Recently I have been thinking alot about my job and whether I am going to be stuck here in the same position forever. I haven't been in my current position for two long (a little over a year and half). However, I find myself worried that it's not giving me the kind of experience that will make me valuable for other positions either with this company or other companies. I work for a mutual fund company working on reporting for the funds. I basically work up all the financial statements, portfolios, annual and semi annual reports for a group of funds owned and managed by my company. I like my job. It's interesting.
However, currently there are only 4 staff working in my department. There are 3 managers. One of the staff has been here and in the same position for 8 years. I know she is very frustrated that she can't get a promotion to some sort of management level. I can picture myself in the same situation 6 years from now. Still working in the same department as a staff. That has me worried. I don't want to be CEO of a company. However I do want to be successful. I feel that moving up into middle management and taking on more responsibility is a sign of success. Higher pay also helps. My concern is that with the type of work I do, there is not alot of demand in my city. There are two big mutual fund companies that I know of where I live. Other companies accounting departments are looking for people with mutual fund accounting experience. Therefore I don't see how I could expect or hope to move up the career ladder either with my current company or a different company. I guess my main concern that I don't want to be stuck in a dead end job.
Today there was a job posting for a tax associate in my company. The position is a staff position working on the tax aspect of the mutual funds owned by my company. I'm considering it. The reasons I'm balking at applying for the position are that I'm not sure if it would get me anywhere. Would I be exchanging one dead end staff position for another? Or would this position offer the kind of experience valuable to other companies? Could this position possibly lead to a higher up position in the future? Another reason for balking is that I don't even know if I would like the position. I'm fairly happy doing what I currently do. What if I switched jobs and hated it? The job description doesn't give me a great idea of what they do. The responsibilities are listed but they don't give you a great idea if you haven't worked in that type of position before. I am going to mull this all over in my head today and tomorrow and see where I land. In life you must take chances. Time will tell if I make the right decision.
Showing posts with label My Life. Show all posts
Showing posts with label My Life. Show all posts
Wednesday, March 26, 2008
Taxes, Wedding Savings, House Appraisals and More
I haven't posted in awhile because thier hasn't really been alot going on recently. We filed my fiances taxes about a week and half ago. She will be getting refunds from federal and two states. She owes $8 to a third state which she worked in for probably 2 or 3 weeks total this past year. Anyways, we used turbotax and the federal was really easy. The state part was a bit confusing. It didn't help that we moved mid way through the year and crossed the state line. Hopefully we got it right. So she recieved her 2 state refunds via direct deposit last week and we moved that money into our wedding fund. So the wedding fund has increased a total of $750 this month with contributions! I think that's a pretty good month. When we get her federal it will also go to the wedding fund.
I got a call from the bank that is doing our mortgage this morning to let me know they got the appraisal done on the house. We are purchasing the house for 162k and they appraised it for 168k. So that sounds pretty good to me. I have heard that the bank appraisers usually go lower then what the house would be appraised for by someone you personally hired to do it. But for now we'll stick to this appraisal's value.
On the insurance front, we have decided to switch our insurances to Traveler's Insurance. After getting quotes from Nationwide, Allstate, Farmers, StateFarm, Shelter and Traveler's, Traveler's worked out to be slightly cheaper then the next closest and so we decided to go with them. We will be saving almost $600 a year in car insurance which will come close to covering the homeowners insurance. This is because we will get the discounts for having all our plans with the same company. Good news!
I got a call from the bank that is doing our mortgage this morning to let me know they got the appraisal done on the house. We are purchasing the house for 162k and they appraised it for 168k. So that sounds pretty good to me. I have heard that the bank appraisers usually go lower then what the house would be appraised for by someone you personally hired to do it. But for now we'll stick to this appraisal's value.
On the insurance front, we have decided to switch our insurances to Traveler's Insurance. After getting quotes from Nationwide, Allstate, Farmers, StateFarm, Shelter and Traveler's, Traveler's worked out to be slightly cheaper then the next closest and so we decided to go with them. We will be saving almost $600 a year in car insurance which will come close to covering the homeowners insurance. This is because we will get the discounts for having all our plans with the same company. Good news!
Tuesday, March 18, 2008
Savings Updates!
This past weekend I went ahead and transferred some money from checking into our wedding fund and our emergency fund. This month we were able to save $500 into our wedding fund. We were also able to save $800 towards our emergency fund. We decided to save more into our emergency fund because the money we need for closing costs for the house will come from this account. Once the end of the month hits I will know how much we were under budget. Currently it looks like we will be about $300 under budget which we will also put in our emergency fund at that point.
Also this weekend we completed filing my fiances taxes. Once all was said and done she will be getting refunds totaling just over $1,000. We will probably divide this money up between the wedding and emergency funds.
On my run yesterday I was doing some math in my head. I figured up that at our current savings rate we should be able to have about $11,000 in our wedding fund when it comes time to pay off everything we have yet to pay for such as catering and photography. Hopefully along with some help from my fiances parents this will be enough to cover everything and we won't have to dip into our emergency fund to pick up any slack. I also figured that if we save the rest of the year like we did this month that our emergency fund should be close to $25,000 by the end of the year. This is not including any money we can hope to get for our wedding which I'm sure some will go towards this goal. I also did not take into account the tax stimulus of $1,200 we should also be recieving in May. Thus, I was feeling pretty good on my run both physically and mentally. I feel like we are in a good position to end this year off in a good position with our wedding paid for in full and our emergency fund to the point we want it. That will put us in good position to work towards more exciting goals in 2009.
Also this weekend we completed filing my fiances taxes. Once all was said and done she will be getting refunds totaling just over $1,000. We will probably divide this money up between the wedding and emergency funds.
