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.


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 Monthly Review, Personal Finance 
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November ‘06 Net Worth Monthly Review

Welcome to yet another one of these net worth reviews – not quite as comprehensive as Flexo’s corporation-like balance sheets and income statements, but a little more than you’re probably used to hearing from your friends.

November was one of those truly good months in which nothing bad happened – everyone is healthy, the cars are running well, and the house is still in great shape. For all you number lovers, more after the jump.

Net Worth: $161,957.79 (+3.74%)

Retirement Assets: $69,029.34 (+2.26%)

I wrote a few days ago that I was going to contribute 90% of my income into my 401k but unfortunately that didn’t pan out – apparently I didn’t submit the request early enough (I submitted it on the 27th).

So, where did that retirement asset boost come from if not from my own contributions? It came from huge gains by my stock investment in Airtran Airways, which was upgraded by Bear Stearns and spiked up around 20% to around where I bought it. Funny thing is that Bear Stearns was the one that downgraded it in mid-October which led to its drop in the first place.

One thing that was pretty exciting this past month was that it marked the third consecutive month that this site generated more income than my starting salary at my “real” job three years ago. This is part of the reason why I was motivated to investigate whether I could really contribute 90% of my income to my 401(k) and because at this rate I was going to get phased out of being able to contribute to a Roth IRA – something I had already done for 2006.

See you next month!

 Monthly Review 
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October ‘06 Net Worth Monthly Review

It’s been a long long time since I’ve written one of these reviews (back in May is my last one) so those of you who have been patiently waiting for one of these can finally rejoice, it’s here. Some personal finance bloggers give you brutally and painfully detailed account information, I just give the roll up information and then look back at what I did wrong, what I did right, and any other big changes.

All the gory details are after the jump.

Net Worth: $146,886.30
Retirement Assets: $67,501.11

Normally there are percentages next to those number, they’ll return next month.

Here are some things of note that have changed in my financial picture since I last wrote one of these:

  • I’m engaged. While the numbers above partially reflect some of my fiancée’s assets and liabilities, they don’t reflect all of them. In fact, the only financials on her side that are counted are those that we share in a joint bank account where we both direct deposit our paychecks but that hasn’t been significant since we’ve only had about a month of paychecks deposited in there so far.
  • I switched jobs. Hopefully my net worth growth curve will be elevated with the increase income but it also experienced a slight blip as a result of my former employer paying me for two and a half weeks of vacation. That temporary blip will be very temporary as I’ve already put that away for my new windows and doors.
  • I paid off one 0% balance transfer. It was the Citi mtvU card, a 6 month offer, that got paid off. After all these 0% balance transfer deals expire, I’ll probably stop doing them. While it’s taken only a small amount of time, there is a lot of hassle involved and I’ve gotten too busy as my new job to really have the energy to stay on top of these.
  • Opened Up A Vanguard Account For Extra Savings. My fiancée opened up a Vanguard mutual fund account (we put it in her name since she’ll be in a lower tax bracket and we aren’t yet married) and we’ve deposited $5,000 into it and put it with an index fund, this will be the first time any one of us has invested money in the market outside of a retirement account (401k or Roth).

Some thoughts on my mind:

  • Rolling over my 401(k). I was looking at the fees on my former employer’s 401(k) plan funds and most of them were under 0.7% with the exception of the Emerging Markets fund which had a whopping 1.5% fee. While Emerging Markets had performed quite well for me, I am debating whether or not I should just push my 401(k) to a Vanguard IRA and put it in a Target Retirement fund.
  • Business Income. This blog has been incredible, all of the folks who read it are incredible, and I’ve been lucky to make even a penny off just writing my thoughts on money. That being said, I have no idea what I should do with this extra income. Right now it just gets lumped into my bank accounts and pretty much disappears into the numbers (with the mental note that we’re probably saving it for the wedding) but I’d like to earmark it for something bigger after we’ve saved enough for the wedding. I’ve thought about using it as a down payment on a rental property but I think I need to research that a little bit more before I do anything drastic.
  • Budgeting Daily Expenses and Being More Frugal. I’ve been really really lax on this the last year or so. Part of that was because I was over-diligent before I bought the house and I may have been burned out because of it, keeping track of expenses pretty much sucks honestly, but you have to do things you don’t like to do in order to achieve the goals you want to achieve. Another part of the reason was that this blog started to earn money and I saw that money as “free.” I wasn’t really “working” for it and so any excess spending I had would be covered by this income… that’s a bad strategy, it’s a lazy and irresponsible strategy, so I’m going to change it.

