Author Topic: Net Worth volatility  (Read 10777 times)

retired?

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Net Worth volatility
« on: March 05, 2015, 09:55:17 AM »

Since I stopped working, this is the variation I've seen in my nw, normalizing by the value at the start.  This is with about a 3% spend rate.  Of course, the market has helped quite a bit since June 30, 2014, and things can change quickly.

Am curious - aside from major events, how large a swing have you seen in your NW?  And if large, the cause.  For me, it has mostly been the market and going from Nov to Dec I did an update of home value (I adjust it once a year).

Jul-14   100.0%
Sep-14   99.4%
Oct-14   97.5%
Nov-14   98.9%
Dec-14   101.4%
Jan-15   100.4%
Feb-15   99.2%
Mar-15   101.7%

Exflyboy

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Re: Net Worth volatility
« Reply #1 on: March 05, 2015, 12:44:50 PM »
So these numbers include the estimated variation in home value?

I wonder (because home prices are highly location dependant) what you NW variation looks like without the home price adjustment?

clifp

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Re: Net Worth volatility
« Reply #2 on: March 05, 2015, 01:15:57 PM »
My year over year, net worth variation include changes in home and rental real estate prices, cashing out ex girlfriends, a failed business venture,and off course daily living expenses. Sadly I don't have the 2000,2001 figures

2002 -12.8%
2003 24.2%
2004 -13.8
2005  5.7%
2006 24.7%
2007 -0.5%
2008 -21.0%
2009 21.2%
2010 13.5%
2011 1.6%
2012 6.1%
2013 19.5%
2014 15.0%

Overall up 79.6%.
« Last Edit: March 05, 2015, 01:18:08 PM by clifp »

deborah

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Re: Net Worth volatility
« Reply #3 on: March 05, 2015, 02:49:13 PM »
Yes, my net worth is rather volatile. Each week I look at it. Some weeks it is up by more than my yearly expenditure, some weeks it is down by that much. I added a row of the difference between my net worth that week and the same week a year before. Since I did it, it has always been up for the year. However, there can be REALLY large swings between the yearly change in worth between weeks (for instance when the markets moved up between weeks last year and down between weeks this year). It's just numbers.

retired?

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Re: Net Worth volatility
« Reply #4 on: March 05, 2015, 04:59:55 PM »
Without home price adjustment, it would be:

   Original   No adj.
Jul-14   100.0%   100.0%
Sep-14   99.4%   99.4%
Oct-14   97.5%   97.5%
Nov-14   98.9%   98.9%
Dec-14   101.4%   99.7%
Jan-15   100.4%   98.7%
Feb-15   99.2%   97.5%
Mar-15   101.7%   100.0%

Interesting, without house, it is less than 1k diff from start.  I'll move it both ways, but my intention is to only move it once a year.

retired?

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Re: Net Worth volatility
« Reply #5 on: March 05, 2015, 05:02:13 PM »
My year over year, net worth variation include changes in home and rental real estate prices, cashing out ex girlfriends, a failed business venture,and off course daily living expenses. Sadly I don't have the 2000,2001 figures

2002 -12.8%
2003 24.2%
2004 -13.8
2005  5.7%
2006 24.7%
2007 -0.5%
2008 -21.0%
2009 21.2%
2010 13.5%
2011 1.6%
2012 6.1%
2013 19.5%
2014 15.0%

Overall up 79.6%.

Thanks.  So, this is after RE?  I didn't include my pre RE since it, while an interesting thing to view, was basically going up a lot due to saving.  Now that I am not really earning at the same level, I am curious what sort of up and down I might see.  Could just look at S&P for some indication.

clifp

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Re: Net Worth volatility
« Reply #6 on: March 05, 2015, 08:51:48 PM »
Yup this after RE.  2000/2001 were also down years, despite having near perfect timing (better lucky than good) in dumping my tech stock in Jan 2000 and sticking the money in bonds, it was definitely down year but I don't have the figures.  I don't think tracking this on monthly basis makes a lot of sense quarter or annual.
« Last Edit: March 05, 2015, 08:53:22 PM by clifp »

Exflyboy

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Re: Net Worth volatility
« Reply #7 on: March 05, 2015, 09:01:25 PM »
Thats fascinating Clifp.

As your the first person I have seen with a long term actual withdrawal can I ask..
When did you RE.. was that 2000?

What portion of stocks/bonds do you normally keep in your portfolio?
What withdrawal rate did you use was it the same percentage each year?

