NinjaPigeon - My Flight to Financial Independence

Rolling over my 401k... again

2007-04-09T16:49:00.000-04:00

Last year, when I left my job at a medium sized company and joined Megacorp, I needed to get my money out of their 401k plan. So, I did a rollover from a Fidelity 401k to a Vanguard IRA.

One of the quirks that tripped me up then was that my previous employer had not updated my status as no longer being an active employee. That ended up costing me a week or so of time. So, this time I thought to call and ask about that first.

Well, when I called, they informed me I was indeed out of the plan and I could start the process if I wanted. I decided to do so, and found out this experience will be slightly different than the last one.

Specifically, my money at Fidelity is actually in a BrokerageLink account, and not directly in the 401k plan. So, I first have to liquidate my shares in the BrokerageLink account and have them transferred back into the plan. Once that has happened, I can then call back to request a check be cut.

My shares should be sold tomorrow at market close. I will try to contact Vanguard tomorrow and confirm that the check needs to be made out the same as last time.

End of Balance Transfer Promo

2007-04-09T16:39:00.000-04:00

Well, it's been a year since I signed up for a 0% balance transfer from Citibank. I estimate that I made about $600 in interest from their money, but I haven't had time to fully calculate it.

Since I knew the promo date was due to expire, I called Citibank and asked the date it would end. They informed me it would end on the 16th of April. So, sometime last week I pulled the remaining money out of my EmigrantDirect account. Then I paid off Citibank. I estimate it took maybe 2 hours of work over the last year to earn the money. Not too shabby!

Sadly, I'm now out of BT money. I am thinking about applying for some more, but I won't go crazy and pull an app-o-rama since I plan on buying a new car in December or January. But 10 or 15k couldn't hurt!

Helping out someone financially

2007-03-24T23:14:00.000-04:00

I haven't mentioned it before, but I suppose it's only appropriate to disclose it here. Starting in January, I began paying my girlfriend's student loan payments.

If you recall, I helped her in the past with tuition since she has had to make ends meet on a pretty meager income. Well, around December she got hit with a double whammy - graduation, which required she start paying back her loans, and shorter hours at work.

She humbly asked for my help, so I've taken over the payments so she can keep from being overwhelmed. Thankfully, I've had a good year and I was both able and willing to lend her my assistance.

However, I can't imagine what it's like to be in her shoes. It's got to be hard asking for help. Even if the person you ask doesn't expect anything in return, there's got to be feelings of owing them something. And it can cause you to doubt yourself, even believe you're a failure. Unfortunately, that doubt can become a self-fulfilling prophecy.

Because of that, I try very hard to not make her feel guilty for asking for my help. I remind her that the first year out of college can be pretty challenging and that getting on your feet can take time. Heck, I've been out of college since 2002 and I only hit a positive net worth last year!

Now, I'm not suggesting that you should help every family member that comes to you for assistance. But you have to remember that not all hardships are brought on through irresponsibility, and everyone can come upon hard times. Our money may come and go, but the relationships we form can endure it all.

Annoying Credit Card Payment Rules

2007-03-15T09:08:00.000-04:00

As I've mentioned in a previous post, some credit cards actually limit how often you can pay your bill. In my case, this would be Chase. Since I'm fairly confident I'm one of a fraction of a percentage of people who ever have this problem, I thought I'd include a nice screenshot so you guys can see what I have to deal with on a semi regular basis ;)

I guess I'll have to fight back the overwhelming urge to pay my card until tomorrow. But this will drive me nuts all day.

Request by IRS

2007-03-09T07:11:00.000-05:00

As I stated before, I used TurboTax to file my taxes this year. I sent everything off a few weeks ago and was pleased with how easy it was.

Well, I got a letter this week from the IRS. Apparently they want me to send proof that I had overpaid social security by $290. They have asked me to send back a copy of the letter they sent (they provided 2 copies) as well as copies of all my W2s. And they gave me exactly 20 days from the date of the letter to do so, which meant I had about 15 days.

I must admit this worried me a bit. I've never done my own taxes, and I was trusting TurboTax to do a good job. So, just to be safe, I created a new return and reentered just my W2 information in it. Sure enough, it still believes I overpaid by $290. So, I'm gonna assume it was right.

I mailed back the letter to the IRS along with my three W2s. I'm hoping this satisfies the IRS and they move on to bothering other people.

Real Estate Investing

2007-03-04T12:07:00.000-05:00

A friend of mine had tickets to go see David Lindahl talk yesterday on multi-family investing. Since he was unable to make it, he offered them to me. So, I went with another friend of ours to the all day session.

As usual, the 1 day session is just an extension of the 2hour session, and also is an upsell attempt to get you to go to the bootcamp. Normally $3995, but for that day only... $2900! Now, I'll be honest and say I get a little of a twinge when I see things like this. Meaning, I'm susceptible to them to some extent. But I remained strong and just listened to the talk.

Although there was certainly some fluff for the upsell, there was also a good bit of information in his presentation. He discussed why he did multi instead of SFH investing, and also how you could use SFH flips to get capital to move into multi. Also, he mentioned the difference between a momentum investment (a multi that already cashflows) and a one that requires rehab.

He talked about a lot of other things, but there are too many to list. The gist of it was just that the economy of scale could work in your favor and you could get much bigger paydays than you could with SFH.

I'm still on the fence about whether I should jump into real estate investing. I've got a few friends who are working on their first flip now. They have a $2100/month payment on the property, and issues have come up that are eating away at their profits. They will probably break even if they manage to sell it in the next few months. But, they will have learned a lot.

I'm just not sure if I could sleep well knowing I had $10k sitting on the table that could quickly erode. Although after the hit I took in my mutual funds this week, the diversity could be nice. Plus with a little experience behind your belt, the REI could turn into a decent source of side income. Maybe I'll wait until I can just afford to buy a vacation home that could be rented out 11 months out of the year and I basically break even on. Given 10 or 15 years of that and it'd be a nice chunk of equity ;)

Rebates

2007-03-01T21:33:00.000-05:00

Woo! My $50 rebate check from T-Mobile came today. Unfortunately it came from buying a $400 phone :) But hey, I'll take it.

I also sent in another $50 rebate for my new laser printer last week. Think I'm gonna put them into my savings account, which hasn't gone up in a while.

New job at a startup company

2007-02-28T00:41:00.000-05:00

I can't believe I forgot to post about this. Blame it on my hiatus and just being busy in general.

I got a new job ;) As I've written here before, I do a lot of contract work on the side. I have been doing it for a little over a year. Well, over the christmas holidays I was told that the company was generating more business than we could handle as part-timers. So, the owners asked me to jump with them and go full-time.

We all quit our days jobs in mid January and have been working at this since. I'm a lot busier than I was at megacorp, and my job responsibilities have increased beyond just programming. I am involved a lot with business decisions from interviewing and salary recommendations to planning and revenue discussions.

Salary wise, the move was somewhat of a lateral one for me. Meaning, on a yearly basis, the salary is comparable. However, the compensation package is less. I get no paid holidays, my health insurance is four times more expensive, and I don't get a lot of the little perks that add up. However, I have infinite more flexibility with my work hours (even though they are more!), and there is the potential for profit sharing next year if our growth rate continues.

The biggest hit to my bottom line is that I no longer have a side gig paying a 25% "bonus" to my day job. However, it's important to realize that even if I'd stayed at megacorp, I'd have lost that portion of my yearly income. My new company needed a full timer, not another contractor. So that gig would have dried up for me no matter what.

Anyway, I'm getting in at the ground level with a new company. Even though this is technically our third fiscal year, we all had day jobs before this. I'm betting on this really taking off and being a company I can grow with for the next 10 years. Ideally, I'll be able to evolve with the company and take on new roles. After all, I can't see myself being a programmer for the rest of my career.

Wish me luck!

Requisite Downturn Post...

2007-02-28T00:35:00.000-05:00

I'm pretty sure everyone is posting about today's market movements. So I'll post it from my perspective.

First, the numbers: Drop of 3.428%, which was a four figure drop for me (my biggest one day loss so far). Needless to say, this has thrown a wrench into the end of year goals I had.

Funny, even with this big of a hit, I'm not really phased. I started investing last year, and threw all my cash into the market right before the big dip in May. That really helped me get used to the idea of buying on the way down, and I ended up stronger for it.

This year will be no different. I've got 4k (a lot for me!) ready to invest later this week. This dip just means I am getting it all on sale ;)

Filing my taxes

2007-02-12T18:02:00.000-05:00

I know this sounds kinda sad, but I've never done my own taxes. So, this year I decided I would pick up a copy of TurboTax and run through it. Since this was also the first time I've had capital gains due to stock as well as some dividends on my mutual funds, I figured I'd learn a lot.

I was impressed with how the wizard worked, although the organization confused me a little. I'm assuming the order is based on the way the forms work out. But entering my 1099 income many screens after the W2 kept worrying me. I was scared I'd forget to include something.

I found a sucky bug while I was entering my credit for paying state tax last year. The program kept going in a loop, decreasing my tax liability everytime it went through the loop. Luckily I found a post on the TurboTax support forums that told me how to remove the erroneous credits and got me out of the loop.

Anyway, I finished that up and went to e-file last night. And that's when I find out that TurboTax wants another $30 to e-file my federal and state taxes. Hello, didn't I just pay them $45 for the software?! And to top it off I have to mail the state tax payment myself. They won't direct debit.

I'm hoping TurboTax will tell me where to mail the check after it confirms that Georgia received my taxes. And then I can be done with my taxes earlier than I've ever had them done before. Woo!

Back from the dead

2007-02-11T11:53:00.000-05:00

Wow, can't believe how fast the last few months have gone by. I originally planned on taking only a slight hiatus from posting here, but it quickly grew into a 4 month lapse.

I'll confess my original reason for stopping posting was fear. You see, I'm ready to marry my girlfriend and bring her here to the States. So, I felt it was time to show her this journal. But then I freaked out. Do we have the same financial goals? Can I trust her not to wreak havoc on my future? Are we sure marriage is the right idea?

You see, to a lot of people, our fascination with saving for retirement when we are still in our 20s is crazy. The idea of living below your means or building an emergency fund does not make sense to them. And let's not even bring up the concept of App-o-ramas. Just mentioning the idea of rate chasing with online savings accounts is enough to send them running.

They are The Spenders. We are The Savers.

They laugh at us, make fun of us, even pity us sometimes. But why? Honestly, I'm not sure. I just know that for whatever reason, we are "different" than they are.

Now, my girlfriend knows I'm heavy into this kinda thing. I've admitted to her that I have a minimum amount I must save per year and I'm not willing to compromise that number no matter what. That number for me is about $15k. In fact, that number seems tiny to me! I wanna save MORE!

At first I believe she felt I was obsessed with money. It's weird. You hear obsessed with money and it sounds insulting. I always figured The Spenders just didn't comprehend the math behind compound interest. Maybe they think that finances are just too complicated and boring.

Personally, I think they are intimidated by money. And we can help them with that. But there is something of value they bring to the table too.

Balance.

That's one of the reasons I believe my girlfriend should be my wife. She keeps me grounded. She reminds me that sometimes, you gotta spend a little to keep things in perspective. That there is more to life than a balanced portfolio and saving 15% on your car insurance (yes, I have geico - and they totally saved me money).

And so, with those thoughts in mind, I have decided to pick up where I left off and start posting again. Hopefully you will start reading again. And maybe in the near future my lovely girlfriend will be able to post and give you her perspective.

Vanguard Security Changes

2006-10-10T08:52:00.000-04:00

I've been hearing for several months that Vanguard has slowly been phasing their customer base into the new security system. This morning I received an email notifying me that it was my turn.

When I logged into Vanguard it brought up a notice telling me that I'd need to change my security. After hitting continue it informed me that I'd need to perform two steps:

Select and name my security image.

Select and answer three security questions.

I cliked the button to get started, and was presented with an image selected on my behalf. It wasn't really my style so I clicked a button allowing me to pick a different one. There are 10 pages of 8 images to choose from. Once you pick one, you enter a name for the image and continue.

You are then given a screen where you choose questions from a drop down list. I'm a little disappointed they didn't follow Emigrant Direct's lead and allow free-form questions, but this is still quite a step up from before.

