My Money Path

Do You Care About Finances When You're Busy?

2007-01-28T07:28:00.000-08:00

I try to. But not as much as I should. This has been a very very busy month for me and I haven't done much in the area of personal finance.

Granted, I've gotten a lot of things on "cruise control" but I haven't spent the time to find out new things and be proactive.

However, on that note, I think I have all my tax information, so I'm going to attempt to do my taxes soon and that will be my personal finance focus for the next few weeks.

Cramer's Stock of The Year - NYX

2007-01-15T06:42:00.000-08:00

First a disclaimer. I own this stock. Cramer owns this stock in his charitable trust. Don't buy this stock because I said so. Don't buy the stock after you read this. Do your own homework.

Now the story. Every year, Jim Cramer picks his stock of the year. I didn't buy his stock of the year last year, but it ended up doing something ridiculous like going from $36 to $88. I don't even remember the name of it.

So this year, Cramer picked his stock of 2007. And it is the NYSE Group (NYX). This stock isn't for the weak stomachs though. Cramer says: "If you're comfortable taking a few risks to make more and more mad money, NYX is for you."

Cramer feels that the earnings estimates for this stock are way to low and once the NYSE completes its transition to electronic trading, the cost savings would be incredible. Currently the stock trades at about $105. In the past two weeks it was as low as $93. I had bought in at about $99.

Cramer's price target? $240

We'll see in a year.

Certain Costs Of A Car That I Could Live Without!

2007-01-09T20:35:00.000-08:00

When I was in college, I drove a used 1987 Honda Accord. It had 180,000 miles on it, but it ran great. During college, I was working a lot, had some money, so I upgraded to a new 1997 Chevy S-10 pickup. And after about 3 years of working in the real world (and 165,000 miles on the S-10) I upgraded to a used 2001 BMW 530.

And the following things happened:

Gas went from 87 octane to 87 octane to now 91 octane. $$

Oil changes went from $19 to $19 to $79. Granted I need them less frequently in the BMW. $

Insurance has stayed consistent as I have gotten older, the age discount has evened out with the increased car value.

But the one that really gets me: TIRES!

Tires on the Accord were like $50 each. I had some meaty truck tires on my S-10 that ran about $90 each. But I'm buying tires this week on the BMW that are $140 each. If I went with the Continental Brand that BMW recommends, they would be $220 each. $$$$$

Not only do they cost more, but I could swear they wear down faster than any tire I've ever owned.

Okay, I understand that I love my car, and I'm happy to be in a BMW 530, so I'm not necessarily complaining. Mostly, I'm just trying to evaluate whether all these extra costs are worth it. Because in all honesty, my 1988 accord was pretty nice and much cheaper. I'm still 2-4 years away from purchasing another car, but I wonder if I'll remember how much these costs are and buy a car that is more practical.

Can I be happy again in a used Honda Accord?

Wedding Costs Are Too Much!

2007-01-07T22:12:00.000-08:00

I've spent the last week trying to get a handle on securing some of our wedding vendors for our wedding this July.

Everything is expensive. I don't know what else to say.

December Net Worth Update! + $2,612

2007-01-02T20:40:00.000-08:00

Well, we squeeked through Christmas month with a gain of $2,612. I'm actually pretty happy with this. You can see the details below:

Assets
Cash savings - $33,410
Ameritrade brokerage account - $6,924
Vehicles - $41,695
Engagement ring - $12,000
Rental deposit - $200
My 401k - $19,813
Fiance 401k - $33,920
Traditional IRA - $5,155
Roth IRA - $4,491
My profit sharing - $8,897

____________________
Total $166,505

Liabilities
My credit card debt: $3,100
Fiance credit card debt: $2,785
Student loans and ring debt: $13,479
My car loan: $17,188
Fiance car loan: $24,861

_____________________
Total $61,413

Total Net Worth $105,092

So what happened this month:

1) We racked up some credit card debt. Some was due to Christmas, some was due to going to the USC vs. UCLA game and the Rose Bowl. We'll spend the next couple months getting this back under control.

2) We continued our normal retirement contributions. We save a lot every month, probably about $1,200 or $1,300 a month. This is going up in January to about $1,500 a month to stay in line with our retirement goals.

3) We continued to pump a lot of money toward our wedding fund. We have a little over $13,000 saved for our wedding thus far. We think it will cost about $30,000 total. We should get there by July when we get married.

And that is about it! Not too shabby for a Christmas month. I'm hoping that next month will be a good month because I don't think we have any big expenses coming up. Hopefully the stock market does well.

I know February should be a great month because I get a bonus that month and we should get our tax returns back by then.

Judge Your Personal Finances Like A Company Would!

2006-12-29T08:51:00.000-08:00

If you do any investing or follow the stock market at all, you will often hear a company report its earnings every quarter and also every year. Often investors are looking for a couple of indicators including revenue and net income.

I started wondering if I could judge myself the same way. So here is a base effort, to be updated once numbers are final for 2006:

Revenue - My base salary increased 9% from where it was at the beginning of the year. Once I do my tax return, I'll have a better idea of what my other revenue was including: bonuses, capital gains, interest and dividend income. I'll post an update once this is done. I also have to add my fiance's results into this.

Analysis: While 9% is not bad, I felt I could have done better. I imagine my final revenue number will actually be about 11% higher than the previous year. When setting goals this year, I would like to see this number increase by 15% or more next year.

Net Income - I don't know my own net income, but my fiance and I started the year with a combined net worth of $34,514. As of November 30th we are at $102,480. So our net income for the year was $67,966. We don't have any numbers from 2005 to compare to. But as a percentage of net worth, our net worth increased by 197%.

Analysis: I'm extremely pleased with this part of our financial picture. This was a big year for us. I think if a real company reported net income numbers like this, they would be rewarded by getting a bump in their stock price.

Kudos To My Fiance! But Now I Have A Problem.

2006-12-22T13:36:00.000-08:00

She is pretty great. She put a lot of effort in this year to get Christmas presents accomplished and spent a ton of hours wrapping and decorating. I pitched in on decorating and Christmas cards and slightly on presents but she mostly made it happen. So kudos to her! (I'm not trying to brown nose, just honestly think she did great).

Which brings me to my problem. She didn't shop for her gifts from me. And rightly so. So I'm hitting the stores this weekend to buy her gifts.

The good news: We agreed to spend only $100 on each other.

The bad news: We agreed to spend $100 on each other, and every idea I had to get her something cost more than that.

In any event, I have some good ideas that I'm going to try to make happen this weekend.....wish me luck?

Christmas Spending = Impossible To Track!

2006-12-20T07:06:00.000-08:00

I posted at the beginning of the month about trying to track spending on Christmas stuff. It is just too hard for me. So far I haven't spent too much, but it seems like everytime I go to the store, I spend a few bucks on something and I'm losing count.

My fiance and I have agreed to not spend more than $100 on each other, which is forcing me to be creative instead of just spendy. By keeping out spending on each other under $100, we can spend more on other people. I constantly bug her about the $100 limit to make sure she isn't going over. I guess I saw my Dad fall victim to this game too many times while growing up. Mom and Dad would agree not to buy each other anything, but then someone would break the rule and the other person would be mad.

But in thinking about Christmas spending, there were expenses I didn't realize were out there; such as:

80 stamps for Christmas Cards : .39 cents a piece
Christmas Cards: Probably $30 for 80 cards
Christmas decorations (seems like we buy more every year) : At least $100
Small presents for Co-Workers - $15 each but multiplied by 10 or 12 people, it adds up.

I think that next year, I will try to have a savings account set up to use exclusively for Christmas and then once that money is gone, I will stop spending.

Orange County Housing Market Update!

2006-12-19T09:52:00.000-08:00

The LA Times reported the latest housing numbers here in Orange County again and the year over year change in Orange County's median housing price was 0%. However, I'm not quite sure that tells the whole story. Things in Southern California look like they might get a little hairy as two counties out here (Ventura and San Diego) both posted significant declines (-8.2% and -6.9%, respectively. And here is what the monthly Orange County median price looks like as tracked by me:

November : $616,000
October : $625,000
September : $626,000
August: $633,000
July : $639,000
June: $646,000

Now I understand that a drop in prices is normal from summertime because that is a high demand season, so I'm willing to keep an open mind that these prices will recover by summer, but for now, I really think that prices won't recover. We shall see!

5 Things You Probably Don't Know About Me!

2006-12-18T07:42:00.000-08:00

I've been tagged by One Million and Beyond to list out 5 things that you probably don't know about me. Although I have some things listed about me on my "About Me" page, I'll list some other things here. So here goes:

1) I'm tall. I stand about 6'6. I also weigh 265 pounds. It makes it difficult to find fashionable clothes sometimes. While I absolutely love being tall, one time I received 6 staples in my head after running into the top of a door. (There was no drinking involved, just plain clumsiness).

2) I am a Southern California native. I spent one year of college in Rhode Island, in a year that was considered one of the worst snowfall years on record. It was cold. With that and some other reasons I finished my last 3 years of college in Southern California.

3) I like to travel, even if it is just for a weekend. I haven't gone international yet, but will be this summer. I did a lot of roadtrips as a kid from California, through Arizona, New Mexico, Texas, Kansas, Colorado, Utah and Nevada. I don't mind going to the same places twice as I find new things to do. As a matter of fact, I'm currently writing this from our hotel in Chicago (a place I've been 3 times now in the last 5 years).

4) I have attempted to eat a 72 ounce steak at the Big Texan Steak Ranch. After being put up on stage at the restaurant, I completed the entire meal with the exception of 11 ounces of steak. Because it is free if you finish, I had to fork over $54. I felt bloated for about 3 days.

5) I really like Chinese food. My work is located in a primarily Asian neighborhood and my firm does a lot of work in China requiring some employees to speak Mandarin. Because of this I spend a fair amount of my lunches eating at Chinese places. This isn't Panda Express either, it is places where menu's sometimes aren't in English.

I think a lot of bloggers have already done this, so I won't tag anyone else to do it!

Oh Those Joneses! Do They Save For Retirement?

2006-12-16T07:05:00.000-08:00

They are hard to keep up with! And believe me, I feel like we are trying hard sometimes too. Granted, we are doing pretty good for ourselves. But we also save a LOT for retirement. And sometimes I feel like the Joneses aren't.

It can be frustrating sometimes to see people we know buy things all the time. And the only thing I can wonder is: "For sure that was a great purchase, but what is your 401k balance?" or something lame like that.

In any event, it just gets a little frustrating sometimes.

Increasing 401k Contribution from 1% to 3%!

2006-12-16T06:59:00.000-08:00

In some past posts, I've written in detail about how we are saving for retirement. Well, in light of my recent raise, I'm increasing my 401k contribution from 1% to 3%. I know. It isn't much. But I'm still trying to max out my Roth IRA for the 2006 year. I have until April 15th to do this and I'm sure I'll get there by March.

Because my fiance and I are are getting married in 2007, we will be over the married income limit to contribute to a Roth IRA. So once my Roth IRA is maxed for 2006, I'll up my 401k contribution from the now 3% to about 10% or 11%.

Taking Advantage of Warranties! Thanks Sony, Epson and Motorola!

2006-12-11T07:13:00.000-08:00

I've had pretty good luck recently with using the warranty for a couple things I own. But first, let me say that I never ever ever ever buy the extended warranty or the optional product protection plan that they always try to sell to you. This is where places make money and they aren't going to make money on me!

I recently bought an electronics item for $100 and they offered me a 3 year warranty beyond the stated 1 year warranty for $20. That is a 20% price increase. I told them no. Even if the thing stops working in a year, I'll probably want to buy the next generation one. If if lasts longer than a year, then I scored!

But recently, I've had really good luck using the standard warranty that comes with most products.

I have sent in the following products recently under a one year manufacturer warranty:

-Razor cell phone
-Sony Digital Camera
-Epson Photo Printer

And I have gotten a replacement back within about 2 weeks, with the exception of the phone which took 2 days. It works great!

I highly recommend using this if you have a broken product. All 3 of the above items were gifts that I didn't have a receipt for but it was replaced anyways. I didn't have to pay for shipping on this stuff either!

So kudos to Sony Epson and Motorola for making the warranty process great!

Yard Sale Money Making!

2006-12-10T09:24:00.000-08:00

I guess only in the warm weather of Southern California can you hold a yard sale in December. But that is what my mom did yesterday. So I took just a few items from our house and some old clothes. I ended up making $9. My mom made over $100 dollars and so did my mom's neighbors.

It was nice to get rid of some of our stuff. It made me really want to try and sell 1 item per week on ebay or craigslist to start getting rid of things. Don't get me wrong, I think the yard sale was a success, but I think our market was limited to people driving by. On Ebay, the market is huge!

In my college days, I used to sell a bunch of stuff on Ebay to make extra cash. Specifically, I would buy things on Ebay and just resell them. Pretty simple. It was amazing how someone would have a poorly time auction with bad photos. I would take that and turn it into a few dollars profit for the same item!

So I will try it next week and put a link on my blog for the item I'm selling!

Is Your Net Worth Normal?? Check It Out!

2006-12-07T06:56:00.000-08:00

Are you in the age bracket 25-34? Well, you should read this then. I posted two days ago about the new Feed the Pig website which is designed to help 25-34 year olds focus on savings. Well check out these stats about the average 25-34 year old:

Numbers in 1985

Median net worth - $6,788
Percentage who have interest bearing savings account - 61%
Ownership of stocks, bonds, IRA's or 401(k)'s - 65%
Average debt - $3,118

Now look at 2004:

Median net worth - $3,746 (despite higher incomes, it declined)
Percentage who have interest bearing savings account - 47% (another decline)
Ownership of stocks, bonds, IRA's or 401(k)'s - 55% (another decline)
Average debt - $4,733 (an increase)

This is amazing! I'm most amazed at the percentages. Forget the net worth and the debt, only 47% of people have an interest bearing account?? Come on! Everyone should have one of these!

Orange County Housing Market Update!

2006-12-06T06:41:00.000-08:00

As we haven't bought a house yet and don't have plans to buy one in the near future, I still find it interesting to track Orange County's (CA) housing market. Houses are definitely expensive here. So back in June, I started tracking the median housing prices in the Orange County market. So here is the update for October:

October - $625,000
September - $626,000
August - $633,000
July - $639,000
June - $646,000

So October wasn't much of a change from September. It will be interesting to see the next year.

New website! Feed The Pig!

2006-12-04T19:19:00.000-08:00

Awhile back I posted about a website that is sponsored by one of the trade organizations that I belong to as a CPA. That post is here. Well, out of that website, another one has been born.

The trade organization recently launched Feed The Pig. The website is aimed at the younger generation to encourage them to save money or "feed the pig" (making reference to their old friend from childhood, the piggy bank).

There are a couple videos on the site and the pig even has his own Myspace page. There is also a handy bring your lunch calculator and credit card pay down calculator.

Just thought I would share the information as I just came across it in the monthly newsletter I receive. Enjoy!

Net Worth Update! +$2,220

2006-12-04T07:25:00.000-08:00

Here is our net worth for December. See details below of what happened this month.

Assets
Cash savings - $31,256
Ameritrade brokerage account - $6,586
Vehicles - $41,425
Engagement ring - $12,000
Rental deposit - $200
My 401k - $19,334
Fiance 401k - $32,491
Traditional IRA - $5,608
Roth IRA - $4,600
My profit sharing - $8,897

___________________
Total $162,397

Liabilities
My credit card debt - $1,828
Fiance credit card debt - $1,296
Student loans and ring debt - $13,779
My car loan - $17,798
Fiance car loan - $25,216

___________________
Total $59,917

Total Net Worth $102,480

You can see definitions of the above in our first net worth report. You can also see our previous month's reports: October, September, August, and July.

So what happened?

1) I previously posted that I thought net worth would be up about $3,000 or $4,000 this month. Well, on the last day of the month we made a deposit with our wedding photographer of $1,427 which brought us down.

