Thursday, January 31, 2008

2008 Goal Progress Bar Updates

I updated my 2008 goal progress bars to the right this morning to reflect our end of January numbers.

This month we paid off alot of the credit card debt. The goal is to reduce my credit card debt to zero. This goal does not include B's credit card because it is paid off in full every month. By using my emergency money and some money from B's checking, we were able to wipe out half of the credit card debt this month. We are well on our way to accomplishing this goal in 2008. One credit card is gone. Our next mini goal is to get the other card balance below $1,000.

Retirement was not so good this month. Our accounts rose a total of only $95 which doesn't put us very far towards our goal of $10k. Hopefully next month will be better because we still have 98% to go towards our goal this year.

Paying down our total debt was a decent month. We got 29% closer to our goal of being under 30k by the end of 2008. Hopefully we keep this up and go below our goal!

Total net worth did not have a good month. While our debts decreased quite a bit, so did our cash. What we saved in retirement did not show in the small increase in those accounts. What we paid out for our wedding location won't help us for the next 4 months. While we paid down alot of the credit card debt, it was at the expense of some of our savings so the cash number went down.

Overall, I am pleased with the debt reduction this month. Hopefully next month will be a better month for retirement and overall net worth!

January Net Worth Update!

This is my second net worth update where my fiance and I are combined so I can make some comparisons from last month. Overall our net worth increased just $192 or 0.84% to just over $23,000.

Our assets overall went down $1,852 or -3.09%. Cash went down $2,136 because we used my emergency fund to pay down credit cards. We also made a payment on our wedding hall and used some extra money in B's checking account to put towards the credit cards. Stocks went up $189 due to me owning Countrywide when they were announced to be bought out by Bank of America. I quickly sold to take a nice profit percentage wise. Retirement only went up $95. We probably contributed over $300 to retirement accounts so this number is no good.

On the debt side, we paid off $2,044 or 5.51%. Alot of this is from the cash taken from my emergency fund and B's checking to pay down the credit card. One card is completely paid off and we will now be working on the last. Other debts decreased with their normal payments.

Overall I'm happy to see our net worth increase. I know these next 4 months are going to be difficult to increase because of paying off our wedding. Hopefully the stock market turns around and helps our retirement accounts out so we can balance our savings with our outflows.

Thursday, January 24, 2008

Tax Rebates from Stimulus Package in June

Looks like the President and Congress have agreed on a stimulus package aimed at helping the economy get through this current crisis and sub prime housing mess. An article is linked here. It appears they have decided to give tax rebate checks to be sent out in June in the amount of $600 for singles making less then $75k a year and $1,200 to married couples making less then $150k a year. If you have children you will get an extra $300 per child. There is also a partial rebate for individuals making up to $87k per year and couples making up to $174k per year.

The article states that Democrats pushing for more food stamps and unemployment payments gave up this idea when Bush agreed to include workers who don't make enough money to pay taxes in the plan. I'm not sure why Bush would not want to give rebates to those who don't pay taxes since they will be the ones needing it the most and in my opinion most likely to spend the money which is the goal of the package.

Overall I am pleased to be receiving a rebate which will greatly help out my fiance and I for our wedding. I am not sure if this package will accomplish what it is set up to accomplish but I do know it will help us out.

I am unclear on how this money will be disbursed. I don't know if we will need to claim it and get it back with our regular tax refund or if it will be sent out as a separate check. The article states that rebates will be sent out in June so I'm assuming a separate payment.

Made Some Payments and Transfers

This morning I paid off my Capital One credit card for good. Last month I paid the card balance down to zero but proceeded to charge it back up a couple hundred dollars on a couple christmas items and a night out on the town with friends. Today I paid the balance off completely again and won't be putting more on it any time soon. How do I know this? I won't be using this card because I have put it in a drawer and don't carry it with me. If it does get used it will be paid off that month with no balance being carried forward ever again.

I also paid down $500 towards my gas credit card. I originally got this card to use just for gas. But I charged it up while trying to pay down my capital one card. I also transfered some of my capital one balance over to this card so I could get a lower interest rate. This debt still stands at about $1,300 and hopefully will be completely gone by the end of the year.