At the bottom of that screen there is a checkbox labeled "Check this box if this is a public computer or you don't plan to use it again to access your accounts." I'm not so sure I like them remembering my computer. I never click the option for that on ING Direct, and they nag me everytime.

The Vanguard wording seems to encourage you to always use the same computer. Personally, I'd rather that they always ask me my security question. However, that's gonna require that I click that checkbox every single time I log in to keep it from remembering me. Contrast that with ING, which does the opposite by having you click the checkbox to make it remember you.

Once you are at the end, you click submit and you are brought to a screen that reminds you of the new features and shows you your security image and its name one last time.

This is certainly an improvement over the previous authentication methods, and I'm glad to see the industry moving in this direction. Hopefully it will become a standard that other banks adopt in the near future.

Car Tag Registration

2006-10-06T10:03:00.000-04:00

Well, it only took me eight months, but I've finally updated my car registration. It occurred to me that since I'm getting close to the time when ad valorum taxes are due, that it might be a good idea if the tag office knew where I lived. Since I had today off from work anyway, I went down to the tag office to get it changed. The best part? They didn't charge me! Last time I did this it cost me $5. But now I've got a nasty premonition that that $5 will come back to haunt me come ad volorum time...

Fidelity BrokerageLink in 401K

2006-10-02T21:15:00.000-04:00

Got my welcome letter stating that my application for BrokerageLink is now processed. They gave me an account number and a little brochure explaining very vaguely how the program works.

What they don't tell me is which funds I can invest in and how much that will cost. A friend at work says I should be able to buy most of the Fidelity funds without a fee, but I want to find that somewhere in writing. I looked at the website, and there's a bit to it, so I'm gonna need more time to figure it out.

Anyway, now I have to decide which funds to buy! I think I'm gonna go the same as I did in my Roth and get one of those Freedom Funds that auto adjusts allocations for me. I am feeling a bit overwhelmed already with just handling the mutual funds in my after tax account.

Net Worth - September 2006

2006-10-02T20:52:00.000-04:00

Nothing exciting happened this month. Still making progress, but one of my contracts hasn't paid up yet. I'm also a little over extended right now and payday can't come soon enough.

Very possible I might miss my goals for the end of the year, also.

Quickies

2006-09-24T22:52:00.000-04:00

Not much going on lately, financially speaking, but I have a couple small updates.

Got a $50 check from Chase Rewards. Using it to catch up on some of my over spending lately.

This week was my one of my odd checks during the year. Using it to pick up some more VFINX shares.

Mailed in my application for BrokerageLink. Hoping to hear back on that sometime next week.

Finally got the correct information on my batch of checks.

Net Worth - August 2006

2006-09-09T23:25:00.000-04:00

Pretty good month, I suppose. Spent about $1700 on vacation, and was still able to get a pretty good increase in my net worth.

I sold the 50 shares of WAG at $49.03. It's gone a little higher lately, but I got out with a 21.06% gain, which is plenty good enough for my tastes! I used the proceeds to pick up another 50 shares of MSFT at $25.70, giving me a round lot for once. Holding off on any other stock purchases until I find something that I like.

I was also able to increase my savings a good bit this month, mainly because a pretty big contract paid out. I have another medium one that will pay out sometime in September, but it won't be quite as nice.

Mutual funds have seen some improvement, but are still in the red. I'm hoping for some better performance as we get closer to the end of the year.

I'm still on track to hit my goal for the end of the year, but it feels like I should be doing more. I'm pretty behind for my age, I think, and future years probably won't be this strong income-wise. Let's hope I do better in the market so that compounding we all love will work in my favor :)

5th edition of the Festival of Under 30 Finances

2006-09-08T09:22:00.000-04:00

Welcome to the 5th edition of the Festival of Under 30 Finances. I'm your host, Ninja Pigeon, and I'll be with you through the remainder of the posting!

Hopefully you are all aware of The Under 30 Honor Roll, which was founded by our very own Kira of Penny Foolish. If you're only hearing about this for the first time, we'd appreciate you stopping by and maybe even checking out the forums, which are sadly lacking in posts since the site was moved to its permanent home. Here is a
little more background information on the Honor Roll.

Also, as a quick reminder, the next edition will be hosted at Molly’s Brother On A Budget. Why not submit an article by going to Blog Carnival?

And now, without further ado, I present you with the main attraction...

Carnival Entries
Bryan C. Fleming invites you all to join his club in The Million Dollar Savings Club Kick Off! It's never too late to get started! So why not head over to his site and track your progress? Or, if you're still not convinced, check out his follow-up post, How to be Your Own Bank.

Want to know The Three Strategies to Maximize Your Financial Success? Well, Steve from Debt Free has just what you're looking for to "reduce your debt, increase the balance in your savings and investment accounts and contribute to your financial security". I've done the first two, and it's certainly working so far. Maybe I should try out number three?

Trying to buy or sell a home? Well Jeannie from Bouncing Back wants to introduce you to The Greatest Real Estate Tool Ever(Part 1). I just tested it on the home I sold a few months ago and it came up with the price I paid for it 2 years ago. Seems pretty accurate and lots of other great info there too.

Ever heard someone talk about the Monte Carlo model but not sure what it meant? Simran Gill has an answer for you in his post on Personal Finance and Simulation Modelling. He is even kind enough to summarize his findings at the end for those of us who couldn't make sense of the pretty graphs!

Katie from Aridni worries about the seeming obsession many of us have with tracking our net worth. Her post, Financial bloggers losing focus asks a very pointed question for all of us - "shouldn’t we be aiming for financial freedom"? I can't speak for the rest of you, but that's exactly what I'm doing. My net worth updates are simply to help me keep my eyes on the prize!

Ken offers us a "little different take on what [he's] been seeing on the under 30 PF blogs". Head on over to his blog, After reading rich dad poor dad, and read his post entitled, Personal Finance Blogs to see if you have an investor or a saver mindset. Personally, I'm mostly a saver right now, but I'm working towards a happy medium. I'll bore you all with the details of my forays into real estate at a later date!

Steven from Finding Freedom wants to help you with Saving Money Buying Diamonds, an important topic for men and women alike. Check out his site for other great posts where he answers the question, "How quickly can a fool find his money again?" Judging by my net worth lately, the fool can lose it much faster!

Ever wondered, What's in Carleton Sheets' No Down Payment Real Estate Program kit? Well wonder no more! Kira from Penny Foolish has your answer. Looks like a nice little discussion is starting on the topic as well, so feel free to contribute to it.

Try not to be scared as you read a post that "contains a lot of details, numbers, and statistics!" Honor Roll member Penny Nickel, from Money and Values, aims to help you with Retirement Planning in Your 20s (& Beyond), Part 3: Figuring Out the Nest Egg Needed. Personally, I'm terrified of that post! But I will give a plug for a handy retirement calculator known as FIRECalc. Many of the posters on one of my favorite retirement forums sing its praises.

Laura from Then Things has a bit of a rant that points out some of the problems you face with transferring money to online banks. Check it out at
EmigrantDirect: PLEASE MAKE TRANSFERRING MONEY EASIER! and see how your experiences compare. I know that the old "send in a check" line is bothering me too. In this age, why can't an account number and a routing number suffice? Heck, throw in a couple of those random deposits under $1 that ING does and you've got some security to boot!

If you are just starting out in the world of credit cards, then Mike over at College Student Financials has some advice for you. His post addresses a Question from a reader and "discusses one way a college student can get a credit card if they have never gotten one in the past". I'm not sure how you guys did it, but I got my first credit card by sheer luck when applying for a free t-shirt Eight years later, I even paid it off!

Honor Roll Insights
Not everyone was able to respond to this edition's question during their submission, so maybe we can get some more feedback right now. Here is the question posed:

Why do you think it's become so taboo in our society to have discussions on finance that don't center around debt?

Kira from Penny Foolish responds:
I think it's easier for people to complain (about their debt) than to do something (about reducing their debt, or saving any money.) Also, it's considered kind of like bragging to say that you are doing better than anyone else - even if others are doing terribly. I really hope this attitude changes in our generation.

Penny Nickel from Money and Values responds:
I think part of it is the idea that salary is a reflection of your self-worth, which is just ridiculous, but still affects the way people interact-- people who make less (or just conspicuously consume less, but as a result conclude they're making less) feel embarassed about it, so they try to avoid the whole thing. People who're making more and/or who are able to buy and do nicer things don't want to brag (if they're decent people), which is a good impulse-- but if there weren't so many emotions tied up in it they could help give context and advice on how they got where they are. Frustrating...

Laura from Then Things responds:
It's just another sign that people equate wealth with self-worth. If people didn't feel that the value of their investments was the value of themselves they would be happy to share information.

Mike from College Student Financials responds:
I think it is taboo to discuess finances in our society because people fight so hard to get the salary they make, or the are embarresed that their friends make more than they do so they don't want to talk about it. My friends and I talk openly about the interest rate we got on our car loans, how long it will take us to pay off our credit cards and how much we net a week. There are other groups of friends I am in where I wouldn't discuss this because I make more than they do and don't want to make them feel bad about not making as much.

Check Problems

2006-09-07T09:18:00.000-04:00

Well, if you recall, I recently ordered new checks. Well, they came late last week, and as you might guess by the title, were not what I ordered.

Even though I very explicity stated what I wanted printed on my check, they were still wrong. They had the wrong names on them, and also the wrong address. However, they were at least mailed to the right location and were the color I wanted!

So, last night I called Wachovia back and told them of their error. They are going to print me up some new checks and mail them out next week. They assure me I won't be charged a second time as it was a printing error. If that works out, even though I've still paid too much for my checks, I end up with a few hundred extra that are valid, if not exactly what I wanted.

The only good news is that I need to update my vehicle registration, and the county likes proof of your new residence. I don't have any bills in my name here, so having my current address on my checks should satisfy their requirements.

Chase Credit Protector

2006-09-06T20:17:00.000-04:00

Well, about three weeks ago I deposited one of those $15 checks from Chase to sign up for their fraud proection program. The check came with auto-enrollment that was free for 30 days and then was $7.99 thereafter.

Today I finally got around to calling them to cancel. I had to listen to the usual retention type information, which consisted of about a 5 minute long listing of all the wonderful features of the program. Then I cancelled and got a cancellation number as verification.

What I found interesting was that the representative on the phone mentioned that 1 in 40 people experience identity theft. She did not mention the timespan during which those statistics are valid, but it was a much more common occurrence than I realized. She followed that statistic up with a monetary figure by stating that those cases cost between 2 and 16 thousand dollars to "clean up". I'm very curious to find any references for those numbers.

Does anyone else have fraud protection, and if so, what do you have?

Financial Life Preservers

2006-08-23T18:59:00.000-04:00

Imagine a friend, caught in the rising tide, the shore getting smaller in the distance. They slip beneath the surface of the water, then spring back up gasping for air. It happens a few times, and then finally, they are overwhelmed.

This has become the state of many people's financial affairs in today's economy. People are literally drowning in debt, with financial freedom shrinking on the horizon. And rather than call out for help, they choose to let the waters take them.

It seems almost ironic to me that there are people I work and interact with daily who are struggling to get by yet take no positive steps to improve their situation. In particular, there is someone whom I have been speaking to about her future.

My friend, who we shall refer to as Kate, has told me a little about her financial challenges. The gist of it is that she's living check to check. I gave her some basic advice and then offered her my favorite book on turning your life around - The Wealthy Barber.

Kate has so far read only four chapters in the two or three weeks she's had my book. Which, unfortunately, tells me that she's not serious enough about taking her life back. Or, more specifically, she isn't willing to give up her lifestyle.

Now, to be fair, Kate makes very little money. In fact, she works a second job after she leaves her 9 to 5 just to keep up. But there is still room to maneuver, even on her budget. Did I mention that she wears very trendy clothes and owns a phone that is several hundred dollars? How about her fabulously manicured nails and perfect hair?

The problem, as I see it, is that people have developed the fast food mentality and are trying to apply it to every aspect of their lives. If they want something, they want it right now; tomorrow is too far away. Saving $20 per check just doesn't put the big numbers on the board fast enough for them.

What they fail to realize is that all of us who practice the live below your means (LBYM) philosophy started at that point. We got to where we are today one dollar at a time. It is merely through discipline and continued resolve that we have achieved more.

