Monthly Review Column

Every month I recap the “state of personal finances” in my household and bare it all to the world. While I don’t discuss income and net asset figures in absolutely, I do discuss percentage changes. My belief is that it doesn’t matter how much money someone earns, it’s what they do with it. While the principles of asset management at the millionaire level is probably different than at the “everyone else” level, I’m in that everyone else level so the numbers aren’t important.


You are currently reading an archive section.
To see the latest articles, please visit the homepage.

 Monthly Review 
10
comments

July ’08 Net Worth Monthly Review

July was a month of peace and it was wonderful. No roof to replace, plants are flourishing, and life was nice and relaxing. Net worth increased 7.7% this month despite retirement accounts falling 1.93% this last month (yesterday’s nearly 3% increase in the DJIA will help correct that), mostly because we didn’t have any major expenses to record for the first time in what feels like a long time.

The only significant expense of the month was a wonderful wedding up by the Finger Lakes region of New York where we had a wonderful time. It was a Friday wedding so we drove up early to stay with a college friend. Her family has a cabin on Lake Canandaigua and she graciously let us stay there the night before. We’ve been up there before for holidays and it’s absolutely beautiful. The weather was wonderful, the water looked refreshing, and we were so glad to be able to have a nights sleep after a six hour drive. The wedding the next day was on Lake Seneca and the weather cooperated wonderfully. Afterwards, we stopped by Cornell as one of our friends showed us around his old stomping ground.

All in all, it was a great little weekend mini-vacation.

(click here to continue reading…)

 Monthly Review 
4
comments

June ’08 Net Worth Monthly Review

Wow, June was a little rough. Net worth fell approximately 5.0% on account of two major reasons: quarterly estimated tax payments and retirement accounts. Outside of those two, which really consists of not much else, everything is progressing as expected. Neither income nor expenses, outside of the roof, had drastically changed. We don’t track our expenses as closely as we probably should but we have, at least qualitatively, gone out to eat less.

Eating Out

We’ve gone out to eat at restaurants less frequently for numerous reasons. First, gas prices have increased the cost of my wife’s commute, which is mitigated by my commute. Second, it’s far healthier to eat home on all accounts. You eat less and what you eat is healthier for you. Third, we need to learn how to cook better which only comes with practice. Eventually, whenever we have kids, eating out will no longer be an option (again, from the health and cost perspective) so it’s better to learn how to cook now than learn under the gun.

Estimated Taxes

Estimated taxes are paid quarterly, for the most part, and so the month in which those payments come due will be times when my net worth will see an “artificial” drop. Technically, that’s not accurate, it’s the other months that are artificially inflated, but you know what I mean. This is one of those cases where understanding the underlying cause explains away any concerns I might have, at least with this reason. Retirement is a totally different issue.

Retirement

Everyone knows that retirement accounts are long term. I know that when I log into my IRA’s, I can’t touch that money, unless I wish to pay a penalty, for another 40 years. However, it’s really difficult to look at the Dow drop 300+ points and not think about how one of our largest account balances is in an account pegged to that metric.

Retirement accounts took a 4.41% cut across the board, the largest single month change in my short adult life. I will do exactly nothing in response, though Todd Harrison, founder and CEO of Minyanville.com, who was a former trader at Galleon Group, Cramer Berkowitz, and Morgan Stanley, is in all cash. (there’s more to it but that’s the headline idea) A lot has happened in the last 10 years, there’s a lot more that will happen in the next 40.

The one thing I won’t be doing is adding to positions outside of the regularly scheduled retirement contributions. I think we already have enough invested in the stock market for our comfort level and unless we settle on our other long term investment goals (kids, college, home), we won’t be adding to our taxable brokerage account.

Actions from May

In May I listed three “action items,” I merely said it was looking towards the future, and I think it’s important to revisit them to see where we’re at. Think of it like my own little checklist of important things to do and where we’re at with them. I want to thank everyone who leaves comments with advice, suggestions, etc. because it definitely helps me out in many of these areas. I don’t have experience in a lot of these things and your insight, even if it’s what you did or what you’ve, is a tremendous help.