I made two transfers today for savings as well. I transfered $1,000 into our wedding fund. I also transfered $100 into our emergency fund to put it up to an even $19,000. This is for my own psychological benefit. I like the idea of having over 19k instead of almost 19k.

This is the money that was left over in our checking account this month after all bills were paid. The main place this money came from was my fiances checking account before we combined our checking. She used to keep a very large balance in her account and with our joint account we decided that was not necessary. I'd rather have the money working for us in a savings account or paying off some debt. I don't want 3 or 4 thousand dollars sitting in a checking account earning nothing just so I don't have to worry about an over draft. I can keep my records good enough that this should not happen and we don't need that much protection. From now on we have decided to keep a $1,000 balance in our checking account so my fiance feels comfortable we won't over draft. I have agreed to this because it is better then the $3,000. Also, alot of our bills are due right at the beginning of the month and our two paychecks won't cover all of them. We need a carry over balance from the previous month to make sure we can cover these bills. Then the second paychecks we get in the month can go towards savings because we only have a couple bills that comes out of those checks.

Wednesday, January 23, 2008

What Would You Do with Tax Refund from Stimulus Package?

Recently in the news there has been an announcement by Bush to put some energy into the economy and try to fix the current problems by giving back to the American public a one time tax refund ranging between $600-1,000. The amount is still undetermined. Yesterday I read another article discussing the fact that both Democrats and Republicans believe this stimulus package to be an imperative issue and are working hard to get one passed before Presidents Day.

What do you think? If you recieve an extra $800 in this years tax refund what would you do with it? Some will pay off debt. Some will save. Others will go buy that big screen tv they have been wanting. Some might pay off thier credit card just to charge it back up in a couple months anyways.

I personally know where my refund will be going this year. Both my fiance and I have decided to use our rebates for the wedding. So they will be going into our wedding fund for a couple months before being spent on catering, photography, invitations and whatever else we need. The rebates won't cover it all so we will also be spending more of our savings. I guess we will be doing what the government hopes. If I didn't have this upcoming wedding, this money would go towards wiping out credit card debt or the auto loan. If I wasn't in debt this money would go into savings. What would you do? Hopefully they get this passed and I can see some extra money to help out with the wedding!

Not Concerned about 401k

This has been a bad month for the stock market. I read something over the weekend that said the S&P was down nearly 10% in January which will go down as the worst January in S&P history if these losses hold until the end of the month.

Now I'm sure my 401k investments are losing money. Hopefully not to much but I haven't checked the balances because I am not too concerned. They can lose 50% and I'll still be coming out better then just saving in a savings account. Here is the deal. I recieve a match on my funds I put in to my 401k. If I save 5% of my salary then the company matches with 4% of my salary. That is an 80% return right from the start each time I make a contribution. The market can crash 80% before dipping into the money that I personally have put in. I don't see that happening.

Another reason I'm not to concerned is time. I have 30 years before the thought of retiring will enter my mind. I have closer to 35 to 40 years before I probably actually do retire. This is a long time. If the market is entering into a bear market now and continues over the next couple years that is fine by me. I would prefer a bull market. However, I won't jump off any buildings yet. If we have a 5 year bear market I still have 30 to 35 years to gain back any losses and then some. I think I'm safe.

Stock Lesson #1

I'm considering getting back into actively trading my online stock account and while I'm at it I figure I might as well post some lessons I am learning along the way.

Yesterday after the close of the market I decided I would like to purchase an ETF that shorts the S&P. I put in my order last night which would purchase at market price as soon as the market opened. This is a bad idea. The market opened way low this morning which means the price on my ETF was up. Since then the market has been rebounding to a breakeven point with yesterdays close meaning I have been losing money.

The lesson is never enter a market order to be executed at the open of the market.

Along with this is to never enter a position the first half hour the markets are open.

I'm Back in the Market

Well, before this year started I decided I was not going to trade in my individual stock account this year. I held two positions and was going to continue holding them through the year. Then one of the positions had news that it was being bought out. I bought Countrywide when it was at it's low point and a month later there was news that Bank of America was going to buy Countrywide. I exited this position with a nice 17% gain in about a month's worth of time.

