Do I have the Ten Traits that Make You Filthy Rich?

Today on yahoo personal finance I read an article entiled "Ten Traits that Make You Filthy Rich." You can access that article here. After reading through the article I thought it was something worthy of sharing on my blog and I'd like to comment on whether or not I feel I have some or all of these traits. I'm not necesarily convinced that having these traits will make you rich, but I think they would help you on your journy.

The first trait is PATIENCE. Patience is waiting for the right time and opportunity. It is waiting for the sale special deal to save some money. It is putting off a new car purchase a couple extra years so you can save the money. Having patience can mean the difference between buying things with cash and buying things on credit. Another part of patience is with investments. This year the market has seemed to go nowhere but down. Have patience with your retirement investments. For me, with retirement being 40 years away, it would be unwise to react to the down markets moving all of my retirement money into bonds or cash. I will be patient and reap the rewards with the market turns itself around eats up the current losses and gives me even more gains. I'm not sure that I have always held this trait but as I become more and more aware of my personal finances, I am becoming more and more patient with both investments and purchases.

The second trait is SATISFACTION. This involves being satisfied or happy with what you have. For example, I am satisfied with my current tv. It's not a large flat screen but it is big enough and works well for me at this point in my life. Will I never get that new tv? I will, just not right now. I am satisfied with my current car. It's not the Mercedes I would like to have but it does it's job. It's a nice car and I will keep it for a very long time. If you are not satisfied with what you have then you will always be spending money trying to find that satisfaction. It may give you joy buying that new product, however, it will be a joy that is short lived. Once that joy runs out you will be looking for something else to satisfy you. Be satisfied with what you have. This is a trait that I feel I have. There are things I want but I realize I would be no better off then I am now by getting those things.

The third trait is ORGANIZATION. I admit I could use a little help with this trait. I know where my stuff is but I sometimes lose things. I am working on this skill of organization. I have bought a filing cabinent and try to keep my financial records organized. Being organized helps you from losing things and paying late fees. I try to stay as organized as possible with my finances especially so I don't pay the unnecessary late fees. Organization can help you be more productive by being decluttered. Stay organized.

The fourth trait is DISCIPLINE. It is discipline that helps you stay on the road to your goals. You will not become a millionaire over night. Save for your goals. Stay on track paying off debts. Work hard and you will achieve. I am trying to be as disciplined as possible but sometimes I falter. I try to stick to a budget, save what was planned, pay off debt that was planned, and do everything I can to achieve my goals. It will not help me to make a purchase that is not in the budget. This will only force me to save less or pay off less debt that month. Stay disciplined.

The fifth trait is REFLECTIVENESS. Look at your financial decisions and reflect on thier results. I do this every month by looking at our net worth progress. So far my decisions have paid off and my fiance and I are increasing our net worth every month since keeping track. Another area for me to reflect is my stock brokerage account. Currently it is a small percentage of my capital I use to speculate in stocks. I often reflect on purchases and sales and what went right and wrong. I want to improve on each stock transaction I make.

The sixth trait is CREATIVITY. There are many aspects to creativity. For me, creativity is finding things to entertain my fiance and I without spending as much money. This includes walks in the park, picnics, nights staying in to watch a movie, and game nights with our friends. We try not to go out and blow too much of our hard earned cash on drinks and food or other more expensive forms of entertainment. Another way creativity comes into play is our budget. We must be flexible and creative with our budget to make it work each month so that we may accomplish our goals.

The seventh trait is CURIOSITY. Being curious helps you learn and improve. I am constantly reading personal finance books and investing books because I am searching for new and better ways to reach my goals. I read personal finance blogs every day looking for new ideas. If you are curious about something you will learn more about it.

The eighth trait is RISK TAKING. You must be willing to take risk. If you don't take risk then all your money is sitting in a savings account earning you very little interest. To make the kind of money you need to be filthy rich, you must take risks in investing and business. If you always do the safest thing then you will be paid to do the safest thing. The stock market may be risky with it's up and down volatility. However, that is a risk I am willing to take if I have a chance at earning over 10% return on my savings. This does not mean be stupid. I don't have all my assets in the stock market. You must diversify and have an emergency fund in a liquid savings account. I have mine in an online money market account. But by taking thought out calculated risk, you give yourself a better chance for becoming wealthy in the future.

