Category Archives: Networth

Hello 2013.

For better or worse, I closed out 2012 with $200k in savings and investments. I realized the $50k savings a year strategy works against me when I over achieve my target and start to have a subliminal excuse to spend money that I shouldn’t be spending.

But I’m still pretty amazed that I see $200k in my networth IQ stats to begin with. Given that I’m not the most responsible spender, saving $50k in one year is no easy feat. Most of it was thanks to the growth of my Apple stock, and the overall turnaround of the markets. Also, I effectively earned about $110k last year with all of my bonuses and mid-year raise, so it really shouldn’t be that hard to save $50k. But I like to shop, and eat out, so it’s still rather hard.

This year is the big year. In 2013:

  • I turn 30. (AH!!!)
  • I celebrate my 7th (!!!) anniversary with my boyfriend.
  •  I (probably) get engaged?
  • I move in with my boyfriend?
  • I plan a wedding in 2014 (yikes)
  • I support a young company’s extreme growth year (excitement + stress)
  • I contemplate trying to have children in 2016
  • I exit 2013 with $250,000 in networth!!!
  • (and I hope my boyfriend gets his first FT job and lets me introduce him to the concept of retirement savings)
As you can see, this is a BIG year for me. It makes me quite nervous, given it’s importance as my last year to get my act together before I enter my 30s and all of the other craziness that goes along with growing up. Hanging out with my good (married and one year younger than me friend who is pregnant) friend last night, I joked that the conception of her child was the end of our own childhoods. She was the one to hold off-the-wall parties back in the day, and her gathering last night was much more tame. It really is time to grow up. I know 18/21 is supposed to be adulthood, but I’m finally feeling this transition at 29. And I might be having an early mid life crisis.
Still, I’d like to focus on $50k+ in networth increase this year. I’m concerned stocks will drop what I currently have below $200k, which will require further saving. I also need to buy a new car – and questioning if I should wait until 2014 or buy it now. I’m really tired of my beater (the squeaking is embarrassing, as is the missing front of the car.) But I’d rather have more money in the bank and an old car then a new car and failing to miss my targets in 2013.


2013 – the Quarter Million Year – on to $250k

Five years ago, I wouldn’t have thought it was possible that a quarter million dollars was in my reach. Even with plenty of setbacks (my shopping addiction and my DUI, for starters) I’ve still managed to hit my target for the year (knock on wood.) Next year, however, is the biggie.

I don’t think I’ll feel any different with $250k in the bank vs $200k. I certainly don’t feel any more stable than I did at $100k now. The $100k was a big turning point because then it felt possible to save serious sums of money. I think $250k will be the next big turning point in my financial journey, followed by $500k, $750k and — $1M, if I ever can get there!

The other day I put together a spreadsheet which noted exactly how much I’ll need to save per month to hit my $50k savings goals without the growth of my stock accounts. Basically, in order to hit $250k by Dec 31, 2013, I’ll need to max out my 401k and Roth IRA, and then save $3125 per month out of ~$4669 per month after tax and after 401K income. That should be doable. The good news is that doesn’t include any stock growth and it also doesn’t include any bonuses that I may be able to obtain during the year.

And really, I should be aiming for ending the year with more than $250k (maybe I SHOULD make my goal $275k – but that’s verging on impossible.) At some point my annual savings and interest targets must accelerate. $50k per year gets me to $1M at 46. BUT it will be hard to save $50k per year some years in the future – maybe I’ll want to take time off and have kids. Maybe I’ll decide to finally move into a place of my own and get decent furniture. Maybe I’ll lose my job and have to take one that pays less. All possibilities. The best I can do is save as much as possible right now when things are stable and my life is pretty cheap.

So I’ll be tracking my journey to a Quarter Million in the next 13 months. I’ll need a lot of luck to get there. But I can see next year being a major breakthrough year in my finances, or one that is extremely disappointing. It really can go either way.