On my run yesterday I was doing some math in my head. I figured up that at our current savings rate we should be able to have about $11,000 in our wedding fund when it comes time to pay off everything we have yet to pay for such as catering and photography. Hopefully along with some help from my fiances parents this will be enough to cover everything and we won't have to dip into our emergency fund to pick up any slack. I also figured that if we save the rest of the year like we did this month that our emergency fund should be close to $25,000 by the end of the year. This is not including any money we can hope to get for our wedding which I'm sure some will go towards this goal. I also did not take into account the tax stimulus of $1,200 we should also be recieving in May. Thus, I was feeling pretty good on my run both physically and mentally. I feel like we are in a good position to end this year off in a good position with our wedding paid for in full and our emergency fund to the point we want it. That will put us in good position to work towards more exciting goals in 2009.
Monday, March 17, 2008
If You Were Debt Free!
Today I read a post over at Apples and Telephones that got me to thinking. The author is debt free and most of the personal finance books she has read focus on getting out of debt. She mentions Dave Ramsey who it seems focuses completely on getting out of debt. I feel this is because this is the biggest and most important step in his plan. Also, most of Ramsey's audience is probably in debt which is why they are looking for help. The author of Apples and Telephones states that she has no debts and therefore does not quite no what to do. She has no big goals to aim for such as becoming debt free.
For me, once my fiance and I are debt free we will have a plan. I've thought about this many times before. I am considering having all our debt besides the mortgage paid off as being debt free. I think once we are at this point we will be in a good position to save.
We currently save for retirement but once we have no debt we will be able to save a higher percentage of our salaries. I believe that it is very important to save as much as you can towards retirement close to 15% of your salary.
Once we are debt free except for the mortgage we will start paying off the mortgage at an accelerated rate. We don't want to carry a mortgage for 30 years. Hopefully if things go well we can get it paid off in 20 years or less.
We will have our emergency fund built up to 6 months of expenses and we will focus on keeping this at 6 months worth of expenses in a safe online savings account that hopefully earns us a higher rate of return then a regular account at a brick and mortar bank.
At this point we will save for things we want. We will have different accounts saving for new cars when the time comes to replace our current cars. We will save for vacations we want to go on. We will save for anything new we would like.
Last we will be saving into a couple of mutual funds through my company (a mutual fund company) for our futures. We will be saving to build wealth. For us the ultimate goal is building a large amount of wealth where we can feel comfortable financially. An amount of wealth where we will not be concerned with any emergencies that may arise. An amount of wealth where we can feel comfortable donating large amounts to charity. An amount of wealth where we can feel free to experience different things we would like to experience such as world travel.
I feel that once you have become debt free the journey has really just begun. At that time it is time to really save for your future. Enjoy the now but also save so you can really really enjoy the future!
For me, once my fiance and I are debt free we will have a plan. I've thought about this many times before. I am considering having all our debt besides the mortgage paid off as being debt free. I think once we are at this point we will be in a good position to save.
We currently save for retirement but once we have no debt we will be able to save a higher percentage of our salaries. I believe that it is very important to save as much as you can towards retirement close to 15% of your salary.
Once we are debt free except for the mortgage we will start paying off the mortgage at an accelerated rate. We don't want to carry a mortgage for 30 years. Hopefully if things go well we can get it paid off in 20 years or less.
We will have our emergency fund built up to 6 months of expenses and we will focus on keeping this at 6 months worth of expenses in a safe online savings account that hopefully earns us a higher rate of return then a regular account at a brick and mortar bank.
At this point we will save for things we want. We will have different accounts saving for new cars when the time comes to replace our current cars. We will save for vacations we want to go on. We will save for anything new we would like.
Last we will be saving into a couple of mutual funds through my company (a mutual fund company) for our futures. We will be saving to build wealth. For us the ultimate goal is building a large amount of wealth where we can feel comfortable financially. An amount of wealth where we will not be concerned with any emergencies that may arise. An amount of wealth where we can feel comfortable donating large amounts to charity. An amount of wealth where we can feel free to experience different things we would like to experience such as world travel.
I feel that once you have become debt free the journey has really just begun. At that time it is time to really save for your future. Enjoy the now but also save so you can really really enjoy the future!
Thursday, March 13, 2008
Finally! An Agreement Reached!
We finally reached an agreement with the sellers of the house last night for good! After our inspection we realized there were some problems with the drainage in the backyard causing water to pool up on a side of the yard when it rains alot. In the midwest we get alot of water through the winter and spring so this was a concern of ours. We didn't want a pool of water in our backyard for half the year. We want to be able to play in our backyard with our dog. We don't want concerns that the pooling of water could cause foundation problems in the future. Thus, we were set on making sure this issue could be fixed and that the sellers were the ones to have to pay for the solution.
So, we recieved 4 estimates on what it would take to fix the problem. Most all of them were using a drainage system that would bring the water around the side of the house and out the front yard into the street. The estimates ranged from $1,650 to $6,665. The $1,650 came from someone the sellers wanted to get to do the work. We did not like this solution. We did not know if they were just friends that would do a quick fix so the seller could pay as little as possible. They weren't an actual company from what we could tell.
Thus, we decided to take the $1,650 that the sellers were willing to pay in an eschrow account. We will use our company which gave us a bid of $2,600 and a one year warranty that the solution would work. We will pay the difference ourselves.
So with that taken care of we have an agreement and a house will be ours in mid April! It is a scary ordeal. We will be a homeowner and all the costs that come along with home ownership will be our responsibility. The house is wonderful and I can't wait to get the keys and be able to move in! The next concern on our list is getting our current residence rented out so our landlord will release us from the lease. Hopefully we can get that taken care of within the next month!
