The end of the first quarter of 2010 means its time to measure progress in our retirement investments and overall net worth. At this stage in our retirement planning, overall forward progress in wealth building is crucial and less important than discrete investment returns. When I use the term “wealth” in this context, I refer to assets that can and will be used to generate retirement income. More than ever, I am all about “liability focused investing.” The “liability” in this case is our retirement income.
Speaking of inflation fears, our biggest winner in our taxable accounts was DBC at +12.3% for the quarter. This is a commodity index tracking ETF so it is no surprise that it did well. Increases in energy and food prices are a prime mover now.
Our net worth increased 2.6% in the first quarter. Real estate values were flat, although the developer has now increased asking prices on condos like ours by $20,000 over what we paid. I don’t know that he will get it but I sure hope so. For now, I am holding the valuation for our net worth calculation to the appraisal we received last November.
We still own our three old vehicles. I started to look at replacing one of them with a left-over new or used 2010 Prius, but the dealers (and therefore secondary sellers) have jacked the prices up by several thousand dollars. This is a knee-jerk response to gas prices and part-shortages in Japan. It happened in 2008 as well. I refuse to negotiate in such a market so car-buying will wait until equilibrium between demand and supply is once again achieved. Car dealers have no shame and are unconcerned about reinforcing the negative perceptions about the way they do business. Folks who borrow to buy cars are more interested in monthly payments and less about the total vehicle cost. When the Toyota salesman learned that I wanted a cash deal after showing me the $2,000 dealer mark-up hand-written on the sticker, he knew he would not be selling me a Prius that day.
So how did your personal balance sheet perform in the first quarter?