What I’ll need to figure out is how much of my savings I want to put into stocks. Once I max out my 401k and Roth IRA, there’s the $3k per month in savings left over. Do I keep doing what I’ve been doing — picking stocks and ETFs and funds on my own, or is that plan stupid at this point? Well, it’s worked so far. I’d diversify of course, but still… will it be enough, or will I be throwing money away? I believe in taking risks BUT NOT STUPID ONES. But the only way I can encourage myself to save is to put money on stocks, because it’s exciting. I don’t day trade, but I like to follow the market. It’s why I’ve saved so much thus far. I get more thrill out of watching Apple swing up and down then living in a fancy apartment in the city. So, yea, if I lose $1k a month on stocks, it’s almost better than paying that rent. Either way it’s gone, and at least with the stock market there is a chance that $1k could be worth $1.5k down the road.

Oh, I also really want to buy a car next year. But I’m thinking if I put that off one more year (assuming my car actually continues to work) I’ll feel much more comfortable buying a car with $250k in the bank than $200k without knowing I can get to that goal. But I do really need a car.

 

Oh the Progress You’ve Made…

Sometimes I forget just how far aheads I am (in terms of savings) than most of the American population, let alone most people my age (28.) I obsessively check my networth and investment growth, and have this month watched my “investing for fun Sharebuilder account” hit $100k. Sure it’s down a few thousand now under that mark, but I’m confident it will inch over the line again. My total Networth is now $200k, a goal that seemed completely impossible just 5 years ago on my then $50k a year salary.

A few months after I started investing in this “fun” account the stock market crashed and it was hard to keep watching my investment account go down. At the time, even though I had about $15k in the account, it was painful to watch it slip to $10k or less. I knew that was the right time to invest as much as possible, so I started to try to pour as much as possible from each paycheck into my investment accounts.

Interestingly enough, my more “safe” investments — such as my Vanguard index funds — have not performed well at all over the last 7 years. Meanwhile my fun account — which is unfortunately taxable but the only place to put my investment dollars when either I have no 401k option or I’ve maxed out my 401k and Roth — had performed quite well. It’s had its ups and downs, but I realized overall since starting the account it has made about $25k — on less than $75k investment. Knock on wood as things can always change, but the performance has definitely been much stronger than my safe accounts that have barely moved at all.

I recently met up with two of my friends from different aspects of my life — one who I grew up with back east, who moved across the country to go to culinary school and has been moving her way up in the world as the manager of a hotel. The other, also my age, I met in a summer program in high school. She too picked up and moved across the country and is now working as a video editor. All of us are middle class — the hotel manager, I’ll call her Sally, owns a 2br condo in the suburbs, which her parents helped her purchase despite the fact that they were struggling with money. I don’t know her exact income but I’d guess it’s around $60k. My friend the video editor has been at the same job for 6 years now, and hasn’t received much of a raise in those 6 years. Her income I estimate to be about $50k. She likes her field but is unhappy with the company and some colleagues, but is comfortable without change. She hasn’t saved for retirement yet and is living in a 1br apartment for about $1200 a month (which isn’t bad for the city she’s in, but having roommates could help her save more.) Meanwhile, my boyfriend just quit his PT $20/hr job and has $0 in retirement savings. He turned 30 last March and is finally getting his act together and looking for a FT position with benefits and such.

I’m sitting here today staring at the net worth in my PersonalFinance.com account, with the number $200,947.58 staring back at me. This isn’t a fake number or guesstimate of my networth today. This isn’t filled with some questionably accurate estimate of a car or home value. This is $200,947.58 of straight-up cash and stock investments. This isn’t meant to brag — for one, I could have been much wiser with my money to date and saved even more, and two, I know I’ve been fortunate in my upbringing to be able to get where I am today, with no student loans and $5k from my parents plus $10k from a lawsuit when I was a kid to buy my first car and get started in the world.

Still, my friends noted above had similar situations. My friend the hotel manager may have student loans, but her parents bought her a 2br condo. My friend the video editor had her college education paid for and is likely going to inherit a large sum down the road. My boyfriend’s college education was paid for by his mother, and he lives at home paying $0 in rent in a part of the country where jobs that pay well are relatively plentiful. So, in short, I feel ok comparing myself to these three people I know in understanding my level of success versus the rest of the world who may be less fortunate.

In June, the average American family saw their net worth drop 40% in that three-year time period from $126,400 to $77,300. Going on 29 and single, I’m already well above that. It’s sad to think that most families do not have more than $77k in networth! I’m still shocked that I’ve been able to save and earn this much on my investments in less than a decade of work. I’m a bit terrified of how little i’ll be able to save once i have a family and kids — I’m pretty sure the whole financial advice that marriage is good for your finances is actually going to be the opposite for me.