Well, that’s that, tune in next month to see how things have progressed and if you have any advice, as always, I welcome it with open arms.

 General, Monthly Review 
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I’m Engaged & I’m Switching Jobs

Whew… how’s that for two life changing events in a short span.

First, I proposed to my girlfriend while we were on top of a mountain in Lake Tahoe on the 27th of July (she said yes) and I will be starting my new job of the 28th of August. Yes, I proposed on 7/27 and will be switching jobs on 8/28… I love palindromes (and coincidences and sarcasm). The workings of these events all occured in the last few weeks and I hadn’t blogged about them (much) because I wanted to get word out in other ways and make things official before I wrote about them. (For those of you keeping score with the net worth updates and how I haven’t had one in a few months, I didn’t want the numbers to clue anyone to the fact that I was going to propose… net worth updates will continue as usual in September October)

So… expect to be reading a little about the first and a lot about the process of the second in the coming days or weeks.

 Monthly Review, Personal Finance 
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May ‘06 Net Worth Monthly Review

Net Worth: $123,649.78 (+1.66%)
Retirement Assets: $56,383.36 (-5.42%)

Own any stocks do ya? May was a pretty rough month for the ole retirement portfolio with the S&P dropping 3.1%, the Dow slipping 1.75%, and the Nasdaq Composite plummeting 6.2% – I felt pretty happy only falling 5.4% in an emerging markets heavy retirement portfolio. Compare that with VWO, Vanguard Emerging Markets Stock VIPERs, which fell 11.54% and that 5.42% doesn’t look so bad…

If you noticed, the net worth figure increased by 1.66% despite a “significant” drop in my retirement assets, that’s mostly because of blog earnings since my regular salary hasn’t changed and my spending has, on the whole, maintained the same level. Other than that, nothing significant worth mentioning.

One change in my Net Worth calculations was the inclusion of $7,300 in credit card debt that I’m now carrying month to month for arbitrage reasons (that debt is offset by a balance my bank account). The most challenging aspect of seeing $7,300 extra money in my Emigrant Direct bank account is mentally separating it from my own money. I see the $7,300 in there and there’s no risk that I’ll “accidentally” spend it but I have to remember it’s not mine.

I can’t wait until July 1st when the energy bills spike.

 Monthly Review 
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April ‘06 Net Worth Monthly Review

Net Worth: $121,598.88 (+8.73%)
Retirement Assets: $59,613.50 (+4.23%)

April, like March, was a great month for several reasons:
1) Blog – Again, the blog accounted for a nice part of the 8.73% networth increase. When I started doing all this I told my girlfriend all I wanted was for it to pay for a vacation a year, it’s done so much more and I’m thankful to all the folks who spend time each day reading.
2) Tax Refund – I bought a house nearly a year ago and I’ve been paying more than my fair share of taxes (only a little more). I can thank Uncle Sam’s honesty for a nice boost a few weeks ago.

I think I’m really messing up my retirement assets (Roth specifically) by playing around in the stock market. You see that the retirement assets amount has increased by 4.23% and you are led to believe that it’s been a good run (and it has been) but a large part of that is because of my heavy allocation in emerging markets (and it’s strong performance). What you don’t see is that I keep screwed myself over by playing around with the money in my Roth.

My Roth consists of four holdings right now, two of which are underwater.