The ninth trait is GOAL ORIENTED. Goals are like road maps. If you don't know where you want to go then how are you going to get there. I know I want to be independently wealthy. I want to be comfortable with money so I don't have as many worries in life. I have set goals towards reaching this goal. I have goals of paying off debt and saving certain amounts. With these goals in mind, I have put together a plan to reach them. I have a plan to pay off a certain amount of debt this year, save a certain amount this year, and reach a certain net worth this year. These goals keep me focused, disciplined, and knowing where I am and need to be.

The last trait is HARD AND SMART WORKING. Your chances of becoming wealthy by winning the lottery are slim. You must work hard and smart. Be as efficient as possible. Do your best at everything you do and your hard work will pay off. It is the people who put in the time who are rewarded. If you have a business, and you don't work hard to make your business successful, then chances are it won't be. People like hard workers. Hard work pays off.

I feel like I possess quite a few of these traits. I am concious of the ones I don't and can make an effort to do what it takes to develop them. What do you think? Which of these traits are most important and do you have what it takes to become filthy rich?

Starting My Own Online Side Business

Recently I came across a blog post that said that Microsoft Office Live was giving small businesses free website domains and hosting. I looked into it and sure enough it looks like you can register for a domain name and set up a pretty basic website for free. This is a great opportunity for anyone who has thought about starting their own business on the side. An online business can be just the part time project needed to test out your business idea without having to quit your day job.

Personally, I am extremely excited about this opportunity. I came up with an idea a couple months ago for a business I wanted to try out online. I'm not sure of the demand and was afraid to take the chance of paying for a website and hosting if I would not get any customers. Since I was/am on a mission to pay off all debts and save for an upcoming wedding, I decided it was not the best time to take on this business adventure idea of mine. This seems to be the perfect opportunity for me. I can set up my website and pay a little bit for advertising and test out the waters. If it works then I will make a little income on the side each month to help pay down those debts faster. If it doesn't work then all I am out is a little time.

I went ahead and registered for a domain name and played around on their design page for a short while to try to get a feel of what I could do. I don't know exactly when I'll get the complete business plan hashed out and the website completely designed and ready to go. Work is pretty busy this month. That is usually where I do a lot of my brainstorming and come up with the good ideas. At night I am tired and don't like to do too much thinking so I tend to relax more. Therefor, I may not get the site completely designed and ready to go until next month. I'll work on it a bit here and there and hopefully have it up quickly but I am in no rush.

For me it would be great if my idea takes off and I am able to make a couple hundred dollars a month from this online business. I'm not looking to hit a home run and quit my day job. I like my day job. I just want to earn some extra income in a side business. This extra income could help me get out of debt faster and save more. Another pro about my idea is it is something I will enjoy spending my time on. If I am making money from doing something I already love to do, then I will call that a victory!

For now, I will work slowly on forming my business plan and designing the website. Once I get everything finished I will post more on my business idea and where you can go to check it out! Wish me luck!

Stacking Pennies added to Blogroll

I just updated my blogroll on the left with a new blog that I've been reading for about two months now. The blog is titled "Stacking Pennies" and is about a female twenty something who has just recently moved to California for a new job. I enjoy following her blog because we are about the same age and seem to have alot of same goals and interests. You can click on the link in the blogroll to the left to go check her site out.

I need to update the blogroll with blogs that I have been reading lately. I set that up when I first started my blog and have been neglecting to update it as the blogs I frequent change. I have started frequently visiting more and more personal finance blogs and will add them in the near future. If you would like me to check out your blog and possibly add you to my blogroll then feel free to drop me a comment. Of course I would appreciate you do the same thing for me.

Be Careful with Your Free Credit Report!

About a month ago I went to freecreditreport.com and took a look at my credit report from Experian. I also had the opportunity to look at my credit score for free. The catch was that I would be signed up for CIC Triple Advantage program. The first month would be free and then it would be $14.95 each month after until you cancel. This sounded ok to me as I planned on canceling right away and not using the service.

Well, I looked through my free credit report and got my free credit score and thought nothing of it. I never received an email about the Triple Advantage program and when I went a week later to try to sign in on the Experian site, it showed that I had no account. I took this to mean I was not signed up for the program and I also didn't know who to contact to make sure to cancel it.

Fast forward to today. I took a look at my Capital One credit card and found a balance. This is the card I paid off last month so I looked to see what it was. It was a charge for CIC Triple Advantage. Now I have been charged for something that I really don't know what it is. There was a phone number listed on my credit card statement for this charge so I will be calling tonight after work to cancel the program.

