November 2007 Net Worth Snapshot
In a month where the stock market, and subsequently our investments, took a beating, we were still able to pull out enough of an overall increase to reach our 2007 net worth goal of $70,000. Woot! Woot! And to think, the wife didn’t think it was going to be possible. :) That’s another milestone we’ve crossed. It’s been 4 months since we crossed the previous milestone of $60k. Below is a listing of when we hit each milestone, and how long it took:
Nov. ‘07 - $70k (4 months)
Jul. ‘07 - $60k (4 months)
Mar. ‘07 - $50k (5 months)
Oct. ‘06 - $40k (8 months)
Feb. ‘06 - $30k (11 months)
Mar. ‘05 - $20k (years)
Some of you may notice that the Business Equity asset increased. As I’ve explained previously, I invested $2,000 in a start-up company. The company had a 2nd round of fund raising and I added some additional money ($1,550) to maintain my equity stake. Alternatively, I also could have sold my existing stake for about $6,000, approximately 3 times my initial investment. But, I think there’s some potential with the company, and I’d like to see where it goes. At the valuation the company was given, my equity in the company is worth more than I am listing here, but I am leaving it at the amount of money I have put in. At this point the valuation is mostly a guess. I’ll update the asset’s true value when I’ve sold or the company folds, which ever comes first.
I also put $500 in Emigrant Direct. I keep trying to build up the emergency fund, but every time I put money in, I end up pulling it out a few months later. Hopefully that money will be there for good.
December is an expensive month with the holidays and another semester of school tuition due, let’s hope for some positives in the stock market..
How did you come across the opportunity to fund a start up? Also, (if I may ask a personal question) why did you opt to put a significant portion of money relative to your total net worth into a start up?
It seems like your Efund or your retirement (roth) could use a boost ? Why not put that money there?
btw, great post and the blog layout is great!
Cheers,
EC
EC,
Good questions. The start up opportunity came through a group of associates. We had met a few times with the intent of using our network to learn about and find some investment opportunities. This one presented itself and we decided to take advantage of it.
As for why I put my money into it, there are several reasons. The people involved have great reputations, and lots of experience. They knew where we were coming from , so, it was an opportunity to learn a lot about the whole process ie. research, business plans, valuations, etc. In the worst case scenario, I’ve lost some money and learned a lot in the process. Money well spent in my mind.
Also, I think the company has some real potential. I’m a pretty conservative investor (broad based index funds). It’s nice to have a little something that has a chance for big returns.
As I see it, it’s not such a significant portion of my net worth. The initial investment was a little over 3% of my net worth at the time. And, I’ve been averaging gains larger than that each month. Also, as I mentioned, I could have already sold for nearly times my investment.
We already max the Roth IRAs, so we couldn’t have put the money there. Sure, I could have built up my emergency fund with that money, but that hasn’t been my priority. I’d rather take advantage of an investing opportunity while I can. Then I can build the emergency fund. In the worst case scenario I can always access the money in my Roth, if an emergency calls for it.