This is probably one of the posts I was least looking forward to doing, as I knew that after the poor results from my June net worth summary there wouldn’t be much to look forward to there. While I’m not constantly checking my portfolio, there is something addicting about seeing the numbers going up every month. I have to realize that things aren’t always going to look that way, especially as my portfolio gets larger and larger. My savings will have a much smaller affect on the total compared to where the market is taking me. This was probably an excellent lesson for that, and in the end the results really weren’t that bad.
Tracking my retirement number is just as exciting for me as tracking net worth, because they are so tied together. I love being able to watch my net worth go up, and seeing my target retirement date go down! Unfortunately that was not the case so much in June, as expenses caused the total amount needed for retirement to go up, cancelling out the net worth growth. When I first went to run the numbers, I actually expected things to look much better than this. It’s a perfect example of how your expenses are just important as your total savings when it comes to establishing a safe withdrawal rate and a targeted total amount.
We’re finally making some progress again, this was welcome news when I went to calculate all of this in May. This was to be expected based on the net worth increase in April, but it’s always nice when the numbers are able to confirm it. The temporary lower expenses may have boosted my retirement estimation target the past few months, but now I know that my net worth will be the contributing factor.
There’s not too much to report once again this month, with my net worth remaining flat. Probably the only variable that has really changed is the fact that I’ve increased my savings rate by bumping up my 401k contribution rate by another percent. I still feel like money has been accumulating in my checking account, and I’d rather be putting that excess into the market where it will hopefully be earning money. When money is just sitting in my checking account I know it won’t be doing anything!
I’m not expecting too much from this analysis for March with the fact that my net worth actually decreased in February. But I do think it’s important to keep doing this to see the long-term trends and flat areas, like over the past three months. As long as I continue to save the same percentage of my income, the market should return at a positive rate over a longer time period. Obviously these things are not guaranteed, but growth is necessary for an early retirement.