2)I cashed in some of our brokerage account to pay off a 0% credit card loan.

3) The Dodgers refunded my playoff ticket money. This had no net worth effect though as I previously had a receivable due from the Dodgers.

4) Last month we had an increase in the value of our cars of $750, while this month, the value declined by over $1,000.

5) Our 401k's performed really well.

6) We started spending. Christmas is right around the corner and just in general we spend more this time of year.

And that is about it. Since I started posting in July, we have squeaked out net worth gains every month, mostly thanks to a strong stock market. I'm hoping this can continue.

Preliminary November Net Worth Looks Good!

2006-12-01T20:01:00.000-08:00

I haven't finished our calculation yet, but we are looking like it will be up about $3,000 or $4,000 this month........

Final numbers coming soon!

Getting Excited About My Raise!

2006-11-29T09:38:00.000-08:00

I have a raise coming up which should hit my paycheck on December 15th and I'm getting excited about it. Normally I like to budget my planned spending and saving about six months out, but without knowing my upcoming raise, planning becomes difficult.

I decided that for the new year, first, I'm going to increase my retirement contribution to remain in line with my plan to retire early. This will involve increasing my current 401k contribution from 1% to 3% and increasing my Roth IRA conversion to about $600 per month up from $540. This will just get my 2006 Roth IRA fully funded faster before April 15th. For more details on my retirement, see my previous post.

After that, any leftover from my raise will go straight into reducing my student loan/ring debt of about $13,800. I currently pay about $300 to $350 a month on this loan. It sits on a credit card at about 4.99% interest. The minimum payment due is about $215 a month.

So with my raise, I'm going to start throwing a lot more money at this loan (I hope). I'm currently projecting being able to throw an extra $600 a month at this loan which will get it paid off in a little over a year. My new total payment will be somewhere between $900 and $1,000 per month.

I guess what I'm most excited about is the year 2008......when my loan is paid off and I'll have an extra $1,000 a month to do what I want with.

Keeping Track of Christmas!

2006-11-28T09:02:00.000-08:00

I was driving home last night from Target where we spent over $100 on a few gifts, some ornaments and other assorted Christmas items. I thought to myself, I wonder how much Christmas really costs? So I'm going to try to keep track. I don't know how well I will do, but I'm going to give it a shot.

My hunch is that it will be close to $1,500 or $2,000, but we shall see!

Merry Christmas everyone!

$100,000 Net Worth! - Our Retirement!

2006-11-26T08:15:00.000-08:00

To continue my detail posting about our net worth of $100,000 that we recently attained, I will now cover our retirement.

I have posted in detail how we want to retire by age 45, or soon thereafter. I did a follow up post here also.

The two biggest wildcards in our dream to retire early are home ownership and starting a family. As those events happen, we will have to revise our plan, but hopefully it is still probable.

So here are some details about our current retirement accounts:

My 401k - My 401k has done well this year. Through September 30, it was lagging, but now year to date, I'm up over 12%. My goal was 10%, so hopefully it holds up through the end of the year. I only contribute 1% of my salary as my company doesn't match and we are focusing on Roth IRA's and my fiance's 401k. I just contribute 1% to keep the payroll deduction going. We'll have a big change coming next year due to marriage and exceeding the Roth IRA income limits. So we'll probably end up increasing my percentage substantially.

Fiance 401k - Where almost 50% of all our retirement money is sitting. Her company matches 50% of her first 6% of contribution, so we contribute 6% here to take advantage of the free money. We reallocated her account back in August to hopefully kick up the performance. So far things are going well. Since we will be Roth IRA ineligible next year, we will switch over to funding 401k's more next year, so we'll bump her percentage of contribution up.

Traditional IRA - This account comes from my fiance from way back. It is help in TD Ameritrade and we have traded stocks in it this year without much success. However, the gains made in our Roth IRA's have just about made up for it.

Fiance Roth IRA - As of this week, we have fully funded my fiance's Roth IRA for the year up to the $4,000 limit. I snuck in about $500 last April that I counted as a 2005 contribution. We hold this account in TD Ameritrade also. We won't be able to contribute here next year, so the balance will only change based on performance of investments.

My Roth IRA - I just opened this account this week. Since my fiance's IRA is now funded, we will start working on mine. We have until April 2007 to fund this up to $4,000 and we should hit it by March. It is also at TD Ameritrade.

My Profit Sharing - The least of my worries is here. I can't do much about this. Basically every year, my work contributes 3% of my salary to this and it is invested. I can't pick investments. The only thing I can do is try to make my work more profitable I guess? However, it counts as retirement money because I can't touch it until age 59.5.

And that sums up our retirement and my posting about achieving $100,000 of net worth.

I'll be back to normal posting this week!

$100,000 Net Worth - Our Engagement Ring and Story!!

2006-11-23T08:24:00.000-08:00

To continue my detail posting about our net worth of $100,000 that we recently attained, I will now cover our engagement ring. This might be a controversial part of our net worth report, but you can judge for yourself after reading this.

Back in April 2005, my girlfriend of 7 months or so had told me that she never had a pair of diamond earrings. If you have met her, you would know this was a completely innocent comment. If you have met me, you would know that sometimes I have a mind like a steel trap!

So off I went to our family friend to buy her some quarter carat diamond earrings. Boy did I learn a lot about diamonds that day. I ended up going with some higher quality quarter carat diamond earrings for about $800. And I gave them to her for her birthday. (Yes, I know that you can get the same size in the mall for about $400 or less, but you should compare those to these; quality does matter.)

Don't think I'm a sucker for this because she planted the idea in my head with her line "I've never had a pair of diamond earrings before." Because later she also told me she always wanted her own drill, which I subsequently gave her a drill for Christmas. It didn't go over as well as the diamond earrings, but at least she laughed.

I knew I had gotten a deal on the earrings when I went to the Caribbean the next month and tried to buy the same earrings just to price compare. The cheapest I could find was $1,975 for lesser quality diamonds.

Whew, I'll try to speed up the rest of the story here. So in September 2005, my girlfriend and I were going to move in together with some roommates. I always thought I would be married if I moved in with a girl, so I went out and bought her some half carat diamond earrings ($2,500) to give her to show her I was serious. Moving day also coincided with our one year anniversary. So as I told her how I wanted to be married before I lived with someone and reached into my pocket, this look of horror crossed her face. It was a look of "You are not asking me here are you?" No, I was just giving her the half carat earrings.

There was a catch though. I told her that I traded her quarter carat earrings in to help pay for these. What I really did was ask the jeweler to put her quarter carat earrings in her engagement ring that I was getting made.

So my jeweler put her quarter carat earrings in her ring and then sold me a center stone which was just shy of one carat. It was a good quality diamond that he sold me for $3,800.

And that was my total cost. $3,800 for the center stone, $800 for the quarter carat side stones, and $2,500 for the half carat earrings she wears. Grand total = $7,100. I had gotten a really good deal. When I had the stuff appraised, it came in at about $20,000. So I took a value of about $12,000 to record for our net worth. This was about 60% of the appraised value. I feel that this was a fair number to put down.

Now, is it right to have this asset on our books? I think so. Will we ever sell it? No. Will we get a lot of insurance money if it is stolen? Yes. But more importantly, I think it is symbolic of bringing my fiance and I together. And since we are in our financial lives together now, it seemed like the right thing to do.

So the rest of the story? In November 2005, we took a trip to a ski resort in Colorado before the snow came. We were planning on doing some hiking and just general relaxing. I had arranged for a hot air balloon ride so I could ask her to marry me. We arrived on Friday and on Friday night a freak snow storm hit. No more hot air balloon. I was in a panic. So we walked out in the snow on Saturday morning, and the ring was burning a hole in my pocket. So finally I just got down (on both knees actually, I wasn't begging though :), just nervous) and asked her to marry me. After a 30 second pause that felt like 30 minutes, she said yes!

And we have been stuck together ever since. And joint net worth reports started as soon as we got home! :)

$100,000 Net Worth - Our Vehicles!

2006-11-20T13:44:00.000-08:00

To continue my detail posting about our net worth of $100,000 that we recently attained, I will now cover our vehicles.

I use Kelley Blue Book to value our cars every month. I confirmed this source as a good source when we sold one of our vehicles during the year. We sold a car for $5,500 while Kelley Blue Book had it valued at about $5,375. So I know from experience that Kelley Blue book appears to be accurate.

Our vehicles haven't had a significant effect on our net worth when looked at in the following way:

In November 2005, vehicles had this effect:

My 2001 BMW 530 - $21,280
Fiance 1998 Honda Accord - $5,325
My car loan - ($24,964)

Total net worth effect - $1,641

I have also posted a few times about how I'm upside down on my car. You can see those posts here: Upside Down Car #1 and Upside Down Car #2.

In October 2006, vehicles had this effect on our net worth:

My 2001 BMW 530 - $15,545
Fiance 2005 Mercedes 230 - $26,950
My car loan - ($18,406)
Fiance car loan - ($25,572)

Total net worth effect - ($1,483)

So our cars aren't really affecting our net worth too bad when looked at it that way. However, if we look at how much we shell out every month, which is $1,145 of car payments, I'd have to say we would be in better shape if we drove less expensive cars.

I am hoping to be able to drive my car for a couple years after it is paid off, but I still have two years to go until it is paid off. I pay $667 a month for my car on a 3.9% loan. So I'm not exactly sure how that will work out.

I have to admit that I bought my car in 2004 when I had just gotten a big raise, was single, and was just looking to impress people (um..girls). Now that I'm happily engaged, I have a little bit of different train of thought. I would like to have something more affordable. But we will see what I actually do when its time to replace my car.

$100,000 Net Worth - Our Brokerage Account!

2006-11-14T21:10:00.000-08:00

To continue my detail posting about our net worth of $100,000 that we recently attained, I will now cover our brokerage account. Our brokerage account as of October 31, 2006 was valued at $11,025.

Here are some facts and figures about our brokerage account:

- We trade with TD Ameritrade. I previously posted various reasons why we use TD Ameritrade.

- We don't research any stocks on our own. As I previously posted, I just use a service run by Jim Cramer.

- I borrowed $5,000 on a 0% credit card about 12 months ago to fund this account and put in $5,000 of our wedding money.

- The borrowed money is due in about two weeks, so I have recently liquidated some stocks.

- We don't have a specific goal in mind. It is just fun to invest.

- I would love to have $100,000 under management in this account someday.

- By using Cramer, I save time, by not picking my own stocks, but I also learn a lot from him. Hopefully in the future, I won't need him.

- This account hasn't overwhelmingly contributed to our net worth increase. Through October 10, 2006, we were up $1,768 in gains for the year.

- While it has only contributed $1,768 this year, which is very small portion of our income, I continue to trade stocks because I'm hopeful that this portion of our income will be a significant portion of our total income someday.

And that about sums up this part of our net worth. Next up, I'll cover our vehicles.

Finally Back to $100,000 Net Worth - Our Cash Savings

2006-11-13T22:14:00.000-08:00

Whew.....what a week at work. Just when I was getting excited about hitting $100,000 of net worth, my work just took me out of the blogging world. There was no posting and little reading of other blogs.

In any event, I think I'm back now and I'll continue on with an analysis of some more things we did to reach $100,000 of net worth by going through different parts of our net worth report.

So first up, is our cash savings of $29,919. Some facts in figures about cash savings:

- We keep very little cash in our checking accounts. We get paid, pay our bills and transfer money to savings.

- Most of our cash savings is in ING Direct. We experimented with T-Bills at treasurydirect.gov; thought about Emigrant Direct and HSBC; but we are so ingrained in ING with multiple accounts, we just leave it there for the most part.

- We have about 12 different ING accounts to save for different things, such as travel, wedding, home buying, furniture.....basically anything that is a non-monthly expense.

- We have a lot of our assets in cash because we our saving for our wedding in July. We also have some inheritance money that we haven't quite decided what it is for yet, so it just sits in ING.

- Having ING accounts helps us save because the money isn't linked to our ATM cards, so it is harder to spend.

- For having a lot of cash, I often feel cash poor. At least, on any given day, there is very little cash in my pocket.

- If we stayed at $29,919 of cash, the interest generated by our cash savings will add about $105 a month to our net worth.

- I look forward to the day when the interest number is in the $1,000's.

I think that is about it....next up will be our brokerage account.

Work Is Killing Me This Week!

2006-11-09T10:07:00.000-08:00

Sorry for the lack of posts.....I'll be back in a day or so!

$100,000 Net Worth - How We Did It - Part 1.5

2006-11-06T06:38:00.000-08:00

To continue the celebration of us achieving our goal of $100,000 net worth, I'm going to name a few more things that I think helped get us there. As you know from previous posts, we started tracking our net worth in November 2005 when it was $24,562.

So what else helped us?

- For the time from September 2005 until June 2006 we kept our rent low. We were renting a house with other people and our total rent was $950 per month. We had to move to where we live now in June where our rent is $1,650 per month. When our rent was low, we were able to make significant payments on the credit card debt that we had at the time.

- We have good credit. If we had bad credit, I think it would have been difficult for us to get where we are. Our highest interest rate on any debt right now is 5.9%. If our credit was bad, this would be a lot higher.

- We worked together. We sat down once a month to figure out what our net worth was. It would have been very difficult to improve our position if we didn't know where we were at.

Next, I'll move on to part 2.....line by line analysis.

$100,000 Net Worth Week - How We Did It - Part 1

2006-11-03T07:56:00.000-08:00

As I have posted, we achieved a net worth this week of $100,000. This post is going to give some background of how we did it and events that happened to us that got us closer to this number. As I mentioned, $100,000 of net worth was one of the few goals that we had, so I'm pretty excited about it.

When we got engaged in November 2005, I started putting together a net worth report monthly. Our net worth at that time was $24,562. So we have come a long way in about a year. So without further delay, here is what happened.

First, the big things that helped:

- Our jobs. I can't really say what our individual salaries are. But together we will earn about $165,000 to $175,000 in gross income.

- Inheritance. Our net worth increased by about $36,000 because of this. So that was a big event for us.

And now some little things:

- We worked hard to contribute to our retirement plan. And the stock market did well. In November 2005, we had retirement funds of $50,499. As of last month we were at $68,552.

-We worked hard to pay down credit card debt. I had been working on this prior to November 2005 when we started tracking, but in November 2005 we had $12,889 of credit card debt (excluding 0% borrowing for our Ameritrade account). As of last month, we were at about $1,460. And for the most part, it gets paid every month with maybe a little left over.

- We worked hard to build up our savings. We have multiple accounts at ING and we just automatically put money away for things. For example, we put away about $650 a month to save for our wedding every month.

And that was the major things. For part two of this post, I'm going to do a series of posts on each line item in our net worth report to give details about what we do.

Net Worth Update - $100,260! +$7,816

2006-11-01T20:57:00.000-08:00

As I previously posted, we finally hit $100,000 of net worth! I'm pretty excited about this as it was one of our goals. I will be posting all week about our road to $100,000. But prior to that, here are the details of the month:

Assets
Cash savings $29,919
Ameritrade brokerage account $11,025
Due from Dodgers $1,213
Vehicles $42,495
Engagement ring $12,000
Rental deposit $200
My 401k $18,797
Fiance 401k $31,643
Traditional IRA $5,454
Roth IRA $3,941
My profit sharing $8,897

___________________
Total $165,404

Liabilities
My credit card debt $7,044
Fiance credit card debt $90
Student loans and ring debt $14,032
My car loan $18,406
Fiance car loan $25,572

____________________
Total $65,144

Total Net Worth $100,260

You can see definitions of the above in our first net worth report. You can also see our previous month's reports: September, August, and July.

So what happened:

1) We were busy at work. I feel like both of us worked so much, that we really didn't have time to spend money.

2) There weren't too many expenses. We had one out of town wedding to attend, but no car repairs, or other big bills come due.

