Starting Net Worth: $318,475
September was another “boring month” financially for us. We didn’t have any major one-time expenses, unexpected financial surprises, or big decisions to make. We continued our usual routine of making regular contributions to our 401(k) and brokerage accounts, steadily working toward our long-term financial goals.
The stock market, however, had other plans. Despite our ongoing contributions, our total investment balances declined by almost 2% during the month. It’s a good reminder that even when we follow our financial plan and do everything within our control, the markets don’t always cooperate.
There is an interesting milestone that comes with building an investment portfolio: eventually, market movements can have a greater impact on your balance than the money you contribute. When you’re just starting to invest, regular deposits often make up a significant portion of your portfolio’s growth. Adding money each month can help your balance grow even when investment returns are modest. But as your portfolio grows, the math changes.
That’s the stage we’re reaching. Our investment balances have grown to the point where market fluctuations increasingly determine our month-to-month results. This is encouraging in the long run because it reflects the progress we’ve made in accumulating assets. But, as September demonstrated, it can also work against us.
The temptation during a down month is to become discouraged or question whether your investment strategy is working. However, one month’s performance tells us very little about the long-term success of a financial plan. We can control how much we save, how consistently we invest, the fees we pay, and the level of risk we take. We cannot control what the stock market does from one month to the next.
Our approach remains the same: continue making our planned contributions, stay focused on our long-term objectives, and avoid letting short-term market movements dictate our decisions. September wasn’t a great month for our investment balances, but it reinforced an important lesson: as wealth grows, patience and perspective become just as important as consistent saving.
Ending Net Worth: $311,183
None of the above information is a recommendation. This blog is purely intended as commentary on things that have happened along our financial journey.