Unfortunately, my efforts thus far have been in vain. Kate is still living beyond her means and not planning for tomorrow. But I have not given up on her. I have thrown her the financial life preserver that can save her. The one that saved me. The one that can save all of you.

Credit Card Confession

2006-08-21T03:09:00.000-04:00

Okay, I've been keeping a dirty secret from you all for a while now. But I think it's time I came clean. Here goes...

I'm an obsessive credit card bill payer! Don't laugh, it's true!

I think I must be the reason the credit card companies restrict monthly payments. Oh, didn't know about that? Yep, they actually won't accept more than one payment every three days. And if that wasn't horrid enough, they also cut me off after four payments in a single billing cycle! /dies

Okay, I know some of you think I'm exaggerating, but here are the dates of the last 90 days of payments from me.

4/27, 5/1, 5/19, 5/27, 6/16, 6/30, 7/9, 7/20, 7/27, 8/11, 8/19

The only reason there aren't more payments in that list is because my credit card company won't let me pay unless I have a non zero-balance, even if I KNOW there are charges that will hit within a day or two. Man, that one irks me.

Okay, so maybe I have a bit of an OCD thing going on there. :)

Revisiting Goals

2006-08-18T21:01:00.000-04:00

It's very important to keep goals and track your progress. However, sometimes we forget to revisit and revise them.

In my case, I set a goal for a net worth I wished to achieve by the end of the year. Well, it looks like I'm about four months ahead of schedule. Rather than coast the rest of the way into the finish line, I'm gonna raise the bar some and see if I can make it.

While I'm at it, I am going to go ahead and update the entire list. So, here is my new set of goals for the remainder of 2006.

1. Create an encrypted backup of my financial data and put it in safety deposit box.
2. I'd like to get a simple will created.
3. Obtain duplicate copies of the last 5 years of tax returns.
4. I'd like to finish my MCSD to ensure better job security.
5. Explore at least one entreprenuerial idea with Chris.
6. Learn more about stock trading from my brother.
7. Talk to previous employers for letters of recommendation.

The Unthinkable!

2006-08-16T21:43:00.000-04:00

Something crazy happened today. Something that I never thought could happen. Yes, I have finally run out of checks for the account I opened in 1996!!!

Now, to be fair, they gave me an initial batch of probably 200 checks. And then at some point, they randomly gave me another batch without my asking. Which, given my habit of writing only 1 or 2 checks a month, seems like it'd last an eternity.

Alas, the fountain hath dried up. I have to bite the bullet tomorrow and call the bank to order checks. Hopefully they have a reasonable price. Either way, I have a plan.

See, about two months ago, I noticed a random $20 charge against my account labeled "safety deposit fee". Interesting, given that I don't even have a safety deposit box. Turns out, they billed my account for my mother's safety deposit box.

The reason for that is because since I went away to college, my mom needed a way to easily transfer money to me. That way was the very checking account I still use today. And she is still listed on the account today as a joint owner.

Now, you might ask why I felt this was important enough to share with you. Well, the reason is because my mother is a senior citizen. She gets free checks for all her other accounts. So, while my account is a different type of account, it may be possible for me to get some free checks. I'm not gonna get my hopes up too high, but it's worth a shot!

Cutting Costs

2006-08-16T21:32:00.000-04:00

This month I decided to do something I haven't done in several years. I decided to start bringing my lunch to work.

Now, I know this is mostly a no brainer for many of you super budgeters out there, but for me this was a tough one. I figure I cut a lot of corners in life, and having a fresh cooked meal for lunch was a reasonbly splurge. However, when you start having two ATM withdrawals for $40 in a single week, you realize that it's gotten out of hand.

So, I did something about it. I bought some new plastic dishes to store my food in, and hit up the grocery store to buy lunch type items. My dishes cost me about $10, but they have cool compartments in them to separate my food so I don't go through ziploc bags all the time. I also reuse the plastic bags my groceries come in to tote my food to work and back.

I've only been doing this for about two weeks, but I've already noticed a difference in my checking account. Mainly, it stopped going down for no reason at all! Unfortunately, I'm not quite disciplined enough to track the success of my change down to the dollar, but I estimate that I'm saving upwards of $30 per week.

Wedding Extravagances

2006-08-03T08:42:00.000-04:00

Okay, it's no secret I think expensive weddings are a pointless waste of money. But this one takes the cake.

Now, it's their right to waste the money however they see fit, but this is just sheer stupidity. If you have so much money that you can afford to throw it away, try giving it someone who needs it instead.

Increasing your income

2006-08-01T10:56:00.000-04:00

Increasing your income is perceived to be a hard thing. Your salary is usually the primary source of income, and employer's don't like to give out raises just so we can all fatten up our bank accounts. So how can you speed up your accumulation of wealth without a raise?

The good news is there are lots of opportunities out there for enterprising people. One of them is taking advantage of free money. There are many sources of it, which is great because not everyone will be comfortable with all of them. So here is a list of things I've done so far:

Take advantage of store promotions. This netted me $20 in free gas.

Find out what deals and coupons you can get from your company. This saved me $150 in groceries.

Open accounts and earn free gifts. I scored $50 on this promotion. I got another $200 from opening credit cards.

Use a balance transfer to earn interest. I make about $60 a month off this.

Cash those checks from your CC that auto-enroll you in their credit protection program then cancel a month later for no cost. I've made $20 on this not long ago.

For those of you who don't like doing the promotion deals, or just can't seem to find them, you still have options. I started doing side gigs late last year just to pad my resume. I never thought it'd bring in any significant amount of money, but boy was I wrong.

So far this year, I've made a decent amount contracting, and I've got an invoice that I'm submitting next week for another payment. My only regret is that I didn't start doing this sooner!

How about you? Are there things you could be doing right now to increase your income? And if there are, why haven't you done them yet?

Net Worth - July 2006

2006-08-01T10:38:00.000-04:00

Here are the numbers for last month, which represent a 36.8% increase in my net worth:

I started my 401k this month. This is the first month I've been eligible under my new employer, so the balance is not that impressive yet.

I invested more into my mutual funds account this month, but overall I'm still in the red. Just for reference, I've contributed quite a bit to that account so far, which puts it down by about 3.3% since mid May. I'm hoping for this to bounce back into the black by the end of the year.

I also picked up some more stock last month, which increased the balance on my brokerage account. My stock holdings are both up so far, which is nice after the disappointing performance of the mutual funds.

Liabilities continue to decrease. Also you can see I made another payment on the 0% balance transfer that I'm doing. I'll pay that in full early next year.

Overall, a pretty good month. Next month will be a little challenging though, as I need to pay for GF's tuition. And September will also bring some challenges as I'm going on vacation that month.

Losing money during your home sale

2006-07-27T08:20:00.000-04:00

There is more money that changes hands when you sell your home besides what is on the HUD-1. The most notable of these includes the balance of your escrow account. Luckily, the mortgage companies will automatically send this check to you. But you'll still want to perform your own due diligence to make sure you collect all the money you are due.

I recently sold my first home, so wasn't sure what to expect. While there are less papers to sign at the closing table, there are still many things to take care of. One of the big ones is calling your mortgage company and telling them your new address so they know where to send the escrow check! While a mail forward at the post office will probably catch this, it's not something you wanna take chances on. Furthermore, the mortgage company can tell you how much the check will be even if you won't see it for several weeks. Balance of my escrow account? A cool $912.33.

Another source of money, and one that I didn't consider, was the balance of my home insurance premium. Since they are billed annually out of your escrow, you often don't even notice when they get taken out. Well, mine got paid about a month prior to the sale. So when I called recently to notify the insurance company that I had sold the home, they told me I'd receive a refund for the remaining time on the policy. They even said they'd prorate it based on the day of the sale if I could show proof of it by faxing over the first page of my HUD-1. That value of my premium? A nice $435 that I almost lost because I didn't know I could get my it refunded.

Finally, you'll want to call your utility companies before you reach the closing table. Most of them require a day or so notice before they can shut them off, so if you stall, you'll be paying for them up to several days after you no longer own the home. Cancelling the water bill even scored me a refund on the deposit I put down when we bought the home two years ago. Score another $18.50.

Online Banking Security

2006-07-26T08:48:00.000-04:00

Well, EmigrantDirect and INGDirect have both revamped their websites this week to be more secure. This morning I decided to give them both a spin.

Emigrant Direct
Emigrant asked a lot of questions, as expected. I had to verify my SSN, provide them my full date of birth, and even enter in a 10-character code the mailed me last week. After it verified who I was, they prompted me to change my password and pick between 5 and 10 random security questions for which to provide answers.

After getting through that, I was presented with the new layout. Wow, what a difference. They really made up for the poor and barren UI they had prior to this update. And they've increased the functionality quite a bit.

I took advantage of the new options to set up a beneficiary. Unfortunately it doesn't allow me to enter multiple, nor does it allow you to edit all of the details of them once you've entered it. I'm hoping they'll correct this in the future.

I also updated my mailing address, which I noticed a couple weeks ago was incorrect. The UI confused me a little here, as apparently there is a section for your account mailing address and the my primary residence address. The account can simply inherit the primary residence one. So I only had to change my address in one place. But I picked the wrong place on my first try :)

Also, they allow account nicknames now, which I like. It's much easier to do my transfers when I can say "savings to checking" instead of "12348661 to 1068661" or whatever random craziness it was before!

All and all, I give it 4 out of 5 stars. With a couple tweaks, it will even surpass the user friendliness of ING.

INGDirect
ING also updated their site. They have split their login across several screens, which seems to be the new thing lately. They've also added a security picture/word concept.

So, I picked a new picture and a word, and filled out a number of pre-canned questions. Unlike ED, there was no opportunity to create my own questions, but they did have a decent selection.

After filling out the question section, they asked me if I'd like to "register" my computer to avoid typing in my questions all the time. I'm not too keen on that idea, as it means anyone who sneaks into my room could potentially access my accounts. So I decided that feature isn't for me.

That was pretty much the gist of the changes. When I logged in I was greeted with the same UI as always. A little disappointing after the ED goodness, but to be fair, ING was already a great UI.

Anyway, the only thing I found weird about the picture thing is that it doesn't make me verify my picture really. If you answer the questions properly, the picture is just always the right one in my testing. Um, and that helped my account be more secure how, exactly?

Financial Hurdles

2006-07-26T08:11:00.000-04:00

It's been a while since I actually was worried about money. Generally my e-fund can absorb any problems I encounter. But with the fire sale going on in the stock market, my savings account is pretty barren lately.

So it came as a bit of a shock when my GF told me that her tuition was due next month. I remember her telling me about it months ago, and I knew that I'd need to save up for it. But, I kept putting it off.

Where does that leave me? It leaves me $771.22 short because I didn't set aside money along the way. Now, I could tap the e-fund and cover the cost, sure. But right now, that happens to be a significant percentage of that account. And I could split the payments up using her university's payment plan, but we'd have to pay some additional fees.

No, it looks like I'm gonna just have to suck it up and pull some contracting hours to cover this. I don't think I can quite pull off the hours to cover all of it, but I can get close enough that the rest will only cause a small impact on my paycheck.

I guess I'm fortunate that I had work available to me when this hurdle presented itself. But that won't always be the case. So I'm gonna take this as an opportunity to remind myself (and you!) why an e-fund is so important and why we should plan ahead for hefty bills we know are coming up. Putting $50 aside every paycheck could have solved this problem before it became one.

Next time, I'll be better prepared. Hopefully you will too :)

Pre-nups

2006-07-16T08:06:00.000-04:00

So, in the first Festival of Under 30 Finances, Kira posted an entry about pre-nups. My girlfriend and I have talked about it in the past a little, but I decided to see how she stood last night.

Here are the highlights:

"i refuse to do a prenup"
"if you screw me over, im going to take all yer money! HA"

First line was her actual answer. The second one was her teasing me ;) Her take on it is if we don't have a pre-nup, I won't cheat on her. My take on it is that if we have a pre-nup, we're not serious about the marriage.