3) My fiance's company stock that we hold in her 401k did really well. It increased about 10%. About 12% to 15% of her 401k is in her company stock.

4) In general, the stock market did really well in October which boosted our 401ks, IRA's and brokerage accounts.

5) The value of our cars increased by $750. This bothered me, because it really is going to be temporary and I hated reporting an increase here. But I use Kelley Blue Book everything month and use the private party value. So I wanted to stay consistent.

And that is about it. As I mentioned, all week I will be posting about our path to $100,000.

$100,000 Net Worth! We Finally Made It!

2006-11-01T07:06:00.000-08:00

I completed our October Net Worth Report last night (which I will post later) and discovered that we finally made it to $100,000 of net worth.

As I have previously posted, we have only sat down to come up with a couple goals. One of these was to reach $100,000 of net worth at which point we would reward ourselves with a $100,000 dinner. This means that we will jump on a plane, train, or car and go to a different city and have a nice dinner. No, we won't spend $100,000 on the dinner. Yes, this dinner will set us back some $$$, but we wanted something to reward ourselves for hitting the $100,000 mark.

Now, I don't want to sound like someone who is bragging. I understand that $100,000 isn't that significant in the big scheme of things. But, my post is one of excitement because we finally did it. We finally reached a goal that we had set!

If you ever watch CNBC, whenever the stock market hits a milestone, they take a timeout out to reflect on some facts and figures on how the market achieved that milestone. I'm going to do the same thing.

So, my next few posts will cover:

- First, our October Net Worth Report.
- Some key factors that helped us go from net worth of $24,562 in November 2005 (When we got engaged). Two posts on this one.
- Future events that may drop us below $100,000 of net worth.
- Some ideas for a next goal for us to achieve.

Retirement at 45 - More Details!

2006-10-29T07:44:00.000-08:00

Awhile back I blogged about retiring at 45. This is about 15 years away for us. The key to our whole plan is contributions and rate of return. This year we will contribute about $14,000. Next year, we will contribute $17,000 and in 2008 we will contribute $20,000. After that, we contribute $2,000 more per year until we are 45. So $22,000, then $24,000....etc.

We are shooting for an overall rate of return of 10% per year.

I know the contributions will be no problem. But the rate of return is up in the air. We'll strive for it, but I can't really say we are going to hit it.

If this works out, we will have $1.26 million dollars by age 45. I'm not sure we can retire on that, but it will be nice to have.

Here is the fun part. Suppose at age 45, we continue to strive for 10% return. If we achieve that, we will earn $126,000 a year. So we can spend that money and still preserve our $1.26 million principal.

There are a lot of other factors on whether $126,000 per year will be enough. Will we have a house? Will we have kids? Will inflation make that money worthless? Who knows?

Orange County Housing Update! Is There A Bubble????

2006-10-28T22:34:00.000-07:00

Every month I make sure I take a look at how housing prices are doing where I live (Orange County, CA). I don't own a home, so yes, I'm secretly hoping the housing market collapses so it will be easier for my fiance and I to buy one. I'm not holding my breath waiting for a collapse and I know that we will eventually buy a house someday regardless of where prices are. However, I still find it interesting to track the prices. So how are things looking? See for yourself. Here are the median prices in Orange County for the last 4 months(info provided by LA Times or Orange County Register, via Dataquick service):

September - $626,000
August - $633,000
July - $639,000
June - $646,000

Do I think there is a bubble? I don't know, but prices are declining. From what I read, prices are generally higher in the summer as that is when demand for housing is usually at its highest. So it isn't too unusual to see September prices lower than June prices. But the next couple months will really paint a good picture. If the median price drops below $600,000 by December/January, I would consider it a real decline.

Open Enrollment Week - Recap!

2006-10-28T22:10:00.000-07:00

Here is the recap of the posts I did this week to celebrate Open Enrollment Week:

- First, I decided what I had to do about Life Insurance.

- Second, I decided how much I would contribute to my Flexible Spending Account (FSA).

- Third, I decided if I should go with an HMO or PPO health insurance plan.

- And last, I decided if I should pay for more Long Term Disability Insurance.

And that about does it. A lot of the decisions I made this week will affect my personal finances for the next year. These decisions can be pretty important as they won't change for 1 year.

Open Enrollment Week - Long Term Disability Insurance!

2006-10-28T21:37:00.000-07:00

The last option I had during my work's open enrollment week was Long Term Disability Insurance. First some background on the topic. As a resident of the State of California, I pay payroll taxes called SDI (State Disability Insurance). Should I become disabled and not able to work, the SDI program will pay me money for I believe up to 12 months. This will start from the day of my disability. The amount of money varies but works out to about 50% of my normal salary.

My work offers a long term version of this. The Long Term Disability plan will pay me money should I become disabled. However, the payments don't start until after 90 days from my disability date but they will continue until I reach age 65 if I'm disabled that long.

There are two options here at my work. I automatically (my work pays for it) get coverage for salary up to $5,000. This means should I become disabled, after 90 days, the plan will pay me $2,500 per month (50% of $5,000) until I can work again or reach age 65, whichever comes first. However, this payment gets reduced by whatever I am getting from any other program (such as California's SDI program mentioned above). So this only really will benefit me should I become disabled for longer than 1 year. After 1 year, California's plan stops paying me and this long term plan would kick in. The option that I have is: I can pay to have the salary limit of $5,000 increased to up to $10,000 and have the amount paid increased from 50% to 66%. Whew....complicated.

What decision do I have to make? - Should I pay more to increase my coverage? The base amount that I will get automatically of $2,500 per month really isn't going to cut it for me. Essentially, I can increase my coverage to 66% of my current salary if I pay a little bit more. How much more do I have to pay? About $5 or $6 a month.

My solution - This is so cheap. $5 or $6 a month is almost nothing. But it is also very unlikely that I will ever use it. I really would have to be disabled for over a year for this to pay off for me. However, I'm going to do it. It really isn't going to hurt me to do it. So I'm going for it.

Open Enrollment Week - HMO vs. PPO!

2006-10-25T09:17:00.000-07:00

At my work, we have an option for health insurance between choosing an HMO plan or a PPO plan. There are significant differences here.

Generally, HMO's are plans that require me to go to one preferred doctor that will refer me out to other doctors should he not be able to solve my problem. I have done this for a long time and it can be a hassle sometimes. However, it is cheaper. My work will pay 100% of my premium if I choose HMO. Also, co-payments are pretty small under this plan.

Under PPO, I would have a lot more flexibility in choosing which doctors I want to see. Therefore, any medical problems I have would most likely be solved faster. However, work will only cover the premium up to the amount they spend on the HMO. So I would have to front the extra $160 a month of premium. In addition, there would be a deductible to reach and higher co-payments.

An example of how my HMO was frustrating was a few years ago. I had a condition to which I went to my doctor. After 4 visits (about 7 weeks) he hadn't solved anything. He finally gave up and referred me to another doctor. After 4 visits there (about 8 more weeks), the doctor couldn't figure it out. I finally went out of my HMO network on my own, paid the doctor out of my pocket and he solved my problem on my first visit. Luckily it was not a life threatening condition, just something random and annoying. If I were under a PPO program, I could have given up on my doctor a lot sooner and gone to see the doctor I wanted to go to a lot earlier.

What decision do I have to make here? HMO or PPO.

My solution: I'm going with HMO. PPO just requires too much out of pocket for me. In addition to the $160 a month of additional premium, the co-pays and deductibles could add up to a lot more. I don't really have any health issues and I don't anticipate any popping up in the next year. And if they do, I can always switch to PPO next November.

Open Enrollment Week - Flexible Spending Accounts (FSA's)!

2006-10-24T07:36:00.000-07:00

Flexible Spending Accounts (FSA's) are pretty awesome. My work just started offering these last year. What is it? It is a plan that allows you to contribute money to a plan to pay for medical expenses and childcare expenses. Why is it good? The money is contributed before taxes!

Assume you have a 25% tax rate. We'll ignore the really high California state taxes for now. So, a rough assumption of a $50,000 salary times the 25% tax rate equals $12,500 of tax due. But if you contributed $2,000 to your FSA plan, you would only pay tax of $12,000 ($48,000 * 25%). So you would save taxes of $500! And you would have $2,000 in an account to spend on medical expenses/childcare.

What can you spend it on? A lot. For childcare, you can spend it on any registered childcare center. For medical, the list is huge. You can spend it on insurance premiums, co-payments for doctor visits and prescriptions, contact lenses, contact solution, Nyquil or any over the counter medicine, first aid kits, band aids, dentists, orthodontists.......the list is very long.

What is the downside? - If you don't spend the money within the year, you lose it. It just goes away. You also have to determine the amount you want to contribute at open enrollment time and you can't change it.

So what are the decisions I have to make?

How much should I contribute? At my work, we can contribute up to $5,000 for childcare expenses and $2,000 for medical expenses. Last year, I contributed $400 and I had a $700 dentist bill that blew through that.

My solution: Childcare is easy. $0. I don't have kids. :) For medical, I'm going to do $600. I don't anticipate a big dentist bill this time around, but I think I will get up around $600 with co-pays, doctors visits etc. I'm considering having laser eye surgery in the future which is also eligible, but I won't get around to that this year, so next year, I will bump my FSA amount to cover that.

Open Enrollment Week - Life Insurance!

2006-10-23T06:48:00.000-07:00

To kick off my week of open enrollment blogging, I'm going to start with the options I have for Life Insurance. First, what is life insurance? Pretty simple, if you die, your beneficiary gets a predetermined amount of money. As with anything there are a bunch of rules surrounding policies like this. The main rule is that suicide is excluded. Most policies have additional "accidental death and dismemberment" additions to them which will increase the amount of paid to your beneficiary if you die in an accident. Some accidents not covered: War, acts of war, infections, and aircraft travel as a non-passenger.

Okay, so what decisions have to be made here for me:

1)Do I need additional coverage? My work provides me with $35,000 of coverage (increased to $70,000 if I die in an accident) free of charge. I can purchase additional insurance at a rate of .06 per $1,000 of coverage. So if I wanted to have an additional $500,000 of money paid to my beneficiary it would cost me $30 per month. ($500,000/1000)X(.06). The .06 rate is based upon my age of being 29 years old. It increases as you enter different age brackets. I can decide whatever amount I want. It doesn't have to be $500,000. It could be as little as $1,000 or as much as $2,000,000.

My solution: I'm not going to add additional coverage. I have two reasons. One, I don't think I need it. I don't own a house/mortgage. I don't have any children. Second reason: I know I can get this cheaper through my membership in my national trade organization that I'm a member of. The rate for that organization is .05 per $1,000 and .03 per $1,000 if I don't want the Accidental Death and Dismemberment part of it.

2) Who should be my beneficiary? Essentially, who gets the money if I die? This is a tougher decision. Who can be a beneficiary? If you are single, anyone can be. If you are married, you husband/wife has to be unless they sign a waiver allowing somebody else to be. In the past, I have always named my sister as my beneficiary. But now, I'm engaged and am planning on being married in the next year. Now, I love my fiance. No doubt. But I would never give advice to anyone to name a girlfriend as their beneficiary. Too many things can happen to end the relationship.

My solution: I'm going to leave my sister as the beneficiary. And I will change it next open enrollment period to my wife. I have no doubt whatsoever that my fiance and I will get married this year but I'm just following my own personal rules.

A Whole Week Of Open Enrollment!

2006-10-21T10:38:00.000-07:00

I am going through open enrollment for insurance/benefits at my work right now with our deadline to turn everything in by November 1st.

A lot of the issues that come up during this time have a very strong effect on personal finance so I'm going to spend this week blogging about the decisions I'm making and why.

Some of the topics that I will cover:

- HMO vs. PPO
- Long Term Disability Insurance
- Life Insurance
- Flexible Spending Accounts

Happy Reading everyone!

Bonus Potential!

2006-10-19T21:01:00.000-07:00

If you have read my About Me post, you know that I am a CPA and more specifically I am an auditor. To relate that to a famous event..... Arthur Andersen was the auditor of Enron. Enron supposedly tricked Arthur Andersen by mis-representing a lot of things that eventually caused the demise of both Enron and Arthur Andersen. What Arthur Andersen was supposed to do for Enron is what I do for smaller companies. Things in my field have changed quite a bit since Enron went down. There is more scrutiny on my work, the quality of our work is more important, and the personal risk of losing my license is more significant.

Given this background, here are the ways that I can earn a bonus through my work:

1) Through a formula that mostly revolves around how many hours I work and how much my firm profits. This can be up to 15% of my salary; so it is worth my while to work a ton of overtime to get there.

2) I can bring a new client to the firm of which I receive a percentage (10%) of how much they are billed. I have earned this bonus before and this can be a significant amount of money depending on the size of the client.

3) I can refer a new employee that has at least 2 year experience in public accounting. The bonus here can range from $3,000 to $40,000 depending on the level of experience. I haven't referred an employee yet.

And thats it. Kinda of funny, don't you think? Given the extra scrutiny on my work, there has yet to be a bonus for WORK QUALITY. There is no bonus incentive to become an expert in my field. I can argue that I'll probably get better raises if I have good work quality, but it is tough to confirm that.

Just food for thought......

Wow! We Have A Lot Of Stuff!

2006-10-18T06:55:00.000-07:00

I posted way back about videotaping our stuff for insurance purposes. I finally got around to it this weekend.

I found out we have a lot of stuff. I'm going to review our renters insurance policy to make sure I think we are covered. I believe our policy limit is $35,000 at replacement cost. My fiance's engagement ring and diamond earrings are covered under a separate policy. Generally renters insurance won't cover jewelry past a certain amount. I think our's was $3,500 so we got a separate policy. I also don't think my baseball cards are covered over a certain amount, but we didn't get a separate policy for those. Those are more sentimental value than anything.

I knew that we had our big items like our television, computers, tables, couches.....etc. But as I was walking around videotaping, I realized how much other things that we have that could add up to a lot. These things included:

- Every piece of clothing. Try to put a value on every single t-shirt, pair of jeans, socks, underwear, sweaters, jackets.....it adds up to a lot.

- Watches, sunglasses, cufflinks, (just now realizing I didn't videotape my 30-40 ties and belts).

- Suits for work. These cost $300 to $500 each and I have quite a few.

- Online music collection.

- Pots, pans, plates, glasses, utensils.

- Fully stocked food cabinets, liquor cabinet, and bathroom cabinets with all kinds of stuff.

It seemed like there was a lot of stuff. It made me realize that we probably have too much stuff and we need to get rid of some things. I don't have the time right now, but I would like to start selling some things on eBay even if it is just one item per week. Some day!

Special thanks to my sister for loaning me her video camera!

My 401k Fees!

2006-10-17T07:06:00.000-07:00

In a previous post, I talked about my 401k plan and how I was invested in lifestyle funds. Lifestyle funds invest in a bunch of different mutual funds to meet your "lifestyle" choice. My current lifestyle choice is aggressive, being that I'm only 29 years old.

An anonymous commenter had said that the lifestyle funds had higher costs and that the lifestyle funds get more conservative as I get older.

So I did a little bit of looking into this because I really didn't know much about it. I found that the Morningstar Average Expense Ratio for the lifestyle fund that I'm in is 1.17%. Blah. This isn't too bad, but it isn't great. My preference would be that this amount is under 1%.

Also, the other part of the comment revolved around the lifestyle funds getting more conservative as I get older. This will only occur if I voluntarily move the funds out of the "aggressive" lifestyle fund that I'm in now. So I can stay in the "agressive" lifestyle fund as long as I want.

But I'm glad the commenter brought up the topic of the fees. I looked up what sort of fees my fiance's funds in her 401k plan had associated with it and those were in the ballpark of 1% to 1.25% with the exception of the S&P index fund which was at about 0.2%.