The two I’m underwater on are Amazon (AMZN) and Ford (F). In work emails, my friends often write ‘f’ instead of the full four letter, more colorful, equivalent; sometimes I feel like Ford is seriously f’ing me. I bought Ford after it tanked a few weeks ago thinking that it had finally hit its low and was going to make a comeback. I felt that auto was last year’s airlines and since Ford was profitable as a whole and sitting on a ton of cash, it was a much better play than General Motors (GM). I’m down -15.76% on Ford as of today.

Amazon, however, is a different story. I’m a fan of the company and I’m an Amazon Associate so they pay me a nice little check every quarter. The reason I bought into them is because I like Amazon, I buy a lot of stuff on Amazon, and they reported a bad quarter and were, in my opinion, punished unfairly for it. Since then they’ve been up and down and as of today I’m down -9.56% on Amazon.com.

Of the two that have been profitable…

The first is Cap Rock Energy Corporation (RKE), a special situation investment I bought into after test trying Fat Pitch Financial’s Contributor Corner (it’s pretty sweet honestly, George writes about his investments after the fact for those interest). You can win a month simply by being the most active member of Fat Pitch News, a Digg-like site for financial news. Honestly, RKE was a sure-fire win because they’re buying back shares at $21.75 and I bought them at $20.45.

The other company I hold is Disney (DIS). I bought them prior to their Q1 earnings announcement, which were favorable, and I’ve held them since. I’m up +10.57% on that trade.

So why do I say I’ve been screwed myself? I could’ve saved myself all the heartache (not that much heartache, it doesn’t bother me when Ford tanks 7% in one day because I don’t have that much money in it and I don’t plan to touch it for 40 years) by investing in an index fund like every other intelligent person.

At least my 401(k) is kicking ass instead of kicking my ass…

 Monthly Review 
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March ’06 Net Worth Monthly Review

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Net Worth: $115,365.77 (+3.19%)
Retirement Assets: $57,193.22 (+3.90%)

This past March has been very good to me and the biggest reason for the net worth increase was this very blog. We were able to sell some very solid advertising and it appears that the hard work I’ve put into this baby is starting to come into fruition. As for the retirement asset improvement, some of that had to do with me creating a SEP-IRA and a pretty healthy return from my 401(k).

I doubt I’ll see as many good months as this past one but one can always hope!

 Monthly Review 
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February 2006 – Monthly Net Worth Review

This is my first monthly net worth update for quite some time so these numbers lack a bit of context but I’ll present them anyway. Also, these numbers are going to be a little inflated because as of 3/1 my mortgage company hasn’t deducted my February-end payment.

Total Liabilities: $257,594.76
About $24k of that is student loans which are currently in deferrment until I complete my studies at Johns Hopkins and the balance of that amount is from my home mortgage.

Total Assets: $384,714.93
The vast majority of that asset value is in the home, appraised at $299k. Approximately $16k go towards my 2003 Toyota Celica (Kelley Blue Book value), $55k in my retirement accounts, and a little over $15k stuffed into my mattress.

Net Worth: $127,120.17
Before you say, wow that’s a great net worth for someone who is 25, $40k of that is in the form of a “gift” from my parents that went to the purchase of my home. While by all accounts it was a gift, on a personal level I see it as a loan I want to repay, even if they don’t see it that way. I’ve mentioned this in the past before and readers have said that I should count that in my net worth, but in my mind I don’t.

My February 2006-end Net Worth: $87,120.17

 Monthly Review, Personal Finance 
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Goal Setting & Net Worth Updates

I’ve been a little derelict in keeping this sort of information updated (publicly and privately, to be honest), which I admitted to in an interview with Scott of the Money Blogger Podcast, so to motivate and remind me to update it I’ll be putting up a panel very much like many of the other bloggers out there and put a list of my goals.

Here they are:
In 10 years (35):
Retirement accounts totalling $350,000 (revised from $200k, currently at $55,121.77)
Total net worth at $650,000 (revised from $500k, currently at $109,598.19)

In 20 years (45):
Retirement accounts totalling $750,000 (revised from $500k)
Total net worth at $1,500,000 (revised from $1M)

Are those numbers entirely out of whack? (Thanks for the numbers LAMoneyGuy, how do these look now?)

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