  • Jewelry Insurance: A year after first discussing it and a few weeks after putting it into a monthly review, I finally got jewelry insurance for my wife’s engagement ring. If you read the article when it first was posted, I invite you to go back and read the comment Tim left as it covers many points I missed or misunderstood.
  • Auto insurance: I mentioned earlier this week that being married doesn’t affect car insurance premiums and readers pointed out it was the multi-car discount, not the marriage aspect, that decreased premiums. The process will now be to get car insurance and register the car in Maryland, which includes paying the 5% tax. There may also be a penalty involved because you’re supposed to register a car within 60 days of moving to Maryland (you get a credit for taxes paid elsewhere), so we will see how that plays out.

    One interesting point, when I requested a quote, they lowered my six month premium from $282.60 to $203.30 even though it was a sample quote. This reflects something Dedicated said in a comment: “The discount comes from the wife expectance to drive a portion of the time on the mans vehicle. Thus, his rate goes down.” Cool! The addition of the new car only increased the six-month premium to $355.40. The insurance doesn’t include collision and comprehensive coverage.
  • Water heater, Roof: The roof replacement is complete and the charge is sitting on our Citi CashReturns card, due next month. We opted for the 1.2% cash back over the six months 0% financing. 1.2% cashback is $53.40, 6 months 0% financing in a high yield savings account earning 3.50% is about $56 – not worth the effort. Water heater is still pending… the prospect of a tankless option is more and more attractive as energy prices increase.

Looking to the future:

  • Further Consolidation: My wife and I still has some accounts floating around out there that have since outlived their usefulness. I made a big push to the last few months to consolidate as many accounts as I could, so we will have to keep plugging along. Consolidation sounds easy enough, they’re just activities that take longer than you expect.
  • Getting A Pet: Every once and a while my wife and I watch my parents-in-law’s two Scotties. They’re adorable, lots of fun, and they poop everywhere (most of the time outside). My wife thinks I need more companionship during the day, the SAHMs at the gym don’t count, and so we’ve discussed getting a dog. Right now we’re leaning towards adoption from a local pound because there are so many there, it makes no sense to look elsewhere. An added benefit is that often those dogs have had their shots and are current on everything. Before pulling the trigger, we think it’s important to look at the finances just to be sure.
  • Continuing Education: One of the longer term goals we have is for my wife to return to college and get her Masters or a Ph.D. Many programs offer tuition assistance or funding, but some don’t. Plan for the worst, hope for the best. This is one of those farther in the future type things, but one of the reasons why we bought those Series I bonds was because earnings are tax free when used for education. Just something to keep in the back of our minds.
  • Kids: Ahhh just kidding, not yet. :)
 Monthly Review 
7
comments

May ’08 Net Worth Monthly Review

Last month was the return of these monthly net worth reviews and the first time, probably since when we bought our house (closing costs are brutal), that our net worth decreased across the month (taxes are brutal too). This month, we saw our net worth increase by a healthy 8.6% helped along by a mild recovery in the stock market (1.39% increase in retirement assets).

Last month I talked about three things in the future – roof replacement, water heater, and diversification of our investments. The roof is set to be replaced on June 16th, contingent on good weather, at a cost of $4,450. The roofing company offers a six month same as cash option but I think we’re going to put it on the Citi CashReturns card for the 1.2% cashback since interest rates are so low (it’s nearly a wash after taxes, so we figured for simplicity the credit card option was better). We knew the roof needed to be replaced so we were prepared, there won’t be any other financial impact (other than the -$4,450 to the bank account).

(click here to continue reading…)

 Monthly Review 
8
comments

April ’08 Net Worth Monthly Review

This marks the actual return of the monthly net worth reviews and the first time, in a long time, that my net worth actually fell and it fell by 12.1% in the month of April. Now, before well all jump on the “jim has no idea what he’s doing, let’s go read some other blog,” I have to warn you that the fall was expected and planned for.

The fall was due to the payment of income taxes for 2007. I paid a pittance in estimated taxes last year because income from this site (and other online ventures) was relatively small and so I wasn’t required to pay much in estimated taxes. However, on April 15th, the piper had arrived and was demanding his money so I wrote some of the largest checks of my life. I had to pay 2007 federal and state income taxes as well as first quarter 2008 estimated taxes to both the feds and Maryland. The end result was chopping off 12.1% of my net worth. However, since it was expected and planned for, it’s not a big deal. Here’s a case of where the numbers don’t tell the whole story and why commentary is always important.

