Net Worth and Investment Performance – Second Quarter 2012

Regular readers know that I am a big believer in net worth tracking. My reasoning is simple. When we retire, our income will come from Social Security and from our retirement nest egg. The more liquid assets we have, the more income we can theoretically generate. Net worth is one of the most direct ways of learning if you are making progress toward a reasonable retirement, at least financially.

Tracking net worth is easy for me because of the detailed personal financial spreadsheet I created in 2010. It provides an instant snapshot view of our financial condition. This spreadsheet is maintained in Google Docs so is accessible from any computer, smart phone, or tablet.  I highly recommend that all baby boomers use this or a similar method to track their performance. It is an excellent way to instantly cure the dreaded “head in the sand” retirement non-planning syndrome.

Enough lecturing – let’s get to the numbers.

In the second quarter ending June 30, our net worth increased 1.6%. Year to date, it has increased 3.5%. Compared to the second quarter of 2011, our net worth is up 6.3%.  These are not stunning  numbers by any means but I am generally pleased. Over the last 12 months, the markets have  been highly volatile and we have burned significant cash replacing two roofs and completely remodeling a master bathroom. In these calculations, I have not factored in any changes in real estate values because I don’t believe there has been significant movement in either direction.

Our core retirement assets are held inside my 401k account. Our personal rate of return on those assets was 1.77% for the second quarter and 2.82% for the first six months of the year.  This is our investment return and does not include balance increases resulting from ongoing contributions. (We contribute the maximum permitted by law, including over 50 catch-up contributions.)  Again, these are not fantastic numbers but considering that the Dow was down 2.5% in the second quarter, I’m not crushed. The Dow is up 5.35% for the year so we are trailing that by a significant margin. However, our equity positions have been substantially reduced to limit volatility so this is to be expected.

Our best performers in our core holdings continue to be LTPZ (+7.1% YTD) and VIPSX (+3.9% YTD).  I will likely do some selling and re-balancing before the election this fall, to prepare for what may come. I also have to decide whether to continue the CD ladder we created inside the 401(k) account.

How did your retirement plan perform during the second quarter? I welcome any comments, criticisms, suggestions, etc. that you have for me.




  1. rick fiedler says

    I’m early 60’s and have discovered closed end funds and have seen very good results, you can buy them at a discount to their actual NAV and some pay a good steady dividend, most of them are up over 6% for first 6 months of 2012, actually prefer them now to regular mutual funds. FOF is a good one to look into

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