So, we recieved 4 estimates on what it would take to fix the problem. Most all of them were using a drainage system that would bring the water around the side of the house and out the front yard into the street. The estimates ranged from $1,650 to $6,665. The $1,650 came from someone the sellers wanted to get to do the work. We did not like this solution. We did not know if they were just friends that would do a quick fix so the seller could pay as little as possible. They weren't an actual company from what we could tell.
Thus, we decided to take the $1,650 that the sellers were willing to pay in an eschrow account. We will use our company which gave us a bid of $2,600 and a one year warranty that the solution would work. We will pay the difference ourselves.
So with that taken care of we have an agreement and a house will be ours in mid April! It is a scary ordeal. We will be a homeowner and all the costs that come along with home ownership will be our responsibility. The house is wonderful and I can't wait to get the keys and be able to move in! The next concern on our list is getting our current residence rented out so our landlord will release us from the lease. Hopefully we can get that taken care of within the next month!
Tuesday, March 11, 2008
All Major Bills Due Beginning of Month!
The other day I was going over our budget and our checking account and freaking out. My fiance and I try to keep a minimum of $1,000 in our checking account. That may be high but that's the level we both agreed we would feel comfortable with so that's where we try to keep it.
The problem is that all our major bills are due at the beginning of the month. So we get paid at the beginning of the month and our bills such as rent, credit card, 2 cars, and other smaller ones are due before we get our second paychecks. I realized this month that this brings our checking account balance down very low to a level we are definately not comfortable under $300. We will get paid again mid month and there will be a couple bills to be paid but a majority of those paychecks will go towards our different savings goals and we will end the month off with exactly $1,000 in our checking account.
Right now I am wondering if we shouldn't end the month off with closer to $1,500 in our checking account so that mid month we don't get below $500. Or does it really make a difference? We have plenty of money in our savings that we can transfer over if needed to pay a certain bill if we do get close to running out of money in our checking account. I feel as long as I keep good track of how low my checking account balance goes and make sure I don't overdraw on funds I should be alright. It is really only about one week out of the month where that balance is well below our $1,000 comfort level anyways.
I think we will continue to do what we currently do and if things get to tight we can transfer some of the money over from savings. I wish that our bills were more spread out. The current situation makes me sad at the beginning of the month but very happy towards the end. This is because I'm paying out a bunch of checks at the beginning and then only at the end do we get to see our savings going up.
The problem is that all our major bills are due at the beginning of the month. So we get paid at the beginning of the month and our bills such as rent, credit card, 2 cars, and other smaller ones are due before we get our second paychecks. I realized this month that this brings our checking account balance down very low to a level we are definately not comfortable under $300. We will get paid again mid month and there will be a couple bills to be paid but a majority of those paychecks will go towards our different savings goals and we will end the month off with exactly $1,000 in our checking account.
Right now I am wondering if we shouldn't end the month off with closer to $1,500 in our checking account so that mid month we don't get below $500. Or does it really make a difference? We have plenty of money in our savings that we can transfer over if needed to pay a certain bill if we do get close to running out of money in our checking account. I feel as long as I keep good track of how low my checking account balance goes and make sure I don't overdraw on funds I should be alright. It is really only about one week out of the month where that balance is well below our $1,000 comfort level anyways.
I think we will continue to do what we currently do and if things get to tight we can transfer some of the money over from savings. I wish that our bills were more spread out. The current situation makes me sad at the beginning of the month but very happy towards the end. This is because I'm paying out a bunch of checks at the beginning and then only at the end do we get to see our savings going up.
Friday, March 7, 2008
Home Inspection
We had the inspection on the house we are considering buying on Tuesday and most everything turned up good. There was one problem with drainage in the backyard and what looked to be a little problem has turned into a very big problem. The inspector, who is a family friend, expressed to us his concern that the back yard had very poor drainage and water was and would continue to pool in the backyard making the back yard unusable and putting too much pressure on the foundation. He recommended calling a company that does drainage work to figure see if there was anything to be done to fix the problem.
So Wednesday the drainage company checked out the yard. I was not able to go because of work but the realtor went and she called and told us they thought it would be around $2,500 but were working up an estimate and would get that to her Friday. So today we got the estimate for a much larger number of $6,650.
For my fiance and I this is completely unacceptable. We are going to submit an offer for them to pay for this drainage system to be put in or we are going to drop the contract and move on to looking for a different house. Currently this is not our problem and if they are not willing to pay to have this fixed then we don't want to make it our problem. We have no pressure to move from our current location so we can keep looking and still be fine if we don't find a house for a few months. If we don't find a house in before June we will probably continue renting our current house.
This whole process has gotten frustrating. We are starting to feel like our realtor is just trying to get a sale and isn't looking for the best house for us. She makes little comments that I just don't feel comfortable with. I believe if things fall through with this house we will be looking for a different realtor as well. I'll keep you posted on what happens.
So Wednesday the drainage company checked out the yard. I was not able to go because of work but the realtor went and she called and told us they thought it would be around $2,500 but were working up an estimate and would get that to her Friday. So today we got the estimate for a much larger number of $6,650.
For my fiance and I this is completely unacceptable. We are going to submit an offer for them to pay for this drainage system to be put in or we are going to drop the contract and move on to looking for a different house. Currently this is not our problem and if they are not willing to pay to have this fixed then we don't want to make it our problem. We have no pressure to move from our current location so we can keep looking and still be fine if we don't find a house for a few months. If we don't find a house in before June we will probably continue renting our current house.
This whole process has gotten frustrating. We are starting to feel like our realtor is just trying to get a sale and isn't looking for the best house for us. She makes little comments that I just don't feel comfortable with. I believe if things fall through with this house we will be looking for a different realtor as well. I'll keep you posted on what happens.
