2005 Net Worth Review

I have been looking forward to this time of the year, because I can finally put together the full numbers for 2005 and look for good or bad trends and areas I might be able to improve.

Let me start with a chart of my monthly net worth for 2005. I started the year with a net worth of $157,340 and ended the year with a net worth of $206,990.

On the surface this chart looks pretty healthy, net worth is trending in the right direction - mainly UP. Hard to complain about that. However, if you look at the trend, my net worth seems to be moving up very linearly. As I have mentioned before, I am always striving to find exponential ways to improve my net worth. It may not possible, but obviously the faster my net worth increase, the quicker I will achieve my goals.

Here is another chart that tracks the total change per month in my net worth for 2005:

As you can see I actually decreased my net worth in Jan 2005, mainly the result of very sharp declines in stock investments. Other than one month were I had to pay closing costs on my home, I have never had a down month since I began tracking my net worth. January was a rough way to start the year.

The rest of the months seem to revert towards an average somewhere between a $4,000-$5,000 increase in net worth per month. This average is good because this is about the same rate I need to maintain to hit my 2006 net worth goal.

Now lets look at how much an impact my investments had on my net worth change each month. Keep in mind these numbers only include my taxable stocks held in various brokerage accounts and DRIPS. It does not include my Roth IRA nor my 401k.


As you can see there are a couple key months where I suffered significant losses in stock investments. In January, my investment suffered from a general market downturn and in April, my investments suffered from sizable losses from my heavy exposure to IBM stock, which plummeted in April after a disappointing 1Q earnings report. However this didn't result in a negative monthly net worth gain because I received my annual performance bonus during the same month.

Nothing really earth shattering in this review. I was able to pretty consistently increase my net worth month-to-month in 2005 despite lackluster performance in the stock market. Lets hope I can do the same in 2006.