I should also point out that the theory that you're protecting your assets seems strange to me. If you are married, and your spouse has access to your money anyway, they could take it while you are married. Why would they wait? Even if they don't have access, what kind of man would I be if I didn't share my wealth with my wife? If she wants some new shoes and it's within my power to give them to her, why wouldn't I want to see her happy, assuming it doesn't compromise our financial future?

I can live with losing my money. I can't live with knowing I didn't love her more than that money.

401k - the tax gamble

2006-07-07T07:29:00.000-04:00

RunBlog made a post asking if it was better to invest in a 401k or to pay the taxes now and save in other ways.

His quote about the radio station, in my opinion, only shows their failure to see the big picture. They suggested paying the taxes now.

My answer? Do both.

There is no smoking gun to retirement savings. Fact is we don't know what will happen to our 401k programs or to our new-found love, the Roth IRA. So how do we, as future retiress, plan for such things? By diversifying our assets across retirement vehicles just as we do across asset classes.

So, contribute to your 401k. If you have money left over after reaching the company match, contribute to a Roth if you are eligible. Still got money left? How about investing in some low-expense mutual funds? Still more? Tax-friendly municipal bonds or a treasury bill perhaps?

Remember that 401ks also provide some other benefits that make them attractive even if you think you should take the tax-hit now. There is the forced savings that RunBlog mentioned. Also, for those of you close to a income-tax bracket, they can help you get under it by lowering your Adjusted Gross Income(AGI), avoiding a higher tax rate. By that same token they lower your Modified Adjusted Gross Income (MAGI), which is the number used to determine Roth IRA eligibility. They also allow you to potentially get free money through company matching of contributions.

Make sure as you are exploring these different places to put your money that you don't forget to keep some of it in guaranteed accounts, such as CDs or savings accounts. You don't want all of your money tucked away where you can't get to it if you are able to retire early!

Bought some stock

2006-07-06T18:57:00.000-04:00

My check to Scottrade hasn't cleared, but the funds were in the account anyway. I watched the market this morning for a bit, though, and noticed the trend was up overall.

So, I picked up 50 shares of Microsoft at $23.50. I might just be overly optimistic, especially with the recent news that came out, but I think they will bounce back above $25 by the end of the year. The only reason they had the big drop was because of Bill's announcement. Their products haven't changed, and the new Office suite is pretty nice. We'll see how I do!

My Income

2006-07-05T21:55:00.000-04:00

Jonathan discusses a sensitive topic, even given the relative anonyminity we all believe we have on the internet, in his post, What's Our Income?

I think my income is probably hinted at a bit in my previous posts, but I suppose I've never really stated it directly. I wasn't opposed to posting it before, but as I mentioned in his blog, I recently discussed it with a coworker, which was probably a poor decision. The problem is that he makes the same as me, although he should make more based on his credentials.

So, I won't say what my salary is at my company, but I will say that I expect to pull down six figures, factoring in my contracting. If you recall from this post, I originally thought combined I'd pull down about 85k. But the contracting has really taken off in a way I never dreamed could happen.

Credit Report and new VantageScore from Experian

2006-07-03T19:11:00.000-04:00

So, I saw that the new VantageScore system was officially live in an article on bankrate.com. I wasn't sure how long ago I'd last requested my free credit reports, so I figured I'd try for both at once.

I went to this site to request my free reports. Turns out I've already used up my Equifax one in the last 12 months, but Experian was available. I went ahead and checked it out. Seems like my first mortgage has shown up as paid off, but the HELOC hasn't cleared yet. Overall, my report looked great.

While I was there I saw the promo link to see my new VantageScore for $5.95. I decided to get it and see how I stack up. The last time I pulled my FICO was just before I requested my free BT money. Turns out it's had a hit. My FICO was around 780-790, which is pretty respectable. However, my VantageScore is only 749, which is a grade of "C". I'm in the 50% percentile ranking, whereas I used to be MUCH higher.

Here are the reasons they suggested:
-The sum of balances on your credit card accounts is too high. I only carry the BT money as a balance. I pay everything else in full monthly
-The average loan amount across open, recently reported real estate accounts, such as a mortgage, is too low. No clue what that means. Are they saying I don't have enough mortgage debt?
-The balance amount paid down across your open real estate accounts, such as a mortgage, is too low. We had an interest-only loan on the house, but as stated above, the HELOC should show up as paid in another month or so.
-Your report shows that the available credit across your open, recently reported revolving accounts, such as a credit card, is too low. Well, my BT card is at 71.7% utilization. My overall utilization is 27.2%. Seems like they feel that's too high. At any rate, it'll be gone next April.
-Your report shows one or more inquiries on file. There are four inquiries on my account. One is for the apartment I just moved into. One is for a credit card I opened with Schwabb last year. The final two will drop off in November and December.

So, for those of you playing the BT free money game like me, it seems the new scoring system is a lot less forgiving. I think I'll hold off doing any more for now and see how my score changes after the HELOC disappears and the inquiries drop off.

Credit Limit Meme

2006-07-03T11:40:00.000-04:00

Tired but happy has started a credit card limits meme that I thought was a cool idea. So here are mine:

Cards

CC1:   14300.00
CC2:    3750.00
CC3:   20300.00
CC4:    8000.00
CC5:    5800.00
CC6:     100.00
CC7:     600.00

Total: 52850.00

My limits are that high because I actively try to get them higher. Now, some people might freak out and think that's a bad thing. And in some cases, it surely is. But if you understand that part of what determines your credit score is utilization, you'll understand why having a higher total credit limit is not necessarily a bad thing.

Now, don't go run off and open another $20k in credit to do this! You take a hit whenever you get a hard pull on your credit from applying for a new line. The trick is to space these out and only have a pull every 6 months or a year. So obviously if you are about to apply for a new car loan or a house loan, you don't want to be doing this.

Also, if you don't have the discipline to have large lines without tapping them, then this strategy isn't for you. You'll just dig a deeper hole to climb out of.

Anyway, since I started working on my credit I've raised it over 100 points. I'm in the 780-790 range right now. So it appears to be working out well.

Stock senses tingling...

2006-07-03T11:07:00.000-04:00

Okay, they aren't quite as useful as Spidey Senses, but they've been pretty good to me so far.

I've been a little slow in making my purchases, mainly because I'm very particular about what stocks I watch, and how I see them changing in the future. So, the stock I'm currently interested in has already bottomed-out and is in an upturn. I've missed the first 7.5% or so of that, but I believe there is more steam left in it.

My current stock strategy is to find stocks that have dropped in price and are close to the 52-week low even though the company is still just as strong as it was at the peak. This, in my opinion, signifies there is a value to be had, provided there are no lingering problems that triggered the dip. In the case of Walgreens, the dip was greatly influenced by the success of CVS, even though Walgreens was still a fabulous company.

So, with that in mind, I went down to my local Scottrade branch to add some funds.If you recall from this post, the house just sold, which gave me about $2k of money to divy up. So, I deposited a check for $1250, which should be enough to cover 50 shares if the price doesn't rise too much (it's up 1% today).

Anyway, the check won't clear until later this week, but if the price still looks good to me, I'll pick up my shares and see how they do!

House sold!

2006-07-03T09:44:00.000-04:00

Finally, I'm free from that house. I haven't blogged about it much, but I really haven't had a great experience in home ownership. Bare with me while I recount what made it that way, and the lessons learned.

In early 2004, I started reading about real estate and was very interested in doing invemestments in it. I tried to do a short-sale on a property, but it fell through literally at the last minute. However, I was confident that I could make money in real estate, so decided I'd start off with my own home. This would allow me to take advantage of first-time buyer programs and to learn more about the loan process.

My friend and I decided we'd buy a house together, trying to get it under market value, and then rent it out after we'd lived there a year or two. Well, we bought a house, though I'm pretty sure we ended up paying 100% of market value. Our loan officer was either grossly inept or devilishy clever. I very much suspect the latter.

Anyway, from day one we had problems. The AC was very shakey. It broke on us no less than 5 times in the 20 months I lived there. Luckily the bulk of the repair costs were covered by our home warranty.

Other problems with the house were mainly due to the poor upkeep of the previous owner. We had plans to do this grand fix-up of the place, but it never happened. Neither of us were particularly experienced at home repair, nor did we have enough money to do it right. So our house was pretty crappy compared to the neighbors.

Finally, in February, I moved out and we began trying to sell the house. We painted most of it ourselves (and didn't do the best job), and then had new carpet/vinyl installed. Then we listed it with a friend and waited.

At the very end of May we got an offer, and they wanted to close on the 19th of June. The inspection came back with just two problems - a few blown off shingles and the AC was not blowing cold. Well, the shingle problem was only a $100 visit by a roofer. The AC problem of course ended up costing us $1500 to replace a leaking evaporator coil.

Anyway, the house did close on the 19th, even with my friend out of town. I ended up signing for him with a power of attorney. We lost $9400 in commission, which left us with a check for $4150. Definately not the greatest profit for almost two years of work. At least the mortgage company is supposed to be mailing us the balance in our escrow account, which is another $900 we can split.

Regardless, I've learned a lot from this experience. I learned that I'm fully capable of selling the house myself next time, saving half of the commission. I learned that loan people are shady, and you need to scrutinize what they tell you very closely. I learned that home warranties are very much worth it. I learned that you should keep your house in tip top shape at all times, as otherwise you end up with a much larger repair bill when you go to sell.

Next house I get, I'll be ready!

Net Worth - June 2006

2006-07-03T09:29:00.000-04:00

Okay, my apologies for not posting much lately. A lot of things have happened and I've been incredibly busy. I'll blog about them today to catch you all up. But, as June just ended, let's start this off with a new net worth update.

One important thing that happened this month is my Rollover IRA process was completed. Last month's net worth was based on the check cut from Fidelity from my former 401k. This month, however, the Rollover IRA value is based on the holdings in that account. I didn't get out at the best time of the 401k, but I did get lucky and buy when the market was close to the bottom. So I've already seen a 6.47% gain in that account.

Also, you'll notice my mutual fund holdings increased a bit this month. That included an additional investment as well as an accidental purchase. Those two investments are now above water, though they were down for a bit. The original purchase is still in the red, but I'm confident that it will go black in the coming months.

I've also had a nice gain on my brokerage accounts. This is almost entirely due to the purchase of Walgreens. I got in at $40.50 on 5/12/06. I didn't quite catch it at the 52-week low, but I came pretty close. As of Friday, I'm up 10.72%. I could sell now and lock in my gains, but I think I'm gonna ride this one a little longer. I see another 5% or so in the coming months.

My savings went down a little due to the additional mutual fund purchases. However, I was able to cover most of that purchase cost out of contracting money.

Overall, it was a solid month. July probably won't be quite as good, as I don't have a big contract invoice outstanding. However, the trend is clearly going in the right direction.

Jewelry Shopping and Gas Cards

2006-06-09T08:00:00.000-04:00

I've been looking for a ring to buy my GF, so I decided to hit a couple jewelry stores and see what I might find. I already had a ring in mind I'd seen online at The Shane Company, but figured I'd keep my options open.

The first store I went to had a pretty poor selection, most of it overpriced and gaudy. That wasn't surprising since it was in Atlantic Station. But I took their business card anyway, because I knew that another local store was running a cool promotion.

At the other store, the selection was a lot better, but I still couldn't find exactly what I wanted. However, this trip was not a waste, because their promotion was that they'd give you a free $10 gas card just for stopping buy. If you brought in a business card from another jeweler, they'd give you a second card. So, after I'd shopped for a few minutes, they handed over 2 $10 cards. Sweet.

I also learned another very important lesson on my trip. Jewerly stores haggle! When I told the sales person that I wasn't sure about the price, she said that they could knock it down about $50. I didn't know they'd do that. It was like trying to leave a car dealership.

So, looks like I'm probably gonna go with my original choice from the online store. But thanks to shopping around, now I'm gonna see if I can haggle my price down a little.

Duplicate Funds Purchase - Ouch!

2006-06-04T10:46:00.000-04:00

I transferred $money from my EmigrantDirect account last week to my checking account so that I could put it into mutual funds. The money cleared on Friday, but I didn't want to make the purchase at work, so I was going to wait until I got home. Apparently, I made the purchase sometime that day, though I don't remember doing it.

So fast forward to today. I decide I'm ready to make my purchase. The screen looks vaguely familiar, but I think nothing of it and put through my new order. Somewhere on the screen it says "transactions cannot be cancelled". So that got me thinking - maybe I should make sure I didn't already do this.