What this means is that no matter how well our 401k's perform, we are always going to have to pay 1%+ of our total account balance in fees.

For the most part though, there isn't much I can do. Most all of my investment choices had about the same fee % or more. So I guess I just have to stick with it.

I'm predicting that as all of us personal finance people become more aware of this fee structure, 401k companies will begin competing with each other to have the lowest fees. We might be a few years away, but I'm guessing this will happen soon.

How To Turn $100,000 into $98,361 in Six Years!

2006-10-16T06:54:00.000-07:00

I just read a good article in one of the trade magazines I subscribe to. The article, by Mike Dubes was called "A Marathon, Not a Sprint."

The article is about somebody that gets really aggressive with his retirement portfolio. And it paid off for him......at first. His first year return got him 48%. But it wasn't so steady after that. The following years were:

Year 2 -42%
Year 3 +36%
Year 4 -25%
Year 5 +37%
Year 6 -18%

Looks okay, but the hypothetical $100,000 he started with at the beginning of year one now equaled $98,361 at the end of year six. How is that possible? The power of compounding. After year one's massive 48% return, he was sitting on $148,000. So when he lost 42% the following year, he lost 42% of $148,000, not 42% of $100,000. So his balance at the end of year 2 was $85,840. Doh! And when he gained 31% the 3rd year, he earned 31% on $85,840, not $100,000. And so on and so on....

The overall concept was that if he would have stuck his money in something earning 6% per year, his balance after year 6 would have been $141,852.

The moral was that the road to retirement is a marathon....its long and we have to pace ourselves. So just because we only earned 6% one year, probably won't kill us in the long run. I struggle to remember this sometimes. I'm still shooting for 10% which I think is reasonable, but I'll try to leave visions of 40% returns out of my head.

Considering Money Market Investing at 5% +!

2006-10-14T10:35:00.000-07:00

I was reading Kiplingers magazine this month and came across their article featuring their best everything for 2006.

The magazine wrote that the best money market fund was Transamerica's Premier Cash Reserve Fund which yielded 5.2% and required only a minimum investment of $1,000. So I decided to look into this further and do a simple good/bad analysis for myself. So here goes:

The Good:

- The yield on this account hovers around 5%.
- The account minimum is a reasonably low $1,000
- I can write 6 checks per month ($250 minimum check amount)
- I can withdrawal money whenever I like.

The Bad:

- The yield is not significantly higher than what is available at online banks like ING, Emigrant Direct and HSBC.
- The money would not be FDIC insured.
- The effective yield changes daily, so the current yield of about 5% could decline.
- Although the risk is pretty low, you technically could lose money in this fund.

After making this list, I tried to figure out if there would be anyway that this would be useful for us based on the above. The only thing I could really think of was that this might be a good spot to house our wedding fund until our wedding next year given that it has checkwriting abilities.

But I think ultimately, while I liked the idea behind this money market fund, I most likely won't pursue this and will stick with saving through the online savings banks mentioned above.

Year to Date 401k Performance!

2006-10-11T07:20:00.000-07:00

I love the ease of the 401k, but I hate the fact that the investments are so buried to where I'm not really sure what I'm invested in. My fiance's 401k has specific mutual funds that we picked, but mine is a little different. Mine has a lot of funds to choose from, but also some lifestyle funds. These lifestyle funds invest your money in a ton of various mutual funds for you so it is hard to know what I'm really invested in. It worked out okay last year when my return was a little over 10%. But it is still strange not to know what you are really invested in.

10% is the base percentage I want to achieve in all our retirement funds. I have our retirement plan mapped out based on achieving that rate of return. So how are we doing in our 401k funds this year?

Through Sept. 30

My 401k - 6.22%

Finace's 401k - 7.85%

The good news is that my fiance's 401k has about $12,000 more in it than mine, so if she can exceed 10% this year, it may make up for the shortfall in my 401k.

The bad news is, there are only 3 months left to make it to 10% and there really isn't anything I can do but sit and watch.

Jim Cramer's Performance!

2006-10-10T07:11:00.000-07:00

I've posted a few times about how I invest using Jim Cramer's Action Alerts Plus service. His service is a little pricey, about $400 a year, but that seems worth it to me so I don't have to research new stocks to buy. So I thought I would add up how he has performed for me year to date. Today I will just cover our brokerage account. Later I will cover our IRA accounts.

Please remember to make your own investing decisions. I'm not an investing expert which is why I use his service and I'm not personally recommending any stocks here.

Also, throughout the course of the year, the balance in our brokerage account has varied from as low as $2,000 up to over $10,000 just based on our need for money.

Another disclosure. I'm not promoting Jim Cramer's service in any way. I don't receive any referral money if somebody signs up for his service. This is a genuine post about how I've done.

So here goes:

Realized Gains/Losses - Stocks that I have sold since January 1, 2006:

Anglo American PLC - AAUK +$721
ABB LTD - ABB + $37
TD Ameritrade - AMTD -($188)
Gamestop - GME +$410
Microsoft - MSFT +$145
Network Appliance - NTAP -($222)

Total Realized Gains + $903

Unrealized Gains/Losses - Stocks I'm still holding

ABB LTD - ABB +$90
TD Ameritrade - AMTD +$255
Anheuser Busch - BUD +$28
Citrix Systems - CTXS -($189)
International Game Technology - IGT +$137
Marvell Tech - MRVL -($126)
Schering Plough - SGP +$274

Total Unrealized Gains + $469

Dividends Received +$396

Total YTD return = $1,768

Unfortunately, I can't give this in terms of percentages because our account balance varied so much but I think we are doing pretty well. Please remember that we have to deduct about $400 of Cramer fees off the top of this also.

I know we aren't doing that well in our IRA accounts this year and I'll post about those another time. Overall, I like using Cramer's service and have learned some ways of how to use it best to my advantage over the course of the year. Regardless of how much we have made or lost, I have learned a lot about reasons that stocks to good and bad and I think that education has been priceless.

Remembering to Get Paid!

2006-10-09T07:17:00.000-07:00

My work reimburses me for any mileage I drive that is over and above my normal commute. I spend a lot of time driving to client locations so sometimes this can add up to a decent sum of money. The rate they reimburse me is .445 cents per mile. So if I drive 100 miles, I get $44.50. Not too shabby. However, there is a kicker. I have to remember to put this expense down for reimbursement.

For the most part, I'm pretty good about doing this, but I know I have forgotten to do this over the course of my career at least 10 times.

Where I run into trouble is when I drive a short route. For example, there is one client of mine that I drive to about 30 to 40 times during the course of September and October. It counts for 10 miles of reimbursement. So every trip equals $4.45. With everything else in life going on, its hard to remember to ask for $4.45 every day.

If I was driving 100 miles, of course I would remember to claim reimbursement, but for 10 miles it will often slip my mind on a daily basis. Usually at the end of the month, I'll remember to go back and claim reimbursement.

So that is why I'm writing this. I've found that after I blog about something, it plants the idea I wrote about in my brain and I get better at doing whatever I wrote about!

Oh Those Dodgers!

2006-10-08T08:15:00.000-07:00

Well, the Dodgers blew it. The Mets beat them yesterday to complete a 3-0 series sweep. Bad news to me as a huge Dodgers fan. Good news to me as I will get the entire $1,213 dollars that I paid for playoff tickets back. It will only take 4-6 weeks.

I didn't get to go to a game. I had tickets to Game 4 which would have been today. But that is okay.

So, I've officially adopted a new team to follow for the rest of the playoffs. Go Tigers!!!

Did TD Ameritrade Mess Up? SHHH.....

2006-10-05T07:35:00.000-07:00

I haven't looked into it yet, but I think TD Ameritrade might have messed up. I referred a friend to TD Ameritrade awhile back. They were offering a $50 Shell gas card for the referral and they sent me one almost immediately after my friend opened the account.

Well, yesterday, I got another $50 Shell card. And I haven't referred anyone else. So I think they might have messed up. The funny part is, TD Ameritrade doesn't include a letter or anything. It is just an envelope with a Shell card and nothing else. So it is hard to judge what they are doing.

In any event, I'll take it! However, as a shareholder of TD Ameritrade, I hope they aren't messing this up too much!

Don't Be Your CPA's Client. Be Your CPA's Partner!

2006-10-03T07:56:00.000-07:00

Even better, be yours CPA's Friend. As I have stated in my profile, I'm a CPA, but I don't do taxes. I know enough about taxes to be dangerous, but it is not my area of expertise. But I read a letter in the LA Times this weekend from a reader that was pretty funny. It is linked here. You may have to register for free to read it, but I will try to sum it up.

Basically, the reader was upset because he(I'll just use he) is being audited by the IRS because he didn't report some sales of stock on his taxes. He now has to pay back taxes, interest and penalties. And he is upset at his CPA for not catching this. The person apparently didn't receive his 1099 from his brokerage account so accordingly the CPA didn't know about it.

Here is the best quote from the letter: "I had no idea what a 1099 was and had no reason to know whether I should have had one. Doesn't responsibility for knowing such things fall on my CPA?"

Oh yes, the CPA should have gotten out his crystal ball and known this guy had a 1099 from his brokerage account. Actually from reading the entire article, both parties had areas of fault here. However in the LA Times' response to the letter there was another good quote that is the basis for my entire post:

"What's still unclear is whether your CPA actually made a mistake. In a follow-up e-mail, you said your CPA sent you a tax organizer that you ignored. These organizers typically have questions about investment sales that would have tipped your CPA off to your stock profits."

"If you didn't use the organizer and waited until the last minute to have your return prepared Â when your CPA was at her busiest Â it's probably not reasonable to expect her to have quizzed you closely about your entire financial situation."

It is not clear whether the letter writer waited until the last minute but that also could have hurt the writer.

Wow. The letter writer was his CPA's client. He should have been his business partner, even better, his friend. A CPA is only as good as his client that gives him his information. To try to show a comparable situation outside the realm of taxes, the situation above might be similar to this situation:

A guy takes his car to an auto mechanic. The auto mechanic asks "what is the problem here?" The customer's response: "Just have it done by the end of the day." He doesn't help the mechanic at all. So the mechanic spends his whole day trying to figure out why this guy brought his car in. At the end of the day he thinks he has taken care of almost everything he finds and is actually pretty proud of himself. When the customer comes back, he is absolutely livid when he finds out the mechanic didn't recharge the freon in the air conditioner. The mechanic tries to defend himself by explaining all the other things he fixed but to no avail. This is similar to the situation with the CPA above. The writeignoreded the CPA's questions, just dropped off whatever info he had and told the CPA to make magic happen!

I think we should all be our CPA's partner, not our CPA's client. Help your CPA help you. Yes, the CPA is still going to charge you, but you will get a lot better service if you put some effort in. If your CPA asks you questions or sends you an organizer, take the time to answer. Get your information to your CPA early. If your CPA calls you and wants to file an extension, its probably for a good reason. Go with it.

Or you can do what I do. Be your CPA's friend. One of my best friend's is a guy at my firm that is one of the smartest tax guys around. I share my financial information with him year round. He reads my blog also. We talk tax ideas throughout the year. Ok, so we are nerds. But I'm sure that I won't be missing anything on my taxes this year!

September Net Worth Update! +$11,267

2006-10-01T13:55:00.000-07:00

We had a really good month this month with a gain of $11,267. A few things happened to cause this. I'll jump right into the numbers and you can read what happened below:

Assets
Cash savings $27,965
Ameritrade brokerage account $10,576
Dodger Tickets $1,213
Vehicles $41,745
Engagement ring $12,000
Rental deposit $200
My 401k $18,096
Fiance 401k $29,688
Traditional IRA $5,872
Roth IRA $3,132
My profit sharing $8,897

_____________________
Total $159,384

Liabilities

My credit card debt $7,534
Fiance credit card debt $148
Student loans and ring debt $14,274
Fiance student loans $0
My car loan $19,012
Fiance car loan $25,972

______________________
Total $66,940

Total Net Worth $92,444

You can see definitions of these on our first net worth report. You can also see our previous month reports: August and July.

So what happened this month:

1) One of us received a lump sum which was used to payoff my fiance's student loans.

2) The Dodgers made the playoffs. As of today, we have an asset of $1,213 for these tickets and also a credit card debt for the same amount. I anticipate the Dodgers won't make it very far in the playoffs and I will get most of this money back. In any event, next month's report will reflect what happens in the playoffs!

3) We became professional wedding attenders. Not really, but we did attend 6 weddings this month, 3 of which one or both of us were part of the wedding party. This got somewhat costly with the traveling, gifts, and such.

4) The stock market did really well in September. Our 401k's did pretty well and so did our other stock investments. A few months ago we borrowed $5,000 from a 0% interest credit card to invest in the market in addition to other money we have for the purpose of buying stocks.

5) We continued on our plan to retire at 45. We are about $1,300 short of where we are supposed to be right now, but that is close enough for me.

6) Depreciation on our cars took about $1,400 off our net worth this month. We use Kelley Blue Book to value our cars every month.

And that is pretty much it. We are inching closer to $100,000 of net worth at which point we plan to have a $100,000 celebration dinner! The way things are looking, we will be celebrating this around the end of the year, especially if the stock market holds up.

Muni Bonds Pay A 7.12% Equivalent Yield? Yes!

2006-09-30T08:24:00.000-07:00

I just had a buddy buy into a Municipal Bond that is yielding an incredible amount so I thought I would write a post about it. Sorry the post is so long, but I'm excited. First of all:

What is a Municipal Bond or Muni Bond?: From Investopedia: A debt security issued by a state, municipality, or county, in order to finance its capital expenditures. Municipal bonds are exempt from federal taxes and from most state and local taxes, especially if you live in the state the bond is issued.

The key part of this definition is "exempt from federal taxes and from most state and local taxes"; Yes!

So what did my buddy buy into? Through his broker, he bought a single $10,000 bond issued by a local school district here in Southern California. The bond was issued by the district about 7 years ago, so he actually paid $10,800 for it. Okay, this will need further explanation.

When a bond is issued, it has a face value; in this case $10,000. It also has a fixed interest rate; in this case 5.5%. So in this case, a fixed annual payment of $550 paid in two payments of $275. It also has a fixed term; in this case it is 30 years unless it is redeemed by the issuing agency. My buddy's bond has 23 years remaining.

However, bond values (i.e. the $10,000) will rise and fall based on interest rates. But at the end of 30 years, the bond will return $10,000 to the investor (provided the entity is still in business).

So what happens to the extra $800 my buddy paid? Remember, he paid $10,800. The $800 is called a premium. After the end of the 30 years it just goes away. So when he figures out how much this bond paid him in interest, he has to deduct this $800 from his earnings. And I will show that calculation by deducting that $800 equally over the remaining 23 years (called amortizing).

Next question: I can lose money on this right? Correct, you can lose money. This is why they have bond ratings. The bond my friend bought is rated AAA which is the highest rating a bond can have. So what can go wrong? Suppose the school district in question loses some funding from the state or county, their bond rating my fall and if it falls too far, the bond price could fall a lot. Remember though, if the entity stays viable for 23 more years, you will always get your $10,000 back. If they don't make it, you lose. In general though, these things tend to be pretty safe. But do some homework!

Next question: Do I have to wait 30 years to redeem this? Nope. You can sell the bond at anytime. However, you will be subject to whatever the price is that day(i.e. the $10,800 price my buddy paid). So after any amount of time, you can sell it for the going price; could be $11,200, could be $10,500, could be $9,800, could be anything. If you wait the term of the bond (23 remaining years) you get $10,000.

Okay, now the fun part. How the heck is this thing yielding 7.12%? Bear with me here as we walk through it. Suppose you have an ING Direct savings account that pays 4.4% interest. Lets use the same amount of $10,800. If you put that money in ING, you would earn $475 per year. Now if you put that $10,800 in the muni bond (it pays 5.5% interest) you would earn $550 per year. However, we have to amortize that extra $800 over the remaining 23 years because we don't get that $800 back($800 divided by 23 equals about $35). So you would actually earn $515 ($550 - $35). Now, divide the $515 you earned by the $10,800 you invested. Answer 4.7%. WTF!!!!! I thought this thing yielded 7.12%.

