Finance Travels

The first month of 2012 was definitely a success.  With the stock market up a good bit, we managed to pump out nearly $12,000 in net worth increase.  We also payed down about $1,300 on our mortgage, which means that the balance is now down lower than what it had been before our refinance a few months ago

I’m hoping to cross the $300K line in February, as we expect to receive our IRS return.  The majority of this money will be spent to again pay down the home mortgage – I’m laser-focused on getting that mortgage note payoff date down to 2036 so that we can get back to the timeframe of our original 30-year mortgage.

We beat our benchmark of VTI in December 2011 by .36%.  Our portfolio increased in value by 1.74% while VTI increased 1.38%.

Our stock performance for 2011 is summarized in the below table:

So, we only beat our comparison index in one-half of the months.  However, if you sum up the totals, we managed to stay ahead over the entire year by .67%.  October was our best stock performance month, with a gain of over 8%.   Likewise, September was the worst month with a 6.26% decline in investment value.  We did improve significantly from when I started keeping track of these values in 2010.  In that year, we trailed the VTI index by .12%, so 2011′s performance did beat that by nearly three-fourths of a percent.

In comparing 2011 with previous year’s total net worth gains, I was surprised to see that 2011 was our second worst year in net worth change.  I then went back and compared our yearly performance with our stock market comparison index (VTI), and saw that the large increases we had seen in past years had more to do with market performance than I initially believed:

So even through the market was basically flat in 2011, we still increased our net worth by almost $30,000.

I also went back to look at our 2011 spending vs. 2010 spending and found the numbers to be comparable.  There were a few places where we overspent, but in most of the cases, we managed to decrease our spending over the year, especially in groceries and dining costs.

All in all, I think 2011 was a good year financially.  Much more importantly, we’ve been blessed with good health, good friends, and good family.

Our financial plans for 2012 are basically to stay the course.  Our immediate goal is to pay down the credit card charges that we encountered over the holidays and then begin paying down the home mortgage again until we hit that 2034 pay-off date again.  I think we can reach that goal in 2012 pending no more refinances and a little concerted effort.  The only major expense that I can foresee in the upcoming 12 months is the need for a new (used) vehicle, as our 2004 minivan will soon hit 150,000 miles.  We’ve been saving for a sizable down payment for this anticipated expense, so we’ll be ready when the time comes, which hopefully won’t be until November or December of this year.

Although December was by far our most expensive month due to the holidays and a new computer purchase, as well as over $1,000 deducted for vehicle depreciation, we managed to post a decent net worth increase.  Our investments did very well and beat the market’s overall performance by a fair amount.  December was also a “3 paycheck month” for my wife, and that contributed a good bit towards the increase as well.

I’ll have a year end post to summarize progress made in 2011 and identify goals for 2012 posted in the near future, but overall, it’s been a good year financially.  We made some progress on our goals and even through we didn’t get our home mortgage paid down as much as I had hoped (partly due to the refinance in October), I think that goal is attainable in 2012.

Due mostly to losses in my 401(k), we ended up down slightly over the month.  Oddly enough, November 2011 ended up be one of least expensive months in regards to spending.  November typically is one of the most expensive months due to Christmas shopping.  This year, we spent a 10 days of the month on a pre-paid vacation, so I’m sure that had a good deal to do with the decreased monthly expenses.  It also puts a red-flag up though, in that we haven’t bought Christmas gifts yet, and that is going to mean that December is going to be pricy.

We did lag the market significantly in October.  Even with the big gain, VTI did a good bit better.

With the stock market’s gains in October, we were able to set a new net worth increase record while blowing our old record from July 2009 out of the water.  Of course, even with the increase, we are still below our maximum net worth value from July of this year, so the celebration is somewhat muted.  As far as expenses go, October was a pretty good month.  We managed to keep our expenses relatively low in anticipation for this month’s Florida vacation.  November and December tend to be rather expensive months around here, so hopefully we can maintain a positive flow into the end of the year.

For the third straight month, our investment portfolio beat our benchmark.  Unfortunately, it was still a negative month though.  We lost 6.26% of value, while VTI lost 7.54%.

As expected, we took a major hit in our net worth value in September.  Between the poor performance in the stock market, our mortgage refinance, quarterly depreciation adjustments on our vehicles, and paying for our November vacation, we ended up down over $12,000.

The refinance went smoothly, and we’ll be saving well over $60,000 over the life of the mortgage in comparison to our original home loan.  We will continue paying the original amount of the monthly payments to get the thing paid off faster.  We took a pretty big hit in our 401k this month, with it’s decrease representing over half of the total monthly decrease.

Hopefully, the bleeding will stop in October, as we currently don’t have any major expenses planned for the month.

Our portfolio continues to do well in comparison to our benchmark in this rough market.  We were up 2.29% over VTI for the month of August, and it looks like September will be a positive month as well.