All posts by Joy

The Markets Are Doing Crappy, eh?

I watched my money in my Vanguard account gain about $300 and then lose $400 in the past month. Today was the worst. It was apparently the worst day on the stock market since Sept 11. Oy. Maybe I picked the wrong time to start investing.

“Worries that have been out there for the past couple of years are coming to a head right now,” said investment strategist Edward Yardeni, president of Yardeni Research Inc., told the Associated Press. “It’s show time.”

Show time?!? Um. Should I be worried?

While I’m starting to be ok with the fluctuations in the markets, it’s STILL tough to lose money. I’d prefer to make money first, and then if I end up losing what I made through my investments, that’s fine. I just don’t like being under what I put in. And right now I put in $5000 into my mutual fund and $4000 into my Roth IRA. And now I’m at $8839.20. I realize that tomorrow that might be at $9010, or it might be at $7000. I’m a little nervous. This is kind of a test, I guess. But I really ought to balance out my investments a bit better. The rest of my cash is stored safely in low-interest CDs. Watching my investment turn from $9000 to $9300 was really exciting. But that excitement was short lived. I’m trying really hard to stick it out a year. I’m hoping that my money will have, um, made money by June 2008.

Sitting on the floor of a parking garage; goodbye $165

I have a brilliant talent for making my life miserable. I decided to drive into the city today and park in my free spot by the office, which was a good 30 minute walk from the conference I was attending downtown. That all went fine, and despite being upset about my loafers not being the most comfortable walking shoes, I felt proud of saving the few extra bucks it would have cost to take the train or park closer.

Then what do I do? I manage to lose my car key. Yes, somehow during the course of the day my key fell off of the key chain and well, long story short, I do not have a car key.

There goes $165 (or more) plus three hours of my life that i’ll never get back.

I can deal with the wasted hours. But the $165? So much for my payraise.

Spending Habits of the Weak

In my attempt to determine where my money disappears to, I’ve sought out the aid of online personal finance tracking sites. Those of you who have been following my blog know that I enjoyed the ease of getting my finance info up to the Geezeo site. I’ve actually had a bit of trouble with signing in to the site lately (I’m pretty sure I’m using the right password, but then even when I try to reset the password it doesn’t work.) In any case, given that I have little patience and quickly got fed up with typing in my June spending into Excel, I signed in to my Wesabe account and updated my info so I could track my spending…

Geez. I spent a lot last month. I knew I was spending more than I made, but it’s kind of painful to see how grossly I burst past my invisible budget. I spent $3559 in June. But I only made $2273 for the month. Actually, come to think of it that’s all inaccurate because I deposited my final paycheck (which I received June 30) sometime in July. So right now my July earnings are noted as $2466, but really that money was earned in June, and half of the money counted in my June income was really my May paycheck. Plus, some of that money was the $450 my friend paid me to live in my apartment for the month. Oy, my income is much harder to track than my expenses.

I do need to start keeping tabs on my income. While I’ll be making more money at my full-time gig (when I start in a week), what I really need to do is track the money I make working the small freelance gigs I pick up on the side. Whether that’s doing some copy writing for my uncle’s digital marketing company, or designing a basic website for a friend who offers to pay something for the work… I really need to figure out how much per month I’m making on outside projects. Why? Well, it’s difficult to figure out a budget when these extra projects become a consistent portion of one’s income. When I was making about $2000 a month after taxes this year, the extra $100 a month I made on copy writing for my uncle was really a huge bonus. But then one of the companies that I did work for (through him) decided they no longer wanted him to put together a monthly newsletter, so I was then out $50 a month. Considering how much I spend, that $50 isn’t worth that much, but it’s also worth a lot. That $50 covered one voice lesson and a cheese plate at Starbucks.

My general theory on spending (albeit an irresponsible one) was that if I spent slightly more than what I was making at $35k a year, when I received a raise or managed to land a job with a higher paycheck, I’d be able to live comfortably at a slightly higher salary. After all, I don’t overspend EVERY month. Just most months. But only by about $600 to $1000. I don’t think I’m the type who will start spending more just because I’m making more. Sure my rent went up $145 a month (ouch), and I might splurge on nice clothes and paying for a nice dinner with the bf more often, but overall I think my spending habits will remain constant.

