Finance Travels

Sigh…  Not much to say here other than I’m getting tired of seeing the red line below the blue line.  I need to seriously rethink our investment strategy going forward.

Considering that I figured that we would experience a net worth decrease in April, I’m pretty happy with the slight increase that we experienced over the month.  The month was expense-heavy due to a new countertop purchase and a few other out-of-the-ordinary expenses that were incurred.

These expenses can be seen below as increase credit card debt.  I am taking advantage of a cash-back program through American Express and will have these paid down to our “normal” levels next month.

Our stock portfolio once again trailed the market this month.  I really need to take some time and try to get it figured out and balanced so that we can start seeing some improvement in that category.

May should be a relatively quiet month in regards to expenses.  We have our new countertop installation late in the month, so I’m sure we will have a few incidental associated costs, but nothing major.

Our underperformance of our investments when compared to the benchmark of VTI now continues into its sixth month.  We trailed the index by 1.22% this month.  Again, a large part of the problem came about from an overly-heavy position in Apple stock.  All new funds being invested will either go directly into VTI or into existing holdings other than Apple to help balance things out going forward.

March ended up another positive month, with a gain of nearly $6,000.  Being that this was the end of the quarter, I entered in a conservative vehicle depreciation asset deduction of $2,000.  Our expenses were a bit high this month, as we upgraded our basement home entertainment theater in an effort to “cut the cord” from DirecTV and switch over to an IP/Streaming based solution using a Roku box.  So, while we had to upgrade our projector to HDMI and make various other changes, we ended up with a significantly upgraded setup that will cost less monthly to run.  We’ll be investigating later this summer if a complete “cable/satellite” free system with work for us, but for now I am happy with reducing our monthly Satellite TV bill by about 15%.

I suspect April will be a rather expensive month, as we are working towards upgrading our ugly formica countertops with a more modern granite product.  We’ve been shopping around getting quotes since the beginning of the year and have finally found a solution that we like.  We haven’t yet pulled the trigger yet though, as we are waiting for the installer to offer one of their fairly regularly scheduled sales price events.

For the fifth straight month, our stock portfolio lagged in comparison with VTI.  The fact that I’m not picking better than this index fund makes me believe that I need to start putting some more of our investments in VTI rather than trying to out guess it.

Fortunately, the gap this month wasn’t huge as it had been the previous two months.

February ended up with a nearly identical net worth gain as the month before.  We grew our net worth by a tad over $8,000.  A sizable part of that came from our 2012 tax return refund.  Additionally, we did a great job in reducing our spending for the month.  Our monthly expenses were the lowest that they have been since September of 2010.

Unfortunately, our investment performance over the month once again trailed our index fund.

January ended up being a positive month with a net worth increase of 2.45%.  Our spending numbers were good, especially considering that we bought new carpet for a significant portion of the house this month, yet we still spent less that we did in January of 2012.

Looking back, I realize that I’m 3 months behind on updating our stock performance.  To make a long story short, it hasn’t been good (perhaps I’m hoping that it will just go away if I ignore it).  Because of Apple’s continued decline in stock price, I’ve trailed our index of VTI for 4 straight months.  December 2012 and January 2012 were very bad with trailing figures of 3.14% and 2.57% respectively.

I do feel as though our portfolio is too heavy with Apple stock, but I’m not willing to sell it at its current price.  I will consider diversifying our position if/when Apple reaches a fair level again, but for the time being, we are going to stick with what we have.

2012 was a record year for increasing out net worth.  We ended up over 50K than what we had been at year’s end of 2011.  This accounts for a 17.9% increase and, while this may not be a great benchmark because we are dealing with more than investments, we beat the VTI index by over 4 percentage points.

I’ve been keeping a close look at our spending, and we did manage to spend a few thousand dollars less in 2012 than we did in 2011.  Hopefully, we can continue the trend and decrease that even more in 2013.

Some highlights for 2012:

• A new vehicle, one that we are hoping to keep for at least 8 years and have paid off by 2014.
• A good number of home improvements, including new flooring in several rooms.  We saved a lot of money by doing these ourselves (for the most part), and I feel they really have increased the value of our home (although we don’t reflect it in our net worth estimates above).
• We stayed well under budget on our vacations and got great value for the trips that we did go on.
• We survived the summer of the broken appliances when both our oven range and clothes washer died within 45 days of each other.  Fortunately, we had enough of an emergency fund to deal with both of these events, but that emergency fund took several months to get back up to its previous level and is still about $250 shy.

The goal for next year is to break above $375,000 net worth.  We do have some job security issues that will (like it or not) be resolved in 2013, so that may derail us somewhat.

We ended up down very slightly for the month of December 2012.  However, I did account for a bit more quarterly depreciation on our vehicles that was probably necessary, so this number is probably somewhat low.  The reason that I try to stay conservative with vehicle values is so that later down the road I’m not hit with a huge depreciation decrease.

We’ve been stuck in the 330,000 doldrums since August, and hopefully can finally bolt out them in January of 2013.  This December had some fairly high expenses, as we are finally replacing the stained carpet that came with our house when we bought it in 2006.  I also did a DIY bathroom remodel over Christmas break that probably costs about $400.

I’ll do a year end wrap up and goals for 2013 in the near future.