At that point I was in a debate with myself. It didn't seem like a good time to purchase another company with the market going down every day. I thought about withdrawing the money and using it to pay down some credit card debt. My other idea was to leave it in because I knew one day I would be antsy to trade again. That day has come.

I am reading the book "Trend Following" by Michael Covel. This is getting me all pumped up about the markets again like any book I read. So with the markets seeming to be crashing I jumped back in. This time I bought an exchange traded fund that shorts the S&P 500. Thus, if markets continue to go down, I will make money. I should have waited until finishing the book but when I get an idea in my head, I jump on it. We'll see how it plays out.

Monday, January 21, 2008

401k 2007 Performance Review

Last week I received my 401k statement for the 2007 year. I have only been able to contribute to my 401k since October so there isn't much money in there but I think it important for me to see how the funds I've been putting into have been doing.

According to my statement, my year portfolio rate of return was 7.38%. I am very pleased with this considering my first contribution went into the fund in October 3rd. If this rate was annualized it would be over 28%. I have picked some good funds to place my money into.

One fund lost me money. Since I've had my account open I have lost $2.97 in Accumulative Fund. Recently, I quit contributing money into this fund and chose Dividend Income Fund to contribute to instead. Hopefully this pans out good in 2008.

My best performing fund was Energy Fund. I earned $21.24 in this fund in the past 3 months. In Asset Strategy Fund I earned $18.16 over the same period. I will continue to contribute to these two funds in 2008.

This statement is for end date December 31st. So far January has been a bad month for the market. I haven't checked into how this has affected my funds but I'm sure they are not doing to well. However, I am 25 years old. This money will not be used for another 35 to 40 years and I am not too worried about one bad month. Hopefully the markets can turn it around the rest of the year and my statement for next year will give me a good positive return.

Maxed Out Documentary

Yesterday afternoon my fiance and I watched the documentary "Maxed Out." I had heard of it from some other personal finance blogs so I decided finally to put it on our NetFlix list and check it out. I had high hopes for this documentary. I was sadly disappointed.

I feel the documentary was poorly made. They made a few good points but failed to bring home the reality. They fail to mention how Americans are charging their futures away. One point they make often is that credit card companies are bad companies. They want the people who will not pay off their balances, only paying the minimums and paying late all the time so they can rack up more and more fees against these customers. This is where they make all their money. But are the credit card companies the only ones to blame? What about the American consumers who have to have everything they want right now? Forget that they can't afford it! They have the credit to buy it and can pay it off over the next 10 years!

There were some sad stories of suicides. I don't want to sound unsympathetic but were these people not smart enough to say no to purchasing more consumer goods? I feel for the people who work full time and have more then one job but still can't pay their basic bills for the necessary things in life. Food, clothing, shelter. These are the needs. Everything else is a want and I feel most of these people that are getting in trouble are getting in trouble because of their wants.

In the end, my fiance and I always pay off our credit cards. We live with a strict budget that we do not allow ourselves to go over. We are saving for our future. We are paying ourselves first. We are also saving to pay off our own wedding. None of this wedding will cause us to have more debt then the debt we already have. Could we get caught in the consumerism trap and end up completely in debt where we can't afford our monthly bills? Yes but we will not allow that to happen. I have wanted that flat screen 52" LCD tv for over a year now. Still haven't gotten it and with the wedding coming up it is looking like something that we won't have for a couple more years.

Take responsibility for your own actions because the banks and credit card companies aren't there to look after you! They are there to make money and they will cheat you to do it.

Sunday, January 20, 2008

Book Review: Financial Peace Revisited

Recently I finished reading Dave Ramsey's book "Financial Peace Revisited." I am a big fan of Dave and believe in his methods towards financial freedom. I read his book "Total Money Makeover" a few months ago and really enjoyed it. I think his baby steps are a great method to turning your life around financially and I currently am in the pay down debt stage.