A quick check of my pending transactions shows that I had indeed requested a purchase on Friday, afterall. Oops! A quick look at my checking account shows there is not enough money to cover a second purchase. In fact, it appears I'm short, even if I didn't have any bills to pay this week.

Problem is that my savings in EmigrantDirect will take a few days to clear. I'm worried that it won't clear before Vanguard puts through the request for the money. Oh, and the fact that I have little left in savings is not so good either.

The best I can do right now is to empty my savings at EmigrantDirect to cover the order. And to handle the timing issue, I'm going to "borrow" out of the house checking account (money that isn't mine to spend, mind you) to float me the extra 2 days or so I'll need for my transfers to work out. And then I get to figure out how to get my savings into the elusive 3-digit mark again ;)

Ikea to charge for plastic bags

2006-06-04T08:51:00.000-04:00

Ikea is to become the UK's first major retailer to charge its customers for plastic bags, in an effort to tackle waste and environmental damage.

This is a pretty good idea. It's nice to see a big company trying something like this. Although, Ikea is not as squeaky clean as I once thought, according to an article I saw in The Economist this month. So while this doesn't make up for some of their questionable business practices, at least they are leveraging their power for some good. Hopefully more companies around the world will follow their example.

Contract work

2006-06-04T08:24:00.000-04:00

Well, this week I got paid for some maintenance work I did on a previous contract job. It was only $350, of which I'll set aside $175 into my tax account. I've got some bills backed up lately though, so the money won't be able to go into
savings.

Also, I've been working a lot on a new contract. We did a demo for it on Friday that went pretty well. I had some tasks that were identified during that meeting that I'll have to have completed for the next milestone, which is due on the 8th. Once I pass that milestone, I'll be able to submit an invoice for the outstanding hours. Hopefully, there'll be another work order for some additional hours beyond those.

Net worth - 05/31/06

2006-06-03T10:07:00.000-04:00

Lots of things happened this month between the 1st and the 31st, which don't come across in this statement. As I'm sure everyone remembers, the first 10 days of May saw the market make some very impressive gains. The last 3 weeks, however, saw those gains erode, and then some.

During May I got a check cut from my 401k that I'll use for a rollover IRA. That is still in the works. Because I had to sell, I locked in my losses, unfortunately. Thankfully they were just paper losses. Since inception, my 401k achieved a peek return of 17.76%, but dipped to only 8.04% by the time the account was closed.

I also moved most of my cash into a Mutual Funds account. The timing on it didn't work out so well, so as you can see I've lost about 2.45% of principal already. The daily swings on the account are half a percent, though, so the loss doesn't worry me that much. I'm sure it'll bounce back in a few months.

Also, I moved my stock holdings out of Web.com and into Walgreens. It's been mostly flat since I bought it, but the future appears good.

401k Rollover Update

2006-05-27T08:46:00.000-04:00

When I got home yesterday, I was suprised to see that my 401k distribution check had arrived already. Amount of the check was based on the NAVs for the 22nd. Remember how I mentioned in this post that I'd lost some money by being lazy? Well, if I'd done the paperwork on the 16th like I was planning on, I'd have had an extra $479.36! Wow, how's that for a lesson learned?

Also, strangely enough, the check was written to "Vanguard Fudiatiary Trust". I don't know about you, but I find it disturbing that someone who works for Fidelity can't spell fiduciary. I'll have to call Vanguard on Monday and figure out if this check is valid or if I'll need a new one issued.

Fidelity 401k Rollover to Vanguard IRA

2006-05-26T08:40:00.000-04:00

Well, this week I finally was able to get this process going. There were some paperwork issues to resolve with Fidelity prior to starting the rollover. First was that my former employer still listed me as an employee. Took care of that in April. Then I had to update my address. That took the first 3 weeks of May. The person on the phone told me that on May 16th I'd be able to start the rollover.

Called Vanguard on Monday the 22nd and they helped me pick the right options on the account request. When I told them the company I'd be rolling money from was Fidelity they informed me Fidelity would only issue checks to them, and not any of the easier methods. So I got the name to have the check endorsed to as well as the address to mail it to. I was able to get the application completed in a relatively short time after my quick phone call to their support number.

Finally I called Fidelity and was able to request they close my 401k and issue a check to me. They got confused at first and were trying to roll my old 401k into my new one. Got that sorted out and they said I'd have the check by June 1st. Unfortunately, there is no way for me to know how much the check is for, as it is based on the NAV on the day of closing. When I logged in that night to check what the NAV had been, my account balance was $0. Apparently Fidelity wastes no time in getting the account closed and the check sent!

Okay, so the process was painless enough, and I'm just waiting on my check now. But I made some mistakes that cost me some money. Mainly, I was being lazy, and so instead of requesting a check on the 16th, I didn't request it until the 22nd. As we all know, the Market has had a rough couple of weeks. So taking my time to get my check cut actually resulted in a check that was between $200 and $400 less than it could have been. If I had sold on the 16th, I'd have still had that money, with funds still getting cheaper, resulting in more buying power once my check arrives at Vanguard. Oh well, you live and you learn.

Poor Market Performance

2006-05-17T23:38:00.000-04:00

Well, I've had my Vanguard Mutual Fund account less than a week and I'm already down almost $500. Lump sump investing is not going so great for me so far :) Hopefully everyone will stop overreacting to the increase in interest rates this week and the losses slow down. Including my Roth and my 401k, I'm down about 1k so far.

Paycheck Problems, Part 2

2006-05-16T09:12:00.000-04:00

If you recall from this post, my company had a little problem getting my paycheck right last week. Well, my boss told me yesterday that the problem was going to be corrected sometime in the next two pay periods. The details of course, are unknown, but he assures me we will know what payroll is doing soon.

So, of course I'm annoyed quite a bit. They screwed up, and I offered them the chance to fix it. They wait until after it's a pain for everyone involved to fix it too. Also, there's the slight problem that I spent the extra money. Yah, I know that was pretty stupid of me, but I needed it at the time. I spent some of it to help the GF out with her sister's wedding and used some of it to help out my mother.

My best estimate for how bad I'll be docked is about $700 gross and $450 net. Coupled with my paychecks being less than I had hoped for, it looks like I'm gonna have a $900 savings deficit by the end of the year. I'm hoping to be able to make that back through some side projects, but it'll be challenging.

Opening my Vanguard Mutual Fund Account

2006-05-13T17:07:00.000-04:00

Finally, this week I had everything in order to start my mutual fund account with Vanguard. I had been waiting for weeks thinking the market would finally dip, but it was going all-out in bullish fashion until the Feds announced the rate increase on Thursday.

So, Thursday night, seeing a nice dip in the market, I completed my online application to start my account. My funding was the following:

NAESX - 38%
VFINX - 24%
VIMSX - 38%

Originally I had considered some REIT exposure, but the RE market of late seems to finally be correcting itself. A 3k minimum investment in a REIT index would have been larger than the 5% exposure I'd be comfortable with.

Anyway, as we all have seen, Friday showed another drop in the market, depressing my purchase cost of these funds even lower. I'm actually hoping that it takes another couple business days for my purchase to go through so that I can get a better sale price on my funds. I don't think the drops have finished yet, however, so I expect to be down for a bit. Maybe it'll help me offset some of the capital gains from my stock sell last week.

Stock sells and buys

2006-05-13T16:56:00.000-04:00

So, last week, Web.com (WWWW) filed their Quarterly report. Wasn't as great as I was hoping for, but definately not bad. The good news though is that it spurred volume, something that has been depressed ever since they changed ticker symbols. Anyway, I sold my shares at $6.06 for a small profit. My Scottrade account closed at $2047 that day, which was a modest gain of about $120 from this last round of stocks.

So, with a little over $2k to spend, I decided to set my sights back on Walgreens (WAG). It was at a 42 week low of $40.90 on the 4th. I tried to buy it only to find out that Scottrade requires 3 days for my funds to be "settled" and available for trading. Low and behold WAG jumps up 3% by the time that happens. So for a little while I thought I'd missed a great buying opportunity.

I wait a couple days, and Thursday WAG closes at a new low for the year, somewhere around $40.69. I put in a limit order for $40.50 of 50 shares, thinking the stock isn't going much lower. Much to my chagrin it goes down with the rest of the market to $39.97.

Final tally for the week then is down about $40, including two transaction fees of $7. Certainly not the way I had hoped to end up, but not terrible either. I started the brokerage account with $1k in October last year, so I've doubled my money. I'll go ahead and ride WAG out for a little while and see how it does. If it continues to dip I might put more money in that account and increase my holdings.

Paycheck problems

2006-05-06T09:19:00.000-04:00

Okay, yesterday was my first payday with my company. I was expecting three weeks of salary to appear on my check. So I log into my bank account hoping for a nice direct deposit, and there is nothing there. I don't panic; I was warned the first check would probably be mailed.

So, when I get to work, I log into this online payroll site that lets me see my checks. Immediately the amount of the check looks funny to me. When I click on the link to get more details I see that they have paid me for 136 hours, rather than 120. Cause for celebration, right? No way. The Man always gets his money. I don't want a 16 hour bonus this week followed by a 16 hour dock the following week.

I called payroll and it turns out they have my payday start as 4/13. Funny, as my start date as an employee was 4/17. I verified all my paperwork and payroll clearly made a mistake. When I ask them how to fix it they tell me they'll push back the 2 days my contracting company billed them. Um, why would you do that? It's YOUR mistake. And if you push that on my contracting company, they're gonna hit me up for the money! Did you forget they paid me more per hour than you do? Argh!

Anyway, I talked to the HR type person that helped me come on board after that. She told me that mistakes like this have happened before, and they company should and will eat the mistake. Apparently, we've had mistakes as big as paying someone several paychecks after they've been fired! So surely my piddly "bonus" is no big deal?

Well, I gave them till close of business to resolve my issue. I offered to return the check if they could issue me a new one. But, as nothing was accomplished by that time, I cashed my check. I didn't have much of a choice since I had already paid most of my bills for the next few weeks out of my flex money. I'm hoping next pay period I don't end up having to come up with that extra money, because I already spent it ;)

Normally I wouldn't spend the extra, but this week has been a little challenging. My GF's sister is getting married, so I've tried to help ease the burden on my GF's finances as she is the MoH. Nothing major, really, but it wasn't in the budget, so it had to come from somewhere. I'm gonna try to make it up with contracting later in the month.

Happy Birthday, 401k!

2006-05-06T09:02:00.000-04:00

Well, today is exactly 1 year from my first 401k contribution. In order to celebrate this occassion, my 401k decided to close at an all time high yesterday. I don't know the math behind IRR, so the simple interest I've earned, looking purely at what I've put in versus what I have now, is 16.56% since inception. That's not too shabby for my first year!

Now, I know a lot of this has been "luck" since the market has been incredibly bullish in 2006, but I'm still happy to have started my investing habits when I did. It's a lot easier to weather the bearish times when you've at least experienced the bullish times. But let's just hope the next few years continue to show improvements.

Net worth - 4/30/06

2006-04-30T13:49:00.000-04:00

Okay, up until this point I haven't been good about tracking my net worth month to month. I do look at it every few days, but I rarely record it so that I can see the progress. So, I'm gonna try to start posting the results for the end of each month instead of only yearly.

Big changes this month came from my BT from Citibank. That increased my Credit Card debt from $0 to $15k. That also increased my savings by $15k. Also, my savings went up about $1750, with another $1k sitting in my Checking account for a Roth IRA contribution I plan on making in the next week or so.

In coming statements I'll try to keep track of the changes more accurately.

Goals

2006-04-30T10:07:00.000-04:00

Okay, so I'm doing well on improving my net worth this year. I reached my goal of having a positive net worth sooner than expected, so I guess now I should set some goals for the rest of the year.

1. I'd like to have a net worth of $25k by the end of the year. Assuming no complications come up, I think I'll achieve that without too much difficulty.

2. I'd like to get my Mutual Fund account started. Right now I'm very cash heavy, and I'd like to get more of my money into equities. My e-fund will serve as the "bond" portion of my portfolio.

3. I'd like to get a simple will created. I don't need anything fancy just yet, but enough to ensure that my money doesn't get stuck in probate or something.