Because there is more! Oh boy! If you invested in ING, you are paying taxes on the $475 you earned in interest. So now take that $475 and deduct your federal and state taxes. I'll use a rate of 25% for federal and 9% for California (stupid CA taxes). So we take our $475 we earned and subtract $162 ($475 times 34% (25% + 9%)). So now we have earned $313 after tax. $313 divided by our investment of $10,800 = 2.9%. Damn. That pretty much sucks. Remember above, our muni bond is yielding us 4.7% and there are no taxes on the earnings. So how much of a rate do I have to get in ING Direct to come up to 4.7% after I pay taxes?

More calculations. Fun. Basically you would have to earn 7.12% in ING to make the same earnings after taxes as the muni bond. Remember, this assumes a 25% federal tax rate and a 9% state tax rate. To figure out using your own tax rate, just take the 4.7% and divide it by 1 minus your rates. So I took 4.7% divided by 0.66 (1- .25 - .09).

So now what. I'm looking into this more. The account minimum is $10,000 (the face price of the bond), but I'm still exploring this further. There are other issues such as account fees and such, so I'm going to do some more homework.

Leave a comment if you are interested in some followup on this topic and I will post more when I get the info.

The Dow Jones Almost Closes At A Record High!

2006-09-28T23:21:00.000-07:00

The Dow Jones closed today just shy of a record high closing. Unfortunately, I don't think this means a whole lot to me or a lot of people. The Dow Jones Industrial Average only tracks 30 stocks. For most people, a better indicator is the S&P 500 which is still far away from an all time high.

I have to admit that the market as a whole has done pretty decent for September and I hope it holds up. However, I wish the S&P would hit the all time high instead of the Dow.

One good thing that could come out of the Dow closing at an all time high? I think it can be a positive signal to the investing world that market sentiment is pretty good and that the market can continue to reach new highs. Other than that, I consider this mostly a non-event.

Deciding What To Do With a Lump Sum!

2006-09-25T21:07:00.000-07:00

One of us just recently received a lump sum amount of money. So we came across the dilemma of what to do with it. Should we continue to build up our cash savings? Should we add to our wedding fund? Should we invest it? Should we pay down some debt? Should we blow it on something fun? These were all questions that went through our head. Given our current situation, we decided that it was time to start paying down the debt that we had. We felt our savings are currently good for now and that our wedding savings fund is on track through our monthly savings to be fully funded by the time of our wedding.

So the next question is, what debt should we pay down. Here are the choices (amount, interest rate, monthly payment):

My Car Loan: $19,616.......3.9%.....$666 monthly pmt.
Fiance Car Loan: $26,273....5.9%.......$479 monthly pmt.
Misc. Credit Card:About $1,000.....Up to 13.9%.....$Varies
Fiance Student Loans: $7,684..5% to 5.69%......$330 monthly pmt.
My Student Loans/Ring Debt: $14,441....4.9%.....$225 monthly pmt.
Credit card (being invested): $4,874...0.0%......$100 monthly pmt.

We ultimately decided that my fiance's student loans would be the debt that we would pay off. Here is why:

My Car Loan - The lump sum wouldn't be enough to pay this off completely. So from a cash flow standpoint, we would still have to pay $666 per month for at least 14 more months after applying the lump sum, regardless of what the balance is. Plus the interest rate at 3.9% is pretty reasonable.

Fiance Car Loan - While the 5.9% rate is one of the higher ones that we have, we had the same problem as my car loan. The lump sum isn't enough to pay the whole thing off so we would still be stuck with the monthly payment of $479 for at least 36 months after applying the lump sum.

Misc. Credit Card - We may use a little of the lump sum to pay this off, but ultimately we try to pay this off every month, so we will only use the lump sum if we end up a little behind this month.

My Student Loans/Ring Debt - The lump sum isn't quite enough to pay this off entirely, however because the debt sits on a credit card with a fixed 4.9% rate, the minimum monthly payment due would drop from $225 to about $65 so we could save some cash flow if necessary. However, I currently try to pay about $300 a month here anyways. So from a cash flow standpoint, we would still have something to pay every month.

Credit Card - This debt is at 0% until December and I'm currently investing this money in stocks. As December gets closer, I will use the money in our Ameritrade account to pay this off. So there was no need to use the lump sum for this.

Fiance Student Loans - We ultimately decided to pay these off as the lump sum is large enough to pay these off in their entirety. So not only is this debt gone along with its interest rate of 5% to 5.69%, but we will also have an extra $330 per month to use elsewhere. (We still haven't decided what to do with the extra $330 yet.)

It feels good to pay off some debt. I'm personally okay with having our car debt (although I wish I wasn't upside down on my car loan). But our other debt tends to bother me.

Because of this lump sum, we are moving closer to having $100,000 of net worth and possibly with some luck in the stock market we will be there by the end of the year!

The Most Important Financial Decision You Will Ever Make Is.....

2006-09-24T09:04:00.000-07:00

Marrying somebody. I had a discussion with somebody at work about this in a joking fashion but the more I talked about it, the more I realized it was true. I feel that I am pretty fortunate here. My fiance has similar financial ideas as me, a good credit score, and makes a decent income. On top of that she's beautiful (thought I would score some points here.) :)

But in all seriousness, I concluded that you don't have to marry a millionaire, but at a minimum, some financial qualities that your future spouse should have include:

- Similar financial goals or financial mindset as you. If you are a super saver and future spouse has never had a savings account, you may run into trouble.

- A respectable credit score. Face facts here. At some point you will apply for credit together either when buying a house, getting an apartment, or buying a car. If you are packing a 700+ score and future spouse has a score under 550, you may me heading for trouble.

I think that there are more items to list here, but I felt that these two were the most important.

There is one more reason that choosing the right spouse is financially important:

- Divorce is expensive. Very expensive.

Forbes 400 Richest Americans!

2006-09-22T08:45:00.000-07:00

The list is out today. We didn't make the cut. Apparently our net worth of $81,777 was just shy of the $1 billion needed to make the top 400. Close but no cigar.

This is the first time that the minimum to make the list was $1 billion. So I'm working up a plan to make the list next year. We are only short by $999,918,223. I'm gonna do a little overtime ( I don't get paid directly for overtime, but I can bonus more), gonna try to save a little bit more, gonna try a little harder at investing, and consider a weekend job. With those things in place, I feel that we have a good shot at the list next year.

Just kidding!

Orange County's Housing Prices Continue To Fall!

2006-09-21T08:25:00.000-07:00

The L.A. Times came out with their monthly article on Southern California housing prices. The median price for Orange County came in at $633,000 a 2.6% gain from last August.

However, I remember that the median price in July was $639,000 and the median price in June was $646,000. So I think we are starting to see prices weaken a bit.

Since I don't own a home, I'm obviously hopeful that prices continue to drop which will make purchasing a house more affordable for my fiance and I.

We are still at least a year away from seriously buying a house, but I still like to follow the market to see what is going on out there.

I believe that housing prices are very driven by interest rates. Over the past two months, interest rates have seemed to stabilize, so I'm not sure how much lower prices will go.

One other stat worth noting: The number of homes sold in Orange County fell by 32% since the same month last year.

We'll just have to wait and see what happens.

Frustration: When My Stocks Take A Dive!

2006-09-19T18:21:00.000-07:00

I hate when one of my stocks takes a dive. Today, Yahoo (YHOO) went down. Way down. Now I'm down further than I was already down. If you have read my blog, you already know how I invest with Jim Cramer.

So what happened with Yahoo. I bought Yahoo at about $36. I tiptoed in with 32 shares way back in the beginning of January. I don't think I have been positive on it since. Lately it has been hovering around $28 or $29 dollars. But today, it closed at $25.75. I'm down about $10 a share or $320. This isn't going to kill me, but:

It's so frustrating.

Cramer sent out an alert today that he is going to buy more shares for his portfolio. He was going to buy 1,500 shares to bring his position to 5,500 shares. He thought the drop in shares today was an overreaction.

I'm most likely going to follow and buy some shares tomorrow as I missed the alert today before the market closed. If Yahoo doesn't open too much higher tomorrow, I'll probably jump in for 30 to 50 more shares. Defending a stock that is falling can get pretty annoying sometimes, but this method has worked out for me before with Cramer, so I'll stick with it.

Just for reference, Cramer's cost basis is now at about $30, so this purchase by me will bring my cost basis inline with his.

Wish me luck on this one.

Quick Saving Advice For The College Graduate!

2006-09-18T07:13:00.000-07:00

It sounds silly.....but....I'll say it anyways. One thing I wish I did when I graduated from college is:

Started putting $20 a month away strictly for participation in weddings.

I spent my past weekend in two weddings (numbers 3 and 4 of the 7 we are attending in a 2 month span). At one of the weddings I attended, I met a guy who has been a groomsman in 9 (yes, nine) weddings. That is 9:

-tuxedo rentals
-bachelor parties
-wedding gifts
-possibly a bridal shower(co-ed for us guys)
-engagement parties
-travel costs

All of this stuff adds up and almost everyone is going to go through it. I never even thought about this expense until recently. But having been a groomsman twice in the last two weeks, here is just some breakdown of what this costs:

-Tuxedo rental - $150 each time
-Bachelor party - $550 for one and about $200 for the other
-Wedding gifts - Haven't bought them yet but probably about $60 each. (Should be more, but the presents I'm buying are more of a joke: Breadmakers ala the movie Old School. See more of my favorite movies in the About Me.
-Bridal shower: $0 - neither person had a co-ed one
-Engagement party - $0 - neither person had one
-Other - $40 for dollar dances, $50 for pre-wedding drinks.......
-Travel costs - None for the two weddings I was a groomsman in, but about $350 for another wedding we attended over the weekend.

There is so much more and it all adds up. I wish I had saved for this stuff earlier. One other thing that I considered after all this:

Why didn't myself and my 5 closest guy friends (3 weddings down, 2 more of us to go) just all buy the same tuxedo for the first wedding and then try to hold the line on gaining weight until all of us were married. That way we wouldn't have to rent everytime but we could just swap out the vest for a different color or something. Just something to think about I guess.....

The Dodgers Finally Did It!

2006-09-16T08:49:00.000-07:00

They asked me for playoff money! (See my previous post here) So me and the two other people I buy tickets with each ponied up $1,213. I didn't save for this. I really had no anticipation that the Dodgers would even make the playoffs. (They still may not but it's looking good.) However, because the Dodgers might not make the playoffs and because they might not go very far in the playoffs, this is how these tickets will show up on my net worth report in September:

Assets:

Dodgers Playoff Tickets: $1,213

Liabilities:

Additional Credit Card Debt: $1,213

Effect on Net Worth: $0

Now, once the playoffs get started in October, I will know pretty quickly how much money the Dodgers will be giving me back. I anticipate my October net worth report will look like this:

Assets:

Money due from the Dodgers: $1,163

Liabilities:

Credit Card Debt: $1,213 +$25 interest

Effect on Net Worth: $75

I have to imagine the Dodgers will only play two home games in the first round of playoffs before making an exit from the playoffs, of which I will only use 1 seat per game. In any event, the breakdown of the cost of the tickets is this:

First Round : 3 potential games X 4 seats X $25
Second Round: 4 potential games X 4 seats X $55
World Series: 3 potential games X 4 seats X $205

As you can see, the money starts getting serious in the World Series. We'll see what happens, but if the Dodgers pull off something special, our net worth might be taking a hit.

Why I Trade With TD Ameritrade

2006-09-13T23:10:00.000-07:00

We have our brokerage account, regular IRA and our Roth IRA with TD Ameritrade, so I thought I would outline the reasons why:

1) Dumb loyalty. I first opened an Ameritrade account in 1998 and have had good success with using it so I haven't really looked for anything else.

2) Reasonable fees. TD Ameritrade costs $9.99 per trade. This isn't the cheapest but it is reasonable. I think Scottrade and TradeKing among others are cheaper.

3) It is fast and generally reliable. I can log in very fast and navigate quickly through the website on a regular basis. In 8 years of having an account, there are very few times I remember not being able to log in or do what I wanted. Market orders get executed very quickly, usually in seconds.

4) It fits my investing style. I don't do a lot of research. I rarely go on margin; if I do, it's just for a couple days. 50% of my orders are limit orders, 50% are market orders. I only buy individual stocks. It just seems to fit my needs.

5) Good records. I can see every transaction I have made since 1998 whenever I want online. This isn't necessarily helpful, just kinda cool.

6) I'm a shareholder - for now anyways. If you have read how I invest, you know I'm not investing for the long term. But I currently own shares in TD Ameritrade.

I think that is about it. I haven't tried too many other brokers. I briefly experimented with Sharebuilder a few years ago and I liked the general idea, but it just wasn't for me and the way I invest.

I'm not particularly a broker snob. Although I haven't used other brokers, I have to imagine that they are all pretty similar and anyone can adapt to the various styles.

Can Money Make The Stress Go Away?

2006-09-12T07:23:00.000-07:00

I'm stressed this week. I have a really busy month at work and two friend's weddings to attend this weekend including two rehearsal dinners. This stress level got me thinking. Can money make the stress go away? At what point will we be in a financial position that my stress level can decline?

When I got out of college and started working, I thought how great things would be as I earned more money. My salary has come a long way since then, but I'm questioning this week if it is worth it.

I think the problem is: As my salary went up, so did my lifestyle. My car got nicer, my meals got bigger and fancier, my apartment got nicer...etc.

The more I thought about things, the more I came to think that we need to hit certain financial targets before my stress will go away. Here are some short term things that I think I need financially to relax:

- Student loans paid off
- Our Wedding over with and paid for
- Catching up the savings accounts

So how much money will it take? I could be happy with an extra $30,000 to $50,000. Of course, and extra $1,000,000 to put us in a nice big house would be cool too.

What does everyone else think? My real concern is: Can money reduce stress? If somebody walked up and gave me $30,000, would I relax?

How much would it take for you?

JLP's "How to...." Personal Finance Edition is up!

2006-09-11T06:55:00.000-07:00

JLP over at AllFinancialMatters has posted his "How to...." personal finance edition. This is a collaboration of submissions from other bloggers that covers a lot of "how to" topics. Check it out if you get a chance.

BusinessWeek Reminds Us How To Measure Investment Results!

2006-09-10T22:42:00.000-07:00

Sometimes I will read an article and say to myself: "That's a simple concept, I'm glad this article reminded me of that, because that is easy to forget." This happened a few days ago as I was reading an article in BusinessWeek entitled "Taking Stock of Your Adviser." The part of the article that caught my eye was the section titled "How Well Am I Doing?" The article says:

"Many people make the mistake of comparing the performance of their investments to a popular stock market measure, such as the Dow Jones Industrial Average or the Standard & Poor's 500-stock index. Stephen Wetzel, a certified financial planner in Yardley, Pa. says your adviser should be giving you reports comparing your results with a composite of indexes that mimics your asset allocation strategy. So if your plan is to have 75% in stocks and 25% in bonds, your benchmark could be 75% S&P-500 and 25% Lehman Brothers U.S. Aggregate Bond Index."

This reminds me of my recent post about my sister's retirement account. Up until recently, she had been putting 35% of her money in a stable income fund. (It currently pays 4.5% to 5.0%). So even though we have reallocated her contributions, there is still a substantial sum of money sitting in this fund. So while I think she should shoot for earning 10% every year, this is going to be difficult in the next few years because so much of her portfolio is fixed at 4.5% to 5.0% return.

So how should you easily benchmark your investment performance: Benchmark against your own expectations. Don't worry about how the Dow does. Don't worry about how the S&P 500 does. Figure out how much you need in retirement and what rate of return you need to earn to get there. So if you set your sights on 10% return per year and after 3 to 5 years, you aren't achieving this, it might be time to switch things up.