Friday, February 29, 2008
Bought A House! Almost.
Well last night the sellers of the house we put an offer in on countered our offer. It was a good counter and showed they were ready to sell. They came down off their offering price about a quarter of the way down to our offer price. They agreed to give us a home warrenty, a refridgerator, and pay most of our closing costs.
We went ahead and counter offered again to try to get the price down to half way between thier asking and our original offer. They accepted and we agreed on a contract. So if everything goes smoothly we will own this house in mid April!
Next on our list is getting house inspected probably next week. At that point we will either renegotiate or move on with the deal depending on what the inspection looks like. Hopefully nothing major will be wrong and we can move along to close the deal at closing.
So we are getting close to making our very first house purchase!
Thursday, February 28, 2008
Offered on a House
Well, last night my fiance and I decided to go ahead and put an offer in on the house that we hope to buy. We met over at our realtors office about 7 pm and after looking at the neighborhood comps and the sellers disclosure we went ahead and decided on an offer to send the sellers.
The house asking price is $164,900. We offered them $158,900 and asked for a majority of closing costs, the refridgerator and a home warrenty. I'm not sure how that offer compares. Whether we are asking too much or too little. It is an offer I feel good about putting in which gives us some room for negotiation to a point where we would be satisfied.
Next we will wait and see what they come back with. Hopefully they come back with a decent counter offer. My fear is they will not come back with anything and then we will have to move on to something else. I don't think I could work with someone that wouldn't budge a little on asking price if they are serious about selling thier house. We should find out sometime today whether they accept, reject, or counter our offer. I'm expecting a counter offer.
The house asking price is $164,900. We offered them $158,900 and asked for a majority of closing costs, the refridgerator and a home warrenty. I'm not sure how that offer compares. Whether we are asking too much or too little. It is an offer I feel good about putting in which gives us some room for negotiation to a point where we would be satisfied.
Next we will wait and see what they come back with. Hopefully they come back with a decent counter offer. My fear is they will not come back with anything and then we will have to move on to something else. I don't think I could work with someone that wouldn't budge a little on asking price if they are serious about selling thier house. We should find out sometime today whether they accept, reject, or counter our offer. I'm expecting a counter offer.
Wednesday, February 27, 2008
Looking into some Houses
My fiance and I have been on the look for a house to buy recently. We have been looking for most of the month of February. We've seen probably around 30 homes and have liked a grand total of 3. We are at the point where we are considering making an offer on one of them that we liked. One that we liked sold the next week after we saw it. The other one we thought we were going to put an offer on but then we saw this one and are certain it is the one for us. It is a little bigger with a finished basement for the same amount of money.
Here is what we are looking at. The asking price for the home is just under $165k. The home is in a suburb off of Kansas City on the Kansas side in Johnson County. The house has 3 bedrooms, 2 baths (one in the master bedroom), a nice kitchen, dining room, living room and a finished basement. I am so excited about the house. I think we are going to drive by it again tonight after work and then let our agent know we are wanting to put in an offer. After figuring up some numbers we have figured out that buying this house will cost us about $200 more then our current rent. This will make things tight for the next few months because we are still trying to save everything we can for the wedding and aren't willing to compromise that. After the wedding we will still be saving but it will losen up the strings a bit and life will get a little more comfortable. Thus, things will be a little tight for about 3 or 4 months.
Anyways, I've been so busy lately with work, wedding planning, and house shopping that I haven't gotten to post so I figured I better put out a new post to let everyone know what's been going on.
Here is what we are looking at. The asking price for the home is just under $165k. The home is in a suburb off of Kansas City on the Kansas side in Johnson County. The house has 3 bedrooms, 2 baths (one in the master bedroom), a nice kitchen, dining room, living room and a finished basement. I am so excited about the house. I think we are going to drive by it again tonight after work and then let our agent know we are wanting to put in an offer. After figuring up some numbers we have figured out that buying this house will cost us about $200 more then our current rent. This will make things tight for the next few months because we are still trying to save everything we can for the wedding and aren't willing to compromise that. After the wedding we will still be saving but it will losen up the strings a bit and life will get a little more comfortable. Thus, things will be a little tight for about 3 or 4 months.
Anyways, I've been so busy lately with work, wedding planning, and house shopping that I haven't gotten to post so I figured I better put out a new post to let everyone know what's been going on.
Sunday, February 24, 2008
The Ultimate Savings Goal (for me)!
This morning I worked on an excel spreadsheet that I have used to determine how much I ultimately want to save up to be able to sustain my current life. I figured in savings in my 401k and a taxable account. I did not take into consideration taxes.
On my spreadsheet I took my current salary and increased it by an annual raise of 4%. Since I've been there my raises have been higher but I like to be conservative in my estimates. So, if I get no higher of a raise then 4% and no promotions to higher pay grades then I will be making approximately 182k by retirement age of 65. Honestly I'd like to retire sooner but that's going to depend on how well I progress towards my savings goals.
Next I figured out how much I feel I need after retirement to sustain the same standard of living. I decided that in retirement, I would need about 80% of my current income. This is probably a little more then I will need because hopefully I will not have a house payment at that time. To come up with 80% I just figured that if I am saving roughly 20% of my salary during my working years I won't be saving while I'm retired. Thus I figured I need 20% less. This is again pretty conservative I feel. I took the 80% of current salary I figured I would need and adjusted it with a 4% level of inflation out until I am age 95. I figured if I live that long then I'm doing good and honestly I hope I don't live that long. If I pass in my 80's I will be happy.
So next I took my retirement savings. I took what I currently have and what I will be saving into retirement each year from my salary and adjusted it for a return of 8%. Hopefully I can get more of a return but I like to be conservative. I grew this account up to retirement age(65).
