Net Worth update - December 2007: Up 1.3%

Our household Net Worth at the end of fourth quarter, 2007, was $658,360.

Our Net Worth increased by $8,160 (or 1.3%) in this quarter. This quarter has been a challenging one, due to the poor returns in the stock market, and some unexpected expenses we incurred. To summarize:

  • We made $13,450 in new contributions to our savings and investment accounts.
  • We had a net increase in our real estate assets of $11,577, partly due to mortgage payments we made and partly from increase in the value of property we own in India.
  • We had a net unrealized loss of $16,867 in our investment accounts.

Looking back at 2007, our Net Worth increased by $128,345 (or 24.2%) for the whole year.

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Anonymous said...

i just stumbled into your website 3 days ago.its awesome,thank you for your pioneering your net worth posts do you consider valuables like gold or diamonds?
thanks again.

Nigel said...

Hi Sid,
Thank you for the nice comment. I don't include any possessions (cars, other personal items etc.) in our net worth. Some others do, so it is just a personal preference. If you are holding gold etc. as an investment that you may sell one day, you should certainly include them, but in our case we don't have any such holdings.

Anonymous said...

thanks again nigel. pls keep posting i'll be a loyal reader.

hopingR2I said...

Man, what a great resource you are. Everything I wanted to see to decide on an R2I.

we (GC holders) are thinking of r2i in next few years and researching the implications of that. Can you please share your knowledge on these topics

1) we are already contributing to a ROTH IRA (starting 2004) since our HHI is in the allowed limits. My question is, am I still eligible to convert our 401(k) to an IRA and then to a ROTH IRA anytime after 2010 ? Personally, my intention is to grab all the money (contributions) from ROTH before I r2i and leave the earnings to grow.

2)I have seen you have a college savings account. we have not started a CSA/529 because I am not sure whether the money can be used Tax/Penalty free for education in India.

3) If one of us becomes a USC and another one continues to be a INC by the time we r2i, will there be any (dis)advtanges ?

Thanks again for such a a great resource.

Nigel said...

Thank you for the comment.

Please note that there is a 5-year waiting period before you can withdraw your contributions from a Roth IRA without penalties. If you do a Roth conversion, you have to wait 5 years after the conversion to be able to withdraw your contributions.

Money from 529 accounts can be used in some colleges abroad (see here for a list, but I don't think there are any colleges in India on this list currently. I would not count on it.)

I am not knowledgeable enough about a situation where the husband and wife hold different citizenships. It does seem to make your tax situation more complex. You may find the R2IClubForum to be more helpful for this.

Please also note that our plan is not to "return" to India, but rather to retire there. For instance, we have no plans to work or educate children in India. Some things I mention in my blog may not be right for your situation.

Anonymous said...

hi Nigel,
good work. just a quick question related to you accounts. Why do you have an IRA and 401 k account separately. Is there any benefit doing it that way. In other words, why open an IRA, if you have employer provided 401k. Are you doing it obly for investment choices. Again why do invest in money market, how much interest that it generate. If you want to maintain some liquidity in hand, can online savings account like HSBC be a better choice.


Nigel said...

Yes, I like IRAs for the investment choices that they provide, especially if your employer's 401k plan is not particularly good. Another reason to open an IRA is if you have exceeded the maximum pre-tax limit allowed for your 401k (currently $15,500 annually). You can also contribute after-tax money to a Roth IRA which provides some unique long-term benefits. Another reason is that if you frequently switch jobs you will end up with multiple 401k accounts which can then be consolidated to a single IRA.

I like money market mutual funds since they can be conveniently held in a brokerage or IRA, along with your other investments. You don't need to open a separate account just for cash. I use Fidelity Select Money Market (FSLXX) which currently yields 4.2% which is comparable to online savings accounts. On the other hand, they are not FDIC-insured unlike bank accounts, but are considered very safe.

Anonymous said...

Hi Nigel, please give an update on net worth and asset allocation. Are you still on track for this plan or had to make adjustments since last update? It will help me with my asset allocation too.

Nigel said...

Thanks for the interest. I am no longer posting updates to this blog, but we are making steady progress towards our goal. I made one small adjustment to our asset allocation (slightly smaller stock % and no REITs) to reduce risk and volatility.
But otherwise things are the same, and I have been re-balancing periodically.