Net Worth volatility

[retired?]

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]

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]

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%.

[deborah]

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?]

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?]

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]

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.

[Exflyboy]

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

[dragoncar]

Please adjust for inflation thanks

[retired?]

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]

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]

Nice job.. Thanks for the detail

[Cecil]

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]

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!

[Exflyboy]

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]

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]

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%).

[Exflyboy]

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]

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]

Oh yeah I am doing my best to keep the business news turned off..:)

[RootofGood]

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]

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]

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]

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

[Dicey]

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]

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]

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]

I FIRE'd only near the end of 2013, here's my limited data so far:

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