November 2018 Net Worth Update

In November, our net worth rose about 5.25% to $37,962. In euros, it rose 5.7% to €33.417.The big factors that affected this number are as follows.

Stock Market

The stock market continued its volatility, and a number of individual companies I own fell by quite a lot. That's not fun to watch, but I have to content myself that the prices have fallen, and all future purchases are now going to matter more due to the lower purchase price.

I'm sitting on a net unrealized loss. That's mentally taxing, to put it mildly, but in addition to the above-listed consolation, I also spend a lot of time looking at past market corrections and how they affected the names that I'm holding. It feels painful now, but in a few years this will have been a blip in the movement of the stock markets. Even if this lasts a year, it is unlikely to be horrible.

I remember watching the 2015/2016 correction happening, and although it was exciting at the time, it now feels like nothing. When people talk about the long bull market, they rarely mention 2015/16, even though it was incredibly painful for a wide variety of stocks and industries. If you were holding commodity stocks, especially oil, you just got hammered. But that gets lost in the narrative of "the longest bull market in history".

Saving and a Gift

We saved a good amount this month (33.5% of income). Despite the stock market pain and despite my wife working fewer hours last month, our savings rate helped us inch upwards. We did get the electricity bill refund, so that basically eliminated our electricity costs for the month.

The biggest lever when you're talking about modest sums of money isn't the returns from investments but the total amount saved.

For transparency's sake, at the end of last month I received a monetary gift of $1000 out of the blue. I'm still uncertain as to why (other than that person loving me), but that money went straight to savings.

Economic Outpatient Care

The The Millionaire Next Door, Dr. Stanley spent a lot of time discussing "economic out-patient care". His basic idea was this: young people who receive a lot of monetary support from their familial elders often remain dependent on that support and develop bad habits that limit their future financial resourcefulness. He called that "weakening the weak".

Since learning of the concept, I've tried to be much more careful with such gifts. When I was much younger, I did develop bad habits from the knowledge that I had monetary help should I need it, and I'm trying to make up for past sins, so to speak.

Looking Ahead

December is a bit of a wild card. We have estimated taxes to pay, and we will eventually be billed for an extra payment for last year's German taxes. We also have a small trip to enjoy, which will cost some money, but I doubt we'll be extravagant.

Of course, there's always Christmas gifts, but we're modest gift givers, and we encourage modest gifts for ourselves as well. Because we live abroad, nobody expects anything too expensive or complicated, which does reduce expectations.

Unless the market really falls off a cliff, I expect further slow but steady progress.