"Financial Peace" was the book he wrote before "Total Money Makeover." Where as "Total Money Makeover" is the plan towards financial freedom, "Financial Peace" is the idea. I feel this book was mostly about why credit cards are bad, why debt is bad, why you need an emergency fund. In this book Dave discusses living below your means by spending less then you earn. He talks about debt being bad. Pay for things in cash and save for your future.

This was a good book, however I didn't enjoy it as much as "Total Money Makeover." Had I read it this book first I may have enjoyed it more. I feel like both books discuss the same issues while "Total Money Makeover" actually provides you with a plan for turning your financial life around.

Do I recommend this book? Sure. It is a good easy read. The principles are sound. However, if you are only going to read one Dave Ramsey book then I suggest "Total Money Makeover." In my opinion they both cover the same basic topics and you can get all the information you need from "Total Money Makeover."

Wednesday, January 16, 2008

Redirected Future 401k Contributions

I have my 401k invested in 3 different mutual funds. I have only been contributing to a 401k for about 3 months but decided that one of the funds was not what I wanted to be in. When looking at that funds past returns I noticed it hasn't really done well for the past 10 years. There are better options out there. I decided to stop contributing to this fund and start contributing to a fund called Dividend Income. This fund returned 17.09% for 2007 and has averaged a return of 15.63% since the funds inception.

I chose this new fund not only because of the average returns but because of the strategy of dividend investing. I recently read a book about the powers of dividend investing and feel it is a good strategy to imploy. I don't have enough money to put the strategy to work for myself so I figure this is the next best alternative.

The other two funds I contribute to did well for 2007 and in the past. I will continue to contribute to them.

We recieved an email at work today saying the 401k quarterly statements were mailed out two days ago so I will post a review once my statement is recieved.

Tuesday, January 15, 2008

Renter's Insurance and Why We Have It

Today I read an article on Yahoo Finance about why you need renter's insurance. You can read the article here. My fiance and I recently attained renter's insurance for our house that we rent. We have always thought we needed renter's insurance but have never gotten it. Recently when I proposed to her we decided it is time. We also wanted to get the engagement ring covered which was the main stimulant for us finally getting the renter's insurance.

As with all insurance, we hopefully will not need it. However, if there was a disaster and we were not covered, it would become a disaster to our finances. We would have to replace furniture, computers, televisions, clothes. All of which would cost quite a bit if we are replacing them all at once. More then we currently have. We see on the news everyday house fires, floods, tornodos or other different disasters that can happen. If one of these were to hit us, we would want to be covered.

Renter's insurance for us was not that expensive. We chose $20,000 coverage with $1,000 deductible. This kept our premiums close to $150 a year which is a low price to pay for financial security. Because of the low price of renter's insurance, there is no reason for anyone who rents to not have it. Protect yourself now, before it is too late.

Monday, January 14, 2008

Money Decisions

My fiance and I have decided this weekend to use my emergency fund and some money from some stock I just sold to pay down some credit card debt. I have an emergency fund saved up of $1,000. On top of that in the same account I have been saving a set amount each month for my next car insurance payment. My fiance and I decided that she has a big enough emergency fund for both of us, close to $19,000 and that my emergency fund would be better off used to pay down my credit card debt. We have decided to leave $200 from the $1,000 in the account to help with the fiances auto insurance and this leaves us $800 to use. We decided that I would use $500 to pay towards the credit card debt and the other $300 would go into our wedding fund.

On another note, I owned some preferred shares in Countrywide which recently had a nice run up due to being bought out by Bank of America. I sold these shares today for a nice 17% profit and have decided to withdraw the money from my stock account and use it to pay down more credit card debt. This will leave me only a couple hundred left in my stock account which is invested in Bank of America. I don't want to completely close the account but have decided to put my dreams of being a rich stock trader on hold until we are more financially stable in other areas of our lives.

So, I will be putting a total of $300 into the wedding fund and a total of $1,150 paying down my credit card. This will leave me with credit card debt around $1,500 which I will still be working towards paying down!