However, I am worried. While looking into this on the internet, I came across a number of sites with complaints about this program. People going to look at their "free" credit reports and being signed up for this program. I am worried because while reading through these complaints, it seems that people are having trouble getting the company to actually cancel thier accounts. You can read the complaints here on the site Complaints Board.

I just wanted to make sure my credit report was free from error. Because my fiance and I are thinking of buying a house in the near future I thought I would check out my credit score. Apparently nothing is really for free.

Does anyone else check thier credit scores and reports? How do you go about getting this information and do you pay for it? Anyone else have troubles with this CIC Triple Advantage program? Let me hear your comments and suggestions!

Filed 2007 Federal Taxes

Last night I went ahead and filed my taxes for 2007. I used H&R Block's free TaxCut software online to e-file so I can get my refund back as quick as possible. The software was pretty easy and free. To file for state costs $30 each state. I moved to a different state so must file in 2 states. I didn't know when I agreed to do them both on the TaxCut site that you can only efile for one state. Therefore I paid $30 bucks for Missouri and am going to mail in the return. I'm a little mad about that one. I could have just done Missouri by hand had I known. I did file my Kansas return electronically though.

For my federal return, I am expecting a refund of just over $500. I am expecting a refund from KS of $18 and I owe nothing to MO. I chose the option to have the refunds electronically deposited into my checking account. I am curious to see how quickly the money will be sent to me.

Recently I increased my with holdings from 2 to 3. I am debating whether to decrease it back down to 2 or not. In 2007, I had contributions to an IRA and was able to deduct this amount from my taxable income. In 2008 I will have no contributions to the IRA so I will not have this deduction. Also for 2007 I was able to deduct some short term capital losses. Hopefully, 2008 will fair better for me and I will be reporting gains instead of losses so I won't have this deduction. Both of these issues have me concerned that my taxable income will be higher in 2008 and I should pay more along the way. I don't want to pay taxes at the end of the year but I don't want a huge refund either.

For 2008, I will be getting married. This is a more favorable filing status and will help my taxes. We also plan on buying a house and will be able to deduct the mortgage interest. Therefore, I think I will leave my with holdings as they are for a few months before switching them back to 2. I can certainly use the extra money in the present to help pay off my debt quicker and save for our upcoming wedding.

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.

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.

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.

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.

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."

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.

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.

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!

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.

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?

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.

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!

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.

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.

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.

Assets-

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.

Debts-

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.

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!

A Look Back at 2007

2007! The first year I started keeping track of my finances. I graduated from college in May of 2006 and took what I consider my first real job (current job) in September of 2006. Now I have worked for an entire year and have made significant financial progress.

I started keeping track of my finances more in depth in August of 2007. Back then my net worth started at $2,952. I know have a net worth of $5,321 for an increase of 80.25%. That is quite an increase. My best month was December which accounted for almost half of those gains.

2007 wasn't just a good year for my net worth. This was my first year out in the real world after college and I want to take a look at some things I did right that I am proud of and some things I did that were probably bad ideas.

First lets take a look at what I did right this past year:

1. I began the year by opening a traditional IRA. I contributed 5% of my salary a month into the IRA until I was able to start contributing to my 401k.
2. Once eligible to contribute to my company's 401k in September, I took full advantage. I contribute the maximum amount needed to recieve the company's full match.
3. I opened an online money market account and funded it with $1,000 for emergencies through automatic savings.
4. I got engaged to a beautiful woman who I love with all my heart. I can't wait to get married next year and spend the rest of our lives together.
5. I took a nice vacation with my girlfriend (now fiance) to Mexico. A great experience and well worth the money to enjoy a vacation with her.

Now lets take a look at the things that could've gone better:

1. I racked up quite a bit of credit card debt through the year before I got serious about finances. I paid for last christmas with my credit cards. I overspent on christmas trying to impress my family with the money I now make. I also paid for the Mexico trip with a credit card. I now know I would have been better off saving for things before I spend money on them and not racking up the debt.
2. I bought a new bike and took out a loan to pay for it. The loan is at 0% interest and will be paid off so I won't owe any interest on it. I still count this as part of my current debt. The bike was an impulse purchase and if I would have waited a few weeks I probably would not have bought the bike.
3. I opened up a stock brokerage account and tried trading stocks without really knowing what I was doing. I felt like I've read alot about investing but I ended up losing over a thousand dollars. I funded the account with $1,700 and now have about $600. I now plan on leaving the money in the stocks I currently have them in and earning dividends and hopefully seeing some appreciation over the next year. However, I absolutely will NOT add any more money to the account this year. Once I have a better financial base, I will consider trying to invest in stocks on my own. If I had not tried jumping into the stock market prematurely, I would have a net worth of about $7,000 instead of $5,300. In the long run this will be an inmaterial amount but currently, it would have been nice to have that much less debt or that much more into my retirement account.