Looking ahead, I’m focused on continuing to save $50k per year. My goal has always been to hit $250k by the time I turn 30. As long as the stock market cooperates next year that may be achievable. Given I’m at $200,947 right now with 3.5 months left in the year (and a big iphone release coming out which will only help Apple stock ride up in the short term), I could theoretically hit this goal much sooner than thought. The car purchase will definitely get in the way — it’s kind of funny, but one thing my DUI proved is that large expenses don’t have to get in the way of your goals. I’m still pissed at myself for all the chaos that one stupid day caused to my life, but the reality is the DUI was my largest-ever “expense” and I’ve lived to tell about it. I estimate the DUI will cost me $10,000 all things said and done, whereas previously my most expensive purchase was my car for $7500. Sure, without the DUI I’d actually be able to purchase a car right now and be well over my networth goals, but in a way it’s shown me that you can spend money in life and still save quite a bit.

My goal has always been to have $500k in the bank before having children. The plan right now is to get married at 31 (in 2 years) and start my family in 3 (wedding in 2014, start family in in 2015.) That gives me 3 years to save $300,000, so that goal is highly unlikely. This year my stock performed well but in reality I’ve saved about $25k and the other $25k was earnings on my investments. That may not happen in future years and it very may well go in the other direction. Eeks. But even if I can save $50k per year, that’s still just $350k by the time I want to start a family… no where near the $500k goal. I could wait another 3 years to start a family and put marriage off as well, if I can continue as planned saving $50k per year I should reach $500k by 34. But I’m worried 34 is too late to start having children given my PCOS and how hard it will be for me to have kids in the first place. Sigh. I get very freaked out about how fast life is going and all the choices that need to be made. But I really don’t want to have children until i hit that $500k networth mark. Of course my company stock options can significantly impact this. If my company is able to have a successful exit, my networth could skyrocket past that goal. That’s always in the back of my mind, but I don’t like to consider that in my planning as it also very well may not happen. It’s crazy to think that there’s a better-than-winning-the-lottery chance that it may, but until the day that happens I’ll stick to my plan of saving $50k per year, and try to up that quite a bit so I can get to $500k earlier than 34!

Mid Month-ish Budget Check In

The race is on. With only 5 months left to the end of 2012 (wow) and my goal to exceed $200k in networth AND buy a new (used) car this year, I must watch my budget closely to get close to my goal. I always want to go *over* my networth goal (helps me hit next years goal and makes me feel comfortable that I can survive a few months if something, god forbid, happens to my job.)

Current Networth: $192,431 (remaining to save $7569 + $10k for 2013 cushion)

$3513 per month average savings is required to meet my goal.

AUGUST 2012

Expected Liquid Income: $4200
401k Automatic Contribution: $2080

$1433 Avg monthly savings required from Liquid Income.

Rent: $660
Shopping: $575
Health & Fitness: $452 (Yr Supply contacts)
Fees & Charges: $50
Auto & Transport: $777 (paid off $600 of my $1800 DUI fine this month, plus insurance hike from $44/month to $125/month for next 3 years, sigh)
Food & Dining: $269
Travel $300
=====================
$3083 ($1117) 

So I already spent too much this month to hit the $210k goal. If I buy a car, my goals might be shot. Then again, I could theoretically make up for this next year, as it will be my first full year with a six-figure salary, and I can try to be frugal for the first six months to play catch up. I never like to assume I will have a job from one month to the next, though, so it’s troubling to purchase a car now and know this will keep me from my $200k goal (unless the stock market performs extremely well…)

 

 

 

2012 $200k Networth Goal in Reach

The $200k in 2012 networth goal seemed impossible in January, but I’m inching closer to victory. It doesn’t hurt that I just received a $10k raise and now, for the first time in my life, am making six figures in a FT position (I was making more on an hourly basis at a contract job previously, but this is still a big deal as it’s FT.)

I just calculated my current networth, and according to my records it is $190,586.49 — which leaves $9.4k or $1.8k/month left to save for the remainder of the year to hit my goal. I’m a little hesitant declaring success as $20k of my networth is tied up in company stock (private company exercised options.) That said, theoretically that $20k is worth quite a bit more than $20k right now, if I am to believe what the exec team says about the current value per stock. In any case, I’m considering it an investment like any other, and I still don’t have all of my options vested anyway, so until they vest I’ll just count those options as $20k, which is exactly the amount I spent to purchase them (well, plus a few hundred dollars to repay the loan to purchase them.)