One thing I’d like to spend money on… if I had more money… would be travel. I’d love to take a real adult vacation, like to Hawaii or someplace like that. Thus far my only travel during my full-time work years has been back home to New Jersey. And up until now, my parents have chipped in for my plane ticket back east. But that doesn’t really count as a vacation, despite the high cost of that ticket. Going home is something that I just have to do every once in a while, but it’s not a relaxing getaway.

Since my bf doesn’t work, I’d really love to be able to afford to take us both to Hawaii, or maybe Seattle, or even to some random small ocean-side town in Southern California. I’d love to be able to splurge on a massage every once in a while, or just while on vacation. A massage and a facial. And maybe one of those fancy foot scrubs. And then there’s the laser hair removal and teeth whitening that I want to be saving my pennies for.

So… there’s plenty of things I could spend any extra income on, surely. Would I actually spend it? I’m not so sure. I’m not a huge saver, but I’ve never been good about spending money on big purchase items that I actually really want. Like that laser hair removal. I have this syndrome called PCOS and one of the lovely symptoms of the disorder is having excess facial hair. I don’t have a full-grown beard or anything, but I do spend a ridiculous amount of time tweezing random hairs out of my chin line and sideburns. God, what’s I’d give to permanently get rid of those hairs! Would I give $1500, or whatever the cost is these days for permanent (and painful) hair removal? Possibly. I’m afraid if I did that and it worked, I’d be addicted. I’d have to get my legs and armpits done, and my belly and back. I’d give anything to be hair free in the places where hair oughtn’t be.

Anyway, what makes me sad about my spending habits is knowing that I can go and spend $700 on clothes and makeup in one month, but I’d never really consider spending that much money on laser hair removal at this point in my life. Even though obviously it’s one of those things that I really want. I think I need to go to spending school. I need to get my financial priorities straight. I’m not sure where laser hair removal would fall into these priorities (after all, the treatment would be a luxury for sure, but in a way it’s a medical expense because it’s not like I can live a normal life with a thousand hairs growing out of my chin). Too bad my health insurance doesn’t care about that.

Am I the Only Person in the World Who Doesn’t Want an iPhone?

Forget the price tag (which is the primary reason why I won’t be buying an iPhone anytime soon), I’m not all that inspired to shell out any amount of cash for Apple’s latest hot gadget anytime soon. Why? I don’t need a fancy phone. I do need one that rings, takes voicemail, and allows me to text message my friends. My crappy Verizon flip phone isn’t really satisfying these needs either, but why spend $600 on a new iPod with phone capabilities?

Ok, so most websites look gosh darn purty on the iPhone. The comparable view on my tiny flip phone handset dek can’t compare to what Apple has done with its display. This image of Geezeo’s mobile site on the iPhone almost makes me want one…

And the Google Maps feature… and the hours I’ve spent lost driving up and down the roads of Silicon Valley… almost has me reaching for my credit card en route to a bad Apple splurge. But I’m waiting for the next generation of iPhone. I look at the clunky first-gen iPods and I can only imagine how much better the iPhone will be in its next few incarnations.

In other related news, I’m getting a (free) Blackberry for my new job. I’ve never owned a Blackberry, so I’m sure owning one will make me feel rather professional, as will my new (expensive) 30 minute train commute into the city.

Anyway, speaking of Geezeo, I’m still patiently awaiting all of the features the site promises to eventually have. I’d love to have one spot to track all of my money, from checking account to my Vanguard investments. And what would be even better would be the ability to make widgets and graphs based on my spending to post in this blog. I’m not sure if that type of thing is in the works over at Geezeo, but it would sure get rid of the headache of attempting to manage my finances in multiple locations, including Excel – in order to make chart graphics. That’s not happening today, though, so off to Excel I go for a recount of June’s spending and income.