Sunday, January 13, 2008

Created Goal Progress Bars

Today I created four goal progress bars to help keep track of how we are doing in 2008. We have set up goals this year discussed earlier like saving for the wedding, paying down debt, saving for retirement.

I set up four bars to help keep track of paying down debt, saving for retirement, and growing our net worth.

The first progress bar set up is to pay off the credit cards. This is the first debt that we are trying to completely eliminate. I am starting out with just under $3,000 in credit card debt and would like to have that completely eliminated this year.

The second progress bar set up is for retirement. This is a joint goal for the fiance and I. I just chose a nice round number, $10,000, and decided to aim for that. Hopefully by the end of the year our retirement account values will be over this mark.

The third progress bar set up is the debt elimination bar. This is our total debt. Combined, my fiance and I have over $37,000 in debt. This is made up of credit cards, 2 car loans, student loans, and personal loans on an engagement ring, bike, and furniture. Our goal is to pay off at least $7,000 of this debt this year and owe under $30,000 heading into 2009.

The last progress bar is our Net Worth bar. I keep track of net worth in NetworthIQ. This bar is to track our progress throughout the year from the beginning. We hope to grow our Net Worth to $35,000 by the end of the year. This is while we are paying for our wedding this coming October. This will be an increase in net worth of 53% and is quite ambitious considering our upcoming wedding. However, I think with an effort of paying down our debt and saving in retirement, we can come close to reaching this goal.

I will update these bars each month around the same time I update my NetWorthIQ profile. Keep watching to see our progress

2007 IRA Performance

Last week I recieved my final IRA statement for 2007 and today I want to analyze it to see how the funds I chose to invest in faired. I don't have much money in the IRA and this is the first year I opened it. I have chosen 4 funds to invest in with my IRA and lets take a look at how they each did.

My first fund is New Concepts Fund. This is a mid cap growth fund and it earned me a small 5.67% this year.

My second fund is Value Fund which as the name applies is a value fund. This fund lost money for me losing a total of -3.24%.

My third fund is European Opportunities which is my international exposure. This fund has done great in the past but for me this year it only earned 3.63%.

My last fund is Asset Strategy fund which has a blended approach investing in lots of different kinds of investments. This fund was my best performer earning 34.22%.

My total IRA performance was 7.44%. I'm not too excited about this. I know the market was bad the second half of the year. I also didn't open the account until the last week of February and continued contributing $150 a month until October when I started contributing to my 401k at work. The two funds I am invested in the most performed the most poorly being Value Fund and European Opportunities Fund.

I think each year I would be happy with about a 10% return. This year my IRA fell slightly short but I have to understand I missed out on the first two months of they year.

Currently I am not contributing any more money into my IRA. I opened the IRA because I wanted to start saving for retirement as soon as possible but I was not eligible for my employer's 401k until October of this year. I contributed 5% of my salary into the IRA each month until I was able to contribute the 5% towards the 401k and get the company match. I plan on sometime in the future contributing to my IRA again. However, with the wedding this coming October and the purchase of a house sometime in the next year, I doubt that sometime will be 2008. I have upped my 401k contributions to 6% for 2008 though so I will be saving more then last year.

Thursday, January 10, 2008

Book Review: An American Hedge Fund

Recently I finished reading the book "An American Hedge Fund" by Timothy Sykes. This book is about how Timothy Sykes turned his $12,415 Bar Mitzvah gift money into $1.65 million in about 4 years. Timothy Sykes writes about starting his own hedge fund and the ultimate demise of his fund.

Sykes starts out in high school trading after recieving about 12k in Bar Mitzvah gift money. He has always been interested in the stock market and after getting accepted to Tufts University early in his senior year he decides to focus more on trading then on classes his senior year of high school. Sykes is very successful in his early trading. He traded small caps based on news releases. Any sort of news release on the penny stocks he was interested in would cause big jumps in the prices. Sykes was forced to adapt his trading strategy a few different times as the market changed. He discusses his changes and how he ultimately ended up mostly short trading penny stocks for profits. He attended Tufts University for a year or two before transferring to Tulane.