I'm JLP's Blog Of The Week!

2006-09-10T22:11:00.000-07:00

Special thanks today to JLP over at AllFinancialMatters for choosing me as his Blog of The Week!

Before I started blogging, I was not familiar with JLP or his blog, but I read it everyday now. He has promoted the personal finance blogging world with his popular Question of the Day Marathon.

I'm sure that almost everyone who reads my blog is familiar with JLP, but if you aren't, take some time to check him out!

Are You Leaving Money On The Table? Review Your Benefits!

2006-09-09T08:09:00.000-07:00

We recently received some new employee benefits at work so we had a meeting to go over these new benefits as well as are old ones. I think that there are two benefits that need to be highlighted due to the incredible benefits. These are:

1) 401k plans
2) Section 125 plans

Whenever you contribute money to a 401k plan or section 125 plan, it is like you didn't earn it for tax purposes. Suppose you have a taxable income of $50,000 and you contribute $10,000 to your 401k plan and $5,000 to your section 125 plan. For tax purposes, the government only thinks you earned $35,000. If you are in the 25% tax bracket, you will pay tax of $12,500 ($50,000 x 25%) on the $50,000, but if you contributed the money to the 401k and 125 plans, you would pay tax of only $8,750 (35,000 x 25%). That is a savings of $3,750 in taxes!!!

Most of us are familiar with 401k plans. But section 125 plans are a little more rare. Another name for section 125 plans are Flexible Spending Accounts. What flexible spending accounts allow you to do is contribute money for childcare expenses (daycare) and medical expenses. If you contribute $2,000 to this plan (not only do you not get taxed on this money), your work will withhold equal amounts throughout the course of the year. Whenever you incur a childcare expense or medical expense, you can get reimbursed.

What is the downside? You have to pick the amount of your contribution at the beginning of the year and can't change it. Also, if you don't use all the money you contribute to the plan, you lose it. However, the list of things you can buy that qualify as medical expenses is pretty big. Things like contact solution, Nyquil.......etc. are all qualified.

Last year was the first year that we had a section 125 plan and I contributed a conservative $400 for the year. I went to the dentist and blew right through it. So next year, I think I will contribute $1,000 or $1,500.

The bottom line is: If you aren't using these benefits, you are paying more taxes than you should be. You are literally leaving money on the table.

Finally Got Around To T-Bills!

2006-09-07T07:36:00.000-07:00

Awhile back I wrote about the fact that I still continue to save with ING instead of a bank that pays a higher rate like Emigrant Direct. My basic reason was that I was lazy. Shortly after, I solved my laziness problem by declaring that T-Bills were the solution to my laziness.

Well, I finally got around to investing in T-bills this week and was a little disappointed. I put $4,000 of our cash savings into 28 day T-bills. I logged in this morning to check the discount rate and saw that it was 4.79%. 4.79?????????? Come on! Granted this rate is higher than ING's 4.40% and I don't have to pay state tax on the interest on the T-Bills. This is good because California's tax rate is approximately 9%! But come on!!!!!!!

I guess I was disappointed because the last 4 weeks of 28 day T-Bill rates looked like this:

9-07-06 - 4.79%
8-31-06 - 5.10%
8-24-06 - 5.07%
8-17-06 - 5.07%

So I was all prepared to earn over 5% and I come in at 4.79%. Oh well, better luck next time!

Silly But True? How Business Trips Can Save You Money!

2006-09-06T23:00:00.000-07:00

My fiance left this week for a two week trip to Amsterdam for business. I've thought about this and have convinced myself that this will save us money. Her business trip is one that will require her to work long hours and leave little room for doing tourist type things. So here is my list of expenses we will save while she is gone:

- Her daily gas money to drive to work.
- At least 3 dinners we would have gone out to if she was here.
- Any food she would eat at home.
- Food not eaten by me as I officially switch in to bachelor mode and survive on tuna fish and mac n' cheese.
- Any lunch she would buy while at work.
- Since we make any big purchases as a team, we have a zero percent chance of buying any furniture, or other one-time type items.

That's all I can think of right now. So we aren't going to break the bank with these savings.....but I think we will spend less.

Any thoughts from anyone whether business trips save money?

Net Worth Update! +$1,676

2006-09-05T07:02:00.000-07:00

We squeaked through another month with a gain of $1,676. I previously posted a projected a decline for our August Net Worth but some things went right this month. See the good and the bad at the bottom of this post. For detailed descriptions of these categories, you can refer to our first net worth report.

Assets
Cash savings $27,327
Ameritrade brokerage account $9,957
Vehicles $43,145
Engagement ring $12,000
Rental deposit $200
My 401k $17,814
Fiance 401k $28,542
Traditional IRA $5,727
Roth IRA $2,614
My profit sharing plan $8,897

__________________
Total $156,223

Liabilities
My credit card debt $6,098
Fiance credit card debt $932
Student loans and ring debt $14,441
Fiance student loans $7,684
My car loan $19,617
Fiance car loan $26,273

__________________
Total $75,046

Total Net Worth $81,777

So what happened this month:

The Bad:
1) We continued to spend a lot. Fiance added $932 of debt and I added $1,089. I posted about my debt under Savings Plan Going A Little Haywire. So my future savings will be slowed while I pay off this debt.

2) Because we spent so much, we didn't reduce our other debt very much or add to our cash savings very much.

The Good:
1) Our cars didn't depreciate very much. I use Kelley Blue Book to value our cars each month. We didn't drive as many miles as we normally do because of our vacation and the fact I spent a lot of time working out of my work's office that is closer to home.

2) Our 401k plans had respectable increases this month. We reallocated my fiance's 401k this month. Although this didn't affect the performance at all, hopefully these increases will keep coming.

3) We continued to contribute to our plan to retire at 45. I have made a table that shows me where we should be each month. Currently we are off by about $1,600. Not too bad considering we were off by $2,500 last month. This isn't' due to our lack of contributions, but lack of market performance. Hopefully things pick up.

So there it is. I'm happy that we had a gain, but I know that we can do better. Both of us have been really busy and this has made it difficult to sit down and talk about goals and where we are going. We are both busy again in September so we probably won't set any goals again this month. Hopefully we can do it before year end!

My Sister's Retirement - A Detailed Case Study!

2006-09-04T10:24:00.000-07:00

My sister asked me to look at her retirement plan to reallocate what she is investing in. I decided to make a long post out of it in a detailed case study. Here are some facts:

My sister is 32 and for the sake of the post we will assume she will retire in 23 years at the age of 55. She currently has $25,060 saved up for retirement in a Roth IRA and a employer sponsored plan (similar to a 401k). My sister does not contribute to social security as her work opted out of the program. She does however have what I call a "dinosaur pension" that will pay her a fixed sum for life after 30 years of service. I think she will have 30 years of service at age 50. She will also receive health benefits for life after 30 years of service. Her current monthly contribution including employer match is $263. At retirement(age 55) she will have the following amount depending on rate of return:

5% - $215,599
6% - $256,306
7% - $305,976
8% - $366,695
9% - $441,043
10%- $532,220

I think 10% is a good goal to shoot for especially since she is only 32. Her Roth IRA only has a couple thousand dollars in it that is already invested in stocks, so I will focus on her 401k-like plan. The biggest part of her plan that I had a problem with was that 35% of her money was going to a stable income fund. This currently pays in the range of 4.5% to 5.0%. There is nothing wrong with this, but this is by far her single largest holding as this has been happening for years. So I'm going to suggest reducing her ongoing contributions to this fund to zero and reallocating it to other funds. For this reason her potential return is going to lag until future contributions get allocated better. So I suggest reallocating her 35% to the following funds:

10% - International Equity Fund - Capital Guardian - This will bring her international exposure to 20% spread over two funds.

10% - Small Cap Equity Fund - Brandywine - This will bring her small cap exposure to 25%. This fund has low expenses (0.51%) and has returned 14.38% since inception. Inception included the market meltdown in late 1999 and early 2000 so I feel that this is pretty decent.

5% - Medium Size Company Fund - DIA - This will bring her Mid-Cap exposure to 20%.

10% - Balanced Fund - Dodge and Cox - This will be a new fund for her, so her contribution will be at 10%.

After this her ongoing contributions will look like:

20% - International
25% - Small Cap
20% - Mid Cap
10% - Balanced Fund
25% - S&P 500 Fund

Yes, this is really stock heavy, but I'm only changing ongoing contributions. She has about 35% of her portfolio already in a the Stable Income Fund mentioned above, so I intentionally set this to be stock heavy for at least the next 3-5 years at which point we can reallocate.

What else can she do? She can start contributing more. At a 10% return over 23 years, every additional $100 a month equals an extra $107,000 in retirement.

In any event, when this money is combined with her "dinosaur pension" I think she will be in okay shape. As always, I think the more anyone can contribute to retirement, the better.

Identity Theft Update!

2006-09-03T15:49:00.000-07:00

I guess I overreacted the other day when I posted about potential identity theft. I had left a message with the vendor in question to dispute the charge when I saw this charge and got a new credit card number reissued to me.

The vendor called me back and got more information from me in order to look into the transaction. The vendor called back about 24 hours later to confirm that some numbers on an order had been transposed by mistake and that he would immediately refund the charge made to my card.

So it was all cleared up without too much hassle. While, I guess you can never be too careful!

Still Haven't Received Your Tax Refund?

2006-09-02T07:35:00.000-07:00

My Aunt hasn't. So I logged on to the trusty IRS website and found a link on the left that says "Where's my refund". I just had to provide her social security number, the filing status (single, married..etc) and the amount of the refund. And......viola! I found out her check was mailed on June 30, 2006. This presented another problem in itself, because she hasn't received it yet. So the site provided a number to call. The IRS is investigating now and we should know in a couple weeks what happened. I will post on update when it is resolved.

Identity Theft?

2006-09-01T17:17:00.000-07:00

I got a charge on my credit card two days ago for something I don't recognize for $13.25. I don't really use the card for anything besides gas, so I don't think it is mine. I called the phone number from my credit card statement for the vendor in question and got a recording for which I left a message. No word back yet.

In the meantime, I called my credit card and had a new card number issued before any other charges appeared.

I don't think it will be a problem to get the charge cleared as this has happened twice to me before, but it is a little annoying to have to spend the time to clear this up.

Savings Plan Going A Little Haywire!

2006-08-30T20:00:00.000-07:00

My fiance and I have multiple savings accounts set up at ING Direct. Each paycheck, we will contribute money to these accounts to help minimize getting trapped by expenses that only occur a few times per year. This is separate from our retirement savings. Here are examples of what we save for and typical amounts we put away each month:

Keep my wheels rolling fund - I contribute $300 a month to cover insurance, car registration, tires, maintenance, and repairs. My fiance has her own system for this one, so this is primarily used for me. I've spent at least a year at this trying to keep the balance above zero on this one due to the number of miles I drive, but I'm finally doing it.

Adventure fund - I contribute about $60 to $100 a month to cover all costs of vacation such as airfare, rental cars, hotels, meals and any fun things we do on vacation. My fiance typically contributes $100 a month to this one.

Wedding fund - I contribute $250 a month to save for everything wedding related. My fiance puts in $400 a month.

Roof over our heads fund - I contribute $50 a month to save up towards a down payment. My fiance contributes $100 per month. This isn't much, but it is slowly building. After the wedding is over, I imagine most of that monthly money will go in here.

Gifts fund - This fund is only used by me. I contribute $80 a month to this one to cover gifts for the year.

Furniture fund - I contribute $20 a month. My fiance does $100 a month now up from $20 a month previously. We moved into a new apartment two months ago and this has become a priority for her.

Clothing fund - I contribute $50 a month for suits, shoes and other work clothes.

We have some other funds that we contribute smaller amounts to but I'll cover that in another post.

Now the haywire part. Sometimes we go overbudget. For example, I may have $200 in my car fund, but incur a $300 repair bill. I put the $300 on a credit card and immediately paydown the $200 I have in savings. I keep track of this, and on my next paycheck I will contribute only $50, instead of $150 and use the $100 to pay off the credit card. This happened a lot last year for my car, but I am finally ahead. However, here is how much we are behind on some of the others:

Travel fund - Down $380. Our recent New York trip pushed us over the amount we had saved.

Gifts fund - Down $850. I considered the recent bachelor party a gift in addition to the tuxedos I had to rent for the two weddings I have coming up.

Clothing fund - Down $195. I bought a nice suit on sale in New York.

I am temporarily reallocating my contributions to help get these things paid down faster and am trying to cut back on spending so I can contribute extra to these. I am projecting that we will have these above water again by the end of October.

Ultimately, we are trying to get ahead on all of these accounts so that we always have a good base amount in each one. It is happening slowly, but it feels way better than what we were doing before which was : Don't save, buy now, figure out how to pay for it later.

File Retention - A New Strategy

2006-08-28T22:42:00.000-07:00

When I first started blogging, I thought that I would write about my daily adventures in personal finance issues as they happen to me. Generally, when I write about something, it is because that topic or event came up that day. Which brings me to today's topic:

My new plan about keeping my financial records.

How did this come up? I did my aunt's taxes for the last two years and I found out today that she needs copies of her tax returns and she doesn't have them. Unfortunately, it looks like I might only have her 2005 return and not 2004. I'm still looking.

So I came up with a new plan for myself. As of now, I will save my tax returns and any tax returns I do for anyone else indefinitely. Generally, the IRS rule is that they have 3 years from the DATE OF FILING to assess you with additional tax. This bumps up to 6 years if you omitted 25% of your gross income. There is no time limit if you're a fraudster. However, this is not the reason I'm saving mine indefinitely. There are some other rules that require you to keep things longer than 6 years. See it straight from the IRS here.

The reason I'm saving mine indefinitely is because it is easy. I will scan in or print all my documents to PDF files and keep them on our external hard drive (coming soon). I will also keep a backup on CD until I find a good online storage company. The documents I'm keeping will include my tax forms, all information that supports the information, such as, W-2's, 1099's, brokerage statements, charity receipts, etc.

As for other non-tax related documents, I'm going to rely on some companies that provide the information. Bank statements, credit card statements, etc. are already accessible online through the respective company, so I will let them handle it.

However, for documents such as lease agreements, warranties, car repair records, medical records, school records, vehicle titles, etc.. I will keep these in paper format until they become unimportant.

The Finances of A Vegas Bachelor Party!

2006-08-27T11:03:00.000-07:00

So the Vegas bachelor party is officially over. Going into this party, I have to admit I was a little worried. I hadn't saved any money for this event, so I wanted to keep it cheap. I think most of the guys (7 guys including the bachelor) going wanted to keep it cheap also. I have always heard horror stories about how guys get to Vegas for a bachelor party and blow all their money gambling and then don't have money to kick in for everything else. The end result was that I think we all had a good time without spending too much. So I'll list out the details of the expenses below for myself only. No names are used to protect the innocent:

2 hotel rooms for 2 nights at the Orleans - $503
Money I was able to recover from the guys - ($310) - Wasn't able to recover everything, but not bad.
Liquor purchased before we left - $115
Approximate value of liquor I brought home - ($60)
Gas to drive bachelor and another guy to Vegas and back - $100
Amount this other guy pitched in for gas - $0
Amount this other guy pitched in for anything - $0
Amount this other guy spent on himself at the gentleman's club - at least $150; including the 2nd night when he went by himself.
Entrance to gentleman's club for myself and bachelor -$20 (discounted from $60; we had a friend there that got us a deal)
Drinks inside gentleman's club for myself and the bachelor - $45
Money spent on entertainment for bachelor - $45
Money other guys chipped in for bachelor entertainment - $0 or minimal
Entertainment for myself - $20 - Temptation is a terrible thing
Other tips for group entertainment - $10
Dining at the Rio buffet - $26
Net winnings on sports bets - ($10) - Squeaked out with a positive number here
Other gambling losses - $15
Other meals - $35

Total spent - $554 (approximately) - Even as an accountant, it was hard to keep track. :)

I limited my own gambling to save on money, so that was kind of a bummer for me. My biggest disappointment was the other guys not pitching in for things for the bachelor. There should have been a couple hundred spent on this guy at the club alone. They did pitch in for his Rio buffet and they did buy him a few drinks here and there, but for the most part, everyone was on their own. This was the classic trip of 1)drive to Vegas, 2)drink, 3)go see entertainment, 4)drink, 5)sleep, 6)eat, 7)drink, 8)gamble, 9)eat, 10)drive home.