I also have a taxable savings account where I took current savings and grew it by about the amount it currently grows and adjusted it for a gain of 6.5%. I will have most of this money in mutual funds so I expect it to earn me a high return. I did this through retirement age as well.
Once I hit retirement age, I took the amount I figured I would need to live off of and divided it by two. I took half of that from the retirement account and half from the taxable savings. I switched the return on those accounts to 5% because they will now be invested in a mix of bonds and stocks. I continued to decrease these accounts by taking out what I would need to live. Once taxable savings was down to 100k I took only from retirement savings. I decreased these accounts until the age of 90 and if I live to 91 with this plan I will be completely out of money.
Anyways, these are all really really rough estimates. In the long run I could need more I could need less. I may live off of half my current salary when I retire. I didn't take into account a pension I plan on receiving from work. I didn't take into account the fact that my highest expense should be gone by retirement which is mortgage or rent. But I said I wanted to live without worry. I wanted to be able to be at financial peace with myself. Therefore, I took the numbers I came up with that I would need at retirement to come up with my goal number. At retirement I figured I would need roughly about 3.5 million. Therefore, my goal savings number is going to be 4 million by retirement. With that number as my target, I will work out a plan to achieve that goal.
By the way, I said I am not worried about being incredibly wealthy and to me 4 million sounds incredibly wealthy. However, once you take into account inflation and the fact that I plan on living off of this savings with no other income for 25 years, this is not a lot of money. Today it is. In 2050 it will not be. Four million is my ultimate goal and next I will work on plans to reach that goal through mini goals.
On my spreadsheet I took my current salary and increased it by an annual raise of 4%. Since I've been there my raises have been higher but I like to be conservative in my estimates. So, if I get no higher of a raise then 4% and no promotions to higher pay grades then I will be making approximately 182k by retirement age of 65. Honestly I'd like to retire sooner but that's going to depend on how well I progress towards my savings goals.
Next I figured out how much I feel I need after retirement to sustain the same standard of living. I decided that in retirement, I would need about 80% of my current income. This is probably a little more then I will need because hopefully I will not have a house payment at that time. To come up with 80% I just figured that if I am saving roughly 20% of my salary during my working years I won't be saving while I'm retired. Thus I figured I need 20% less. This is again pretty conservative I feel. I took the 80% of current salary I figured I would need and adjusted it with a 4% level of inflation out until I am age 95. I figured if I live that long then I'm doing good and honestly I hope I don't live that long. If I pass in my 80's I will be happy.
So next I took my retirement savings. I took what I currently have and what I will be saving into retirement each year from my salary and adjusted it for a return of 8%. Hopefully I can get more of a return but I like to be conservative. I grew this account up to retirement age(65).
I also have a taxable savings account where I took current savings and grew it by about the amount it currently grows and adjusted it for a gain of 6.5%. I will have most of this money in mutual funds so I expect it to earn me a high return. I did this through retirement age as well.
Once I hit retirement age, I took the amount I figured I would need to live off of and divided it by two. I took half of that from the retirement account and half from the taxable savings. I switched the return on those accounts to 5% because they will now be invested in a mix of bonds and stocks. I continued to decrease these accounts by taking out what I would need to live. Once taxable savings was down to 100k I took only from retirement savings. I decreased these accounts until the age of 90 and if I live to 91 with this plan I will be completely out of money.
Anyways, these are all really really rough estimates. In the long run I could need more I could need less. I may live off of half my current salary when I retire. I didn't take into account a pension I plan on receiving from work. I didn't take into account the fact that my highest expense should be gone by retirement which is mortgage or rent. But I said I wanted to live without worry. I wanted to be able to be at financial peace with myself. Therefore, I took the numbers I came up with that I would need at retirement to come up with my goal number. At retirement I figured I would need roughly about 3.5 million. Therefore, my goal savings number is going to be 4 million by retirement. With that number as my target, I will work out a plan to achieve that goal.
By the way, I said I am not worried about being incredibly wealthy and to me 4 million sounds incredibly wealthy. However, once you take into account inflation and the fact that I plan on living off of this savings with no other income for 25 years, this is not a lot of money. Today it is. In 2050 it will not be. Four million is my ultimate goal and next I will work on plans to reach that goal through mini goals.
Saturday, February 23, 2008
What is Financial Peace for Me?
Earlier in the week I wrote an article about how I wanted to develop a plan towards reaching financial peace and prosperity. I want to formulate a number and mini goals to help myself keep on track towards the ultimate goal.
However, before I can do that I feel like I need to define what financial peace is exactly for me. Financial peace can be different for every single person. One person may be happy just having enough money to get by with every day living with no luxuries, no vacations, no entertainment. Others may want to be able to take the occasional vacation or the occasional dinner out but are not concerned with being very wealthy. And yet there are others who may want to accumulate as much as they can until they are millionaires when they feel they can do what they want.
I would like to define what I believe would be financial peace for myself. Just after college I took a job as a financial planner. They promised the potential for a very high salary and I was all game. I wanted to be rich. That is all I knew and that is all that mattered to me was I wanted to say I made over 100k this year and have x amount in the bank with a big house to come home to. However, once I got into that job I quickly found out that it was definitely not for me. I was working every day from 8 in the morning until 9 in the evening. I was working half a day on Saturdays. What good would it do me to have all this money if I never had any time to enjoy it? I quit after a couple months and searched for something with less hours. Therefore I know I would much rather have time to spend with those I love and earn a little less instead of working all the time and earning a lot.
So for me, financial peace will involve being able to live comfortably while spending most of my time with those I love.