Just to clarify, while withdrawing at x% your portfolio went up 79% between 2002 and 2014?.. thats very impressive.

Thanks

Frank

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Re: Net Worth volatility
« Reply #8 on: March 05, 2015, 09:07:54 PM »
Please adjust for inflation thanks

retired?

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Re: Net Worth volatility
« Reply #9 on: March 05, 2015, 09:31:52 PM »
Yup this after RE.  2000/2001 were also down years, despite having near perfect timing (better lucky than good) in dumping my tech stock in Jan 2000 and sticking the money in bonds, it was definitely down year but I don't have the figures.  I don't think tracking this on monthly basis makes a lot of sense quarter or annual.

I do it on a monthly basis just because it (RE) is new to me.  Prior, I did it quarterly.  But, when you think about it, the generally aware person has a good fix on it all the time.  The calc is just adding precision to what you likely already know.

I feel like the monthly feedback could perhaps indicate if I need to change the mix. 


clifp

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Re: Net Worth volatility
« Reply #10 on: March 05, 2015, 09:57:04 PM »
Thats fascinating Clifp.

As your the first person I have seen with a long term actual withdrawal can I ask..
When did you RE.. was that 2000?

What portion of stocks/bonds do you normally keep in your portfolio?
What withdrawal rate did you use was it the same percentage each year?

Just to clarify, while withdrawing at x% your portfolio went up 79% between 2002 and 2014?.. thats very impressive.

Thanks

Frank

I stopped working in 1999, @39 and took a year leave of absence, in part because I wasn't really sure if was ready to retire so young, and also so I could wait until Jan 2000 to exercise stock options and sell the tech stocks (except for a large position Intel which mostly still hold) and be in lower tax bracket. I moved from CA to Hawaii during time.

In 2000, Tips bonds had a real yield of above 3.75, California Muni were over 5%. So I took most of the money from tech stocks and bought bond my AA in 2000/2001 was rough 60-65%/35-40%. It gradually moved to my desired AA of 75/20/5.  In 2009, I sold my TIPs, GNMAs and searched the couch for loose change to buy stocks and some junk bonds.  I hated bonds for the last several years. So I am currently down to 83/7/10% with most of the cash in long term Penfed CD with interest rate between 3-5%.

Facing a 50 year retirement, I wasn't comfortable with any withdrawal rate. I ended up constructing a dividend income portfolio.  I keep very careful track of my income (not so careful track of my expense) and budget my expense to be under my income.   My withdrawal rates have ranged between 2.7-3.4% of my liquid assets. Except for 2009, when my banks stocks, and even companies like GE,and Pfizer, my income has increased each year.  I spent more than my income in 2009, and the last couple years, I've been spending like a drunken sailor. But a lot less than my paper paper capital gains.

The 79.3% figure the total gain of my total net worth from 12/31/2001 to 12/31/2014  ~75%, is financial assets, but also includes rental properties, Angel investments, and my house in Honolulu.
Oh and the CPI is up 40% from 1999 to 2015, I ended up even on a real basis sometime in 2012, and well ahead by 2014

Exflyboy

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Re: Net Worth volatility
« Reply #11 on: March 05, 2015, 10:05:16 PM »
Nice job.. Thanks for the detail

Cecil

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Re: Net Worth volatility
« Reply #12 on: March 06, 2015, 02:26:33 AM »
My year-over-year net worth percentage increase, starting from Jan 1, 2007 (right after university, net worth $20,398).

Jan-Dec 2007 - 117.6%
2008 - 52.2%
2009 - 43.0%
2010 - 30.6%
2011 - 25.5%
2012 - 27.4%
2013 - 53.9%
2014 - 35.1%
2015 - 8.8% so far.

arebelspy

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Net Worth volatility
« Reply #13 on: March 07, 2015, 08:17:48 AM »
Retiring at one of the worst possible times (1999) and being ahead 17 years later and looking really strong going forward?  Awesome, and inspirational. I want to be like Clif!
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

Exflyboy

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Re: Net Worth volatility
« Reply #14 on: March 07, 2015, 10:59:42 AM »
Retiring at one of the worst possible times (1999) and being ahead 17 years later and looking really strong going forward?  Awesome, and inspirational. I want to be like Clif!

Amen Brother!

clifp

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Re: Net Worth volatility
« Reply #15 on: March 16, 2015, 05:50:11 PM »
Retiring at one of the worst possible times (1999) and being ahead 17 years later and looking really strong going forward?  Awesome, and inspirational. I want to be like Clif!