Overall, we had fun, but I just wished we could have done more for the guy getting sent into marriage!

Hopefully I'm not ruining anyone else's bachelor party by exposing to wives and girlfriends what happened at this one!

Money Money Money Money Everywhere - This Has To Be Part of Our Goals!

2006-08-26T18:09:00.000-07:00

So I'm in Vegas this weekend. There is money everywhere. Everywhere. I'm now convinced, that when my fiance and I sit down to write out our goals, we really have to focus on getting ourselves on the receiving end of all this money instead of the spending end. Controlling spending is great.......but improving the income is better....I think.

To be continued..........................

Protect Your Net Worth! Don't Watch The Movie "Two For The Money"

2006-08-26T06:11:00.000-07:00

Especially if you enjoy gambling on sports. Especially two weeks before football season. Especially the day before you go to Las Vegas.

Unfortunately, I'm guilty of all three. I saw this movie on Thursday night and I got all excited about the upcoming football season. I'm sure most people learned a lesson from this movie: "Gambling on sports can ruin people's lives!" However, I learned other lessons, such as: "Don't bet on Sunday's games on Tuesday. Wait until Saturday when you know the weather and the injury report."

Oh well, I'll try to keep clean as possible while I'm in Vegas this weekend for a friend's bachelor party.

Stay tuned on Monday for my post: "The Finances Behind a Vegas Bachelor Party."

Attributes That Are Essential For Raises!

2006-08-23T13:13:00.000-07:00

Most of us that are interested in personal finance strive hard to increase our net worth. We do this through finding the highest rate savings accounts, using credit cards that pay us back, creative budgeting and controlling our spending. Sometimes I think, that while all of this is important, our jobs might be the most critical part of this. An easy way to increase your net worth is to simply increase your salary. Easier said than done right?

I have worked at my CPA firm for about 6 years now. I have been active in recruiting and managing new employees for about 3 years now. I have learned a lot over the past 3 years, and still have a long way to go, but as my firm's recruiting season is coming up, I wanted to share some attributes that people have that I feel can get them hired, promoted and get them salary increases faster: (Keep in mind that I need to work on these areas personally also).

So here are attributes I think an employee should possess:

1) Be accountable - Be that person that I know I can ask you one time to do something, and it will get done.
2) Be resourceful - A lot of times, I will give out a work assignment where the final answer isn't clear. I like it when employees can think beyond the parameters of the assignment to make the project happen.
3) Be professional and conscious of your work - Essentially, make me believe that you care about your work getting done right.
4) Know your allies - I am your manager. I have a vested interest in your success. If you don't succeed, I don't succeed. So when I give you advice or criticize your work, please recognize that I am only trying to help you be better so I can help myself. Sounds funny huh? Funny but true.
5) Be a team player - This is really important in the first few years. Develop relationships with co-workers, clients, etc. Stay late to finish the job, prove yourself early on. It will earn you respect later on.
6) Don't be a constant complainer - Key word is constant. I don't mind complaints, but when the same person can find ways to complain about every little thing, it gets old.
7) Be smart in your field. This used to me at the top of my list, but no longer. I think I would take a 3.0 GPA student that was a pro at my first 6 items, than a 4.0 GPA student that couldn't pull off the first 6 items. I can teach you accounting, but I can't teach you my first 6 items.

I could go on and on about this, but these 7 items are what I feel most strongly about. (Trust me when I say that some of this is written out of frustration).

Good luck everyone!

How Many Shares Do You Buy?

2006-08-22T22:41:00.000-07:00

When you are investing in individual stocks, how many shares do you typically buy? My decision in this area is typically based on the price of the stock. Generally if a stock is over $25, I will open my position with 30 shares and build up to 70 or 80 shares. If a stock is under $25, I will open a position with 50 shares and build up to somewhere between 100 and 200 shares. Please remember How I Invest with Jim Cramer and read the example of how I use his service.

The reason I am writing this post and asking this question is due to the recent performance of my friend's stocks. He shall remain nameless. (He reads this blog, and he knows who he is). I got him to open an account with TD Ameritrade awhile back where he essentialy had free trades for 45 days. He used these trades to open very small positions in different companies. Here is an example:

He purchased 10 shares of Intrawest Corp. - IDR - This company subsequently got bought out by a private equity firm. The 10 shares he bought for under $28 a share were all of a sudden worth almost $35 a share. He made almost $7.50 a share. $7.50 a share times 10 shares equals a gain of $75. This is a huge amount based on his original investment of $275. His $75 gain will turn into a $65 gain when he sells the shares and pays a $10 commission.

So, I'm happy for him, but also wished he would have been in for 50 shares or 100 shares. I think at some point you have to realize the impact trading commissions will have on your purchases. Granted, his purchase transactions were commission free due to his TD Ameritrade sign up bonus but he still has to pay a $10 commission to sell his shares.

So, if you buy 10 shares of a stock and pay $20 commission ($10 to buy, and $10 to sell), your stock has to increase by $2 a share to make more than your commissions. This is not a big deal if the stock costs $80 a share, but if the stock is $15 a share, a $2 increase can be a lot to ask.

Anyone want to share the number of shares they are buying?

Videotaping Our Stuff!

2006-08-22T07:49:00.000-07:00

About 6 months ago we went through the process of getting renters insurance (more in another post) to protect our belongings. From what I have read, it appears that you have to be able to substantiate what you have in case of a loss. Apparently the insurance company just won't believe that you had the original Mona Lisa painting without some sort of proof.

I explored using a free software like the one available at Know Your Stuff which lets you load pictures/receipts of the items you on to keep track of all your things. But ultimately, I decided that I would just videotape our belongings. This seemed easiest to me.

So I borrowed a video camera from my sister and this week, I will walk around our house and videotape the stuff we have. I plan on keeping the tape at my work. My work is 25 miles away from our apartment, so hopefully any sort of natural disaster would leave one of these places intact.

Since I don't own a video camera, going forward, I will try to manually track any more significant stuff that we might buy.

Anyone else done anything like this?

Reallocating My Fiance's 401k

2006-08-21T00:21:00.000-07:00

I finally got around today to looking at the investments in my fiance's 401k. It underperformed last year and both of us have been meaning to adjust it. While we made quite a few changes, the main change we made was:

Lowering her ongoing contribution to her company's stock. This was at 15% of her contribution and we lowered it to 10%. Don't get me wrong, her company is great, it is profitable and it is growing. But I just don't feel safe with too much money in there. We already have ourselves vested in her receiving a salary from there, plus she just recently received some stock options too, so I don't want us too tied to her company's performance. In addition, as great as her company is, the stock just doesn't perform. It is sort of stagnant. I think eventually that we will lower this amount to 5% or 8%. Remembering the people of Enron who had 100% of their 401k company stock and losing everything really scares me.

Ultimately, we are just trying to achieve a 10% return to hit our retirement goal. Hopefully the changes we made today will work out.

I'm Upside Down On My Car - Part 2

2006-08-20T14:47:00.000-07:00

I previously posted about how I'm upside down on my car loan to the tune of about $3,500. My ultimate conclusion was that because my interest rate is low (3.9%), I would just drive on and eventually I will turn right side up. I've noticed that my blog receives a lot of google search hits on this topic, so I thought I would try to provide some more info on this topic.

Being upside down on a car means that you owe more on your car loan than the car is actually worth. My ultimate recommendation has not changed. Just continue driving your car until the loan is paid off.

A recent article in the Detroit News states that 29% of car owners are upside down on their car loans to an average amount of $3,789 above the trade in value.

This statistic, I think, portrays part of the problem. If you are upside down on your car, don't use the trade in value as the value. I don't think there are any circumstances that justify trading in your car if you are upside down. Doing this will just cause you to be upside down on your next car. I'm a big proponent of selling your own car as a private party to maximize gains. We recently sold a car as a private party seller and we received well over $1,500 more than the highest trade in offer.

Selling a car that you are upside down on can be difficult as most banks won't release the lien on your title. This just builds the case for continuing to drive the car.

Some other things that can be considered if you decide to continue driving your car:

- Consider trying to refinance your loan through your credit union if you have one, or through a bank like Capital One to lower your interest rate. A high interest rate can make an "upside down" problem get worse. Sometimes credit unions will be flexible on financing a loan for more than a car is worth. If you do this, do not extend your current remaining loan term. It will make your problem worse.

- Consider GAP insurance. This insurance covers the "GAP" between your loan amount and your car value. Sometimes, if the difference is great, your lender will require it. Sometimes GAP insurance is tough to come by after the initial purchase date, but check with your insurance agent as this practice varies widely.

- Consider adding an extra $50 to your current loan payment. Just because your car payment is $450 doesn't mean you can't pay $500 and get it paid off faster.

In a few weeks, I will post part 3 on this topic which will revolve around avoiding getting "upside down" in the first place.

Diversification : How I'm Learning the Hard Way!

2006-08-17T08:58:00.000-07:00

I've already posted about How I Invest through Jim Cramer's service. I've also read through Jim Cramer's 25 rules of investing. But one rule I apparently didn't pay enough attention to is :

Diversification

Boy, did I learn this one the hard way recently. As I mentioned in my investing post, Cramer will own 25 stocks in his portfolio and I can only afford to hold 5 to 7 names at a time. In the past 5 or 6 months, I jumped on two of Cramer's recommendations: Network Appliance (NTAP) and Citrix Systems (CTXS). It seemed innocent enough. Just for clarification, Network Appliance is classified as being in the computer hardware industry. Citrix Systems is classified as being in the computer software industry. Reading closer, you will also see that Network Appliance is also involved in software. Because Cramer has 25 stocks, holding two in the same or similar industry qualifies as being diversified. But for me, holding only 5 to 7 stocks, doesn't qualify me to do this.

So how did I learn this rule the hard way? Both of these names have had a rough road lately. I guess Cramer is right when he says that 50% of a stock's performance is the industry they are in. I ended up down $800 on Network Appliance before I got out to focus on defending my position in Citrix. I'm still down about $500 on Citrix but I have a plan to turn this one into a money maker. Fortunately, Citrix has made a big comeback in the last week.

I learned. If I'm only going to hold 5 or 7 stocks, they have to be in completely different industries. No argument from me anymore on this one. I'm going to be a lot more careful in the future. So when Cramer recently recommended Haliburton, I passed on it, as I already owned Nabors Industries, which he had also recommended. Both Haliburton and Nabors operate in the oil services industry.

Please take the time to read Cramer's rule. I'll link to it again here. Sometimes companies appear to do different things, but deep down, can be considered to be in the same industry.

Happy investing everyone!

We Still Don't Have Any Real Goals!

2006-08-16T23:28:00.000-07:00

Since beginning this blog about a month ago, I thought my fiance and I would have sat down by now and come up with some real goals that we could try to hold ourselves to. Up until now, we have sat down and came up with a retirement goal. We are actually contributing quite a bit of money every month to try to reach this goal. But we haven't really talked about much else.

We also have our wedding coming up next June. We have discussed an informal plan of how to pay for it and we have stuck to that plan, so that is good.

I would like to sit down and come up with some other goals that we can strive to achieve and that have deadlines. Some of my ideas are going to revolve around:

1) Strategies to earn more money (get promoted, get bonuses, generate alternate income ideas)
2) Work to pay off both of our student loans early. My fiance's will be paid off in mid-2008 and mine will be done in mid-2009. But I think we can pay them off faster if we set our minds to it.
3) Setting goals to save up for a house (even if it is just a little bit).
4) Being smarter about how we allocate the money we save every month. We currently put money in quite a few different accounts set up to pay for travel, furniture, house down payment, car expenses, gifts....etc. But we don't really work together on these. I would like to have set amounts we are trying to save and dates we need to accomplish this by.
5) Striving to anticipate non-recurring expenses in time to pay for them without going into debt. We got caught with our pants down this month by not saving for gifts for the 5 or 6 weddings we are attending. Christmas will be our next big challenge and I think we should address that soon.

As I'm writing this, I realize we appear to be on the right path (i.e., we are already saving a lot of money), but I think we lack a way to measure our success. In addition, I think things are very haphazard and we aren't challenging ourselves very hard.

Sometimes we informally talk about a lot of goals, but we don't get them down on paper. We are also very weak and bad influences on each other. For example, we will informally agree to spend less, and within two hours, one of us is calling the other with plans to go out to dinner. And of course, there is no argument.

Hopefully someone can share what has worked for them in achieving their goals!

Orange County Housing Market Starting to Weaken

2006-08-16T06:07:00.000-07:00

The LA Times published the monthly housing figures this morning and the volume of home sales in Southern California is now at a 9 year low.

Specific to my situation, Orange County's median home price increased this month by 6.3% to $639,000 from the same period last year. However, the Times doesn't publish how this price compares to last month. I know that last month's figure was $646,000, so prices appear to have dipped a little bit.

Because we don't own a house yet, I'm obviously biased (and hopeful) toward the fact that I think prices will fall. I'm a firm believer that the entire housing market is interest rate driven and that if interest rates rise too high, we may be in for a significant downturn in housing prices.

But I'm not holding my breath. I anticipate that my fiance and I would seriously be in the housing market after our wedding next June, so we have some time to see how things play out. My current attitude (this seems to change weekly) is that as long as we own our house for 10 years, it won't matter if we buy at an inflated price. However, if we are buying for less than 5 years, or for investment purposes, we should probably be careful.

Is anyone out there seriously considering buying a house in the next year? If so, how do you react to this "potential" drop in prices?

The Dodgers Have Me In A Personal Finance Catch 22!

2006-08-14T22:53:00.000-07:00

I love the Los Angeles Dodgers. Even though I now live in Orange County (home of the Los Angeles Angels of Anaheim), I grew up being a Dodger fan and will always be one. Ever since I can remember I have followed the Dodgers daily.

So when I graduated college and had been working for a few years, I found two other guys who liked the Dodgers and we went in on 4 season tickets. We have had these tickets for 4 years now. This was a perfectly reasonable expense for a single guy! However, since I have gotten engaged, I tend to not use as many tickets and also give a lot of them away. The first few years that I had tickets, I probably went to 20-25 games a year. I have only been to about 6 or 7 games this year. The rest I have given away.

Two years ago the Dodgers made the playoffs and we had to fork over some serious money to secure playoff tickets. The playoff tickets almost cost as much as the entire season did. The Dodgers were eliminated in the first round that year, so we got most of the money back, but it did take a few months.

So just when I was about to write the Dodgers off this year, they have started playing the best baseball around. It's almost like they can't lose. And there arises the Catch-22. Here are the scenarios:

The Dodgers continue to win and make the playoffs. I win as a lifelong fan. I lose as the guy who has to fork over the playoff tickets money that I haven't saved up for.

The Dodgers stumble and don't make the playoffs. I lose as a lifelong fan. I win by not having to spend the money.

I know this is very petty, but seriously, what would you hope for as a lifelong fan?

Carnival Roundup!

2006-08-14T22:46:00.000-07:00

This week I participated in two carnivals with some recent posts I had written. If you get a chance, check out the Carnival of Personal Finance over at Frank the Financially Savvy Atheist.

When you are done there, check out the Carnival of Investing over at Journey to Financial Freedom.

Happy reading everyone!