While in his final year at Tulane, Sykes pursues his dream of starting and managing his own hedge fund. Sykes discusses the problems with the hedge fund industry and the difficulties that hedge fund industry regulations cause for small start up funds to raise capital. Sykes struggles to raise any capital for his fund. It seems that when Sykes is finally gaining some momentum and getting some investors, one of his earlier investments is falling apart and giving him the worst losses of his career. Unfortunately, Sykes traded in restricted shares of a company and cannot sell the shares for two years. This strays from Sykes typical day trading strategy and is the ultimate downfall of his fund.

Was the book worth the read and should you buy it? I enjoyed the book overall. It is a good biography of someone who has started out with a small amount of money and turned it into a large amount of money. I like hearing the stories of people doing this because I feel it gives me hope. I wish I had the talent to make lots of money in the market. However, I was a little disappointed that his strategy is not defined more. It seems impossible to me to figure out exactly how he traded based on the book. I would have liked to have seen some specific trades and strategies but that is not what this book is. Therefore, I would recommend this book to those who enjoy reading any stories about the stock market. However, if you are looking for a guide on how to trade, I would look elsewhere.

World's Cheapest Car! Would You Buy?

Today I read a newspaper article about Tata Motors in India releasing the worlds cheapest car. You can find the article here. The India car maker has released their car called the Tata Nano. It is a tiny smart car that executives say can seat 5. The car goes a max of about 60 mph while getting 50 miles to the gallon in gas mileage. Currently the car is only going to be offered in India while company executives hope to offer it in Asia, Latin America and Africa within two years. It doesn't appear that there are plans to release this car in the United States anytime soon.

What if this car was released in the United States? Would you buy it? It certainly is a lot cheaper then a fifteen to twenty thousand new car you would get here. It gets great gas mileage. It won't get you up to 70 mph on the interstate though. I think I would definitely consider buying one of these cars. I don't have to get on the highway to go to work. This car would definitely save me a lot of money in the long run with the low price and great gas mileage. My only concern is how long can such a cheap car last? Will it need to be replaced every couple years or can this car last as long as today's more expensive cars? In looking for ways to be able to save more money, I think I would definitely consider this purchase. However, I'm not sure I would actually do it. The car isn't that attractive and I sometimes find myself wanting to get a status symbol car like a Mercedes. I know I shouldn't but I can't help it.

How about you? Would you buy one of these new cars? Or would you rather continue to drive a "normal" car where people won't look at you funny?

Tuesday, January 8, 2008

Liar's about Money

One of my greatest pet peeves is people who blatantly lie about money. I try to be as truthful as I can about my financial situation. If asked, I will tell. I don't go around pretending like I am better off then the truth. However, there are some people I come in contact with that it seems blatantly lie about money.

I had a college roommate who came from a wealthy family. If it was ever pointed out that his family was wealthy he would deny it. However, the brand new Jeep Grand Cherokee he drove around campus said otherwise. I don't have a problem with this. However, this roommate would swear up and down that he bought that Jeep with his own money. This roommate would come back every year from summer break and have pictures and stories of spending the whole summer hiking and camping in Colorado. Somehow though, he was able to save money and buy this brand new Jeep in high school. He did not have a job in high school. His first and only job was after senior year of high school when he worked at a summer camp in the kitchen. Can you earn over 20k as a dishwasher in one summer? If you can I'm in the wrong business. That is how he was able to afford his brand new jeep all on his own with no assistance from his parents. Come on man, just admit it, your parents bought your jeep. I don't have a problem with that. I do have a problem when you insist that you are the one who bought it but you have never had a job that could earn enough money to make such a purchase. Somehow, his younger brother was also able to buy his own brand new jeep grand Cherokee when he turned 16 as well. Hmmmm.