What is comfortably? Comfortably for me involves being able to afford to pay our bills each month without worry. Also being able to go to eat occasionally on the weekends. Also being able to take a vacation or two every year. Being comfortable would mean I'm not worried about the budget when I go looking for a gift for my loved ones. I would have a house that I love and am happy with and can afford to pay for. I probably wouldn't be living excessive. I wouldn't be traveling every month of the year to far off places. I wouldn't have to have all of the latest electronic gadgets, although an occasional one would be nice. I don't need a maid or a live in home nanny. I just want to live comfortable. I want to be able to pay for the necessities, a few luxuries, and have some left over to save because I love to save.
Later I will write a couple more posts about how much money I will need to live "comfortably." I will figure out how much I need in savings to support the lifestyle that I want. Ultimately I will not be forced to work to live how I want to live. I will write a post about where I want to end up and another one about how I want to get there. Stay tuned for more.
However, before I can do that I feel like I need to define what financial peace is exactly for me. Financial peace can be different for every single person. One person may be happy just having enough money to get by with every day living with no luxuries, no vacations, no entertainment. Others may want to be able to take the occasional vacation or the occasional dinner out but are not concerned with being very wealthy. And yet there are others who may want to accumulate as much as they can until they are millionaires when they feel they can do what they want.
I would like to define what I believe would be financial peace for myself. Just after college I took a job as a financial planner. They promised the potential for a very high salary and I was all game. I wanted to be rich. That is all I knew and that is all that mattered to me was I wanted to say I made over 100k this year and have x amount in the bank with a big house to come home to. However, once I got into that job I quickly found out that it was definitely not for me. I was working every day from 8 in the morning until 9 in the evening. I was working half a day on Saturdays. What good would it do me to have all this money if I never had any time to enjoy it? I quit after a couple months and searched for something with less hours. Therefore I know I would much rather have time to spend with those I love and earn a little less instead of working all the time and earning a lot.
So for me, financial peace will involve being able to live comfortably while spending most of my time with those I love.
What is comfortably? Comfortably for me involves being able to afford to pay our bills each month without worry. Also being able to go to eat occasionally on the weekends. Also being able to take a vacation or two every year. Being comfortable would mean I'm not worried about the budget when I go looking for a gift for my loved ones. I would have a house that I love and am happy with and can afford to pay for. I probably wouldn't be living excessive. I wouldn't be traveling every month of the year to far off places. I wouldn't have to have all of the latest electronic gadgets, although an occasional one would be nice. I don't need a maid or a live in home nanny. I just want to live comfortable. I want to be able to pay for the necessities, a few luxuries, and have some left over to save because I love to save.
Later I will write a couple more posts about how much money I will need to live "comfortably." I will figure out how much I need in savings to support the lifestyle that I want. Ultimately I will not be forced to work to live how I want to live. I will write a post about where I want to end up and another one about how I want to get there. Stay tuned for more.
Friday, February 22, 2008
Paying for a Wedding
I had a discussion today over lunch with a coworker about me and my fiances wedding planning and how it is going. I make it no secret that my fiance and I are saving for our wedding and paying for most of it ourselves. I found it interesting how my coworker thinks it is so ridiculous that we have to pay for our own wedding. She thinks it is the brides parents responsibility to pay for the whole thing. This confuses me considering she has told us before that her father is unable to work for some reason and does not have much money. Her mother passed away a few years about. She still expects her father to pay for her wedding and from how she talks, it is going to be an expensive wedding whenever the day comes.
What do you think? Obviously everyone has a different situation but do you feel it the responsibility of the brides parents to pay for the wedding? My fiance and I don't. We know the financial situation of her parents and would feel really bad if they were paying for it. They are helping out by paying for a few things. All in all I think we will end up splitting the costs about even once the whole thing is done and over. My fiance and I are financially responsible and we have been saving for our wedding since the day we got engaged. We have our own joint account that we automatically deposit money into every month. As we need the money we have been able to pay from the money we've saved in this account. I don't have a problem with it and neither does my fiance. However, for some reason others find it necessary to tell us how they won't have to pay for thier weddings because thier parents will. In some cases I think they are right. In others like with my coworker I think she is in for a rude awakening. I don't think she realizes how expensive weddings can get and I doubt her father will be able to pay for it all. In most cases, I just think to myself that it is a good thing your parents are going to pay for it because there is no way you are financially responsible enough to do it yourself without putting yourself in massive debt. However, I just keep my mouth shut and smile and nod.
What are your thoughts? Who's responsibility should it be to pay for a wedding? What about your own situations? How was your wedding paid for or how do you think it will be paid for?
What do you think? Obviously everyone has a different situation but do you feel it the responsibility of the brides parents to pay for the wedding? My fiance and I don't. We know the financial situation of her parents and would feel really bad if they were paying for it. They are helping out by paying for a few things. All in all I think we will end up splitting the costs about even once the whole thing is done and over. My fiance and I are financially responsible and we have been saving for our wedding since the day we got engaged. We have our own joint account that we automatically deposit money into every month. As we need the money we have been able to pay from the money we've saved in this account. I don't have a problem with it and neither does my fiance. However, for some reason others find it necessary to tell us how they won't have to pay for thier weddings because thier parents will. In some cases I think they are right. In others like with my coworker I think she is in for a rude awakening. I don't think she realizes how expensive weddings can get and I doubt her father will be able to pay for it all. In most cases, I just think to myself that it is a good thing your parents are going to pay for it because there is no way you are financially responsible enough to do it yourself without putting yourself in massive debt. However, I just keep my mouth shut and smile and nod.
What are your thoughts? Who's responsibility should it be to pay for a wedding? What about your own situations? How was your wedding paid for or how do you think it will be paid for?
Thursday, February 21, 2008
You'll Give Me How Much for a Mortgage!