Rub the Balls of the Charging Bull for Good Luck!

2006-08-13T17:43:00.000-07:00

On our recent trip to New York City, I took a few hours to go hang out in the Wall Street area. All the exchanges were closed for security reasons so after I wandered around a bit, I sought out the famous Charging Bull statue nearby. This link describes some of the history behind this famous statue.

While I was researching in our hotel room where the statue was and what the story was behind it, I came across a few articles suggesting that people rub the balls of the bull for good luck in the stock market. I also saw articles that just referred to rubbing the bull(no body part specified) and also suggesting rubbing the nostrils of the bull. My fiance and I both took our shot at rubbing the balls of the famous Charging Bull. Good stock market luck, here I come?

529 Plan For My Niece!

2006-08-12T08:29:00.000-07:00

My sister had a little girl back in December 2004. The accountant in me pretty much said "Congratulations, does she have a social security number yet? We need to open a 529 plan for her so she can go to college." My niece is really benefiting now. Being the first child in that generation of my family, she has about 8 people(4 grandparents, 2 parents, myself, and a great uncle) that are interested in contributing to her college education. She coming up on two years old and has almost $1,000 saved up for college. In the big scheme of things, this isn't much (especially given how much college costs nowadays) but every little bit helps.

There are seemingly a thousand ways to save for college nowadays....529 prepaid tuition plans, 529 savings plans, Coverdell Education accounts, savings bonds, a regular taxable account, UGMA/UTMA....blah, blah, blah, blah, blah.

I chose the 529 savings plan for my niece because it gives you the most bang for your buck (flexibility) and it is actually quite simple. I'll just talk about a few things related to the 529 savings plans, as that is the one I chose. Here is why I think you should have one:

1) Investments grow tax free. Awesome.
2) It is very flexible. You can change beneficiary's, (in case your kid doesn't go to college, you can switch to a sibling and through 2010 to a cousin). You can also get your money out (you'll pay a 10% penalty on the earnings and taxes).
3) You can use the money for almost any accredited university/college.
4) You, the donor, calls the shots. The money is yours, not the beneficiary's.
5) It is incredibly easy(in hindsight).

Once I looked into opening a 529 savings plan for my niece, I ran into a wall of confusion. Each state has their own plan. Some states offer tax deductions. Sweet, I thought, money grows tax free and there is a tax deduction available. But wait, California doesn't offer tax deductions. Darn. If you are in a state that offers a tax deduction, I would probably chose that plan. Here is a link to Kiplingers on which states offer deductions. If you are in California or an other state that doesn't offer deductions, you should chose a state that offers you two things: 1) Good investment options and 2)Low fees.

Kiplingers recommends Iowa, Michigan, Minnesota or Virgina if you aren't in a tax deduction state. I chose Virginia. Specifically, I chose the Virgina College America Plan.

In addition, there was a recent rule change that will make sure that 529 plans are accounted for as parental assets and not child assets. Under financial aid formulas, children's assets are counted at a much higher rate. So while having a 529 plan will affect the amount of financial aid your child gets, it won't affect it as much as before.

The bottom line is that anybody with a child that will be attending college should strongly consider opening one of these 529 plans. If you need more info, check out Kiplingers or Saving for College.

What Assets Should Be Included in Net Worth?

2006-08-11T19:59:00.000-07:00

I have been looking at a lot of personal finance blogs and a lot of net worth calculations on NetWorthIQ and am trying to figure out if we should include household assets in our net worth calculation.

We already include our cars in our calculation, mostly because through Kelley Blue Book, there are pretty solid values that can be used to value the cars.

I also include the value of my fiance's engagement ring mostly because it is our largest single asset. We also had it appraised at about $21,000, but I don't think jewelry appraisals are all that accurate, so I discounted the value to about $12,000. I have a really solid connection on jewelry, so I didn't even pay close to the $12,000, but I felt that was a fair number based on what I paid and what the appraisal came in out.

But what else should we include? I feel like we have some decent assets (more on our renters' insurance later) that we may have difficulty putting a value on.

These potentially included assets are: big screen TV, couch, computer, stereo system, 6 or 7 business suits, other expensive clothing, old baseball card collection, digital camera, household decorations, etc....

The replacement cost of all our stuff could be in the range of $15,000 to $35,000, but the market value would most likely be substantially less. I have hesitated on putting these on our balance sheet due to the fact we can't put a good solid value on these things.

Has anyone else considered putting these items on the balance sheet?

Opening a Savings Account with Bank of America. Free $35!

2006-08-09T20:29:00.000-07:00

I'm considering opening a savings account with Bank of America. They sent me an offer for a $35 gift check if I open a savings account and link it to my checking account. I have to open it with a minimum of $100.

Here's the bad parts:

1) The interest rate on this account is 0.5%. Yup, it is that low.
2) To avoid monthly fees of $3.00, you have to maintain a minimum balance of $300 or have a monthly automatic transfer from your checking account of more than $25 set up.
3) If you make more than 3 withdrawals a month and have less than $2,500 in your account, they charge $3 a month.

I feel dumb opening this account because there are so many better options with ING Direct, Emigrant Direct, and HSBC among others.

But here is why I want to open it:

1) Definitely for the $35 gift check.
2) Following our trip to New York and seeing Bank of America ATM's everywhere, it made me realize it would be good to have emergency cash that is easier to access than on my online savings accounts.

So, in the next few days, I'm going to open this account with the $100 and sign up for $25 automatic withdrawals until I get to $300. That way I will avoid the fees and have easy access to a little cash through an ATM.

How Expensive is Your City? Part 2!

2006-08-09T05:29:00.000-07:00

A few weeks ago, I posted about various cities I had visited and if they were cheaper or more expensive than where I live now, Orange County, California. Also, Jonathan over at Mymoneyblog.com posted this morning posing a similar question.

After spending a week in New York, I have some more insight on this issue. Outside of housing, I personally think certain places are considered more "expensive" because there is more availability to be impulsive with your spending. In addition, there is a significant number of "Joneses" for you may feel the need to keep up with, or, a significant number of people in which you spend money with. Let me explain further:

Suppose you walk out of work at the end of the day in:

1)New York - You see your friend in the building lobby and he says "Let's go grab a drink" - and next thing you know, you are spending money somewhere at a bar.

2) Howard, Kansas - (I picked this because I have some family there) - You don't see a friend when you leave work, so you go straight home and spend no money.

Another idea I think about is, because a city has more people, you will have more friends. Because you have more friends, you will spend more money going out with those friends.

I could present more scenarios, but what is my point? If you can make a good salary, and live in a place without the temptation to spend money on sports teams, theaters, countless expensive restaurants and bars, amusement parks...etc., it may be worth considering.

For me personally, I don't think I'm going anywhere. I prefer to try and handle the temptation of spending, rather than move away from it.

But here is one question for everyone. If you are in your twenties or thirties, is it harder to move from Orange County, CA to Howard, KS or from Howard, KS to Orange County, CA?

Managing Dad's 401k!

2006-08-07T05:52:00.000-07:00

My Dad retired at age 62 at the beginning of the year after 35 years with his company. He had a few things going for him in retirement including an old style pension (what I call a "dinosaur" pension), the ability to start collecting social security (he could have waited till age 65 but I ran a thousand scenarios and he was going to need the income), a lump sum cash payout for retiring early, and the fact that my Mom still works. He also had a 401k that needed to be rolled over to an IRA. I went to task figuring out what to do with it. He needed his 401k to last 10 years when his house was paid off. So I targeted a very conservative return of 4% to last him 12 years (to give him some cushion). Here is the list funds I decided on. The funds are being bought a little bit at a time ranging from 4 to 12 months.

Ameritrade money market fund -25% of portfolio. Current yield 4.41%. So, if my target return is 4%, why not put all the money here? I'm just not sure that money market rates are going to stay this high, so I wanted to invest in some other things to have a foundation of investment.

T Rowe Price Equity Income Fund - PRFDX - 20% of portfolio. While I think it unusual to have this money in a stock fund, he is still 12 years out from the final use of the money, so this could be a holding for 5 to 7 years which should be enough time to wait out any potential downturns.

American Funds High Income - AHITX - 10% of portfolio. Very similar to the T Rowe Fund, with the same idea of holding for 5 to 7 years.

Vanguard REIT index - VGSIX - 10% of portfolio. Designed to give Dad some exposure to real estate at a small clip (only 10% of portfolio). I am most worried about this fund but so far has been the best returner since he has owned it.

Vangurard GNMA -VFIIX - 25% of portfolio. A good safe fund invested in high quality mortgage pass through certificates. Hasn't had a down year in 7 years and has a 5-year average return of 5.25%

Vanguard Fixed Income Security Inflation Protection- VIPSX - 10% of portfolio. Good safe fund invested in US Treasuries.

And there it is. As I said above, after 5 to 7 years, we will have to take steps to make the investments a lot more safer with less risk, but thus far this year we are right on target for the return he needs. He should have had return of $1,380 so far and we have achieved a return of $2,050 ($1,410 of dividends/interest and $640 of capital appreciation). I monitor this monthly and will keep updating with an occasional post. My idea is to have a average return of 4%, which means it might be good to get a return of 7 to 8 percent in the earlier years, so a safer return of 3% could be done in the later years.

What Helps My Net Worth the Most?

2006-08-06T02:15:00.000-07:00

Reading.

I think hands down, reading helps my net worth the most. Here is why. When I was a kid and I saw the "Superman" movie, all I wanted to do was tie a cape around my neck and jump off the roof. I'm not sure if I ever made it to the roof, but the movie definitely inspired me. Also, when I read the book "The Adventures of Huck Finn", I really wanted to build a raft and float down a river. Obviously, it took about a day of other distractions to make me forget these ideas, but they were real ideas.

My point is that I think we are all inspired by what we read, see, watch, and hear. There are personal finance books that I have read, that are relatively short and easy reads that I can pick up and just read a chapter and get myself inspired about saving money. These books are : "Rich Dad, Poor Dad" and "The Automatic Millionaire" (Links below).

These books are often criticized as being too basic, or not realistic, which may or may not be true. But the bottom line is: The books are inspiring. Just one chapter (since I have already read them) will help motivate me to stay on track.

Many other things can help achieve the same inspiration, including: reading personal finance blogs, reading magazines (Kiplinger's is one of my favorites), reading newspapers, watching certain portions of CNBC.........the list goes on and on.

Feel free to share what keeps you inspired!

Inspiration from Wall Street!

2006-08-05T22:33:00.000-07:00

I'm excited about our upcoming visit to Wall Street. We should be walking down there on Monday morning. Unfortunately most of the stuff I want to see is closed to tours because of security concerns, but I'm excited about just being in the area. While the exchanges appear to be closed, I'm still planning to look at the NASDAQ Marketsite and the Museum of American Financial History. I will also check out the famous "Charging Bull" statue. I did most of this ten years ago when I visited but I wasn't as interested in investing then as I am now. So it should be fun. Anyone want a souvenir?

Projected Decline for August Net Worth!

2006-08-05T05:06:00.000-07:00

While the ups and downs of our net worth are heavily tied to the stock market, pending a good market increase in August, I anticipate that our net worth will decline this month. Generally we have tried to set up various savings accounts to save for non-monthly expenses such as vacation, car repairs, gifts....etc. But this month, our savings just isn't enough or we just flat out dropped the ball in trying to save more. Here are some events this month and next that are going to effect us:

Early August - Vacation in New York. Almost had enough saved to cover this, but as I write this in New York, I see us going over the amount we had saved. We pretty much depleted our vacation funds on our last vacation. This trip also includes a bachelor-ette party that my fiance is attending.

August 12 - Birthday of my Pops! (Happy Birthday Pops). We definitely have some gift money saved up, but no revealing the present here as Dad reads this!

August 18 - Birthday of my Sister! Same as above.

Sept. 9 - Wedding of one of my friends of which I am in the wedding. I paid for my tux rental this month (August) and will also me shopping for a gift and also attending a bachelor party. Didn't really anticipate saving for this one though.

Sept. 16 - Wedding of fiance's sister - out of town. Fiance is in the wedding. We paid for our flight this month and rental car also. Also need a gift.

Sept. 17 - Wedding of one of my friends of which I am in the wedding also. I paid for my tux rental this month (August). Unfortunately it is not the same tux as the Sept. 9th wedding. Also shopping for a gift and attending a bachelor party. More $$$$ that we didn't save for.

Going forward, I think I need to contribute more to my "gifts" savings account. I currently put in about $80 a month, but it just doesn't seem to be enough. I don't know how to do this though as we are saving a lot for our own wedding. So maybe I will just try to squeak through until our wedding next June. After that, we will have much more savings to put in other places.

From SkyMall to Froogle!

2006-08-04T13:33:00.000-07:00

We left on a 5 day trip to New York today and have a layover in Chicago. While on the plane, my fiance and I both flipped through the SkyMall magazine and being the spenders that we are, found all sorts of things that we needed (at least thought we needed). So while we were sitting here in the airport, I started looking up some of the items on Froogle.com and bought one of the items.

The SkyMall magazine price was was $19.95 plus $9.00 shipping. I found the same item on Froogle for $6.97 plus $6.95 shipping. So we saved some money by doing a little investigating.

So what did we buy? Rather than explain the item, just check it out real quick : Our SkyMall Purchase. Did we need it? I don't know, it will help. Our apartment has a small garage that we can park a car in and this seems like it will help. I could have gotten the same effect by doing this myself, like hanging a tennis ball from the garage ceiling or something......but we are still just spenders. Oh well. We won, by buying it cheap, but we lost by buying it period. Anyone tend to be this impulsive?

Solution to My Laziness - T-Bills

2006-08-02T22:17:00.000-07:00

I just checked the latest auction results of the 28 day T-Bills at TreasuryDirect. They are paying an investment rate of 5.212% (Discount rate of 5.12%). On top of that, you don't have to pay state tax on the interest you earn on these T-Bills. This makes your rate of return even higher!

These T-Bills are good for my laziness because on I happened to be motivated enough last month to sign up at TreasuryDirect and test a T-Bill purchase out. I even linked the purchase directly to my ING account.

How did it work out? Pretty good once I had it all set up. The set up involved me visiting a financial institution so they could verify my identity. Essentially you have to log on to TreasuryDirect on Monday morning (for the 28 day T-bill) and submit your bid for auction. You don't really bid, you just put in the amount you want to purchase (in $1,000 increments).

The auction happens on Tuesday and on Thursday they directly withdrawal the amount you selected from your bank account (in my case, my ING account). They pull out a discounted amount based on the interest rate. So, they would pull an amount out like $996.02 and then after 28 days, pay you back $1,000. So the difference between the two numbers is the interest. The money just gets direct deposited to your bank account.

I might consider this as a solution to my problem.

My Laziness Costs Me. Does Yours?

2006-08-02T21:59:00.000-07:00

I was driving home recently and was thinking about why I'm still saving my money with ING Direct instead of Emigrant Direct. As I'm sure everyone knows, ING Direct pays 4.35% interest on regular savings accounts and Emigrant Direct pays 5.15% interest. Why haven't I switched? I'm lazy. There are a lot of ways laziness can cost money, including:

1) Not getting promoted at work.
2) Missing out on good deals/sales.
3) Paying more for something because you waited until the last minute.
4) Not brewing your own coffee and instead stopping to buy one.

The list goes on and on and on...but those came to the top of my head.

So what does my savings account laziness cost me? If I use our approximate savings balance of $27,000, I would earn approximately $225 more in interest per year.

I know my laziness costs me more, but I now know it costs me at least $225 per year. Add another $20 in account opening bonuses for me and my fiance and we are losing $245 per year.

Why don't I switch? We just have so many ING Accounts. We must have at least 15 of them for various savings reasons. It feels like I'm just throwing more money away by not switching, but don't want to go through the hassle. Has anyone gone through a big switch to Emigrant Direct?