Category Archives: Networth

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.