So, I generally feel like I had a good year. I made some good progress and since tracking my finances have increased my net worth and lowered my credit card debt. Hopefully I continue to make good progress in 2008.

Raise for 2008

Today we were informed of our raises effective the first pay period of 2008. I will be recieving a 5% raise or $1,800. I am fairly pleased with this raise. It would have been nice to get more but I could have gotten less. This puts my salary up to 38k plus a bonus if we recieve one next year. I calculated that I will be saving an extra $480 in my 401k plus company match and I will have about $1,200 more take home pay next year then this year with the raise. Right now this money will be earmarked for paying down my credit card debt until I can rid myself of the debt. Then the extra money will be saved each month.

I have been working at my new job for about a year and 3 months now and am currently making about 3k more then when I started. I have also recieved over 5k in holiday bonuses. This is nothing to be ashamed of and pretty soon in another year or so my base salary should be over the 40k mark. I am looking forward to it.

December 2007 Net Worth Update

Today was pay day at work and since I have no more bills going out this month I updated my net worth on NetworthIQ. I had a feeling this month was going to be a good month. I am proud to say that this was the best month I have had since starting to keep track of my net worth earlier this year. The increase in my net worth from last month is 28.22% increase. The dollar amount is a $1,171 increase. This puts my total net worth now up to $5,321. I am extremely pleased to have crossed over the 5k mark before the end of the year.

My cash went up slightly this month. My stocks took another hit losing $223. I have sold out of my big losing stock and bought into a preferred stock that will yeild over 10% in dividends for 2008. My retirement account jumped up nicely by $617 for an increase in retirement assets of 23.31%. On the debt side of the equation, my credit card debt went down $279 or almost 10%. Overall my assets increased 2.67% while liabilities decreased 3.26% giving me a huge boost to my bottom line. These numbers do not include my big bonus I recieved this month from work or the christmas money I recieved. I did not put these figures into my net worth because they are in a joint account set up for my fiance and I's upcoming wedding.

The next step for me is that the fiance and I are about to combine our finances. I will be updating my networth IQ chart again probably this weekend or on January 1st and will get a good picture of where my fiance and I will be starting out together.

The 4 Financial Books I Recieved for Christmas

This Christmas I recieved 4 financial books that I have been wanting to read. Three of the books are more about investing and one is overall personal finance.

The personal finance book, with picture to the left, is Dave Ramsey's Financial Peace Revisited. I am a big fan of Dave Ramsey after reading his book "Total Money Makeover." I believe if you follow his steps you will find yourself in a better financial position. He can help you get out of debt and not have to worry about finances too much. I am excited to get started on this book. I doubt it has any new information in it for me but it will be very motivational to keep on track towards my own "financial peace!"

The investing books I recieved are Micheal Covel's "Trend Following" and "The Complete Turtle Trader." I also recieved Timothy Sykes "An American Hedge Fund." I like reading about stock investing and about peoples success so these books will be very interesting.

So far I have started reading my first book which is the Complete Turtle Trader. It has been interesting so far giving the background of Richard Dennis. He started out with a hundred dollar stake and became a millionaire by his early 20's. He traded on the commodities trading floor in Chicago but soon moved to an office so he could trade all the markets. This book will be about how Richard Dennis trained some random people that answered an ad he put out in papers on how to trade. He let them trade his money and they all turned out to be very successful. This experiment shows that you can be taught how to trade and how to make millions of dollars. I look forward to reading more of it.

2008 Goals

This past weekend I sat down with my fiance and we discussed our goals for the upcoming year. We came up with a list of goals that we wanted to work towards together and then we prioritized them into order from most important to us to least for the year.

Goal #1: Our first goal is our wedding coming up in the Fall of 2008. Our date is October 11, 2008 and so that gives us about 9 more months to continue saving and paying for the wedding. Currently we have just under $2,500 in our wedding fund. We are putting another $250 in there that we recieved for Christmas. We have set up automatic deposits of $225 a month into the fund to save. We are also planning on putting our tax refunds into the fund. Any leftover money in our budget each month will also be put into the wedding fund. Our goal is to be able to pay for our wedding off of savings through the year and not have to tap into our emergency fund and house savings.