So the big question is, do I buy a car this year or wait until next year? If I don’t buy a car this year, I need to at least put $700 into my current P.O.S.mobile to make it save to drive.  I spoke to a car dealership and they said I’d get a whopping $400 to trade it in, so it’s probably not worth doing that. Maybe I’ll just donate it if I decide to purchase  a new(er) car.

Even though with my company stock and other savings I could theoretically be a  paper millionaire right now, I don’t feel like one. I’m still paying $650 a month in rent living with roommates and driving POSmobile. I wish my boyfriend made a decent income so we could move in together, but as of yesterday he quit his job and — although he plans to find another one — has not started to apply for anything yet. It’s a pain when a voice in the back of my head keeps telling me I’m stupid for committing to a guy who has $0 in savings and no job, but he makes me happy and if that isn’t worth more than a stable income and security, then, I don’t know what is…

That said, I still have my big $200k success to look forward to, that’s now within reach, as long as the stock market cooperates. With $50k of that in Apple, my networth value keeps going up and down and up and down. I still believe in the long run Apple will go up, but I probably should start to diversify a little more.

If I buy a car this year, I can either buy something cheap-ish… ie, the same car I have now but in much better condition with much lower miles for $7500… or a nicer car like a used Altima 2.5 or Mini Cooper or Camry Hybrid for $15k – $18k. In August, my insurance rates are going to spike thanks to that DUI I got last year — and I’m not sure how much that spike will be (I guess I’ll find out very soon.) So I don’t really want to get a nicer car because I’m thinking it would be smart to keep comprehensive coverage very low for the foreseeable future. I already cut my comprehensive so my monthly insurance rates went from $77 to $35. They’ll probably be back up to $77 or more without the coverage next month, but that’s my own fault. With that fault comes the reality that it probably doesn’t make sense to buy a car over $8k at this point.

Another option, which I’m considering, is moving to a place located on the local train line. My company is moving to a new office which offers a shuttle from the train station. Actually, that train station is my current local stop, but it would probably be easier to take a train from another station there then to take a bus. If I were to move by the train line I could get rid of my car entirely — which would suck because I like the independence of having a car — but would be great from a financial perspective. The train would also be free thanks to a company perk, so I could spend a little more on rent and still do better than having the car. I’d probably keep paying some insurance (since the SR-22 is a requirement for 3 years with the DUI on your record) but I’d pay the lowest possible since I wouldn’t actually be driving my own car.

Hmm. Anyway, lots to think about. Right now I’m so busy with work that I don’t have time to seriously contemplate moving and I’m struggling to find time to figure out what to do about the car situation. All I know is my current car is embarrassing to the point of I really shouldn’t be using it in professional settings, and that’s a problem, and that’s a problem I shouldn’t have when I’m making $100k and have $190k in networth, right? Still, I can’t bring myself to spend on a car when I know next year my goal is to have $250k networth by 30, and I’d prefer to get a head start on that if possible then buy an expensive item that will just depreciate in value.

 

June Networth Update: $174.5k (-0.78%)

It’s been a rough networth month for many of us, as the stock market, which was doing so well earlier this year, has decided to take a turn in the other direction. In May, my portfolio took a hit, as I managed to spend a bit of money on a few weddings (gifts, dress, shoes, etc.) I’m honestly surprised I ended the month just .78% down.

Assets: $181.628 (.43%)
Cash: $11,870 (124.56%)
Stocks: $113,634 (-2.33%)
Retirement: $52,735 (-3.56%)
Future Kids College Fund: $3389 (-1.77%)
Debts: -$7,087

Networth: $174,541 (-$1367, -0.78%)

In order to hit my goal of $200k this year, I need my account to increase $3637 in June, or 2.08% of my current networth.

$3637 Gain Goal in June? Here’s how…
$1125: 401k auto investment
$1500: savings
$942: growth on investment (.5%)

Of course, if my stocks don’t play nice, this could be an unfortunate month. But, the good news is, I am eligible for a bonus again this July (and again in September) which could help offset some of the losses from wonky markets.

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?