What did I learn from this? Numbers don’t tell the whole story. It’s much like how the weight scale might not show a fall in your body weight but the mirror shows you putting on more muscle and adding definition. Numbers are good but only to a certain extent, so don’t let it get you too high or too low because they can be deceptive. -12.1% of unexplained net worth loss is crippling, but if you know the reason and it’s not indicative of a bigger underlying problem then you’re okay. In this particular case, -12.1% was good because I earned interest on those monies as they sat in a high yield online savings account!

Other notable actions of the month:

  • Series I Savings Bonds: We purchased some Series I Savings Bonds near the end of April, $5k each for my wife and myself, in order to lock in the 1.2% fixed rate. Savings bonds don’t give crazy stock market type returns but it establishes a good base and one that is guaranteed. It locks our funds in for at least a year but the earnings are local and state tax free.
  • Consolidation of Accounts: I finally rolled over my former employer’s 401(k) plan into my Vanguard account, a process that was both painless and fast. This didn’t net any financial benefits but it means there’s one less account I need to log into and review, so there’s a net time benefit in that one (I did miss out on a couple days of solid stock market increases while the funds were in transition though, boo!, but you can’t plan for those).

Looking to the future:

  • Roof replacement: Our roof is leaking and has been leaking for some time now, so a full replacement will need to occur in the next month. This week I’ll contacting a few contractors to get quotes but I estimate the cost will be in the neighborhood of $4,000. It’s a problem we’ve been aware since before the wedding (in February) but there hasn’t been many heavy rains since then so we’ve been lucky.
  • Water Heater: Replacing it is on the radar but it’s currently in great working condition, it’s just old, and we may opt to replace it with a tankless version simply for the energy savings. Since it hasn’t been a priority and since the tank is in the basement, it’s been an “out of sight, out of mind” type of situation.
  • Diversification: I need to take a hard look at all of our investments and make sure we’ve properly diversified. It’s something that Nickel and I have talked about quite a bit lately. He told me about Vanguard’s Portfolio Watch, which looks like a great way to help facilitate this.

Please share your thoughts below!

 Monthly Review 
10
comments

Return of Monthly Reviews!

It’s been over a year since my last Monthly Review and I believe it’s time to bring them back. While other bloggers have continued their monthly income statements and balance sheets, I stopped a year ago because I felt it had become counter-productive. The reality is that the numbers themselves are irrelevant because they don’t apply to anyone else and they don’t help people make better decisions or learn from my mistakes. In fact, I felt that the numbers may be a distraction from the ultimate purpose of my monthly reviews, which was the explain both the good choices I’ve made as well as the bad choices.

So, in this return of monthly reviews, I’m going to simply outline the good, the bad, and the ugly of the decisions thus far. From here we’ll see how the month to months go.

(click here to continue reading…)

 Monthly Review, Personal Finance 
17
comments

January ’07 Net Worth Monthly Review

Near the end of January, I’d decided that I’d be removing hard numbers from my net worth reviews because I felt that it was nothing more than chest-thumping that added nothing to the discussion. I know some of you mentioned that you enjoyed watching the progress of one of your peers or that you wanted to see whether the personal finance stuff I believed in were actually working, unfortunately neither argument (or any of the others presented) were strong enough to convince me that listing a dollar figure was better than not listing one. The plan now is that after a few months of not even discussing the net worth numbers, I’ll move towards percentages (that way none of you math wizards can figure out the hard numbers).

That being said, I have to say that January was another strong month financially for various reasons:

  • My fiancee was promoted again (it’s like her second promotion in six months, I’ve actually never been promoted). Her meteoric rise from a “technician” (I don’t really know their job titles but this was essentially a temp job) working second shift to project manager of that product line took little more than a year. While I don’t talk much about what she does, I figure this is as good a place as any to celebrate!
  • Blogging income is still growing, thank you everyone for reading and commenting (I just went full feeds too). It was exciting seeing this site mentioned in the New York Times this past weekend, I always get excited when cool things like that happen.
  • I began dabbling in PPC (I spent less than $10 in January) so affiliate income may become a more significant source of revenue in the future once I get my tracking down.