Goal #2: Our second goal for the year and a longer term goal is to save for retirement. My fiance will continue to contribute 5% to her work 401k. I have increased my contribution so that I will contribute 6% of my salary to my 401k. It is very important for us both to remember to keep saving for our future even though there are alot of current pressures to save our money for weddings and a house that we want to purchase. We have made the decision, however, that we will not compromise saving for our retirement.

Goal #3: Purchasing a house. We have decided to go ahead and look for a house this spring. If we find one that we like and feel we can afford then we will go ahead and make an offer. If we do not find anything then we will discontinue looking and rent for another year. We would like to keep our emergency fund above $15,000 after the purchase of a house. This means we need to not draw out any money for the wedding. This will give us a comfortable level to not worry about anything happening where we would not be able to meet our future mortgage obligation.

Goal #4: We want to ultimately bring our emergency fund equal to and over $20,000. This will equal about 6 months of current expenses for us. Currently, all our savings will be going to the wedding fund until the wedding. After the wedding we will be working on growing our emergency fund. The main objective with this goal is not using any of the money currently saved up for the emergency fund on the wedding.

Goal #5: Our last goal is to continue paying down our debt and eventually be debt free. Currently our debt consists of $2,500 in credit card debt, 2 car loans, 1 student loan, a 0% financing deal on some furniture, a 0% financing deal on the engagement ring, and a 0% financing deal on a bike. Our top priority is the credit card debt. We will be working towards paying this off as soon as possible and hopefully have it all gone by the end of the year. We are currently paying the car loans off each month with no extra payments. We are currently paying the minimum on my fiances student loans. We are currently paying the amount owed divided by the number of months to repay for the furniture, ring, and bike. The ring will be paid off this year. The furniture and bike next year. We are aggresively working towards paying off the credit card debt and then will work to pay down the car loans quicker.

These are our main goals for 2008. These are the things we want to accomplish and will keep our sights on throughout the year to work towards these goals.

Consolidating our Finances

The fiance and I have decided it is time to combine our finances and work together towards common goals. Starting in January we are going to get a joint checking account where our paychecks will be deposited. We will use this one checking account to pay all of our bills from. We have decided to each keep our individual checking accounts where we will deposit a small allowance each month for each of us to do with what we please. We will continue to hold our online money market accounts for different goals. We currently have the wedding fund which is a joint account. Seperately I have two other money market funds for different goals and she has one for her emergency money. We will keep her money market fund as our emergency fund. My two funds will be for insurance bills and the second for saving for gifts, vacations, other big purchases. We will try to get all these accounts put into both of our names within the next few weeks.

We sat down this past weekend and worked out a combined budget for January. I believe the budget looks pretty good and we should be able to stick to it. We have budgeted for retirement and savings for the wedding fund. We will also be paying down our debts.

Our main goals that we decided to focus on for 2008 were saving for wedding fund, saving for retirement, paying off bad debts (and eventually all debts), saving up to $20,000 in the emergency fund, and purchasing a house. I will write more about these goals in a follow up post and how we are planning on achieving them.

Otherwise, I will be combining our net worth figures into networth IQ soon and we will look to keep increasing our net worth month after month.

A Wonderful Christmas

This was a great Christmas for me this year. This was the first Christmas I spent with my fiance where we stayed together. We started our Christmas festivities off by going up to my hometown and going to Christmas Eve mass with my grandmother. Then the whole family got together at grandma's house for some pizza, visiting, and gifts. My fiance and I then went over to my father and stepmothers house for more gifts and then spent the night at thier house on the sofa sleeper. An uncomfortable sleep and probably not the best nights rest but it was ok. Up early in the morning to head out to my mother and stepfathers house for more gifts. We then had christmas lunch and it was off back to KC to the fiances family for christmas dinner and more gifts.

It was a busy couple days and I am exhausted. I was so excited to get to spend the entire time with my fiance. I love that she got to come experience how christmas is with me with my family and I enjoyed getting to experience christmas with her family as well.

The best part was seeing people open our gifts and seeing them happy with them. I think most people were happy with what we got them this year. I was also very pleased with what we got this year as well. We got some christmas money which we have already decided will go into our Wedding Fund to help pay for the wedding. Along with the money we recieved jointly a new nice silverware set, a digital picture frame, and season tickets to the Kansas City Royals. That last one is the one that has me most excited. Individually I got a few books, a couple cd's, a video game, dress pants for work, a paper shredder, and a sweater.

