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November 02, 2009


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We're well over what we were at that point, mostly because of a couple factors:

1) Wife and I both have stable jobs that have allowed us to start to save some money.

2) Expenses from moving (we had a number of no-interest financing offers for various expenses, so we took advantage of them) are starting to go away.

3) The investment accounts have simply done better, too.

We just reviewed our net worth this weekend and it's increased since last month. Investments have improved this year and we've been saving as much as we can for the house. it's a slow but rewarding process so far. I do need to start increasing my Roth IRA contributions.

I retired 3 years ago and have seen many ups and downs during my working years. I never stopped investing under any market condition. I started investing when Peter Lynch was running the Magellan fund.I lived through the downturn in the 80's and live by the average cost method of investing. I have long ago dumped Magellan but still buy on the dips and sell on the up days with a small percentage of my account. Been a great year so far. Whatever you do don't stop steadily investing and keep your future in your sights.

Life is good. Save for your future.

My results are almost exactly the same as FMF's. I kept saving and investing all the way to the market's bottom so the rebound since March has been a huge positive gain for me. My families net worth passed our previous high about 6 weeks ago and continues to grow.

I still feel my family has been very lucky so far. Neither my wife nor I lost our jobs and we've even seen nice gains in our income this year. We also made a couple of very advantageous stock investments that have really paid off in the past 6 months.

Suprisingly my retirement has gone up almost exactly as much as I have put in this year (break even otherwise) 5k. I usually just ignore this anyway though.

A larger part of my net worth (debt) has gone up $42,641 since the beginning of the year from paying down student loans. I guess that means its gone up 21% although its still a negative net worth!

Our net worth has also increased but one of the reasons is that we have massively reduced our monthly outgoings and any money saved has gone straight into our savings account.

Compared to 2008, my NW increased considerably in 2009. Mainly due to my increased savings because my divorce was finished and there were no more legal fees in 2009.

The stock market crash didn't affect me too much since most of my assets had been temporarily switched to money markets just prior to the crash, to wait there while the divorce decree was finalized--lucky!

My net worth is currently at an all-time high. Savings is also the biggest factor in overcoming the huge drop we all saw in 2008. In addition, we were fortunate to also see our highest salaries of our careers in 2009. Keep buying low and hanging in there.

What brokers do people use and which one do you think is the best? Sorry to bring up something other than the threads topic, but I just looked at my account today and I'm still down by $25,000. Fidelity is managing my money for me and I am thinking about leaving them. The brag that they protect your money and usually return around 8%; The only question I have is if the market has rallied back 45% since the crash, then why am I still down that much!?!?!

Our net worth is at an all time high since we bought up as many shares as we could of our mutual funds while they were nearly half price. We also made some progress on our mortgage principal.

I think most people's net worth's will be at all time highs. This downturn has made most people richer than ever, as evidenced by the comments on this board.

It's a great to know the majority have people have done well in this downturn, and that's why I'm very postive about an extended rebound.

I keep everything at Fidelity, as do my three children, and I find them to be an excellent company, however I make all of my own decisions, they just execute them for me and take care of all the bookeeping.

My net worth increases at approximately 5% annually because at this time I am 100% in income investments that are either tax exempt or tax deferred. At this point in my life I am not looking for capital gains and am very content with 5% growth free of taxes. The children prefer that I continue managing their money pretty much the same way I manage my own and they haven't had a losing year since I took it over in the early nineties.

Fidelity would love me to follow through on some of their suggestions but I have always felt that brokerages put their interests first and not necessarily those of their customers. For one thing they believe in the principle of "Buy and Hope" over the long term, a principle that I have never subscribed to. Until I moved into the slow lane for good in 2007 I was a Momentum Investor. I would search out mutual funds that had a strong upward momentum and stay with them as long as I was satisfied with their progress. Once they started to slow down and come to a halt my finger was on the Sell trigger, when they started down and broke through one of my technical indicators I would sell them immediately and then start searching for something good to buy. If I couldn't find anything that looked good I would stay in a money market fund until I found something. This method requires that you have a mutual fund database that is updated daily, that you have software that can calculate technical indicators that you like, and requires that you watch the market and the funds that you own on a daily basis. It's certainly not for everyone but it worked very well indeed for me between 1992 when I retired and 2007 when I changed direction completely.