Investment Advice From Y’all…

I received quite a few comments on my last post regarding my freaking out about losing $100+ on my Roth IRA and mutual fund investments. Thanks to goldnsilver, enoughwealth@yahoo.com, glenn, savingdiva, wanda, and hazygrey (and “anonymous”) for your words of wisdom. Here are some highlights from the comments, and my responses…

hazygrey said…

“This is your IRA – you shouldn’t be pulling out money for 40 years. Don’t worry about it and leave it for now. I know it’s easier said than done. Also remember that there have been double digit gains in the stock market for several years now, and a correction or crash could happen soon. When that happens, don’t panic and don’t touch the money!”

response: I’m less concerned about my Roth IRA and more concerned about my mutual fund investment. I’m terribly confused about what I should be investing in with my “extra” savings right now. I have $12,000+ tied up in average-rate CDs, which I consider my stable, low-risk investment. Then I decided to be somewhat(?) risky and put $4,500 into the Vanguard Mid Cap Growth Index Fund. While the thought of losing that $4,500 isn’t exactly one of a happy sentiment, I could deal with losing the money. I don’t want to lose the money. That $4,500 might be a long term investment. I’m only 23 now, so I’m hoping I’ll make enough money in the coming years to keep at least $5000 away in a long-term, non-IRA investment account. But I also would like to save for a house and/or grad school. I’m not sure if that’s a year out or ten years out. My life is rather in flux right now. Therefore it’s hard to plan financially. My Roth IRA is fine. It’s in the 2050 retirement account for a reason. I don’t plan on touching it until then.

Wanda said…

Don’t look at your investments every day or even every couple of weeks. Unless you are a day trader, there’s no reason to. …If a 2050 fund & a mid-cap makes you sick at night, then it’s not the investment for you. Like goldnsilver said, pick something that pass the stomach test. Pick something with 20% bonds. You’ll have less risk (of losing your money), but you’ll be giving up the rewards (or potentially larger returns).

So what’s the difference between “bonds,” “money market funds,” and “CDs.” I get the index fund versus stock thing, but beyond that I’m lost. Is a CD a bond?

Anonymous said…

How much do need the money in the other [non roth] account? Were you depending on a quick gain to pay the rent this month? If not, give it atleast a year. These are supposed to be long term investments, not quick capital gains.

I’ll gladly leave my money in the mutual fund account for a year or more. I just don’t want to be losing $100 a week on this account. I guess that’s unlikely, but looking at the performance thus far I’m just a tad bit nervous.

SavingDiva said…

I understand your frustruation with your loss. I don’t like to lose any money. I’ve had to stop checking my retirement accounts every day because of market fluctuations causing fluctuations in my blood pressure! ๐Ÿ™‚

Thanks for understanding. I probably should stop checking my accounts every day as well. I’m sure I’ll be fine once my account starts to grow past my initial investment. It’s just now I’m down $100. And that’s not a good feeling.

Glenn said…

Take a step back and look at the big picture. If you are young and you will not need the funds for over 10 years donโ€™t panic. You will be adding to your investments over time. If they funds are still lower when you make your next investment, you will be buying the same companies at a lower price. When you go shopping would you rather buy the same product at a lower price or a higher price? The same goes for mutual funds and stocks.

Good points indeed. As I noted above, my Roth IRA fund is for 2050. But the mutual fund account could be needed sooner. In 10 years I’ll be 33 years old. I have absolutely no idea what my life will look like at 33. Maybe I’ll already have kids. Maybe I’ll have decided kids aren’t for me. It’s just so hard to plan when I can’t figure out when I’m going to need this money. I’d like to invest so I can obtain enough cash for grad school in a few years. Or at least so I don’t have to take out tons of loans, I really like the idea of paying up front for as much as possible. But it’s also likely that I’ll never go to grad school. How can I plan my finances based on a life I’ve yet to figure out?

enoughwealth@yahoo.com said…

If a drop of more than 10% would make you feel like liquidating your investment, then your current asset allocation doesn’t match your risk tolerance. — Enough Wealth

I’m not going to liquidate my investment, I’m just not all that comfortable with the idea of losing my money. But I doubt anyone is really comfortable with losing cash when it comes to investing. I mean, sure some people are more risk averse than others, but the way I see it is I’m young now and I have time for my cash to recover if the market gets wonky. If anyone should be making risky investments, it’s people like me who are young with no debt. Right? I know I can survive without that $4,500. But it sure would be a shame to lose it.

GoldnSilver said…

Market fluctuation is normal. It has only been 2 weeks. Generally if you are investing for the long term, the advice is not to check your balance everyday. However, people have different habits, no one can make you do or not do something. Compare your funds to its peers or industry benchmark, that’s how you can judge your funds performance. That being said, if you are risk adverse, (seeing a drop with turn your stomach upside down). CD or bond funds are not bad options. So many people focus on time horizion…if you are young you should invest more agressively. There’s truth to it. However, just as important, one should know one’s risk tolerance. There are many investment/savings vehicles out in the market place that can help achieve your goals. Pick one that you can stomach.