Overall it was a great Christmas spent with family and the fiance and I got quite a few things to enjoy for the next few months.

Why am I Such a Terrible Stock Investor?

I think I must be one of the worst investors in the stock market ever! I love the stock market! I read books about investing, read stories of other people turning small sums of money into large sums of money, do research into stocks and love everything about the market. However, I cannot seem to make any money in stocks.

I opened up an online stock brokerage account back in June and have lost over half the money I've invested. Luckily for me I started out with a small amount of money to begin with. I'm not sure why but it seems like every time I pick a stock to buy it plummets shortly after I buy it. This is a sad story considering how much I love the stock market and how badly I want to be a successful investor. It seems however that I would be better off just putting my money into some mutual funds and leave the individual stock picking up to the professionals.

For now, I currently own two dividend paying stocks in my account. They have gone down considerably since I bought them but I am planning on holding onto the stocks for a few years to see what happens. I don't think I'll be putting in any more money to my account for awhile until I have lots of money saved up towards all my other financial goals. Only then will I feel comfortable risking some money to "play" with in the stock market.

Just Increased My 401k Contribution

Well, I just walked down to the HR department and put in my form to increase the amount I contribute to my 401k to 6%. Starting the first pay check of 2008 I should be contributing 6% of my salary with the company matching another 4% putting me up to a total of 10% of saved for retirement next year. It's a small increase but I am working my way up slowly until I am personally contributing at least 10% myself. I'm not sure when the next time I will increase it will be but I felt like this would be a good time for a small increase since I should be getting a raise for 2008. I should find out about the raise the first or second week of January. I think it is very important to maintain the same standard of living even though I will be making more money. This is an effective strategy to save more money by saving any increases I recieve in salary every year.

December is a Good Month!

I admit it, I was nervous heading into the last month of 2007. Along with December comes the big spending time of Christmas. Having a list of family members who expecting something from you for Christmas can put a damper on your budget and goal of a higher net worth. I was worried that this may be my first month since starting to keep track of my net worth back in August where I would have a decrease in net worth.

Now, I'm not so sure and definately not as worried. This month has been going great for me! I have completely paid off credit card #1. My retirement account has risen to the over 3k mark. I recieved a nice bonus at work that will go towards my fiance and my wedding plans. I made a budget for Christmas and stuck to it and actually came in under budget. I didn't buy my gifts this year with credit but instead used the cash I had been saving since October for this specific purpose.

So far the only downside I can see to this month has been my loss in the stock market. I don't have a lot invested in my individual stock account so I am not too worried about the loss. However it is dissappointing that I can't seem to make money with stocks.

December has been a good month for me! I am not sure what I am more excited about. Am I more excited for Christmas in less then a week or am I more excited for a week later when I get to update my net worth chart and see my progress? Both should be good days for me!

Retirement Accounts over 3k!

Ok, $3,000 might not seem like much for retirement so some people might not understand why I am soo excited to be over $3,000 in my IRA and 401k. Well, I am 25 years old. I just started saving for retirement earlier this year and have gone from $0 for retirement to just under $3,200. I like to think that that is a pretty good amount starting out.

I have set up an excel spreadsheet to calculate some projected retirement amounts. I have started with my current salary and figured a 4% annual raise. I have set up three different scenarios where I will contribute 10% total per year to my retirement with the returns being 5%, 8%, and 10%. Based on my calculations, I can hope to have $863,063 if I earn only 5% on my money. I can hope to have $1,657,763 if I earn 8%, and I can hope to have $2,676,029 if I earn a 10% return. Hopefully I can average 10% returns over the next 40 years to have over $2.5 million by the time I turn 65.

The excel spreadsheet has given me some goal numbers I would like to shoot for in the future. One year from now I hope to have $7,265 total in my 401k and IRA combined. This will require me to put in 10% of my salary and to earn a 10% return. Another goal is when I hope to cross the million dollar mark in my retirement accounts. The retirement simulation I set up shows me crossing over into the millionairre category by the time I am 56 years old or 31 years from now. I am hoping to accomplish this goal 6 years before that when I am 50 years old or 25 years from now. In order to accomplish this I will aim to sock away even more of my hard earned money for retirement when I am able. Hopefully I can average some good returns which will also help along the way.

