New Year's Money Resolutions and Net Worth Update

At the beginning of 2006, I committed to several money-related resolutions and promised to track my progress on Free Money Finance. Since my November update, I have invested in two 529 accounts (so take that one off the list) but didn't close the loop on updating our wills (though I have the name of a recommended lawyer and have contacted him.) So, technically, that's the only resolution I didn't hit this year. Not bad!

For 2007, I'm going to be doing something a bit different. I won't be stating my resolutions and then tracking them each month, but I will give a monthly update on my net worth status -- if it's up or down, why, what I'm doing to make it grow, etc. It seems like a more interesting topic to me and is exactly on target for what this blog is about (after all, my tagline is "grow your net worth".)

So to start out, let me detail where my net worth ended 2006. If anything, these numbers will be a bit low since I haven't yet received my final investment statements for the year, and I always have some capital gains from mutual funds. But they're close enough, so let's jump in.

The S&P 500 was up 1.26% in December, but I didn't do as well. I was flat (my net worth was up/down 0.00 % versus the previous month to be exact) due to the fact that I wanted to get in a big charitable contribution before the end of 2006 instead of letting it fall in January. So I made it and was flat as a result. That said, once the capital gains hit, I'll likely be up half a percent or so.

As for 2006, it was a good year. My net worth was up 18.2% -- a strong showing. That leaves me with a compounded annual growth rate of 16.5% since 1996 -- also not bad.

Who knows where 2007 will take me? I will keep saving, of course, but so much of my net worth is tied up in the stock market that I pretty much go as the market goes. If it's up, I'm up and if it's down so am I. Only time will tell which it will be.

Comments

[John]

Have you ever posted your actual net worth figures on your blog?

[FMF]

Nope. But I've talked about it in enough detail that everyone knows I'm doing well versus the averages. See this link for details:

http://www.freemoneyfinance.com/2006/11/median_net_wort.html

[Lord]

But what was your return? If you saved 15%, a 3% return isn't too impressive.

[FMF]

I'll be detailing how I earned 18% in a later, more detailed post. But it's not all income as the gain in my net worth was more than my total annual salary. So even if I had no expenses and put all my salary into savings, it wouldn't be enough alone to grow my net worth by 18%.