You know, I’ve never been a gambler. Maybe that’s because I’m female. Maybe that’s because I was raised by a risk adverse family. But I don’t want to be dumb about it. If lots of people invest in somewhat risky mutual funds, they can’t all be “wrong.” Not that there’s really a “wrong” in index fund investing, but, I mean, it’s not like I’m rushing to trade individual stocks.

Vanguard Woes

Ok, I know mutual funds are rather safe when it comes to an investment, but I’m really bothered that my $8500 invested in a Roth IRA and index fund has turned into about $8338 over the course of two weeks. I know I have to deal with fluctuations in the market, but it’s no fun to lose over $100 in two weeks. The only thing that keeps me from pulling my money out is knowing that if it lost $100 in two weeks, then it certainly could gain $100 in a similar time span. But that’s not really the point of investing. I’m supposed to be making money, not watch it all sink down the drain. Maybe my investments are bad. Or maybe the market just isn’t doing good for the time being. At what point should I be worried about my investments? When my $8500 is $6000?

Vanguard Mid-Cap Growth Index Fund Investor
Shares 180.505
$24.56 โ€“$0.14 *$4,433.20
Subtotal $4,433.20 (Bought for $4,500)

Vanguard Target Retirement 2050 Fund
$24.06 โ€“$0.07 $3,955.61
Subtotal $3,955.61 (bought for $4,000)

Savings Breakdown

Ok, so at least my Vanguard accounts started to gain some money. I just realized that I have no idea how my VGMIX Mutual Fund account will be taxed. Do I get taxed when I take out the money or do I get taxed each year on capital gains, even if ultimately I could lose that money before taking it out of the account? There’s probably a simple answer for this, but as of now I’m clueless.

Bye, Bye Capital Gains

My Vanguard ROTH IRA and Mutual Fund accounts are back up and running. Well, I shouldn’t say “back up and running” given the first purchases all were bounced back and all of the capital gains on these funds were lost. Of course, now that I reinvested my money, the funds are down and I’m losing money. I know not to stress out about this, of course, but it was so nice to see my money gain $50 in the first week as opposed to losing the money.

This time around, I decided to be a little bit more risky in my investment. I put the full $4000 into my Roth IRA (I was going to do $3000, but with my new job also lacking a 401k plan… but with a higher salary… there really is no reason not to max out my Roth IRA) and then I put $4500 into the mid cap growth index fund. In a month or so I might diversify a bit and take $1500 of that and add another $1500 to a large cap fund.

One day, when conflict of interest is not an issue (if that’s ever the case) I’d like to get into stock trading on Zecco. It sounds like a good place to start out. But for now, I can’t get too deep into the Wall Street world.

Dating: Who Pays?

A few years back, I had just graduated from college and was a full-time intern (aka slave) with a decent amount of savings (savings=for grad school one day) and a boyfriend who had started his six-figure attorney job the same year (note: he graduated from law school with no student loans thanks to his mom and dad and some savings). At that point, we were together for over a year. I had spent hundreds of dollars on plane tickets flying around the country to see him, as we had met in one city, then spent a good chunk of our relationship long distance.

Given, I’m not the type of girl who expects men to pay for her, one of the reasons our relationship ended was that I could not stand his stinginess. I know I wasn’t broke, but it would have been nice for him to offer to pay for a movie ticket every once in a while. I felt like I was holding him back from the life he could have, since it wouldn’t kill his piggy bank to go wine tasting once a month, or enjoy a decadent meal every once in a while. There’s nothing wrong with avoiding pricier options, but at the time, well, every cent counted. Really.

Now I’m in the reverse situation. It’s kind of funny, actually. I’m dating a guy who is unemployed. He does have a savings (from my understanding of it, he has just about the amount I have in savings) and he lives at home (so no rent, whereas I pay $1050 a month in rent.) Supposedly his parents are footing the bill for grad school if he decides to go. (My parents are not, as far as I know, though my dad has mentioned that in 3 years when he can access his 401k, there will be some money available to help out if I can wait that long.)

