Tag Archives: savings

Friends in High Classes

My ex is an attorney with a 6-figure salary and a cushy job in the city. He’s also one of the most frugal people I know. Go figure.

He IM’d me this evening to say “it was a sad day.” I figured some girl blew him off again. Instead, this time, it was potential layoffs at the office. Well, he was sad about a new pay structure at the office… no more bonuses.

A part of me gets really ticked off every time he complains about money because he’s making, like, $150k a year. On the other hand, I’m making $60k a year and I still remember a time when I was making $20k and thought $60k was “rich.” I complain about not making enough money too… so I really have no right to be upset with him. While I do feel like I can live comfortably at $60k, it no longer seems “rich” to me at all.

I’m still trying to understand what “rich” means. My greatest desire in life is the ability to donate my money to different causes and people who deserve it. And… realistically, I could do that now… yet I also haven’t donated one penny in years. I’m an awful person. Or at least a guilty one. I used to try to volunteer my time, but that was back when my time wasn’t worth that much money. Now… my time is worth a fair amount of dough, and my free time is worth even more.

My biggest money question is life is when do you reach the point where you can donate money and feel good about it without worrying that you’re pushing off an opportunity to own real estate, go to grad school (etc)? All the extra money… I put into savings accounts or retirement accounts. I’d like to one day make “enough money” where I can donate a sizable amount to non-profit(s) I care about. There are lots.

I’m always intrigued by the person who can’t walk by a homeless man or woman on the street without giving them cash, or, even better, a meal. I’m awed. I grew up in the ‘burbs of NY. My parents taught me to look the other way.

These days, I don’t know which way to look. I just feel so guilty for having such great luck (as in, having a job right now, not having student loans, etc) and so terrified of running out of money one day and going into debt. Money totally controls my life. I like having it (who doesn’t?) but I can’t stand not knowing what to do with it… and feeling like I don’t deserve it. That’s probably why I have a spending problem… I always want to get rid of it as soon as possible.

Roth IRA: Just Maxed Out 2008, down $5000

Today, I put the last $300 into my Roth IRA for 2008. It feels rewarding to know that I’m saving for my future, yet the $5000 in losses to my Vanguard Portfolio due to current economic conditions isn’t exactly a fun “reward” to look at in my accounts.

Still, I’m investing with the hope… and faith… that the economy will recover again. I think it will, eventually, but it’s going to take a while. Had I followed my faith a year ago that the stock market was going to keep tanking, I would have possibly shorted some stocks and cold have been much better off now… but I don’t have time, or the heart, to deal with such “high risk” behavior. Instead, I put my money in the stock market, knowing it’s going to tank now, hoping it will rise in the future.

The question I have now is when do I invest in my Roth for 2009? Usually I put a large chunk of money in up front (money left over from taxes). By “usually” I mean over the last two years, since that’s how long the account has been open. I like to just get it out-of-sight, out-of-mind before I start thinking of myself as wealthy enough for luxuries. The stock market seems pretty bad right now, so I’m not too worried about adding another few thousand once I get my tax return back. Still, this all begs the question whether I should spread out my investments ($440 a month) or put a bunch in up front and finish up over the later half of the year (like I’ve been doing.) Dollar cost averaging is always the recommended way to go… but, eh, when the market is this down, maybe it doesn’t matter as much?

Also, as far as retirement savings go, I decided to do the HSA for my healthcare. In addition to my company putting $100 in the account per month, I’ll be putting $100 in. So that’ll be $2400/year for healthcare *or* retirement. I’m just worried my frugal save-for-retirement self will avoid doctors in order to save for my retirement, and I’ll end up killing myself slowly in the meantime. (Not that I ever go to doctors, even when I have full insurance, I’m too lazy and busy). In any case, the savings rate for the HSA is so sucky – 2.1 or something – and w/ the taxes in California taken out of that it isn’t a huge savings. But I’m going to look at it as a traditional IRA that’s being overtaxed by my bankrupt state. One that I can dip into if I need to go to the doctor for antibiotics every once in a while.

The HSA does have the option to invest with Ameritrade, so I’m probably going to look into setting that up soon. I won’t put all the money in stocks, but I’d like to diversify my retirement portfolio outside of Vanguard and I do want to get some Gold/Silver ETFs in it… since they don’t get taxed at the ridiculous collection tax rate if they’re in an IRA. Well, I don’t know how that works in an HSA… esp since it doesn’t get taxed federally but it does get taxed in CA. Hmm.

I’ve Got $7 in my pocket…

I’m a person of extremes. I eat basically nothing, or, alternately, everything in site. I work my ass off and stay up all night to get projects done, perfectly, or I barely lift a finger. Same goes for my finances. It’s not the healthiest way of living, but it sure works a charm when I’m on the more positive end of it.

