As part of my goal to have six-figures invested, I'm posting periodic updates of my net worth. I missed posting in September, but in the grand scheme of things late September is pretty close to early October, so I don't feel too bad. Besides, the daily fluctuations aren't important. What's important is the focus on continually investing my excess cash so that my dollars are working for me.
My last net worth update was August 25th. Here are the current totals, along with the differences:
- 401k - $25,413.58 ($1,239.99)
- Lending Club - $2,374.32 (-$29.32)
- Schwab - $2,946.30 ($1,450.00)
- I-bonds - $1001.28 ($401.28)
- Total - $31,735.48 ($3,061.95)
The increase in my 401k was probably half from new contributions, and half from market increases. Of note I've been changing my contributions to the various mutual funds my plan allows. I think my new contributions are 100% into the utilities fund, and I rebalanced to somewhere around 80% utilities, 10% international, 10% REIT. I chose the funds mostly based on their relatively low (yet still insanely high) expense ratios.
My Lending Club account is showing a loss. This isn't due to someone defaulting on their loan. Instead, I withdrew around $60 of cash because I was scraping together money from my various accounts to buy some stock. Interest is still rolling in, and the notes I have seem pretty solid (no defaults yet), so I feel okay about Lending Club for the short term.
My taxable investment account at Schwab is showing a big increase. I bought another 100 shares of Corning (GLW), this time for $14.85. If you recall, I bought my first 100 shares of Corning back in March for $12.51. Back then I still had student loans. I'm excited about Corning. I love the company and I think that at current prices it could be a great long-term value (I'm talking 10 years or more). I currently have 201.3878 shares, thanks to two dividend reinvestments so far. Fractional dividend reinvestment is a big reason I like Schwab.
For the I-bonds, I'm opting to use the "current value" which includes accrued interest, even though I can't redeem the bonds until a year has passed since the date of issue. I am really happy with my I-bonds. Passing the $1000 mark feels good, and even though the interest rate is a measly 1.18%, my emergency fund is guaranteed not to lose value to inflation. I'd like to keep up my $200/mo contributions for as long as I can.
In the end, my investments increased by over $3k this month. This is really good. I don't think I can keep up this rate of increase, but if I can, I'll be at $100k in less than two years.
I have about $2k in cash. I'd really like to buy another 100 shares of Corning, but I think pragmatism is going to get in my way. I still have a little over $3k in 0% credit card debt that will come due in March 2014. I should also have a short-term liquid emergency fund for if and when I switch jobs. We'll see how the next month goes. Either way I'm feeling pretty good.
Why is corning worthy of 100% of your controllable stock portfolio? The desire to buy even more of it seems like an emotional decision. If you know you'll have the money for the 0% payoff in march I say find another investment to start paying you dividends.
ReplyDeleteCheers.
Well, right now my taxable investment account isn't very large, so barring investing in an ETF I'm not capable of diversification. Of all the companies I've looked at recently, I still like Corning most. I think the market is unfairly discounting their prospects, and I think the mid-$14 range is still an attractive entry point, given that I'm looking to hold on to Corning for many years (if my investment thesis pans out). I'm happy to write up the specifics of why I like Corning so much in a future post.
DeleteEventually I'll buy more and more companies, but in the short term I don't see any that I think are attractively valued. None I really like, anyway.
Do you have any ideas? :)
I enjoy reading your posts, because I think that you are making a serious attempt at being transparent, but I think that maybe you should rename your updates "investment updates", because you make it clear that you have some debt, but it's not clear that this is all of it. Again, I don't want to sound overly critical, because I enjoy getting your updates, but I'm just looking for more information.
ReplyDeleteAlso, why not try an ETF or index fund? You have a good long view and these could pay off for you.
Great work this October!
That's a good point. "Investment update" implies it's just investments, but "net worth" should be subtracting things like debts. I'll probably change it going forward. Thanks!
DeleteI can't remember if I've written about why I want to build a stock portfolio instead of indexing, but in a nutshell: when I'm finally retired with a huge portfolio, I'd rather not be paying an expense ratio. That'll cost at least a few hundred dollars every year, depending on the funds I'm invested in. I also want to like the companies I own. It really bugs me thinking that I've got some of my hard-earned money in a company like Monsanto or Facebook.
I'll try to remember to elaborate on my reasoning a bit more in a future post. I know that indexing is the right move for almost everyone, but I just don't feel like it's for me.
Same Anon as before: Great answers! I think that it's very mustachian to try to reflect your values in your investing! When you tie it to the wasted money of an expense ratio, it's double mustachian!
DeleteKeep it up!
Thanks. I'm also spending a few hours a week learning how to research and value public companies. If I didn't find security analysis interesting I'd definitely go with indexing. This seems like a hobby that's right up my alley.
DeleteAttractively valued is another way of trying to time the market. It's fun to buy lots of whole shares but the dividend percent pays the same amount of cash per dollat spent on the stocks.
ReplyDeleteMaybe the glass house analogy is a bit haknyed but I'd like the windows to be pyrex and other parts to be still paying me in case they break.
Oil stocks are pretty much flat on the year and pack nice dividends. I don't think you can go too wrong if you spend the same effort that you have with corning on finding your second stock.
Cheers.
You caught me: I'm definitely trying to time the market. I'm looking for deals! It's not like I have a lot of money on the sidelines either.
DeleteTo be fair, GLW isn't the only stock I like. As businesses, I also really like AFL and XOM at current prices; and of course companies like KO and MCD are fantastic and I'd love to own them at anything that looks like a fair price.
There's also this company Potash Corporation of Saskatchewan (POT) I've been looking into, that looks like it has an awesome management team and solid long-term prospects. It got beaten up lately, but I'm not sure it's cheap enough to constitute a good value.
More on all this later. For now, I'm going after Corning :)
I hope you timed the market before today =)
DeleteHi Acho,
ReplyDeleteI like your blog, especially this net worth update. I also have Lending club, 401k, and thanks to your post I am putting money on I-Bond. Have not ventured into stocks investing yet but I will pretty soon once I finish my last debt.
Corning is a ceramics company? Anyway thanks for updating your blog.
Woo hoo I-Bonds! You may be the first person I've convinced. Glad to hear you're on the road to paying off your debts and investing in your own personal freedom.
DeleteCorning researches and manufactures specialty glass and ceramics. The ceramics part of their business is relatively small if I remember correctly, and mostly focused on catalytic converters for automobiles, as well as some other eco-friendly wares.