Net Worth update - 2008 First quarter: Up 1.4%

At the of the first quarter of 2008, our Net Worth was $667,648.

Our Net worth increased by $9288 (or 1.4%) this quarter. The return on our overall portfolio for the quarter was a negative 1.9%, however.

I calculated our portfolio return using a neat formula that I first came across in the book The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William Bernstein. It goes like this:

First find the portfolio value at the start and at the end of the period. Next, calculate the Net inflow for the period which is total amount of money you added to the portfolio during the period minus any money you took out. The Net inflow may be positive or negative. Then,
Portfolio return = (Ending value-Net inflow/2)/(Starting value+Net inflow/2) - 1.

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MRS said...

Good blog! With the increasing real estate prices in India vs. declining US real estate values and declining USD/INR rates, are you affected by the "double whammy" effect? How much of your net worth do you plan to spend on your primary home in India? Or do you own any real estate in India currently that you plan to build a home on or sell to cover the cost of your home upon return to India?

Nigel said...

Thanks for your comment. We own some investment property in India but since we have no plans to retire in the next 10 years, we do not plan to build or buy a home there anytime soon. Real estate values and currency exchange rates are unpredictable in the long term and there is no reason to believe that the current trends will continue indefinitely. If real estate prices in India stay high, it may make more sense to rent rather than buy in many areas.
Also note that we are not planning to "return to India"; we are only planning to spend some or all of our retirement years in India if it will help us to retire at an earlier age.