(Anyway… the details are rather unimportant as a generic entry about who pays for things in a relationship, but as this is my personal finance blog, I’m writing details. Hope y’all don’t mind.)

So guy #2 loves to pay for me 75 percent of the time. We go out to dinner and he often offers. He let’s me pay occasionally. I don’t push him enough because in the back of my mind I’m always thinking, if he pays, that’s another $15 I can pocket for grad school… or a new shirt. It feels rather icky to be the stingy person in the relationship. Sometimes I feel like I should pay more frequently since I’m working and he’s not. Then again, it’s his personal choice to be unemployed (he has a degree from a top school, I doubt he’d have much trouble getting a job) and if he wants to pay for me than who am I to object? Plus he’s got his parent’s money for grad school and if I actually ever figure out what I want to do with my life for the long-term, I’ll need to foot most of my bill for all graduate school fees.

Obviously I’m not talking about the first couple of dates here. That’s the subject for a whole other entry because at that point there’s somewhat of a societal expectation for the man to offer, even if the woman ultimately is sane enough to grab the check and split the bill fairly. But for people in LTR’s, money is a whole other issue.

Sometimes, I admit, I dream of dating someone (*cough*gold digger*cough*) who takes me out to nice places and… takes me shopping. It’s ridiculous, as I’m NOT a gold digger. Really. I wouldn’t date someone just because they were rich. It’s just a nice thought, since life out here in Silicon Valley is so damn pricey and everyone else around here seems to be loaded.

To tell you the truth, I’d rather be the one making the big bucks. I doubt that will ever happen as a journalist, even though I’ve managed to do quite well for myself in the generally poor-paying profession. But I’m not going to kid myself into thinking I’d ever be looking at a six-figure salary. It might be possible if some day I make a name for myself and start my own website, but I’m not going to start dreaming about that now. Reality is I’m making an OK salary, but I’m living in one of the richest counties in the country…

[[The median income for a household in the county was $70,819, and the median income for a family was $80,737. Males had a median income of $51,342 versus $40,383 for females.]]

Ok, so in a few week’s I’ll be making more than the median income for females. That still means nothing (considering that my life involves interacting with venture capitalists and other well-to-do types)… and while I know money does not equal happiness, there’s always the underlying fear of taking out loans for grad school and having to deal with debt (the “good kind”) and then never being able to afford a house or any other form of stability in my life.

It’s all kind of hypocritical of me, since I’m terrible at saving, and I always end up spending too much each month. Why does it matter if I spend too much on a shirt versus a nice date with my boyfriend? It’s probably better to spend that $70 on a date.

Personal Finance Online: Geezeo versus Wesabe

I was Googling “personal finance widgets” when I found myself stumbling on two personal finance network startups. I found Geezeo first, and then through minimal research found out about its competitor Wesabe. The process to sign up for Geezeo was much easier, so for the time being I plan on using that site to explore the world of online personal finance social networking.

While I haven’t had a chance to surf around the site yet, thus far I easily imported my checking and credit card account information to my main page. I’m a little nervous about throwing my banking passwords at any web startup, as I’m sure while 99 percent of them have the best intentions, any little error in security could equate to a depletion of my bank accounts. And that would be so not cool.

In any case, I’m really tired of dealing with Bank of America’s “My Portfolio” tools — which have so many bugs they’re actually discontinuing the feature. Now that I’m attempting to move some funds over to a Roth IRA and Vanguard Index Fund again (the first attempt fell through, I guess I didn’t enter my checking account in correctly) it would be nice to track everything in one spot.

My biggest qualm with Geezeo at the moment is that they don’t support brokerage accounts yet… so for now, I can’t actually access my Vanguard or CD accounts. They’re obviously working to enable this feature soon, so I’ll give them the benefit of the doubt and be patient. At some point my patience will run thing and I’ll check out Wesabe.

On another note, what’s up with the names of these sites? Maybe they have some deeper meaning, but I’m confused. “Geezeo,” what’s that about? It makes me think of some old geezer. If anything, I do get a general idea of being a poor old geezer, and wanting to save for retirement. Meanwhile “Wesabe,” which likely means something in another language, just brings to mind the hot green sauce that comes alongside Sushi. And what does that have to do with personal finance? Is it because Sushi is so gosh darn expensive? ๐Ÿ™‚