Last night the fiance and I had a meeting to get pre approved for a mortgage. We are starting to look at houses and have decided we can afford something under 160k. In our area this should buy us a 3 bed, 1 and half bath, 1 car garage and a basement that is hopefully finished or easily finishable. That is what we are looking for and we have found quite a few that would work but just not the perfect one for us yet.
We knew getting approved for this much for a mortgage would not be a problem. However, the amount they approved us for is ridiculous. The mortgage company told us we could be approved for 350k. That would buy us a mansion in our area. Well, maybe not a mansion but a really really nice house. Anyways, we know we can't afford that with our current situation. Maybe if we didn't want to save for retirement or anything else and if we never wanted to spend money for entertainment, vacation, clothes or anything. Don't worry, we are keeping a level head about ourselves. Just because they say they will loan us 350k doesn't mean we are going to start looking at 350k houses. We are still sticking to our original price range under 160k.
Another interesting thing we got to see last night while meeting with the lender was our credit scores and reports. It was interesting to see that I have a credit score around 720 and my fiances was in the 760's. So she has better credit then me. Yes I'm jealous. But I can live with it. So we currently have good credit. Now we just need to continue paying everything on time and not mess it up.
The funny thing was after the meeting my fiance was asking me how she can increase her credit score. Apparently it wasn't good enough for her. Gotta love her!
We knew getting approved for this much for a mortgage would not be a problem. However, the amount they approved us for is ridiculous. The mortgage company told us we could be approved for 350k. That would buy us a mansion in our area. Well, maybe not a mansion but a really really nice house. Anyways, we know we can't afford that with our current situation. Maybe if we didn't want to save for retirement or anything else and if we never wanted to spend money for entertainment, vacation, clothes or anything. Don't worry, we are keeping a level head about ourselves. Just because they say they will loan us 350k doesn't mean we are going to start looking at 350k houses. We are still sticking to our original price range under 160k.
Another interesting thing we got to see last night while meeting with the lender was our credit scores and reports. It was interesting to see that I have a credit score around 720 and my fiances was in the 760's. So she has better credit then me. Yes I'm jealous. But I can live with it. So we currently have good credit. Now we just need to continue paying everything on time and not mess it up.
The funny thing was after the meeting my fiance was asking me how she can increase her credit score. Apparently it wasn't good enough for her. Gotta love her!
Tuesday, February 19, 2008
A Long Road to Financial Prosperity
The journey to financial prosperity and peace is long and sometimes seems to be an impossible task for me. I started my personal finance journey back in August when my eyes were opened up to the vast world of PF blogs and books available. I became consumed with reading everything I could about personal finance. I quickly turned to my own financial situation with a critical eye. Deciding I needed to make some changes, get out of debt, and start saving for the future, I set out on a mission. This journey is long. There are many turns and bumps on this road. Since becoming interested in personal finance and my own finances, I have had a few life changes. One is that I became engaged and now my fiance and I's finances are one. Another change which is coming up is the future purchase of our first home. This is something we are considering this sometime between now and the middle of summer. These changes throw forks in the road and a plan that was once set has to change.
However, I never really had a set plan. I never really had an exact idea of where I needed to go. I know where I have started but how will I know when I've reached the ultimate dream of having financial peace?
This week, I would like to set out to answer these questions. I want to come up with a goal number that will be my ultimate financial peace. The number where I no longer need to worry (as much) about money and work. The number where I have saved and invested enough to live off of the earnings and my work salary is no longer important. For most, this is the goal number to reach by retirement. This week I would like to try to find this number. I would like to develop a plan complete with short, medium and long term goals to achieve my ultimate goal of reaching this number and being at peace with my finances. After all, how can I ever achieve financial peace if I don't know what that is? I wouldn't start out on a road trip across the country without a map. And I shouldn't start out on my financial journey without some idea of where I ultimately want to end up.
Keep posted for some more posts about where I ultimately hope to end this journey and how I hope to get there.
However, I never really had a set plan. I never really had an exact idea of where I needed to go. I know where I have started but how will I know when I've reached the ultimate dream of having financial peace?
This week, I would like to set out to answer these questions. I want to come up with a goal number that will be my ultimate financial peace. The number where I no longer need to worry (as much) about money and work. The number where I have saved and invested enough to live off of the earnings and my work salary is no longer important. For most, this is the goal number to reach by retirement. This week I would like to try to find this number. I would like to develop a plan complete with short, medium and long term goals to achieve my ultimate goal of reaching this number and being at peace with my finances. After all, how can I ever achieve financial peace if I don't know what that is? I wouldn't start out on a road trip across the country without a map. And I shouldn't start out on my financial journey without some idea of where I ultimately want to end up.
Keep posted for some more posts about where I ultimately hope to end this journey and how I hope to get there.
Monday, February 18, 2008
Should I Sell Stock to Pay Down Credit Card?
Today I made my monthly payment on my credit card towards paying down and eventually paying off the balance. Right now I am able to throw around $200 a month at the balance so that this month it went down from $1,400 to $1,200.
I want this debt gone. It is credit card debt and I have grown a terrible hatred for credit card debt. I have always believed carrying a balance on credit cards is a bad thing to do. Due to some irresponsible moves the past couple years I built up a large balance and have been working since September at paying it all off.
Today I found myself contemplating whether I should sell some stock I own and use that money to pay down some of the debt. I have a small online stock brokerage account which only has about 800 dollars worth of stock in it. I am contemplating selling one of the holdings which would give me a little over $500 to put towards the credit card. This would help me pay off the credit card a couple months earlier then the current plan of paying down $200 a month.