Cigarrete Smoking is a Waste of Money

This morning on my drive to work I was stopped at a stop light and looked to my right to see a lady with her window down. "What is she doing with her window down!" I thought to myself before I noticed the cigarette between her fingers hanging out the window. "Oh, she is smoking." Apparently smokers don't care that it is only 30 degrees outside. They need to have their smoke and don't mind freezing their arses off to get it. The same concept can be seen when exiting the south doors of my office building where the smokers gather to have their cigs. I can't imagine wanting something so bad that I would stand outside in below freezing temperatures to get it.

I think smokers are idiots. There are the health issues and then the financial issues. I'm not sure on the price of a pack of cigarettes but I imagine it is around $4/pack. If you are a pack a day smoker, then you are wasting $28 a week on cigarettes. That is a total of $121.33 per month or $1456 per year. That is ridiculous. I wish I had over a hundred dollars a month in my budget to waste. It's even stupider when you think that they are paying out almost $1500 a year for something that is slowly killing them. I think I'll continue to save my money and stay away from the cigarettes.

How I Dealt with the Costs of Christmas

Christmas can be an expensive time of year. For me, I want to buy those close to me nice gifts. I like to show my love by buying them something that is really great and this usually means spending quite a bit of money. Unfortunately, I am not rich. I have quite a few family members that I will buy presents for this year. This list includes my mother, stepfather, father, stepmother, brother, sister, grandma and fiance. On my fiance's side we also have to get gifts for her two parents, her sister and future brother in law. This can get pretty expensive but I feel this year we did a good job keeping our costs low and still getting gifts that everyone will enjoy.

The first thing I did in preparation for the Christmas money spending season is that I opened up a money market account to specifically save for the holiday. I opened this account back in October with $50 and set up an automatic deposit of $25 every two weeks. Sometime in November I put another hundred in the account so that now I ended up with $275 saved up to spend on Christmas. This is an idea I would like to carry forward in the future with my fiance. Since we have the account set up, we will continue to put in $25 or so every couple weeks automatically throughout the year. This will help us cover all gift giving through the year and the big spending time of Christmas at year end. If there is anything left over we can spend that on ourselves or use for a different goal.

The next thing I did was set a budget. There are 8 people that I personally needed to get gifts for this year. This includes my side of the family and my fiance. I let her take care of her own side of the family but we used the same budget. We decided to spend a maximum of $50 per person. For my grandma we decided to spend $20 and for each other we decided on around $75.

Next came the spending. This year I asked everyone for ideas of what they wanted or needed for Christmas. This way I knew I wasn't wasting money on a gift that will just go in the closet and be forgotten about. Once I had a list I was easily able to find gifts for each person that were in my budget. I am very pleased with what I got everyone this year and don't feel like it is breaking my budget. My total Christmas budget amounted to $395 and I actually spent about $320. Because I prepared for these expenditures, I was able to use cash and take on no new debt. This is a big difference from a year ago when I racked up over $500 on the credit cards and really didn't have gifts that were any better then this year. I just had a debt cloud hanging over my head that was a big hassle to pay off.

Credit Card #1 Paid Off

I have finally done it! Credit card #1 is finally paid off with a balance of $0. This weekend when going over my finances and figuring out exactly where my paycheck for the second half of the month was going I realized I had enough to bring that balance down to zero. This has been something I have been trying to accomplish for the past 3 months and finally have made it. The next target of debt reduction will be the credit card #2. This card will be a little more difficult because I am still using it for gas. I get a 5% discount for gas by using this card and don't want to lose that. Therefore I need to make sure I am paying more towards the card each month then I put on it for gas. Towards the end of the month I will post more on my goals for 2008 and this credit card #2 will definately be a part of those goals. I'll do some math but I hope to have most of it paid off in the next year.

Holiday Bonus Time!

It's always a nice surprise when you get a big holiday bonus at work. I wasn't expecting a bonus but am definately happy and the money is needed. This year I got $3,300 for my bonus which amounted to just under $2,000 once taxes were taken out. I also didn't know that they would take out 5% to put into my 401k but I am happy they did. This adds an extra $160 or so to my 401k and more if they match with the usual match. The bonus money that I recieved in my bank account is going to be used for the upcoming wedding (October 2008). I immediately transferred the money into our joint money market account where we have automatic savings going each month to try to save up some for the different wedding expenses. The fiance has paid all of our down payments so this has me pretty happy that I can finally contribute something to the wedding. She is the one of the two of us with the most cash saved up.