I was reminded of this guy last night when my fiance brought up a conversation she had with a coworker. This coworker is getting married a week before my fiance and I are. This coworker, who just started the job about 3 months ago after graduating college, has stated that him and his fiance are paying for their wedding all on their own. Well this is admirable and believable since my fiance and I are doing the same thing. However, they are getting married in a location we would have liked to have gotten married but it was too expensive. This wedding location costs somewhere around 20k not including your tuxes, dresses, flowers, invitations, dj. I don't know how they are going to pay for this wedding that will probably end up costing in the 30k range when he just started his job 3 months ago and makes less then my fiance. Another wrench in the story is that they just purchased a brand new home a few months ago. I don't know if they put any money down. I don't know what his fiances job is. But I can't believe that they are able to afford a brand new home and a 30k wedding all in the same year all by themselves. They are receiving help but instead want to take all the credit themselves. I hate this.

Am I just jealous? Probably. I hate that my fiance and I are so focused on becoming debt free and saving while others are out spending their money getting the nicer things. I hate that others are being handed things to them while we are on our own. We are doing it all by ourselves. No one has paid for any of our wedding yet. Our parents have offered to help out but that is it. They have not actually commited any money.

I just have to keep telling myself that we are doing the right thing. Eventually we will be in the same position or better position. Those people that I see out there having the nicer things are paying for them with debt. I will not give in. We will win this financial game and come out ahead in the end.

Monday, January 7, 2008

Finally! A Joint Checking Account!

Well, we finally did it. The fiance and I went to the bank Friday after work and opened up a joint checking account. We have decided to join our finances at the start of 2008 so that we can start paying all our bills out of one account instead of splitting them up and figuring out who owes what. We are both aiming for the same goals anyways. What we will start doing is putting both our paychecks in the joint account and paying bills from there. Savings will be automatically deducted from this account to our money market accounts for our goals. Currently our major goal is the wedding and we have an account set up to automatically save towards that goal. We will continue saving for the wedding for the next 9 months before diverting those funds to the emergency fund. Don't' worry, we aren't forgoing an emergency fund for the wedding. We currently have a fairly large emergency fund set up and will finish it up after the wedding building it up to $24,000 or so.

Combining our finances so far has gone pretty smooth. We have sat down a couple times already to work on our budget. We set up a joint budget before January started and sat down this weekend to update it with bills already paid and see where we are standing. No, the picture above isn't my fiance and I, but it very well could be because we set up our budget on our computer. We also combined our net worth a few days ago in net worth IQ.

I'm very excited about joining our finances. The main worry I have is that my fiance will think I am trying to control all the money. I worry that she has a lot more money then I do and she knows how much I think and stress about money. I don't want her to feel like I'm trying to tell her what to do with her money or feel like I am trying to take her money. However, we have worked together to come up with joint goals. We have worked together to build a budget. We have combined our net worth together. I am trying to keep her as involved in the process as I can and I hope that makes her feel like she has more input then just doing what I say. I love her so much and I will do whatever it takes to be with her and spend the rest of our lives together. Even if that means that we have to keep our finances separate and each take care of our own bills. But for now, we will try keeping our finances together. I think it will work out.

Any suggestions on how others have dealt with this topic combining their finances with significant others? Any advice would be appreciated!

Sunday, January 6, 2008

Book Review: The Complete Turtle Trader

For Christmas I received the book by Michael Covel titled "The Complete Turtle Trader." This is the true story of how Richard Dennis and William Eckhardt chose people through newspaper ads to teach their trading methods to and have trade on their account. Their was a bet between Dennis and Eckhardt about whether great traders are born or if they can be taught to trade great.

The book starts off talking about Richard Dennis and the beginnings of his trading career where he made millions of dollars from a small starting stake. He started his own company called C&D Commodities. Later in life, he made a bet with William Eckhardt about whether great traders were born or could be trained. Dennis believed you could train someone to be a great trader. They put an ad in the papers and interviewed and hired a group of diverse people to test their theory on. This group, known as the Turtles, were taught in a classroom setting for two weeks before set out to trade with Dennis' own account. The group became wildly successful as they all made amazingly large returns from the start. The group trades for Dennis' account for a few years before he puts an end to the project and send the Turtles out on their own. Some become majorly successful while others don't trade anymore.