4. I'd like to finish my MCSD to ensure better job security.

Updates

2006-04-29T15:59:00.000-04:00

A quick update on my BT from citi. I followed some excellent advice that I read elsewhere and just deposited it right into the ATM. Instead of taking several weeks to clear, it cleared in only two days! I immediately transferred it to Emigrant Direct. It cleared there in another three, and actually was in both accounts at the same time ;) First time I've had that happen.

As for the house, Chris is supposed to be looking for a realtor for us. I think I've got him convinced that trying to skimp on our sale and FSBO it isn't going to save us any money. If our home were in better condition, and we lived closer to it, then sure. But it does need work, we both live 20miles away (which is pretty far in Atlanta distance), and we're eating $1k every month it sits there unsold. That doens't even factor in the potential for unoccupied homes to be the target of burglars or vandals.

My side projects are going well lately. I've wracked up about 30 hours here and there, so sometime in the next month or so I'm hoping to get a check. Also, I've got some more work starting up here soon that could net me some more cash with luck.

Speaking of side projects, the GF has expressed interest in doing some of my work that I'm not able to complete due to time constraints. Since she is Canadian, I'm not sure how this will work. In theory, I'll get paid by the client on a 1099. Then I'd claim the wages paid to my GF as an expense. However, are there any forms I need to file to pay her? Are there any hassles related to the currency conversions?

Oh, I'm also thinking of converting my old 401k from my last company into a traditional IRA. Since I'll be starting up my 401k with my new company in August or so, I just felt it might be easier to manage them separately. It also gives me the benefit of being able to spread my asset allocation for my mutual funds across more money next month. I am not sure of any potential downsides yet, though.

Mini-rant

2006-04-29T15:47:00.000-04:00

This post absolutely disgusts me. The entitlement attitude overtaking young people today is one of the great embarrasments of our country. Where is it said that our parents owe us a damn thing more than the necessities for the first 18 years of our lives?

I know my parents made some really poor financial decisions. My mother in particular is quite irresponsible with money to the point where I have to give her a lecture before I'll even consider loaning her any. That may make me seem like a heartless and cheap bastard. But in all honesty, I'm hoping she'll learn about money the way I did - by having none. But I've also made sure she knows that once she's ready to take responsibility and try to fix her mistakes, I'll be here to help.

I am truly not sure what angers me the most about that post, though. The entitlement is bad, but how can she presume to cast stones at her parents for poor financial decisions while she's racked up 17k in credit card debt? Or how about the 136k she spent on school - wtf is her degree in?! And to think I'm actually embarrassed that I graduated with $35k in loan debt!

And 25k on a marriage? Wow. They want to commit close to 33% of their NET combined income to a single day in their lives? Marriage is supposed to be a lifelong commitment. Surely that 25k is better spent on the other thousands of days that make up that timespan rather than a single day. Some people truly have lost sight of what's important in life when they think those types of expenses financed with credit are a "must".

17.65% return, risk free!

2006-04-22T09:13:00.000-04:00

Okay, so we are all guilty of chasing percentage points. I know that I'll move most of my e-fund for a quarter of a point to a different bank. And of course rewards CCs are par for the course. So you can imagine my delight when I found out that my going permanent at work would be the same week that my company made our discount grocery cards available.

Apparently, once a year our company has a deal with Kroger for gift cards. The cards only come in $100 increments, and each permanent employee is allowed to purchase up to 10 cards. However, we only have to pay $85 per card. That's a 15% savings! So, if you were to buy all 10 cards, paying a total of $850, and getting $1000 worth of grocery money out of it, that's a 17.65% return! And you didn't pay tax! And you can buy the cards on your rewards CC for another 1% cash back!

Okay, okay, so I know it's not really a return on an investment. But is saving money really that different than a capital gain? At the end of the day, there's still more money in my pocket (and more groceries in my cubbard!)

CC Updates

2006-04-22T09:08:00.000-04:00

So, I'm not sure if I mentioned it in a previous post or not, but I decided to use one of those $20 checks that Chase sent me to join their credit protector program. I deposited it around the 10th of this month. My welcome kit showed up on Thursday, and Friday morning I called and cancelled. The CS rep informed me that any fees I'd incurred would be refunded since I was still within the trial period. So, a free $20 this month from that. Although enduring the "but are you absolutely sure that you wish to put your life in danger by not having coverage for those accounts you carry no balance on?!" speech was a test of my patience.

Also, I got an email from Citibank telling me that they had cut my BT check and I should be seeing it soon. I'll be keeping an eye out for it. My balance doesn't reflect the amount yet, which is good since I don't have the money. I'm assuming my balance won't go up until I cash the check. Although I read on FWF that banks sometimes hold those checks for 2+ weeks! Unfortunately I didn't think to ask if Citibank would just do a bank transfer to my account and save me the hassle. I'll have to keep that in mind if this experiment goes well.

Bank fees for fun and profit

2006-04-22T09:01:00.000-04:00

Okay, sorry about the title. It's perhaps a little misleading but still describes my mood. So, last friday my contracting company screwed up with payroll and I didn't receive my direct deposit. After calling, I was able to find out that it was a company wide problem but they'd have my money in my account by 2pm. Sure enough, it was there by 2pm. Since the extra few hours didn't hurt me any, I thought nothing of it.

Fast forward to either Tuesday or Wednesday this week. I notice a $15 fee on my account labeled "general fee". I found it odd, but I do let my GF withdrawal money from an ATM in Canada sometimes, and that is where most of my fees come from. I figured maybe I'd passed some maximum ATM withdrawal monthly limit or something. Anyway, so I called the bank on Thursday and asked about the fee. Turns out it was because the deposit from my company was done as a wire transfer from their brokerage account.

I talked to the CS rep for the bank and told her that it was my direct deposit and that the mistake was with my company, not me. I'd been a customer for almost 10 years and I already pay them enough in fees. In short, I didn't want to pay for my company's screwup. The CS rep said she'd refund my $15. Excellent.

So then I mention the fee to one of my coworkers who contracts with the same company. He actually had called our company and said something about the free. Apparently our company realized the screwup and was going to give everyone a $15 direct deposit to make up for the fees. I checked my account this morning, and to my wonderment I have an extra $15! Pretty cool, huh? I'm sure I'll have to pay taxes on it, but it's money I didn't have ;)

Credit Card Balance Transfer Fun

2006-04-14T23:51:00.000-04:00

Signed up for my Citibank Simplicity card about a month ago because they were running a 0% BT offer with no fees. Finally got it today. Called the number to activate it and was able to merge my Citibank Platinum Select which I've had for about 10 years with the new card. The CS rep told me that the new Simplicity card would have the full credit history of my Platinum Select, and a combined limit of $20,300.

I then decided to try the trick of getting a 0% BT and putting the money in ING or something similar to get the interest. I didn't want to have a card with 100% utilization, so I went for a $15k BT which puts me at just under 75% utilization for that card, and 30% utilization of my total credit card limits. My minimum payment should be 1.5% of the outstanding balance, or about $225 a month. I'm hoping for interest in the neighborhood of $50/month.

I'm still a little nervous doing this because all the posts I've read on it are by people who use automatic billpay to make sure they don't miss payments. Well, I've never used billpay because I'm a little too anal to let a payment come out of my account without personally clicking the send button. I think this is a little childish on my part. I hope to get more comfortable with billpay and the different ways to use it in the near future.

Going Permanent

2006-04-08T18:20:00.000-04:00

Well, this week I got an offer to go permanent at my company. In some ways, this is pretty good. I'd really like to get back to contributing to a 401k, and the sooner the better. The matching is pretty good at my company, though unfortunately they vest on a four year schedule after a one year delay. (Meaning I'd vest 25%/year starting at the end of year 2) So the vesting is disappointing, but they do match 160% of 4%. Plus we have a real training budget!

The downside, of course, is the cut in pay. It ends up being about a 13% cut, not factoring in the overtime. Luckily, I don't really need that much to live on, but the adjustment will still suck. I'd grown fond of cashing the overtime checks ;)

Anyway, the paperwork should go through around the end of the month. I'm gonna try to capitalize on the training money asap, so on the off chance things don't work out, I've gotten the most for my time with the company.

Financial Security

2006-04-02T15:21:00.000-04:00

Okay, so in this post I mentioned that I was going to buy a shredder and a USB thumb drive. I'd been waiting to buy them until a decent price was available.

So, this Saturday I hit up the local Staples and guess what was on sale? That's right - both of them! So I got a light-duty, crosscut shredder and a 1GB thumb drive. They both came with an easy rebate, which I was skeptical of at first, as rebates are generally shady in my experience. However, the easy rebates are done online and it took less than 5 minutes. It also allows you to track the progress online. Shibby!

So, with my new shredder in hand, I started shredding my backlog of sensitive papers. I got rid of some old insurance papers as well as some health realted papers. I'll sleep a lot better knowing that stuff isn't sitting in a dumpster somewhere with my personal information on it!

As for the thumb drive, I first downloaded this great encryption program. Not only does it let me encrypt the entire thumb drive, but it can even hide an encrypted volume inside another one! I'm not sure I need that level of security, so I stuck with the basic setup. But it's good to know how versatile the program can be.

The only downside I see to the way I set it up is that since the drive appears to have random data, if you try to access it without using the special program, Windows XP will ask you to format it. Obviously I'm not gonna make that mistake, but someone else who snagged the drive might. So I'll have to be careful.

I am gonna use the new drive to store all my old financial statements (since I now print them all straight to pdf!) and my net worth spreadsheet. Once I get a little more comfortable with the idea, I'll delete the backups from my other computer. This way, my financial information isn't sitting on a computer exposed to the internet. I can just pull out the thumb drive when I'm not using it. And I can burn encrypted backup CDs and store them in my sister's safety deposit box.

Nifty, eh?

Sharebuilder

2006-04-02T15:12:00.000-04:00

Okay, I skipped the bandwagon the first time I heard about the ShareBuilder promotions . I was really tempted but just never could convince myself to do it. Don't ask me why, as a free $50 is a free $50.

Anyway, I saw a recent post by Jonathan from MyMoneyBlog for this promotion and decided it was just too easy to pass up.

I have wanted to try out ETFs for a while, but have been hesitant because they don't seem very efficient to purchase unless you get large chunks. However, since I'll be getting a free $50, that will cover the costs and then some! So, I'm gonna go with VWO and see where it takes me. I have put in an order to fund the account with $100 and should be able to make my purchase sometime next week. I'll keep ya posted.

Carpet expenses

2006-03-31T17:09:00.000-05:00

Okay, I meant to post this sooner, but I've been a little busy. As mentioned a while ago, I own a house with a friend that we were hoping to turn into a rental. However, we've decided that the location just isn't the best for either of us, and we are both going in different investment directions right now. So, to facilitate getting rid of the house, we needed new carpet/vinyl throughout.

Got a quote and had it done in under a week. Cost us just south of $3k, and was worth every penny. It looks like an entirely new house! I wish we'd done that before we lived there, and it wouldn't have seemed so bad. Anyway, Chris showed the house to someone on Friday and they seem interested in putting in a formal offer. Let's hope that works out so I can cut out a $500 loss each month that I pay for half the mortgage. I could even make a small profit with some luck!

My favorite new program

2006-03-22T20:53:00.000-05:00

Recently I decided to start storing all of my financial records in PDF format. This is a lot easier than the 15 or so 3-ring binders I have stuffed with about 10 years of old statements. It also allows me to do nice things, like burn a DVD copy of my records and store it with a family member in case of fire at my apartment.

I haven't yet bought a scanner to start converting old documents, but I did download as many statements as I could from my online accounts . For those accounts where a PDF was not available, but an online statement was, I found a program that allows me to "print to PDF". This program rocks. I wish I'd found this sooner.

My next steps are to get a scanner, get a shredder, and buy a thumb drive. I'm going to move all my data to an encrypted area on the thumb drive, and remove it from my computer when not in use. This will minimize the risk of storing such things directly on my computer.

