Last year I gave monthly updates of my net worth. That was a bit much since nothing really changed month-to-month, so this year I'll be updating my progress once a quarter. This post is about what happened in July through September this year.
No news to anyone reading this blog, but the market was down again this quarter (down 9.42% to be exact) and is down for the year. My net worth took a big hit -- down 5.56% for September alone. Yikes!
I was protected from an entire freefall a bit because a good portion of my net worth was in cash that I'd saved for a downpayment on our new house. Furthermore, we continued to invest/save for the three months, so our net worth benefitted from the extra amounts socked away. Still, as the market goes, so goes our net worth. And as we all know, the market went south BIG TIME the past few months.
Of course I continued to buy and invest throughout the quarter (most of my investing is automated), knowing that my long-term view (20 years) would end up giving me good, solid gains if history was any indication of the future. Still, it was painful to look at my net worth drop as I updated my investment information into Quicken.
Unless a miracle occurs, this will be the first year that my net worth has been down in the 15+ years I've been tracking it. I'm at the point where my (relatively high) savings rate can not overcome drops in the market because the amount of my investments are simply too big. I save a good amount each year, but when the market drops 20.66% in nine months, there's no way I can overcome that.
I'm not really doing anything different other than making sure my emergency fund is a bit larger (we're cutting out unneeded expenses). We'll keep saving and investing, knowing that the market will eventually turn around (even if "eventually" is 10 years from now.)
Note: I originally wrote this piece in early October and had to keep moving it back due to other posts coming up. Now that October's market results have been even more brutal than September's, I'm afraid to look at my net worth at the end of this month. ;-)
I feel your pain, FMF. My net worth is down a bit for the year, too, owing to a decline of over 30% in my mutual funds. Of course, at this point it's just a paper loss. And I'm only down a few percentage points overall because I have a lot of money in cash.
Posted by: Todd | October 17, 2008 at 05:53 PM
I've said before that tracking net worth (at least at my age - 36) is a waste of time; and these days, it's a depressing waste of time. I save as much as I can anyway, and that wouldn't change regardless of the current net worth number.
Posted by: Isabel | October 17, 2008 at 07:15 PM
My net worth is down a lot too. I don't know the exact percentage because I am afraid to look at 401K. Probably around 15% since I keep over 40% outside of the stock market. I am 49, so I am a bit more sensitive to it.
Posted by: kitty | October 17, 2008 at 09:17 PM
Luckily, my net worth hasn't taken much of a hit, because almost all of my money is in savings and self-investments -- I've started a business at the age of 19, so my "investing" went straight into the business. I feel for you, though. It must be incredibly painful to watch.
Posted by: Shaun | October 17, 2008 at 10:37 PM
My networth suffered too but luckily I have a good diversification for my money and investment so the impact is not that great.
Posted by: moneymind | October 21, 2008 at 03:08 AM