth/gross annual income).

Current Portfolio:
36% Picked Stocks (Top 4 holdings BMY, BWLD, PFE, MMM)
2% Stock Options
19% 401k Mutual Funds (75% S&P500 index fund)
30% Real Estate (House Value*0.93-Mortgage)
12% Fixed Income (Savings, CA-exempt MM)

Graph of past few years of net worth progress.

2008 was a tough year, watching the S&P500 drop 38% (1468 to 903), and our home value dropped around 17%. In addition, stock options fell 50% in value. I did make it through a 20% layoff despite being off on a 3 ½ month vacation late this year, but things could get worse this year. And the other tiny bit of good news is that I continued to accumulate cash this year, by not investing as much, bringing my cash to 12% of net worth. Thank goodness I kept this cash out of the markets.

2009 will be an interesting year as we are planning to sell our house and purchase a larger one in the next few months. Interest rates are low, and housing prices have fallen, particularly on the larger homes in our area so we are going to try and take advantage of the current housing market. We have good credit and enough equity and cash to easily put down 20%.

Who knows when we’ll FIRE…

2007 Update: NW/AI=5.3

2006 Update: NW/AI=4.6

2005 Update: NW/AI=3.7

2004 Update: NW/AI=2.5

2003 Update: NW/AI=1.4

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No. of Recommendations: 1
Thanks for your update WhyOhWhy. Your graph looks remarkably similar to mine. The same plateaus and bumps! Impossible but real! (I am looking at my spreadsheet against yours over the same time frame).

I will notice that your loss was larger as a percentage. However, your gains through the previous years were also much larger as percentages. I think this reflects your more aggressive position in the markets- more volatility overall. Also your housing market suffered whereas my area didn't. I suspect in the long run the more aggressive portfolio will end up crushing a more conservative strategy but time will tell.

I started out at about 2x and rose to around 6x- you started with around 1x and went up to almost 5.5x. Thus you were kicking my behind over the same time period.

I am also thinking of buying more house- but in the form of a rental which will "carry its weight" so to speak. Your plan of buying a larger house after a downturn with very low mortgage rates seems like a good one, with the added bonus of more room to play in. I hope you enjoy it.

It is very frustrating to be falling backwards when you have a plan of upwards movement. We are all locked into the macroeconomic forces of our times and it doesn't seem simple to extricate ourselves from it as investors. If there is a way, I am curious what it is. Buy collectible baseball cards?

It is awesome you survived the cut where you are. Where I am there are large rumors of cuts coming and time will only tell who ends up landing on the street.

Surviving this period of financial turmoil with a job intact will end up being much more important to the overall financial picture than a few years of investment returns it seems. But this is beyond anyone's control although working hard certainly can't hurt.

Good luck with your future investments.
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