October 2014 – networth and expenses – a disaster

October was a very bad month for me (on the brokerage front). The non-investment stuff was very pleasant. I will tell the numbers first and then supply a few details. (See my initial networth post for some general explanations.)

  • brokerage account 96.5k
  • mutual funds 61.8k
  • cash 21.3k
  • gold coins 9.0k
  • total 188.6k

This is a decline of 28.3k (-15%), which negates all my investment gains since the beginning of the year. But due to our savings it is still a small gain of 8.3k (+4.6%) over last year. I will share my feelings about this drop at the end of the post, let’s continue with our monthly expenses.

Monthly expenses

  • January -2.7k
  • February -3.1k
  • March -3.0k
  • April -3.2k
  • May -3.8k
  • June -2.4k
  • July -2.6k
  • August -2.8k
  • September -2.6k
  • October -2.6k

The numbers look similar, but actually September was over 2.6k and October below 2.6k. I was aiming for staying below 2.5k, but I missed it by 60 Euros. But I’m expecting a refund of 200 Euros which should bring October (and also September) below the 2.5k mark.

Notable sub categories

  • housing 545 (including one time fees of 184)
  • groceries 256
  • children 335
  • transportation 139
  • pension 307
  • insurance 246

On the expenses side it was a quiet month. I expect November to be similar and to stay below 2.5k for the second time of the year (our first month was June).

Networth drop

Now some details to our big networth drop. I do all our finances, and my wife knows about the drop. The first hit was at the beginning of the month, when GT Advanced Technologies (GTAT) filed bankruptcy. Seems this was a surprise to a lot of market participants, at least it was one to me. I was way too much invested in an options position with unfavorable risk/reward profile (short puts). Then my normal investment strategy (sorry, I do not disclose any details) took a hit as well. And to round things off, American Realty Capital Properties (ARCP) fired its CFO after accounting errors. The stock was down 30%.

There are some lessons for me to learn here. I have not fully digested the news. I’m really questioning the use of short puts for speculative stocks (such as GTAT). I will continue to use the for my dividend stocks (which ARCP is one of them).

The financial loss is bearable, because I had a good year so far. My brokerage account was roughly at 100k at the beginning of the year. I’m sure I would feel much worse if I was down 20k or so over the year. But still, I feel the difference everyday. I have less patience with my kids. I’m upset much faster. I do not want it, and I try to hide it, but I can’t.

PS: On the bread maker side, things are running really well. No bread purchases this month – all self made.