Savings rate

2006-03-19T09:45:00.000-05:00

It's a little early in the year still, so my numbers are skewed a bit for the better. Anyway, as of my last paycheck, here are my standings for 2006:

*Taxes as a % of gross income: 34.09%
Living expenses as a % of gross income: 30.45%
Savings as a % of gross income: 35.46%
Savings as a % of net income: 53.80%

*For some reason my company was taking about 4% too much for the first two months of the year. Also, I like to do contract jobs on the side that are 1099, and I put 40% of that income aside in an interest bearing account to cover any tax bills the next year.

What I did right

2006-03-18T09:35:00.000-05:00

Someone asked me recently if I had any tips I could pass on about how I was able to start meeting my financial goals. I'm not sure I'm terribly great off, all things considered, but maybe I can share some of the things that I've done along the way that ended up being right and in another post I'll share some that ended up being wrong.

1. I paid myself first.
This cannot be said enough times, in enough books. It's probably the simplest and yet most powerful thing I've learned. I often like to joke when people ask me why I still have over 25k of student loans yet continue to beef up my savings that "The citibank executives aren't going to Hawaii off me until I can afford to go myself." By paying myself first I was able to build up a nice emergency fun which has saved me several times in the last couple of years, preventing me from having to tap my credit cards for "help".

2. I started my 401k.
I originally only meant to contribute to the match amount of my employer, but accidentally ended up contributing 10%. I didn't even notice the difference in my check, so several months later I upped my deductions to the max allowed. My 401k hasn't yet hit a year but is already up 10%.

3. I started a Roth IRA.
I'd been hearing about Roths for a while and knew that they were "good" but didn't really understand them. However, I contributed anyway deciding it was better to learn as I go than to stall (my usual practice) and miss out on a year of contributions. Seeing as I am not eligible to contribute this year, and my Roth is up about 8.5%, I'd say it was a strong choice.

4. I worked hard to further my career.
While this may seem like a given to most, it's surpising how many people stay at a job because they are comfortable. My last job was very slack, with only 30-35 hours required, compared to my current job where 40 is the minimum. However, I love what I do, love the people, and am learning a great deal more. The 25% raise was just icing on the cake compared to the satisfaction I get at knowing I'm finally making it as a professional.

5. I kept an open mind.
Everytime I tell someone that I keep my emergency fund with an online bank, that I can't get to my money in under 3-5 business days, and that without Internet access I can't get it at all, they stare at me in horror. The entire idea of an online bank frightens many smart people. Because they are unwilling to research these online banks or to explore the benefits, they miss out on 4% or better on a liquid account in favor of 2% or so on a local account, or worse yet, 3.5% on a 12+ month CD.

6. I learned how credit works.
It's funny to look back and realize how little most of us know about credit. My dad, who is the most obsessive saver I know, does not see the wisdom of having multiple credit cards. When he would pay one off that my mother had run up, he'd close the account. I've learned that credit cards can be powerful, as long as you don't fall into the trap set for you by the credit card companies and your own desire to buy things you can't afford.

In the black!

2006-03-17T19:12:00.000-05:00

As of this morning, I am very pleased to say that I have a postive net worth of $1325.71, compared to a negative of $11994.83 at the end of 2005 and a negative of $38110.76 at the end of 2004. My contracting job has really helped me make strong gains for the first quarter this year, as I'm getting some overtime.

I won't be able to sustain my current savings amount for too much longer, but I'm hoping to keep up with the percentage of savings after I convert to a permanent position. Of my gross earnings this year, I have put 35.46% into savings, paid 34.09% to taxes and other deductions, and have lived off 30.45%.

Reading and planning

2006-03-12T17:09:00.000-05:00

Been doing a lot of reading lately. For about a year now I've known I am being way too conservative with my assets. I've slowly been making progress and trying to learn enough to go to the next level. With a positive net worth almost within my grasp, I'm very close to being ready.

I've decided to transfer most of my savings into a Vanguard Mutual Fund account. Right now it is tied up in ING for the 4.75% promotional rate. However, that ends on 4/16. So somewhere towards the end of April I'm going to open up my new MF account.

A good post I've found on different portfolio allocations really helped me narrow down my options to something that works with my risk tolerance, overall financial goals, and diversification capability. Right now, I'm leaning towards the following allocations:

Vanguard Small Cap Index (NAESX)				17.50%
Vanguard 500 Index (VFINX)				17.50%
Vanguard REIT Index (VGSIX)				15.00%
Vanguard Total Intl Stock Index (VGTSX)				32.50%
Vanguard Midcap index (VIMSX)				17.50%

Unfortunately, the minimum required amount per fund to avoid any fees is $10k. I definately don't have $50k laying around though, so I'll be stuck with some fees for a while. However, I believe that getting started now is much more prudent than trying to penny pinch over those fees.

I debated trying to leverage some ETFs in my portfolio but decided against it for several reasons. I don't have a lot to invest, so the purchase and redemption fees of an ETF would work against me. Furthermore, I'd like to DCA into my funds, which would rack up too many brokerage fees with an ETF. Also, I still want to read more on ETFs before I try them out. Perhaps once I get my mutual funds high enough I might exchange some of them for ETFs.

New job, 401k and IRA questions

2006-01-08T09:43:00.000-05:00

Okay, so I started a new job on Jan 3rd. It pretty much is a dream job for me. Very interesting work, very good pay, and a very well respected company. However, I'm only a contractor right now (but on a W2 rather than 1099 through my recruiter), so I'm not contributing to a 401k anymore.

I've read that IRA contributions are not eligible for any tax deduction if you have a qualifying plan and make over X amount per year. Well, last year I made about $65k and had an employer plan, so I didn't contribute to a 401k. This year, however, I am not currently eligible for a 401k plan (not offered by my recruiter), but may be eligible around September, assuming I go permanent with my new company (which I plan on doing). I will be making around $85k this year.

So, since I'm not eligible right now for a 401k, and knowing that I will be eligible later in the year, and that I will exceed the AGI limit for deductions...Can I deduct a 4k IRA contribution as long as I make it prior to being eligible for my company 401k?

2005 Year in Review

2006-01-08T08:40:00.000-05:00

I've been really bad about updating for the last few months, but here is my net worth as of 12/31/05. As you can tell by looking at this entry, I missed my goal by about $2300. Also, you'll notice that my money ended up allocated a little differently than I originally planned.

I ended up putting $2k more in my 401k than I originally planned, and saw a small return on my Scottrade account and Roth IRA. However, I was not able to put as much into my savings as I liked. Several reasons contributed to this, but the big ones were spending $4.5k on a new laptop for myself and a new desktop for my GF. Also, my budget for my winter vacation was $2k but I ended up spending almost $3k. Luckily most of these expenses were offset by a consulting project I did.

Despite the miss of my my goal for the year, I was able to increase my net worth by $26k in 2005, which is a very big gain for me. Remember that I was only making $43.5k and living almost check to check as of 11/2003. So the new job really made all this possible.

¹Denotes a temporary balance earmarked for a specific purpose. This balance is not included in Net Worth.

As for other points of interest for 2005, the big one was that I now remember how expensive being in a relationship can be. While I tend to be pretty good about controlling spending on myself, I must confess I have a terrible time controlling how much I spend on my GF. However, it has been an incredible experience and I am determined not to let my frugality (read: cheapness) become a burden on our happiness! She truly is the most important thing in my life, and I would happily give up everything I've accrued to make her dreams become a reality.

Another CC Application

2005-09-17T16:58:00.000-04:00

After I did the Chase application last night, I went ahead and did the Schwaab visa application also. This one is for a $100 visa gift card. I'm hoping I'd get the card by christmas and could use it to pay for some of my gifts this year. I'd only be getting this card for the promo, and not to actually use, but it's worth the time.

There is another $100 promotion out there from Sony, but I might give it a couple weeks before I do that one. I don't want three pulls on my credit in the same month.

Stupid Transfers and CC Promotions

2005-09-16T19:17:00.000-04:00

So my HSBC account and my ED accounts both were finally set up this week. I decided to go ahead and transfer $800 to HSBC after calling customer service to link my Wachovia account to it. It went through fairly quicky, but for some reason Wachovia charged me a $2 service fee.

I tried to link ING to HSBC but HSBC won't allow it. So I transferred the balance of my ING account to my Wachovia so I could then move it to HSBC. I knew I'd have to fight to get the $2 fee waived, but I needed to get the money in HSBC.

Well, turns out I think you can link HSBC to ING, and then transfer from ING to HSBC. So, I am now moving my money back to ING from Wachovia. Yah, I know it's a long round trip of stupidity on my part, but it'll be easier once it's set up than dealing with yet another account to do the ACH and I don't want to pay service fees everytime I deposit money.

In other news, I applied over the phone for that Chase Cash Plus rewards card since they were running a $100 promo. The customer service rep said I'd hear back via mail within the next 30 days. Wow, that's a long time. I'm not sure why they couldn't give me an instant approval.

401k Musings

2005-09-10T20:09:00.000-04:00

I've been trying to figure out what I could do to bump my 401k contributions to 20%, which would allow me to hit the cap for the year. The problem is I just didn't have enough money each month to do it. I realized the only ways to pull it off would be a raise (not likely), or to juggle money.

So, I decided to fund my Roth out of my savings rather than out of my paychecks directly. This means that I'll only be putting $8000 into savings each year rather than $12000. However, it allows me to put $3500 more into my 401k, thereby hitting the max. In theory, I'm only down $500 for the year in savings.

But if I look closer, the problem is that after taxes, that $3500 is really only $2450. So somewhere in here I've lost $1550 savings for the year, not just $500. I'm gonna try to make up $1200 of it by putting $100 more into savings each month. The other $350 I'm gonna have to look for. I know it's in the budget, but I'm just not sure where yet.

However, even if I can't make up the difference, I still think this is a better move financially. It reduces my tax burden, for one. Also, I can always contribute more to savings each year. But there is a cap on 401k contributions. So for my 401k to truly serve me in retirement, I have to fund it as much as possible in the early years.

401k, Banking, and Money Due

2005-09-07T09:11:00.000-04:00

Read a little more about 401ks over the weekend and found out that my employer matching didn't count towards the 14k contribution limit per year. However, even with that matching, I'm still not too close to the cap. I considered bumping up my percentage to get me to the limit, but quickly realized it'd hurt my budget pretty badly, so opted to just go from 10% to 15%. Hopefully I can pull off a raise in the next 6 months and go up the rest of the way. But for now, the 15% is gonna make my budget a lot tighter than it was before.

I still haven't gotten the final information from ED, or HSBC for that matter, but I'm hoping to hear from them by next week. Although, I think you have to keep your money in ING till the 15th to get the interest, so it's probably not so bad that I'm still waiting to open those other accounts.

Also talked to my "boss" on my side project and found out that I can send an invoice if I'm ready. I think I have about 40 billable hours right now, so an invoice would be a decent amount. However, I'm behind where I should be, and I want to focus on getting more done and not just the bottom line. And I'm not even sure what I wanna do with the money yet anyway. So, I'm gonna hold off on billing.

On the plate for today is to start making phone calls to find out about my vacation so I can budget for it.

HSBC Bandwagon

2005-09-04T22:42:00.000-04:00

Okay, decided to go ahead and open up an HSBC account since I've heard it can take up to two weeks for Emigrant to actually mail the materials to finish setting up accounts. If i'm gonna be waiting, I might as well kill two waiting periods at the same time.

Once they are both set up, I can decide how to split money appropriately. Plus, this will give me three choices of high interest savings accounts to utilize - ING, ED, and HSBC. And best of all, they are all competing to offer me the best rates!

I noticed they had the same phone number requirements that GMAC did. Apparently, this is going to be a recurring issue for me. I can't use my cell because they require a land line. I can't use my parents' number because they live in a different city. So the best I can do is use the house line which is in my friend's name and can't be reverse looked-up to me. Nor can it be answered, as I don't even own a normal phone. It's only purpose is to facilitate DSL.

It should also be noted that I move a LOT. About once a year for the last 9 years. So the "previous address" question is always tricky for me. My driver's license still has my parents' address listed on it, even though I haven't lived there since I was 18! But I move so often that it's just not worth the $15 to get a new one once a year. Besides, I still receive mail at that address periodically.

I also tried using a promo code I saw on Fatwallet. I am not so confident it went through, but it never hurts to try!

