Category Archives: Networth

Mission Impossible? $250k in the bank by 30

As I stare at my PersonalCapital.com Net Worth of just $166,978 in May 2012, I can’t help but feel like my goal of $250k networth by the age of 30 (or, 17.5 months away) is impossible.

That’s $83,022 left to save, or approximately $4.9k per month for the next 17 months. Since I only make about $5k after taxes, that, indeed, is an impossible feat. At best, with bonuses, I make $110k per year pre-tax, which comes out to an average of $6k per month. Still, spending just $1.1k a month for the next 17 months and obtaining all of my bonuses is unlikely, and yes, pretty impossible too.

My only hope is that my investments perform extremely well, and not extremely lousy ($163,747 of my total networth is currently in stock-heavy investment accounts.) I’m concerned my stocks will see losses instead of gains in the coming year, which will completely ruin my hope to be anywhere near $250k by November 2013.

5% interest, 18 months = $176,180
5% interest + $10k per year, 18 months = $192,125
5% interest + $20k per year, 18 months = $208,070
8% interest, 18 months = $183,784
8% interest + $10k per year, 18 months = $200,304
8% interest + $20k per year, 18 months = $216,824
10% interest, 18 months = $188,913
10% interest + $10k per year, 18 months = $205,819
10% interest + $20k per year, 18 months = $222,724

According to Personal Capital, my investments are currently 15% up in the last 6 months. That may not last. I’d like to see my account go up 30% this year, as then suddenly my dreams of $250k by 30 start looking a bit more possible. If they could make 30% for 1.5 years going forward, even without adding a cent, I’ll be at $242,710 by November 2013. With $10k per year of savings, that would bring me to $263.6k by 30, and would be a huge success.

I’ll be tracking my progress as always, to report on how close or far from the mark my investments are putting me.

2012 Self Operating Plan to save $50k for $200k Networth

This is a big year in my networth saving. I hope to have $200k in all of my accounts by Dec 31, 2012. This will have me on track to $250k by 30; and $500k by 35. Somewhere between 30 and 35 I plan to get married and start having kids, so that will change the story a bit, but I don’t want to get married and even think about having children until I have $250k across my various savings and investing accounts.

Since graduating college in 2005, I’ve increased my networth from $10k to $145k. On average over the last six years, I’ve saved (or earned interest on my savings) an average of $22.5k per year (my income for the past 6 years has been $15k, $25k, $35k, $55k, $65k, $85k, and now $90k.) My goal these days is to save $50k per year, but that remains a difficult feat on my $90k salary. Lately I have been eligible for a bonus of up to $20k, and I hope to hit my objectives in order to achieve a $110k per year salary including a bonus.

In order to reach my $200k goal in 2012, I will have to be very strict with my spending. I’m not sure that amount of saving is even possible (unless the stock market rebounds) but my plan of income vs spending below will need to be followed spotlessly if I am going to achieve my goal in 2012. Continue reading

12 Goals for 2012

1. Networth = $200k (by 29, $250k by 30).
This is going to be difficult given I’m making $90k per year, and my current networth is $145k. With any luck the economy will recover a bit and my stocks will see me up to $200k, but I’m also going to make 2012 a super frugal year. Still, saving $2500 a month is only $30,000. Either I need some side income or a serious raise next year to hit this goal. I need to save $4166 a month to save $50k in one year, and after taxes I only make about $4200, so that’s not going to work.

2. Write and publish a (really good) business book
I already have a signed contract, so in theory, this one shouldn’t be so hard. Then again, I have 300 pages to write outside of a more than full-time job, in six months, and it needs to be really good. For it to be really good I need to interview a lot of people and that is what I don’t have time for… but if I can successfully achieve this goal of writing and publishing a book, I will, for once in my life, be proud of myself.

3. Lose 40lbs
My weight has become a huge issue in my life, and I haven’t had time to deal with it. I can’t believe I’m up to 170lbs (and I’m short at 5’3). This is going to probably be the hardest goal of all, but I need to do it if I’m ever going to be a healthy and happy person. Continue reading

CD is Free (that is, I closed my account)

Whether or not I keep an emergency fund is still TBD, but I did finally close my Bank of America CD that was earning a whopping .35% interest. I thought the cancellation penalty was 3 months interest, but, without doing the math it seemed to be more than it should have been — $230 fee on an $8k CD. In any case, I took the hit, figuring it’s better to have the money liquid in a high-interest checking account that probably pays a better rate than the CD with 12 months left on it.

