My Quarter End: Q4 2013

What an absolutely incredible and breathtaking year. Sitting here writing at the end of 2013 my household net worth stands at $331,838.63 And a milestone has been surpassed during this past quarter. For this first time since I began recording my financial statistics, our cash and investments have now exceeded my partial piece of California real estate in value. This past quarter alone on my balance sheet really tells the tale of how the market has behaved over the last 5 years. During the last three months my partial piece of real estate declined by roughly $10,000, while our mutual funds sky rocketed by a little more than that same amount, accounting for the increase in our overall net worth from the 3^rd quarter of 2013.

What is most impressive to me in the equities market is that there was an abundance of negative news that hit the news headlines over the last few months. Bernanke and the Fed set the tapering wheels in motion, the launch of Obamacare has been botched and left an even greater level of uncertainty in the health care industry than ever before and the budget deal that the Congress and Senate are ramming down our throats behind closed doors is an absolute abomination. And in the face of all this, the market has continued to rise like a magnificent sunrise over Lake Michigan.

I do not believe that we will see a freefall crash in 2014. In fact if we look historically in years past there has been a significant jump in equities between Q4 and Q1 and I don’t see a reason why Q1 company reporting in 2014 will be anything less than neutral. I do forecast though that Q2 and Q3 in 2014 will be more in line, possibly even negative, to balance out the last five years of this market surge to reflect more historical market averages.

Make no mistake about it, since the freefall in 2008 the overall stock market has been on a powerful surge that we have not seen since the tech boom that was the 1990s. I also am finding that it was no coincidence that roughly five years ago to this date I first picked up Dave Ramsey’s “The Total Money Makeover,” and started my journey to becoming debt free and steadily investing with confidence and a game plan. I had absolutely no idea five years ago that getting on a budget and living on less than I make, becoming debt free and regularly investing for retirement and through a taxable brokerage account, that I would be sitting here today with the types of numbers that our balance sheet is reflecting. I mean our average annualized return percentage across our investments are in the 20s, our investments (yes excluding cash, art and jewelry!) are worth more than the piece of California real estate owned and we are essentially on cruise control as we move toward the pinnacle point.

But I’m finding my peace and happiness in more than just numbers and percentage returns. I am also grateful to have had the opportunity over this last calendar year to give more than I ever have before in my life. We’ve tithed our *net income across sponsoring 3 children overseas and giving to our church. Plus we have provided offerings above and beyond our tithe to help contribute to various causes that God has presented before us during the course of this past year.

*Note: we tithe our net income because I feel that it takes the hand of God through a miracle to lower our t axes, so the way I see it is if God wants more, He knows exactly what to do!    

While I know the direction we are heading with our household finances, it’s our consistent and prioritized giving that I think is laying the foundation for my contentment and happiness currently in life. In Dave Ramsey’s class Financial Peace University, he talked about the paradox that as you give more that you will have more. When I first heard and reflected on that message I understood and expected that as we gave more that we would receive from God the love and fulfillment from helping grow His kingdom here on Earth and that would be the extent of it. Today I’m of the belief that while this previous statement is true there is another piece that I crucially missed. And that piece is this: At the start of my financial journey God entrusted me with a little and through following His word on how to handle His resources that reach my bank accounts, He has only provided more and more for me to handle. I honestly can’t seem to out give God. Since becoming debt free we sought out and found a church and programs that we send our tithe to, and during THESE last 5 years when the news headlines scream about a disparity between the rich and the poor, He has provided my wife and myself with pay increases, bonus after bonus, company matches and mutual funds with returns that have beat my expectations.

So needless to say I am very much looking forward to 2014. As the market continues to rise and as it comes back to more normalized historical patterns we will continue to invest steadily and readily into our small army of mutual funds. We will also push forward on doing a little more spending, a little more giving and of course a little more investing ! So from my family to yours I genuinely wish you a Happy New Year and all of the best for 2014.