Remember when I listed a bunch of things last week that were scarier than Halloween?
Well, here’s another for the list: Losing $60,000 in one month! 😱😱😱
Haha… Okay, well, it would be scary if we actually cashed it all out and called it a day, but since we all know that it’s just one blip on a multi-blip timeline, we just shake it off and keep on looking forward ;) No need to fret if you’ve got DECADES left of compounding to go!
So scary for one month if you’re just looking at that, but not as bad when you zoom out and take a look at the overall picture. Which looks more like this if you’ve been tracking it for over 10 years as I have:
(Look how tiny that dip is there at the end!!)
You also quickly get used to losses since they’re never permanent ;) Particularly those that are by and large outside of your control.
Here’s a look at the biggest “losses” we’ve incurred over the decade – notice the trend?
- Oct, 2018: -$60,000 (market crash)
- Jan, 2016: -$51,000 (market crash + sold house)
- Jun, 2013: -$40,000 (market crash + income crash + cash crash)
- Feb, 2018: -$29,000 (market crash)
- Aug, 2015: -$23,000 (market crash)
- Jun, 2012: -$16,000 (house value ↓ + loss of 2nd income)
- Sep, 2011: -$15,000 (market crash)
- May, 2012: -$14,000 (market crash)
Almost every single dip was due to the markets and not anything I specifically screwed up myself.
Now take a look at the major INCREASES over those same years:
- Dec, 2017: +$93,000 (sold a website)
- Dec, 2016: +$75,000 (new partnership)
- Oct, 2013: +$62,000 (sold some sites)
- Oct, 2011: +$60,000 ($20k inheritance + mad hustlin’)
- Mar, 2016: +$48,000 (market rebound + tax refund + $10k gift)
- Oct, 2015: +$34,000 (market rebound)
- Sep, 2012: +$30,000 (sold a website + mad hustlin’)
- Jun, 2008: +$27,000 (got back all 401(k) money owed to me!)
Unlike the first batch, the majority of these changes were 100% my own doing! And apparently I like to make moves at the end of all the years! Haha…
(You’ll also notice that the ups far outweigh the dips too, coming out $181,047.42 ahead in the end)
So yes, it stings when you have major drops, but do your best to keep it all in perspective! And remember it’s much better to have wealth to begin with to lose than none at all!
As a friend of mine likes to say, you can’t have the ups without the downs. So mourn your “losses” for a hot minute, and then get right back to focusing on what you have control over!
Here’s Net Worth Report #129: $842,180.92
[As always, these reports are shared to better start discussions around money, and to showcase *real life* snapshots which we rarely see in our world… Some months we’re up, and others we’re down (like today! The “Red Wedding” of net worth reports!!), but it all gets shared in hopes it helps you along your own journey. Here’s the breakdown of October’s money…]
CASH SAVINGS (-$892.10): This is one of the only times I don’t mind it being red so the entire report stays nice and universal ;) The truth of the matter though is that about $6,000 of owed payments hit me late and thus are being carried over into November instead of October. So technically we’re down, but really it’s just stupid timing.
THRIFT SAVINGS PLAN (TSP) (-$271.87): This one here though is a true loss! And the first actually since my wife began her foray back into full-time employment. Her $500’ish monthly contributions were no match for this market crash!
BROKERAGE (-$4,110.27): A nice hit here as well, almost wiping away *all gains* since we first opened up this account back in May. But we’re still ahead compared to what this $50,000 would have been had it stayed in our savings account accruing miniscule interest!
ROTH IRAs (-$11,006.66): It’s starting to sting a little more, haha…. Almost TWO YEARS of maxing out lost in this round! Pretty wild to think about!
SEP IRA (-$43,433.68): And of course – this is the whopper of them all… An entire salary’s worth right out the door just like that – wow. Hard to look at, but gotta keep those blinders on and keep pushing forward!! Can’t have record breaking highs every month up in here!
Here’s a snapshot of how our funds at Vanguard have fared over the years. Not sure why the rate of return hasn’t been updated yet, but needless to say we’re still very much ahead of the game:
CAR VALUES (-$238.00): Lastly – the cars. Which of course you expect to devalue :) Here’s a look at the two of them, although the months are getting shorter for when that minivan comes… My wife is starting to get itchy fingers!!
As per Kelly Blue Book:
- Lexus RX350: $8,005.00 (paid off)
- Toyota Corolla: $2,314.00 (paid off)
Total change in net worth this month: (-) $59,952.58
Going in the opposite direction of that Milly, but hey – what are you going to do?
Here’s a look at the past 12 months that helps soften the blow. Still up $150,000 from last year!
And then here’s how our kids’ net worths are faring too… The markets don’t discriminate! Those meanies!
[That’s a power ranger and the arm of Phineas Flynn hugging the babe, if you were wondering…]
And that’s October! You guys do any better?? Anyone do worse?? (And want to trade? Since it probably means you have more than me? ;))
Some quick tools and spreadsheets can be found below if you’re new to tracking this stuff, but as always – keep paying attention and do your best to stay the course! It gets messy up in here, but it’s a lot worse when you ain’t got much to lose! Keep going strong! 💪💪
(Net Worth Best Friend Forever)
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Personal Capital account instead.
Personal Capital is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Personal Capital - check it out here: Why I Use Personal Capital Almost Every Single Day.
(There's also Mint.com too btw which is also free and automated, but its more focused on day-to-day budgeting rather than long-term net worth building)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!