Owning volatile investments can be a gut wrenching experience on days when the Dow drops hundreds of points and when you don't know whether tomorrow will be better or worse. One's pain threshold gets lower and lower the older you get. Once you feel that you have wealth that is growing risk free by an amount every year far in excess of what you need, what's the point of putting yourself through lots of anxiety just to make even more money that will never benefit you. At some point in time peace of mind and freedom from stress and worry becomes more important. If it's gambling that turns you on then go to Las Vegas.

Old Limey made the point that my husband and I are aiming to follow when we retire.

We are planning on retiring on my husband's pension and less than the annual interest we'll be receiving on our very stable cash reserves, 401k, and Roth IRA investments. If that is actually more than we would ever need to spend, that's not a bad problem to have.

I am glad to hear that your husband will retire with a pension since pensions are getting rarer and rarer unless you work for a branch of local, state, or federal government or are a union worker.

Currently our combined pensions and social security checks every month account for 17.6% of our total income and our investments account for the other 82.4%. We basically live on the pension and social security checks and only dip into the investment income to pay for an overseas vacation every year and for the taxes due on our mandatory annual IRA distributions - so our net worth is still growing nicely even after being retired for 17 years. Next year we plan on two overseas vacations but have had just one/year in recent years. Healthcare is not a big item for us, we are in a fabulous Senior Advantage HMO through a group plan provided by Lockheed/Martin, next year it will cost us $222/mo. for both of us and this year it was only $163/mo. for both of us. So as you can see, healthcare costs keep climbing and are an expensive proposition until you reach medicare age when the government starts paying 80% of the bills.

It's definitely good to start thinking about retirement when you are young so that you don't end up with big surprises later in life.
I do think that my generation has had a tailwind behind them and your generation is facing tougher times so it's even more important for young people to plan ahead than it was for us.

Whichever way you look at it, being frugal and living within your means is essential until you are much closer to retirement and can make good estimates about what retiremeny has in store for you.
Basically, unless you own a small business you depend upon one of two ways to build wealth, they are the stock market, or real estate. Either one requires that you develop experience and learn as much as you can about how to go about it. I had one rental, and that's not enough to make a large contribution, you need close to 10 units. If you go the stock market route you just cannot afford to take large losses, you have to become an experienced proactive investor that has learned how to maximize your returns. The people my age that have done well have made one or the other their primary wealth builder and the other a secondary contributor. One couple that are good friends of ours bought a fourplex in a really great area some years ago, it has grown a lot in value and has provided a very consistent income for them to supplement their pensions and SS checks. The only problem seems to be cleaning up and making repairs after a really bad renter occasionally.

All is good. Not great, but definitely good. Despite the whooping we took in 2008, we are sitting pretty close to our highest net worth. We are not rich, but we control our spending and save in such a way that we should never be poor.

Paid off the house with a big chunk of cash in August 2007 and missed the downturn largely. Dollar-cost averaged throught the carnage and am still down about 10-15% from when I started(2007). I am heavily indexed but have some stocks which have contributed to the negative return.(yucky banks!) Own my house, cars, no student loan debt and have saved over six figures for the kid's 529(they are three and 18 months). I feel pretty good about the net worth despite the relative poor return. Good cash flow situation with zero debt and stable job I like(I am the boss).

In the market crash of 2008 lost about 15% of net worth from the peak but have now exceeded that high point of 2008 by about 5-10% and am at an all time high like FMF.

95% of the net worth I have has come from savings since market gains have been offset by loses. So by working steadily & saving it will continue to grow even during bad times in the market.


My net worth is down significantly because of a big drop in the value of our house. However, when I do the calculation without our house / mortgage, we hit an all time high last month. We're still investing 10% of my salary into the 401(k), working to pay down debt while taking no new debt on, and being frugal. It has paid off though has been very frustrating along the way.

My wife and I are at a new high and are up almost 50% since December 2008. We started the year at $102,000 and are at just about $150,000. (Home equity is 40K of this).

We are above our previous high and doing pretty good in this recession. I'd love another buying opportunity like last March!

Old Limey:
I laughed at your pension comment since that is exactly how my husband still has a pension...he's a middle school teacher and will get the state pension...about 70% of his salary if he does retire as soon as he's eligible...a little more for every year that he waits.