So now, including a few other checks I cashed yesterday, I have $10k in my checking account. The question is — what to do with it?

$1.5k will go into my IRA for this year, so I max it out. That leaves $8.5k left. Since I have a 401k next year (no match) I’m tempted to try to max that out before thinking about an IRA, as I make slightly too much for a Roth and the traditional IRA tax benefits are available for an even smaller salary. I’m also tempted to take the $8.5k and put it into a high dividend ETF or split it up among dividend-bearing stocks. I’m further tempted to put a sizable chunk of it into AAPL, but that seems too risky vs diversifying across dividend paying stocks.

What would you do to invest or save $10k?

$100k in 2010? Accomplished!

Remember when I made a goal to have $100k in savings by the end of 2010? That seems like a billion years ago, and financially speaking, it was. While on one hand I can’t believe how fast time is flying, on the other I’ve lived about three lives between now and the end of 2009.

When 2009 was ending, I was working a job paying $60k per year. So working through the numbers, it seemed impossible to reach my goal of saving ~$50k in 2010… even if I was going to be extremely frugal. I figured I’d save as much as possible, but deep down felt my goal of hitting $100k in networth was just not going to happen.

Fast forward two months… I get laid off from my job and things are really looking bleak, at least in terms of my savings goals. I fall into a deep depression, start questioning what on earth I’m doing with my life, and after applying for a few hundred jobs start thinking about applying to work at the mall.

Then the skies parted. I landed not one – but two really solid jobs. A six month contract, paid hourly, at a large, global company and a freelance job on the side. Instead of losing a lot of money due to being laid off, I managed to make more than I had any year yet within the six months I was working my contract job. Part of that time I was traveling for work — so all my expenses were paid for as well, which meant I was able to save quite a lot.

The contract job didn’t last… long story short, the product I was working on wasn’t very good, so the company decided to shut our department down and had no need to keep me on as a contractor. By that time, however, the company I was doing some freelance work for was taking off, and able to hire me full time. I’m not making as much as I was at the large company, but I’m much happier working for a company with a product I believe in. Plus, I do have stock options which could one day be worth a lot more than any salary — though that is, of course, unlikely.

The chart above is a bit inaccurate because I’m both owed money and owe money… I owe on my freelance income as I haven’t paid tax on it yet, but I think I still broke the $100k networth mark in 2010.

It’s so strange to have $100k in the bank (/my investments.) It’s a lot of money, but then again, it doesn’t seem like that much. The houses I want around here are $2.5 million… and even the basic houses are $1 million — I guess until I have $500k in savings I’ll still feel a bit hopeless when it comes to money.

As far as 2011 goes, I’d like to end 2011 with $150k in networth. I wish I could aim for $200k, but that’s just not realistic given my salary. I’ll be updating on this goal as the year goes along. Once my taxes are done in April I’ll have a better idea just how much more I need to save this year to hit that goal.

It’s interesting looking at how much I’ve saved since Feb 2009…

September Networth: $77,434

Will I or won’t I hit my goal this year of a $100k networth? It’s possible. I’m at around $77.4k right now.

I need to be extremely frugal over the next four months to hit my goal.

As far as income goes, I’m expecting:

Potential September Income
Project A: $10000 pre-tax this month
Project B: owed $1600 + potential income of $3200 (pre-tax)
Project C: owed $300 (pre-tax)
Total: $14000 pre-tax… ~$9000 after tax.
I’ll prob spend $2000 this month on rent, food, insurance, gas, health, etc.

So if I can do +$7000 this month I’ll be at $84k.
That leaves $16k that I need to make in 3 months between Oct & Dec, or $5.3k per month after tax.
It’s possible for Project #C I will start a $5k-$10k per month contract for 1 month. That would help a lot! Project B will likely pay around $3200 pre-tax for part-time, though it’s not guaranteed. Project A is likely ending this month.
I plan to donate 10% of any income above $100k that I earn and 15% of all income above $120k, if I happen to earn that much, 25% of all income over $150k. It’s not much, but I like the idea of donating a portion of income I earn over $100k.