The Turtles traded based on a trend following system. They looked for certain buy signals involved whatever they were trading breaking new highs or lows. They traded many different markets from stocks to oil to gold to cotton. The key is that they were looking for a market that set a new 4 or 11 week high or low. If a high was set they bought. If a low was set they sold short. The turtles had stops in place in order to not risk much of their capital. These stops were put into place based on that particular markets current volatility. Much of their success came about by strictly monitoring their risk. The turtles took a lot of small losses that were usually offset by the occasional huge gain. The occasional huge gains is where they made their money. Even though they were wrong more then they were right, the money they made on their right trades far exceeded the money they lost on their many wrong trades.

Would I recommend reading this book. Yes! I thoroughly enjoyed reading this book just for the story alone. There are some great tips to be learned from the book and you do get a good idea of the system the Turtles were taught to trade. However, the story of how these random people with completely different backgrounds were selected, taught and then set loose to make millions of dollars is very inspiring. Any aspiring trader should read this book.

Thursday, January 3, 2008

Changed Witholding Allowance for Federal Taxes

I went into the HR department after lunch and filled out a form to change my witholding allowance for federal income taxes. I feel like I will be getting a big refund this year and want to change that. I'd rather have more money in my pocket right now.

Another factor is that for 2008 I will be filing married filing joint. This gives us a bigger deduction. I basically changed my witholdings so that they are witholding like I am already married. This will give BRG and I extra money now to help save and pay for the wedding.

Hopefully everything works out!

New Year's Resolution Already Broken!

Ok, I had great plans this year. I was going to stop eating out all the time for lunch and instead go home at lunch time and eat something there for free. Well, today is the second day back to work this year and the second day I have eaten out! I need to learn some self control! The problem is I have coworkers that eat out all the time and it is hard for me to say no to that tasty subway sandwhich when I have ramen noodles waiting for me at home.

However! Just because I have broken my resolution already does not mean I am giving up! I will be getting back on the horse and trying again next week. Rome was not built in a day and changing ones habits is a tough thing to do! I will get better. I just need to control myself. I have an idea for a way to stop myself from being able to go eat. I think starting tomorrow, I am going to start leaving my credit cards and cash at home when I go to work. This way I won't be able to go to lunch because I won't be able to pay for it! It's a brilliant idea I know. We'll see how it works out.

Wednesday, January 2, 2008

We Have Joined our Net Worth Calculations!

Yesterday my fiance (referred to from now on as BRG) and I combined our net worth calculations to come up with one number. We did this in my NetWorthIQ account so you can see in the chart that it jumped up quite a bit. This will skew the chart for a few months but we can now go on from this new joint number.


BRG had quite a bit of cash saved up which increased our cash numbers by alot. She has a very big emergency fund saved up as well as carrying a large balance in her checking account and a standard bank savings account.

BRG has about $1,000 in her 401k at work. She just started contributing to this account and our retirement numbers should grow quite a bit in the upcoming year.

We looked up BRG's car value in Kelly Blue Book to get a rough value. This amounted to just over 9k.

We added BRG's personal property of around 2k. This is the value we paid for our furniture and is likely the only thing we could sell. We did not include other personal items like clothes or her computer.


BRG has student loans from college just under 14k.

BRG has a balance on her credit cards that was added to the total but this balance is paid off in full each month.

BRG has one and half years left on her car loan. This comes in right around 4k.

Last we input the amount we owe on our furniture. We have 0% financing and owe about 1.5k.

Overall our new net worth is $22,822. Before combining our net worth I was just about 5k for December. You can see she was in substantially better shape then I was but we now are combined and look at this as ours together.

Tuesday, January 1, 2008

New Year's Resolutions

Well, it is officially the start of 2008 and I have made two new years resolutions this year.

The first resolution is to eat out no more then one time a week for lunch. If you know me you know I love to eat out and I frequently will go out to eat at fast food places every day of the week. In order to save money and improve the health of my diet, I would like to stop this habit. My original plan was to limit eating out to twice a month. My fiance didn't think this was realistic and talked me into changing it to once a week. I will give this a shot and hopefully stick with it and save some money on the way.

My second resolution involves brushing my teeth twice a day. I usually forget to brush at night time and would like to change that so I can have a good visit to the dentist next time I go.

There you have it! Good luck in 2008!