There are many different things to do with that nice holiday bonus you recieve. I find it interesting to hear how the different people I work with plan on using thier bonuses.

Thier is CZ who has plans to use her bonus for a vacation for her and her boyfriend. I think this is a good idea because vacations are good experiences and not a waste of money. However, since she just bought a house with zero down and sometimes complains about money, I think I would look to save the money for an emergency fund or put towards the house.

Next there is RP. She complains all the time about having no money. I find it amusing because she wastes money all the time. Recently she just bought 6 video games for example. Another example is the gym membership for a year that never gets used and the glider excersice machine recently purchased that does not get used. I haven't heard exactly what they plan on blowing her bonus on but I am certain it is not going towards savings.

Last thier is CW. She seems to be the more financially smart of the people I work with. She is a fan of Dave Ramsey and sometimes refers to her budget so I know her and her husband work on saving and sticking to a budget. Since her husband also works here I expect they got about double a bonus. She said they are using thier bonuses to pay for a new needed roof for thier house. I would hate to spend my whole bonus but if it is needed then it will be worth it.

My boss of course asked me what I was going to do with my bonus. She thinks it should be spent on something nice for myself. I believe in saving. Last years bonus went into an IRA. This year I will use it to pay for the wedding so we don't need to take on any new debt. I am a little disappointed that I don't get to put some towards savings or current debt, but I am pleased that I finally get to put some towards the wedding and feel like I have contributed.

What will you do with your bonus if you get one?

Net Worth Update

Keeping track of the net worth is one of my main goals with this blog. I use NetworthIQ to track everything and you can see the results in a graph on the left sidebar. I started tracking my net worth back in August of this year (2007). I am pleased to say that I have had positive months every month since through November which was the last update. My net worth started out at $2,952 in August and as of the last update was $4,150. This is a total gain of $1,198 or 40.6% in 4 months. I'm pleased with the percentage gain so far but the total dollar amount doesn't have me too excited. Here in a couple weeks I will update my net worth for December and give a new post about the year in review. I don't expect it to change too much from where the numbers were in November. This is the christmas season and that means spending money on gifts. My fiance and I do expect/hope to get some cash for presents from our family but this will go straight into the wedding fund which I do not count as part of my net worth. Coming up in the new year the fiance and I will be combining our finances and I will start tracking our net worth together. I wonder if this will make my overall net worth increase or decrease? She has a lot of cash but she also carries a student loan and car loan. Either way the goal is to always make progress and increase our net worth.

A New Beginning to this Blog

Well, I'm back! I have been gone for awhile as I decided not to blog anymore but have recently had a change of heart and decided I wanted to write some more about my life. I will continue to do what I had been doing in the past keeping track of networth and goals. I am leaving this blog open though to anything and everything I feel the need to express my opinions on or talk about. Moving forward this blog will probably end up being a lot more personal and less personal finance. Most people won't be interested in alot of the things I'm going to write about because this is going to have stuff about my everyday life. Not just my financial every day life. Stay tuned if your interested to follow my journey through life.

Net Worth Update October

First things first. I am now engaged. I asked my fiance over the weekend on October 27th and of course she said yes. Now we have the daunting task of planning and paying for a wedding. For someone interested in personal finance and wanting to grow his net worth, this kind of sucks. Don't get my wrong. I am estatic to be getting married to the woman of my dreams. She is so wonderful and I have never loved anyone like I love her. But the idea of shelling out a ton of dough for a wedding is scary. But I know we are both financially responsible people and we will do what is right. The wedding will be great and we'll keep moving forward in our finances.

So, for the month of October, I was able to increase my net worth by 16.27% or $522. I'm pretty pleased with this jump. This is just about double my increase last month and every time there is an increase I will be happy. This month I have focused on paying off credit cards and other debt. I have made it a new dream in life to be debt free and want to pay off all my credit card debt as quick as possible. This could be troublesome however in the near future due to trying to pay for a wedding. The fiance and I have decided to open a joint account and save all available money for the wedding. Hopefully I will still be able to decrease debt a little just not as fast as I would like. My assets should also still grow nicely from my 401k. Cash should stay idle for awhile.

The upcoming month of November will involve me keeping track of every cent that enters and exits my life. I want to see the net of these numbers be positive. Of course, with Christmas coming up, growing the net worth could be a daunting task. I have saved up for Christmas though so I have that money available. The fiance and I have already talked about not spending too much on each other. Everything is going to work out and I have a goal of a net worth close to $5,000 by the end of the year. Lets see what happens!