Financial Resolutions for 2006: Net Worth

As I promised last week, I will be posting and tracking my financial and blogging New Year's resolutions this year. With this post, I'm starting that process -- focusing on financial resolutions for now.

Here's my first financial resolution:

Increase my net worth by 12.5%

This has been an annual goal for me since I started tracking my net worth eight years ago. And I've done pretty well, averaging 17.4% compounded annual growth in net worth since 1997. Here are my actual gains in net worth through the years:

1997 -- 15.6%
1998 -- 22.8%
1999 -- 18.6%
2000 -- 14.2%
2001 --  9.7%
2002 --  4.8%
2003 -- 28.3%
2004 -- 17.5%

A few comments on these results and my resolution for this year:

1. Obviously it was easier to have large percentage gains in net worth early on since I was working on a lower base amount. It's harder to show a big gain now.

2. That said, I've had great results the past two years. Do you think it's a coincidence that these were the years that I gave the most away? I don't think so.

3. The tough stock market years of 2001 and 2002 are evident in my results.

4. For this year, the biggest single issue impacting whether or not I make the goal will be the performance of the stock market. If it's a good year for Wall Street, it will be for me as well. But if stocks are down, it will be hard, if not impossible, for me to make this goal.

Update: Click here to see where I ended 2005.

Comments

[Canadian Capitalist]

FMF: I am the same boat as you. Most of my net worth increase is now driven by portfolio returns. It makes it so difficult to set goals.

http://www.canadiancapitalist.com/2005/12/10/financial-goals-for-2006-net-worth

[fivecentnickel.com]

Great results in the past couple of years. But it could easily be argued that you gave more away when you were doing better, not that you were doing better because you gave more away. Regardless, glad things are going well, and that you've been doing your part in terms of charity.

[fivecentnickel.com]

Oh, and if it's a bad year for the market, just keep doing what you're doing. You may underperform this year, but you'll be buying low and setting yourself up for the future.

[FMF]

Nickel --

Think about it: My NET WORTH went up substantially in the years that I gave more, not my INCOME (which is what I give from).

There's no doubt to me that giving opens up the door to financial gains. I suggest everyone reading this try it and see what happens.

FMF