May 2016 Net Worth Update

Hello all, time for another progress report.  A solid $92.5 grand this month, which is about an $8,500 increase from last month.  Here’s the usual breakdown:

Increases – $12,189.84

  • After tax income – $7,250.05
  • 401k contributions -$1,983.34
  • Sales on Craigslist – $315*
  • Interest from checking and savings accounts – $38.20
  • Gain on investments – $1,489.15
  • Reimbursements – $1,114.10**

Decreases – $3,700.50

  • Rent – $2,259
  • Other expenses – $1,441.50

Net increase – $8,489.34

Not too shabby.  After tax income increased after I stopped making voluntary after-tax contributions.  My 401k contributions are also lower, but it’s all tax deferred now.

On a related note, I was hoping for a dip in the stock market, however, the S&P 500 index has stayed surprisingly steady at just below 2,100.  Still, the possible upcoming interest rate hike in June may bring about a much needed correction, which would be the perfect opportunity to dump more of my idle cash into index funds.

According to multpl.com, the current price over earnings ratio (P/E) of the S&P 500 sits at 24.15*** which is 55% higher than the historical average of 15.59.  This is a strong indicator that stocks are still overvalued.  So in light of all this, I’ll probably wait until the ratio comes closer to 22 or 21 before I make a purchase.****

In case you’re wondering, I still haven’t paid off my $3,678.79 in undergraduate loans because they’ve been refinanced at a low rate of 1%.  But rest assured, these will be paid off in due time.

Other expenses increased a bit after I splurged on a brand new, $230 charcoal suit (discounted from $600).  I consider this an investment as I’ll be interviewing soon for jobs in lower cost of living areas outside of New York.

In addition, my friend Alex in Hong Kong asked me to buy and ship him a Nike jacket ($300), so that will eventually be reimbursed.

Here’s to another great month!  Until next time.

*Items sold: Xiaomi Mi Pad ($150), Nintendo 3DS XL ($130), two Nintendo amiibos ($35)

**My girlfriend reimbursed me for a few purchases that she had made with my Chase Sapphire card so that we could get reward points.

***A P/E ratio of 24.15 means that the average stock price of S&P 500 companies is 24.15 times average earnings.

****Ideally, I’d wait until the P/E is closer to 15, but a 55% drop like that usually doesn’t happen unless there’s an economic crisis.  The plan is to invest at least a portion of my money before the ratio ever gets that low.  Of course, I’ll set the remaining cash aside to take advantage of any further drops (i.e., cost-averaging).      




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