Net Worth

2005-09-04T20:31:00.000-04:00

I think it's important to keep up with the progress with my bottom line, so here is my net worth as of 12/31/2004:

And here is my current net worth:

And here is my tentative goal for the end of this year, although I will probably move the money around some.

*Denotes balance, not payoff amount.
¹Denotes a temporary balance earmarked for a specific purpose. This balance is not included in Net Worth.

Still Chugging Along

2005-09-04T17:42:00.000-04:00

Just read on MyMoneyBlog that HSBC has passed ED on rates. Since I don’t have any money in ED just yet, I might go ahead and signup for an HSBC account also. This will give me some good options for moving money based on the best rate and also allow me to separate my money as needed. Not everyone has this obsessive need to keep money earmarked for different budget items separate, but I very much do.

I also tried to go ahead and sign up for the Citi Dividends card today that everyone has been raving about. Since I’m already a Citi card holder, they have an option to bypass some of the application process. But, as usual, their page hates me and failed everytime I tried. I think the main problem is that all their data is really stored with the accountonline.com site, which coincidentally backs the data for my AT&T Universal card. End result is that those two sites really give me a hard time.

In other news, I have been neglecting work on my side project. This is bad because 1) it is unprofessional and lazy, and 2) I can’t get paid until I finish.

I’ve also done terrible with my food budget lately. I’ve ordered out every night for the last 5 days, at a cost of about $13 a pop. This is killing my budget right now, and I was already behind this period anyway due to the $125 cost of my cert test and various other things.

Asset Juggling

2005-08-30T15:23:00.000-04:00

Long entry since I have done a lot with finance these last two weeks.

I opened my Scottrade account with a 1k investment recently. I haven’t actually bought any stock yet, since I’m still not that certain what I want to get.

I did try a limit order just to see how it worked. Put in a limit for $2.45 on an internet stock, but it didn’t trigger that day. I had marked it Good Till Cancel, but decided to cancel as the stock just wasn’t a strong pick. After canceling it occurred to me that I wasn’t sure if the $7 fee would apply since I hadn’t actually purchased any stock. I got a message saying that management would approve the cancellation or something similar. However, since this was my first attempted trade, and I don’t have any pattern of trying to score cancels all the time, I think I’ll be okay. So far there are no charges against the account.

Okay, so for a while I had also been content to keep paying on my student loans as normal. However, last week I was going through The Box and noticed that the interest rate on my smaller student loan had jumped to 6.5%. Since I always pay them online, I never look at the paper bill, and hadn’t realized that the loan wasn’t a fixed rate. After looking through a few more bills, I found one that showed it was now at 7%! Those sneaky guys… So, I decided that since I’d already paid off my credit cards, it was time to put an end to these bad debts (read: debts with variable rates).

So, I pulled $3.2k out of my ING and cut a check to Citibank. This will only pay off one of my three student loans, although the other two are at a fixed 3.65%, which with the inflation rate and the current rate of return on CDs and such, makes sense to leave alone. The disappointing part about paying down that loan is that I lose a large chunk out of my liquid savings just to cut out a $50 bill each month. Though, to be realistic, my net worth doesn’t change, simply my cash on hand. And it was way too conservative for my age anyway. Hopefully the check to Citibank clears in the next few days.

Also last week, after paying off the credit card and the variable rate student loan, I decided I should follow some of the good advice I’ve read and heard about my large cash reserves. In other words, I decided I needed to start investing more. The first and obvious choice was a Roth IRA. The reasons I went with Roth rather than a traditional are because 1) I’m close to the cap for tax deferred savings already through my 401k, 2) I wanted to reduce my current cash value and not just future cash value, 3) I wanted to be able to get to my money if I lost my job, and 4) I didn’t want to miss the 2005 Roth contribution like I did the 2004.

So, I knew I wanted a Roth, but wasn’t sure where to get one. Thanks to some helpful entries from MyMoneyBlog, I decided that Vanguard would be a good choice since my 401k is already through Fidelity. The next step was funding it. Calculating the 4k per year contribution, and dividing it by the 26 paychecks I receive per year, I realized I need to contribute about $150 per check to reach the cap.

Since I want to get into the habit of setting aside this payment each paycheck next year, I decided to go ahead and start now. Given that there are 9 pay periods left before the end of the year, and that on Jan 1 I need to start planning for my 2006 contributions, I decided to fund my Roth with $2.65k from my savings. I transferred that from ING and then opened the new account online with Vanguard. Total time from application to funding was about a week.

The Vanguard signup process was pretty easy, and I picked the fund with the 2045 retirement target. Although I would like to return in 2035 or maybe 2040, I wanted a more aggressive fund, hence the choice of the 2045 one. The asset allocation on that fund seems to be a good fit for my age and goals.

As for the interface for the site, it’s very comparable to the Fidelity one in terms of ease of use. The only thing I couldn’t figure out was how to add new funds as needed, and a 5 min phone call to their support line solved that. So far, I’m very pleased based on the signup process, the speed of opening an account, and the prompt and courteous support.

I also decided that my savings account with Wachovia wasn’t doing much for me. I want to have liquid money, but I honestly haven’t touched that account for almost a year. So the pathetic .15% interest just isn’t worth it. I was originally planning on moving it to ING, but realized my cash reserves are already more than sufficient. Instead, I’ve decided to open a 12mo CD with the money.

Ideally, my goal is to have a $1k CD maturing every 1-2 months. I am not ready to try CD laddering, as I don’t want to tie my money up for more than a year at a time right now, so this is a nice solution to get good rates and stay somewhat liquid. So, I checked out the list of top 12mo CDs on bankrate.com and narrowed down my choice to either Ascencia or GMAC. As GMAC was a better name and Ascencia wanted me to mail in the application, I tried GMAC first.

GMAC had a really easy and quick signup process online. However, for some reason they denied my application. I called to ask why and was informed it was because my phone number didn’t have an area code matching my address, nor was it able to be reverse looked up. I told the lady that I had provided my parents’ number because I did not have a land line and only a cell. The response was that I would need to mail a copy of my cell phone bill in for verification. That seems fairly ridiculous to me. I’m trying to GIVE them my money for a year and they require me to have a phone number they can reverse lookup? They already have my driver’s license number, social security number, and can verify my address against my credit report. What is the point? So I cancelled my app. Good thing too, as they don’t lock rates and dropped from 4.35 to 4.21 an hour later.

So, I’m back to looking at Ascencia. Although they require me to mail in an application with lots of documentation, they have a good rating on bankrate.com, they have higher interest rates (4.40) and they give a 20 day lock in period for the rate. So, Tuesday morning at work, I’m gonna go ahead and complete their application.

I also heard back from Emigrant Direct this week. My application was successful and I only need to wait on the paperwork to arrive in the mail with my account information. Once it arrives I’m gonna transfer all the money from ING over and take advantage of the higher rate. I’m gonna keep ING open though and use it for taxes and short term savings.

Paying Off Credit Card

2005-08-29T13:32:00.000-04:00

After reading a lot about finances lately, particularly in some blogs and on the fatwallet forums, I decided that I needed to pay off my credit card. I had paid it off last year (a check for over $4k) and promptly charged it back up. So, I pulled $3.7k out of my ING account and cut a check to my credit card company to get it back to $0. All charges on the card now will be paid off promptly.

I’ve also decided to start using some of my older cards that I haven’t used in years. I don’t want the accounts to get closed. So I’ve decided to put small daily charges on each of them every couple of months so they stay open and active.

My Background

2005-08-28T16:38:00.000-04:00

Okay, I probably should have started keeping records of what I was doing financially a long time ago, but in all honesty, It just didn’t occur to me until now. Unlike many of the bloggers out there whom I read, I have a negative net worth. So, I’ll try to give a basic background of where I started and how I got to here.

I was a bit of a slow starter in my industry, as I just wasn’t that focused on classes. I enjoyed working more than studying, and it took me a couple years longer than it should have to finish my degree.

Anyway, I graduated in December 2002 and was unemployed until April of 2003, when a college friend scored me a job at his company. Technically my degree was in Computer Science, but I had always wanted to do Networking. However, the job was as a helpdesk guy with the premise that I would be switching to the role of a programmer after a few months. Unfortunately, the pay was lousy. I was started at only $38k, which in Atlanta, is pretty poor.

I got a modest apartment, settled into my new professional job and bided my time. Eventually I rediscovered my joy of programming and decided to focus on moving forward in my career. I got a modest raise to $41.5k after about 6 months, and to $43575 about 6 months after that.

After my car died on me in February of 2004, I decided I’d had enough of the used car life and wanted to “treat myself” to a new one. The old car had lasted 8 years and I had stuck with it through lots of work. I knew I should probably buy a used car, but 1) I didn’t have the skills or time to deal with repairwork, and 2) I was already living really conservatively. So after getting the car, I was still able to save a few hundred dollars a month.

In April of 2004, my lease was up at my apartment and I moved in temporarily with the friend who’d gotten me the job. We’d both been reading the Kiyosaki books and had bought into all of his theories. We decided to get a house to rent out, though neither of us could afford to pay for a house and keep up an apartment. So, we decided we’d move into the house, fix it up as needed, then move out and start renting it.

We got a house at the end of May for about $137k that needed modest work. Unfortunately it’s harder than we thought it’d be, and we just didn’t have time to work on it, so to this day, it is still in need of some work.

Around October, my friend left our company and got a pretty good raise, maybe 40%. Armed with this knowledge I told my boss that I knew the market was paying and I wanted to be making $55k. He told me he didn’t think the market was that good but he’d raise me to $50k early next year. I said okay, and decided I’d stick it out a bit longer. A week later, I got a random call on a Sunday night for a contract to perm job paying $32/hour.

I took the job and stayed on contract for about 4 months before moving to permanent and negotiating a salary of $70k. While still not the greatest salary, it was a great increase over the $43.6k I’d been making a few months earlier, and the new company matched 401k to 4%. My last company didn’t match at all.

So, I decided to open a 401k. I’d had one before but had to cash it in when I was unemployed. I wanted to contribute up to the matching limit but realized 3 months of the year were already gone. I did some funky math thinking if I contributed more then my company would “catch up” so I got the full 4% for the year. Apparently they match up to 4% per pay period. So if you skip 6 months of payment, you are only gonna be able to get matching for the remainder months.

Anyway, that mistake left me putting 10% into my 401k each pay period, which, while more than I anticipated, was not such a bad thing. I decided that since I didn’t really miss the money (I was still bringing home about $700 more per month after the deductions), I’d just leave it alone.

I also opened up an ING account about that time at the advice of my brother. That turned out really well and over the last 6 months I’ve made almost $50/month off that account. That also helped me to notice the big problem I had of hoarding money.

See, my father is one of those old fashioned guys that believes you just save money in the bank and keep no debt. Great advice, but it neglects the power of things like 401k programs, mutual funds, etc. My mom on the other hand understood the investment vehicles, but was terrible at budgeting. Between the two of them they had no money. So from their examples I gathered some good habits – 1) Hoard your money, 2) Invest your money. The problem is I could never figure out how those two could coexist.

Well, that’s how I got started on this path of finances. I wanted to avoid the pitfalls my mother had made in squandering the money she made, and avoid the shortsightedness of my father in not getting my money to work for me. So for now, I’m trying to find the right balance of the two.

Who am I?

2005-08-27T18:34:00.000-04:00

Just to get a quick idea of who I am and to keep things in perspective, here is a quick summary.

I’m a 27 year old .Net programmer in Atlanta, Georgia. I live below my means, but still have a fairly new car and a lot of student loan debt. I own a house with a college buddy and hope to rent it out sometime next year. I currently live in the house and manage the bills while he lives somewhere else.

I am seeing a woman who lives in Canada and although we are not “serious”, it is certainly a subject we have considered. Whenever I make financial decisions I try to keep in mind that I very well might end up living in Canada with her in a few years, leaving behind my “high paying American job”.

I don’t tend to go out very often, which helps with my bottom line, although I also spend a bit here and there on frivolous purchases. I also spend way too much on food, as I am both lazy and overweight. Surprisingly enough, the food actually hurts my bottom line more than the frivolous purchases.

I do not have a specific goal of retiring by a specific age, though I would like to retire early. In order to achieve those goals I am trying to work harder as a young adult, saving as best I can so that compound interest will be my ally moving forward.