Not only do I completely agree about having to be overly prepared, but we are planning our retirement solely on what we can save/invest and my husband's pension. If Social Security is still around, that would just be a bonus...we plan as if it won't exist so we won't be hurt if it doesn't. Plus, Texas teachers do not pay Social Security, so he will definitely not be receiving any. This is why we live below our means and have the 401k and Roth IRA.

We are also building a very large cash reserve to keep us going between our retirement and our 60's so we will not have to use the 401k until we are forced to...right now that cash reserve is building in stocks and ING Savings, but we are looking into real estate as well. I enjoy being a landlord and am learning how to repair a bunch of things around the house myself. I just changed our thermostats and heating elements in our electric water heater last month, which included doing some basic rewiring to make the new thermostats fit...overall, it only cost $40 for parts and I now know something new. This week I'm looking into a toilet leak I haven't encountered before...worse and worse, one of our friends is a plumber. Even if I end up paying him to help us out, I will pay attention and never have to pay for that kind of fix's like a class. I enjoy having the knowledge even if I don't enjoy having to use it.

Since we will hopefully be retiring at least 10-15 years before medicare age, we will be getting our healthcare through the state plan for teachers as's a solid plan with okay rates that will fall dramatically when we become medicare eligible.

Yep, we definitely agreed that we would start young, try to be more than prepared, and fit in as many great memories as possible along the way. Balance seems to be the key if you have time on your side.

OldLimey: I too have an account at Fidelity. What are you investing in that you can get 5% after taxes? For my cash investments I usually use FSLXX but that is pretty low right now.

Have you looked at VWINX? I'm considering it because of the low expense ration and 4+% yield right now (however it's not a free transaction at Fidelity so I would use my free trading Wells Fargo account).

VWINX is Vanguard's Utilities Income fund, historically it used to have a good conservative record but had a very poor performance in 2008 that has wrecked its long term and its short term record.

Here is its performance compared with two Total Return Bond funds.
The 10 1/2 year period is between 3/1/99 and 11/2/09 for which all 3 funds existed, all distributions are included.

Fund ------ Annual Rate of Return ----- Volatility ---- Worst Possible Loss
TGMNX --- 6.93% -------------------------- 1.25 .......... -4.59%
PTTDX --- 7.24% -------------------------- 1.49 .......... -6.65%
VWINX --- 6.19% -------------------------- 4.52 .......... -21.73%

Here are the results for the last two years:

Fund ------ Annual Rate of Return ----- Volatility ---- Worst Possible Loss
TGMNX --- 10.37% -------------------------- 1.35 .......... -3.57%
PTTDX ----- 9.75% -------------------------- 2.10 .......... -6.65%
VWINX ----- 0.82% -------------------------- 9.04 .......... -21.67%

For both periods
VWINX has the lowest ANN, the worst volatility, and the worst maximum possible loss during both periods, assuming you bought and sold on the worst possible days.
TGMNX is clearly the best of the three funds. I use it in our IRAS to deposit interest since CD yields have dropped too much.
I feel sorry for investors that owned VWINX before the crash and sold out near its low.

FSLXX is a money market fund and has a miserable return.

I am able to get about 5% return in our IRAs because I bought CDs paying between 4% and 5.5% back in October 2008. In our taxable account I went entirely from money market funds into individual Muni bonds also in October 2008 paying an average of 4.98% yield to maturity. The bonds are laddered out over the next 12 years providing a a nice steady stream of tax exempt and AMT exempt income.

TGMNX is a no transaction fee fund at Fidelity.

I am also too cheap to have workers come in to do things that I have learned how to fix myself.
The last time I had to pay someone was when I needed to replace a hot water heater. I don't have a vehicle in which it would fit and it is was far too heavy to lift up on to its pedestal so I used a friend of mine that supplements his pension by doing tax free handyman work.

OldLimey: Thanks! I'll check out the Muni bonds on Fidelity and see if I can find some to buy.

The pickings are very slim if you want a muni bond selling under par value. The best listed at Fidelity is one bond maturity 2019, yield to maturity 4.67%. This means that if you hold it for 10 years you are guaranteed your money back when it matures.
Muni bond funds are available with yields in that same range but they fluctuate in price with no guarantee that you will be able to get your money back.

OldLimey: Thanks for the info. Did you get yours last Oct on Fidelity or another source? Did you buy all yours at or under face (par?) value?

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