Sunday, January 07, 2007

Annual Report 2006: Part I

This is my first annual report. I covered some basics a few days ago. Here are the more or less final numbers for income, expenditure, and saving:



The format is the same as my usual monthly reports. Current income is actual cash received from salary, tax refunds, and other sources including inheritance. Retirement other income is total employer and employee retirement contributions to my 403(b). I note the transfer of money from current savings to my Roth IRA account separately. Total retirement contributions were, therefore, $15,432. Total income and realized and unrealized investment gains summed to $53,429. About 2/3 of the gains were in non-retirement accounts which have been more aggressively invested on the whole. About a quarter of the US Dollar gain was due to the rise in the Australian Dollar ($12,092).

It is exciting to see investment gains begin to rival income from employment and exceed saving from current other income and retirement contributions that totalled $42,430. Current investment income ($34,728) exceeded spending ($25,676). There is no guarantee that this will continue in the future. But as assets increase the chances are higher that it will. Investment returns on current accounts for this year are close to long-run expectations based on an alpha-beta analysis. I would like to double this income stream - so that it would be close to my current pre-tax salary - before quitting my current job and looking to make a living from trading and investing. If I can achieve the same rate of return this year I would yield $50k in current investment income.

Net worth grew by $94,675 with about 2/3 of the gain in non-retirement accounts. This imbalance is an additional factor that lead me to start maxing-out my 403(b) contributions.

2 comments:

Anonymous said...

mOOm, I am happy for your investment income success. I may be weird in that I have yet to even think of investments, especially trading as an income genererating device. I guess that is because I have no intention on retiring and am still focused on just saving a % of income from salary. My wife's large individual account, I take pride in the fact that not a penny has been ever spent. Just a different way of looking at the same results, I guess and also congrats on the girlfriend thinking similarly on finances. That will help if she is the future Mrs. mOOm.

Also, we are getting weather slammed again. So much for Pacific Nortwest Paradise.

stealthbucks

mOOm said...

Thanks Steathbucks. Obviously I'm not spending this "income" as I'm still saving massively from my salary. Just seeing how easy it would be to live from trading and investing. True that most PF Bloggers are looking at "retiring" whether it is at 60-65 or an earlier age and therefore are looking at the traditional 4% withdrawal model and then the sum they need to accumulate. They aren't looking to be active traders/investors. I'm not looking to "retire". So my question is can I be an active investor.