Net Worth Review: October 2007

Every month, I give a bit of detail on how my net worth did the prior month. This post will detail how I did in October 2007.

The market was solid this month as the S&P 500 went up 1.45% during October. My net worth was up 2.14% for the month and is now up 12.07% so far for 2007. I'm on track to be up 14.49% for the year if it keeps going at this rate. For the year, the S&P 500 is up 9.26%, so I'm doing fairly well.

A few comments this month:

• I did better than the market due to: 1) some funds/stocks I held outperformed the market and 2) it was a good saving month as I stocked more away in case we ever buy a new house.

• I continued to take the value of my house down in Quicken (so it more accurately reflects the home's true worth.) I'm planning on doing this over the next several months and will actually take it far below the sale value (unless prices keep dropping) just to give me a safe cushion in reporting my net worth.

• My quest to make over $500 on my Blue Cash from American Express card this year continues to go well. Through September of this year (the last month reported), I've earned $341.05 on charges of $20,152 while at this time last year I had earned $232.47 on charges of $14,315. Charges are up 41% but earnings are up 47% (and growing rapidly.) So far, I've earned 1.69% cash back on my purchases.

• I received my Chase Freedom Cash Visa Card (now with $50 bonus offer as of this writing) to make even more next year using my hybrid credit card strategy. I made some test charges on it this month to determine how places I shop at are classified (this will determine my reward with the card and hence which card I use at each place) and will review the results once I get my first bill.

Comments

[The Saving Freak]

Sounds like things are going well. I am really impressed by the hybrid credit card strategy. I had not thought to use two rewards cards in this fashion. I will definitely be crunching the numbers to see if we can benefit.

[Kevin]

Reviewing net worth monthly is a great idea. My wife and I have been doing the same thing since moving into our house 2 years ago. And before that more sporadically, since we were just starting out (or re-starting on my part after a divorce). In that time we've seen pretty fantastic growth. Next year we might hit six figures if things go well.

[Anthony]

"For the year, the S&P 500 is up 9.26%, so I'm doing fairly well."

How things change in the stock market in 2 weeks. Now the S&P 500 is dead flat for the year. And, it is one of the worst performing markets Year-To-Date in the world. You call that a sane investing strategy? Putting money in a CD would have netted you more this year...and probably next year as well.

[FMF]

Anthony --

That's why stock investing is not a short-term option. You can pick any short period of time where the market is flat -- or even down significantly. Then again, I can also pick several short periods where it was up significantly. And since no one can predict when it will swing up, you need to be invested at all times.

The market has done well for me for almost 20 years -- I'm averaging a 16% growth in net worth and a big part of that has been investing in stocks. If you'd prefer to play it safe, you can certainly put your money in a CD -- but good luck with that strategy in the long term. You'll make no progress with it whatsoever.