Stocks For Your Kids: Year 1 Update
Dear son,
Happy anniversary. Today your ShareBuilder.com account is roughly 1 year old, and in a few days you will be 5 years old. We're just getting started on your path to financial freedom. I can't wait for the day when you and I can sit down and talk about this together (i.e. bore you to death), but for now, this post will have to do.
Last year at this time, I opened your brokerage account. As you can see, your portfolio has done pretty well in the past year. Your return of ~20% has outpaced the DJIA, S&P 500, and Nasdaq Composite over the same time period, and you've more than covered the ~$90 in commissions that we paid to buy these stocks (always important to remember your true cost basis). In this year you have weathered the tail end of a recession, strife in the Middle East, and the most powerful earthquake that Japan has ever experienced. All of these macroeconomic events have had meaningful impacts on our economy and the stock market. Read more
My Droid X and Its Cheap Case
I don’t really do product reviews, but I’ve owned my Droid X for about a year now and for the last 6 months, it’s been protected by the Motorola MB810 Droid X Rubberized Shield Hard Case Black
If I don’t do product reviews, why am I mentioning it? Well, I brought it up because it only cost me $2.81 plus shipping. That’s not a typo. I looked all over Amazon for Droid X cases and the prices are all over the place. I finally landed on this one and thought that it was really too cheap to be true or any good. Now, many of you should rightfully point out that a phone that costs as much as a Droid X should have a case that is of comparable quality (and probably priced accordingly). It’s hard for me to argue this point except to say that this case has held up great for 6 months, and I could buy 10 of them for the price of 1 of the more expensive trendy cases like the OtterBox Defender Case
What about you? Have you ever bought an expensive item and then tried to protect it using something cheap or better yet with something that MacGyver might come up with? I really am a sucker for anything Macgyver-like. How did it work out?
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Zillow Effect on Net Worth
I’ve been posting my net worth for about 6 months now. In that time, I’ve seen a lot of fluctuation that seemed inconsistent with my savings goals. Either something was out of whack with my expenses or something weird was going on. The answer became fairly obvious when I looked at the trends, particularly the trend in the valuation of my home on Zillow. Their “Zestimate”.
Basically, for the past year my home has been declining in value. This actually doesn’t worry me at all since it still hasn’t even fallen to the price I paid for it 2.5 years ago. I’m also unconcerned since I don’t plan on selling it in the next decade or so given that my family and I love where I live. The part that peeves me though is that this Zillow valuation decline basically negates gains in all other areas when I’m calculating my net worth. Would I be as upset if the valuation was artificially boosting my net worth. Maybe, but honestly probably not. I would probably be marveling at my paper gains just like so many others did a few short years ago. But, that’s not the case. The reality is that my home is a very large variable in the calculation of my net worth (over 50%) so any movement in its value causes meaningful shifts in my net worth that really have nothing to do with the day to day effects of my investment and saving decisions. Thus, I wanted to see what my net worth would look like if I took the Zillow home valuation fluctuation out of the picture.
To do that, I re-visited my net worth Excel sheets and created a new net worth figure that removed the Zillow value of my home and replaced it with the actual price I paid. This seemed like a fair number to choose since the current valuation is pretty close to that price. You can see the results. 
Basically, if we remove the Zillow effect from the equation, you can see that the artificial benefit of that valuation resets my net worth much lower, but it also shows the reality of my investment returns, savings gains, and debt reductions over the last few months in a far more meaningful manner. Now that’s a trendline I can get behind!
Quest for a Million – Net Worth – 5/2011
Good news! Luckily April has turned out to be a much getter month than March. My new HVAC system is working just fine, I haven’t made any retarded stock or option trades, and my wife’s health is continuing to improve. Unfortunately, there have also been no financial windfalls during this month save the fact that it’s a 3 paycheck month if you’re paid biweekly. I am, and I used the additional paycheck to put a tidy sum into our Roth IRA’s for 2011. Funding the Roths is always stressful because I would like to do it as close the beginning of the year as I can so the money can be working for me, but cashflows just currently don’t allow for that to happen. However, this was a good start. I hope everyone has been able to at least contribute a little to their Roth IRA’s for 2011 as well.
So, how is net worth looking this month? Let’s take a look. Read more
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