Some things on the horizon that I might be talking more about in the near future:

  • Taxes naturally, specifically all the taxes I’ll need to pay on the self-employment income. I’ll also be investigating the use of a tax professional in the area so that will make for some thrilling reading if you’re into taxes.
  • While I won’t blog much about the wedding planning, it’s certainly on the brain. While expensive, everything seems to be priced within reason with the exception of freaking photographers. Why does it cost $3000+ to get someone to spend 4-6 hours taking photos and the end product being a 24 page book and some blown up shots? $3000 for a really nice reception hall rent, sure I’ll buy it (you have all sorts of costs), but getting me to shell out three large for the photographer is going to be a little tough.
 Monthly Review 
36
comments

No More Figures in Net Worth Posts

I’ve decided to stop divulging hard numbers in my “Net Worth” series of posts where I publicly track our progress towards financial prosperity. The reason why I started the series was because other personal finance bloggers were putting their net worths out there and I felt like it was the cool thing to do – and it was. Had I not been so public I wouldn’t have had the honor of appearing in the New York Times, quite possibly the coolest thing that has happened since starting this blog, but I feel that the usefulness and “cool” factor of posting a net worth has been exhausted.

If you’re struggling through debt, posting the amount of debt you have gives you motivation to work harder at paying it off. As you pay, you watch that number shrink. As you pay, your readers celebrate your one step closer to debt freedom. But who celebrates when Random Joe Blogger adds another X% to his net worth? I know I don’t really care and I’m pretty sure no one else really cares either.

What people care about are the things you did, not the amount you saved, and so my monthly personal finance updates will now focus on any personal finance related decisions I’ve made in the last month and not on the dollar amounts. Do you think it is a mistake? Do you welcome this change? Do you not really care? Please share your thoughts!

 Monthly Review 
7
comments

December ‘06 Net Worth Monthly Review

Yeah I messed up my net worth review last month when I excluded one of my retirement accounts, the 401k of my current company, and so my numbers from last month in both categories were short around $3,000 (since retirement assets are included in net worth, it was just a real life total shortfall in my calculation of $3k, not $6k). So, here are this month’s numbers…

Net Worth: $174,329.82 (+5.04%)

Retirement Assets: $79,161.53 (+9.90%)

Before the crowd goes wild, the huge uptick in the retirement assets had to do in part with the fact that I contributed 90% of my income into my 401k in December (I planned on doing it in November but I didn’t submit the request in time) in order to reduce my taxable income. I’ve since pulled it back to more earthly numbers.

The major increases in net worth are in large part due to my fiancée and I combining our assets and me starting to count some of those assets in the net worth values. I included our joint banking accounts and her high yield savings account (I’ve moved our emergency funds and other savings into her account to lower the tax liability since we’re still filing as singles) but left a couple things out because I didn’t want to bug her about it.

The blog experienced some growth and I will likely see a net worth slowdown in April as I reconcile my taxes for the blog, I don’t think my standard withholding and my deductions will cover the income from the site anymore. I’ll also be looking into quarterly estimated payments and incorporating into a nice little consulting/blogging business. In fact, I already have one client that I’m helping monetize their site and it’s been pretty good going. In the first month I increased their earnings by nearly a multiple of five and then followed that up with an increase of another 300% times. If this interests you, give me a shout and we can talk.

Finally, one thing I was very proud of was our ability to donate as much money as we did (it’s not really that much in an absolute scale but it’s a lot for us just starting out in life) to various philanthropies both nationally and locally. It means a lot to my fiancée and me to be able to give back and we’re thinking about also donating time in addition to money in 2007. Also, If you’ve read our goals for 2007, we’re looking to give back to our respective high schools in some way, perhaps sponsoring a small scholarship of some kind… I think that would be exciting stuff.

Alright, that’s it, have a happy new year!

Advertising Disclosure: Bargaineering may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.
About | Contact Me | Privacy Policy/Your California Privacy Rights | Terms of Use | Press
Copyright © 2014 by www.Bargaineering.com. All rights reserved.