Once I have that credit card paid off I will be able to save an extra $200 a month. This would help boost my savings quite a bit. My stock account is for fun. I like speculating in the market. However, I don't see myself getting rich off of this. Especially with such little capital and considering I've lost money on most of my trades except a couple. I don't see myself growing the capital I can trade anytime soon either. My fiance and I have specific goals and none of them include building up my stock account. We are saving for our wedding. We are buying a house. We are paying off our debt. After all of this we want to build our emergency fund up about $6,000 more. And after all of this we would like to start saving into a couple mutual funds. I don't see myself contributing to my online stock brokerage account any time soon. Even after our wedding and after our debts are paid off, I doubt my fiance is going to want to put our savings into my stock picking ideas. She would rather put our savings into mutual funds with a history of good performance. And since I work for a mutual fund company, we can do this at NAV with no commissions or sales charges.
It may pain me to liquidate my stock account and use the money to pay down the credit card. However, I believe it is time to face the facts and go after my first goal. Being debt free. Getting rid of this credit card debt will free up a couple hundred dollars a month and that is what I need to do.
I want this debt gone. It is credit card debt and I have grown a terrible hatred for credit card debt. I have always believed carrying a balance on credit cards is a bad thing to do. Due to some irresponsible moves the past couple years I built up a large balance and have been working since September at paying it all off.
Today I found myself contemplating whether I should sell some stock I own and use that money to pay down some of the debt. I have a small online stock brokerage account which only has about 800 dollars worth of stock in it. I am contemplating selling one of the holdings which would give me a little over $500 to put towards the credit card. This would help me pay off the credit card a couple months earlier then the current plan of paying down $200 a month.
Once I have that credit card paid off I will be able to save an extra $200 a month. This would help boost my savings quite a bit. My stock account is for fun. I like speculating in the market. However, I don't see myself getting rich off of this. Especially with such little capital and considering I've lost money on most of my trades except a couple. I don't see myself growing the capital I can trade anytime soon either. My fiance and I have specific goals and none of them include building up my stock account. We are saving for our wedding. We are buying a house. We are paying off our debt. After all of this we want to build our emergency fund up about $6,000 more. And after all of this we would like to start saving into a couple mutual funds. I don't see myself contributing to my online stock brokerage account any time soon. Even after our wedding and after our debts are paid off, I doubt my fiance is going to want to put our savings into my stock picking ideas. She would rather put our savings into mutual funds with a history of good performance. And since I work for a mutual fund company, we can do this at NAV with no commissions or sales charges.
It may pain me to liquidate my stock account and use the money to pay down the credit card. However, I believe it is time to face the facts and go after my first goal. Being debt free. Getting rid of this credit card debt will free up a couple hundred dollars a month and that is what I need to do.
Friday, February 15, 2008
Federal Tax Refund Recieved Today!
Well to my surprise I looked into my checking account this afternoon and had a deposit of my federal tax refund! I was expecting to get the refund next week so am happy to get it a couple days early. I already transferred the money over to my fiance and I's wedding fund. This puts our wedding fund in pretty good shape. My fiance hasn't filed her taxes yet. I think we will do that this weekend so we can know how much more we can expect the wedding fund to go up due to taxes. Other then our tax refunds, there aren't going to be any more big jumps in our wedding fund. We expect to save about another $2k between now and the wedding in the fund in our normal monthly contributions.
On another note, we got preapproved for a mortgage today by another mortgage company. This makes two different companies that have preapproved us. We are going to meet with this second company next week. Our goal is obviously to find the cheapest mortgage we can get with the lowest interest rate offered to us. Thus we are shopping around and will probably look into one or two other lenders as well.
On another note, we got preapproved for a mortgage today by another mortgage company. This makes two different companies that have preapproved us. We are going to meet with this second company next week. Our goal is obviously to find the cheapest mortgage we can get with the lowest interest rate offered to us. Thus we are shopping around and will probably look into one or two other lenders as well.
Thursday, February 14, 2008
Let the Home Search Begin!
Well it's official! My fiance and I went out to some open houses last Sunday and decided that we were ready to begin looking for our future home to purchase. We decided on a realtor we like and got pre approved for a mortgage. Now all we have to do is find that perfect house!
We are in a lease at our current house until the end of July. Therefore, we are hoping to find a house that we can close on sometime in June or July. We decided that we wanted to buy a house now because we are tired of paying so much for rent. For what we currently pay in rent, we can buy a house about the same size. For a couple hundred dollars more a month we can get a bigger nicer house then where we currently live.
We aren't out looking for a mansion. We've decided on the things important to us. We are looking for a 2 or 3 bedroom house. We would like a basement that is finished. A deck or patio area in the backyard and we will be set! Our next plan is to search through some homes on our realtor website and then go check them out with her. Hopefully we'll find something we like in a price range we can afford!
Tuesday, February 12, 2008
Blew Threw my Monthly Entertainment Budget in Half the Month!
Ok, so today I went out and bought a couple items for my fiance for Valentines Day and got myself some lunch at Taco Bell. My fiance and I give ourselves an allowance of $100 a month to spend on whatever we want. Mine usually goes to eating out because I can't control myself. I like to eat out and eat out often. Last month I did a good job. This month however, my fun money is gone. I spent about $30 on my fiance for a couple items for V Day even though we decided because of our budget not to buy each other anything. But I had to get a card and some chocolates for her. And then I got a romantic movie. I feel it is our first V Day together since being engaged and I don't just want to not do anything. So it came out of my fun money. I'm ok with that.
Now I have to figure out a way to make it through the last 17 days of this month without spending any more money. I guess this will force me to not eat out. On another note, somehow my fiance is an amazing saver and has all her money for this month plus $40 left over from last month. I need to learn from her! Next month I will try to have some left over money!
Thursday, February 7, 2008
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!
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!
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