At the rate you are going I'll think you'll be well ahead of me...

arebelspy

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Re: Net Worth volatility
« Reply #16 on: March 16, 2015, 07:04:07 PM »
Retiring at one of the worst possible times (1999) and being ahead 17 years later and looking really strong going forward?  Awesome, and inspirational. I want to be like Clif!

At the rate you are going I'll think you'll be well ahead of me...

Hah.  We'll see.  I think I'll start with less (real) when I FIRE, but I do have a time advantage (FIREing younger) but also will have a family expense drag.  I'll probably have more earned income in FIRE than you, but less income from active investing (options, housing as a timing play, etc.).  That's actually an interesting question - the "race" between our NWs.  :)

In any case, I'll consider myself more than successful if I end up being able to say 17 years in that my NW is up in real dollars and grew at a rate 2x inflation (inflation over 1999-2014 was about 40%, and your portfolio grew nearly double that, 79%).
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

Exflyboy

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Re: Net Worth volatility
« Reply #17 on: March 17, 2015, 09:20:54 AM »
Speaking of volatility,.. I think my NW has been jumping up and down by about $20k a day over the last couple of weeks!

pdxbator

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Re: Net Worth volatility
« Reply #18 on: March 17, 2015, 02:03:11 PM »
Speaking of volatility,.. I think my NW has been jumping up and down by about $20k a day over the last couple of weeks!

Mine has been doing the same. If the market has a big drop just keep an eye on the long-term.

Exflyboy

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Re: Net Worth volatility
« Reply #19 on: March 18, 2015, 12:35:27 PM »
Oh yeah I am doing my best to keep the business news turned off..:)

RootofGood

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Re: Net Worth volatility
« Reply #20 on: March 18, 2015, 06:32:03 PM »
It moves a lot.  I think +$74k in February, but just a tiny bit for March (to date).  Though the intra-month swings in March have been crazy. 

FYI, $74k represents ~2.5 years of living expenses.  It's weird watching that grow or disappear in a month's time.

Exflyboy

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Re: Net Worth volatility
« Reply #21 on: March 18, 2015, 07:06:34 PM »
Your telling me.. last week the market went down by a whole years worth of our expenses in 2 days!!!!!

Wild ride for sure..:)

dude

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Re: Net Worth volatility
« Reply #22 on: March 19, 2015, 06:08:10 AM »
Retiring at one of the worst possible times (1999) and being ahead 17 years later and looking really strong going forward?  Awesome, and inspirational. I want to be like Clif!
Ditto!!

Threshkin

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Re: Net Worth volatility
« Reply #23 on: May 04, 2015, 01:52:35 PM »
I am only 4 months into this FIRE thingy.  My NW has bounced around a bit but it does not worry me much.  I don't like standing close to cliff edges so I have a cushion.

As of the end of the month:
Dec: 100%
Jan:  97%
Feb:  89%
Mar: 103%
Apr: 106%

Edit:  The numbers I like better are my NW growth since I started paying attention to it in Dec 2011:

2011: 100%
2012: 181%
2013: 247%
2014: 293%
2015: 312% YTD
« Last Edit: May 04, 2015, 01:59:20 PM by Threshkin »

Dicey

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Re: Net Worth volatility
« Reply #24 on: May 04, 2015, 02:02:50 PM »
I'm having too much fun to worry about any of that. I'm in a widely diversified, well-balanced portfolio plus rental property and a paid for house. I strenuously follow the low information diet. I do not lose sleep or daylight worrying about much of anything.

BPA

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Re: Net Worth volatility
« Reply #25 on: May 05, 2015, 06:03:34 PM »
Love this thread.  Because my form of viewing volatility is to observe the commuted value of my pension pre-FIRE beyond anything else, I will be using you all as inspiration when I pull the plug. 

Thanks!

soccerluvof4

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Re: Net Worth volatility
« Reply #26 on: May 07, 2015, 10:49:31 AM »
PDXBATOR AND EXFLYBOY- I am riding the same rollercoaster! been that way for quite awhile! Be nice to climb a large hill or go down one to add. Only time will tell which will come first.

DoubleDown

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Re: Net Worth volatility
« Reply #27 on: May 07, 2015, 11:52:26 AM »
I FIRE'd only near the end of 2013, here's my limited data so far:

2013:           100%
2014:           105%
2015 (YTD):  112%