This month, I’ve been extremely frugal. Well, not in the sense of purchasing two pairs of jeans. One, my favorite brand, was on sale at the local mall for $100 and I couldn’t resist. I actually thought it was another style, which I realized it wasn’t, so I promptly went on eBay and bought a “slightly damaged” pair of the ones I actually wanted for $70. Given that the original pair I bought last year cost me $170 for one, I felt good about setting up this two-for-one designer jeans deal.

Regardless, that was really my only big spend in the past month. I’ve also been frugal about eating, in ways I probably shouldn’t be. I tend to go for as long as possible without buying food. Around the house, that’s fine, I still have some random frozen things and tuna. But I’m never home. At work, sometimes I’ll work straight through lunch, and live off the various snacks in the office. Lucky for me, at least my work provides some granola bar-type things. Still, not healthy for mealtime, but I survive.

I’ll be posting my January spending charts soon. Lately, I thought about making a goal to reach $50k in Net Worth by the end of the year. I’m still trying to figure out if that’s obtainable. I need to see what my Net Worth is after taxes this year, and then make a plan. I may not be in debt, but I can still live like I’m getting out of debt, so I can one day buy a house.

The Economy is in The Pooper

Driving home after I picked up lunch late this morning, I was listening to right-wing talk radio, which I do often these days, and the host was bitching about how we need to use our own resources for oil since our avoidance of this is causing lots of commercial establishments to go out of business.

Here’s the big news about 36 retail stores closing their doors…

“Information technology related companies that are closing stores include CompUSA going out of business, Sprint Nextel closing 125 locations, Movie Gallery closing 560 movie rental outlets, and bankrupt Sharper Image shutting down 90 to 180 stores.

Other retailers shutting down shops are: Ann Taylor, 117 stores; Eddie Bauer, 29 stores; Cache, 20 to 23 stores; Lane Bryant, 150 stores; Talbots, 100 stores; Gap, 85 stores; Foot Locker, 140 stores; Wickes going out of business; Levitz going out of business; Zales, 105 stores; Disney, 98 stores; Home Depot, 15 stores; Macy’s, 9 stores; Pep Boys, 33 stores; Ethan Allen, 12 stores; Wilsons, 158 stores; Pacific Sunwear, 228 stores; Bombay Company, 384 stores; KB Toys, 356 stores; and Dillards, six stores.” — http://www.theinquirer.net/gb/inquirer/news/2008/06/24/retailers-close-hundreds-stores


Yikes!!!

Guess those rebate checks didn’t work. Big surprise. I finally cashed mine. It’s going to pay off what I spent in Israel. Sorry Bushie.

The economy is really f’d up right now. I’m sure you’ve figured that out for yourself. I don’t know enough about economics to determine if this is a normal downswing in the cyclical pattern of the markets, or if we’re kind of screwed ala 1929.

What I do know is that my Sharebuilder and Vanguard accounts are suffering. I know now is really a good time to get in on investing because the economy is in the dumps, but it’s still hard to watch the little money I have turn into even less money!

I’ve been tracking my investment accounts separate from my liquid cash for about a year now. That includes all accounts my money lives where some risk of losing that money is involved, plus my CDs because I’m at some point going to move them into my Roth IRA or some other investment account.

The problem in really figuring out what the numbers mean is that I’ve added money to my investment account throughout the year, and while I could go back and calculate just how much I’ve added I really don’t have the time to figure that out. What’s more telling is my individual ETF and stock investments, and even more so my Vanguard funds where I pretty much know how much I’ve invested.

So a year ago on 6/21/2007 my total investment account was worth $21,014.57.
I liquidated about $5200 of a CD and moved that into my cash accounts, so that brought the account down to $22531.18 after it had increased to $27552.65 (not because it was performing well, but because i had been investing more aggresively than in the past and actually saving some money).

At the moment, my total investment account is worht $22,511, but I have some debt in my cash account because I spent like a mad woman on vacation. Luckily all should balance out next month when I’m paying just $550 for rent & storage in between moving and finding a new place to live.

So my investments are pretty much staying at the same base point. That’s mostly because the CDs and prosper account and monthly deposits have kept that stable. I’m sure I’ve actually lost more money in those accounts than what it looks like at first glance.

This is maybe more telling…

My Roth IRA account that I started, like, two years ago, was at $4019.73 on 6/21/07
I did not add or subtract any money from that specific acccount since then.
That account, the Vanguard Retirement 2050 account, is at $3759.84 at the moment.
I’m pretty sure I invested $4000 in that account, so it’s down, and it will likely keep going down as the economy flushes down the toliet.

Looking at my Sharebuilder funds, I can see that they’re all doing shitty. I was updating my spreadsheet a few times a week previously, but since I was gone for a month I had not updated it at all. I also did not invest anything more in that month.

Here is the value of each fund on 5/19 versus 6/15…

COMV: $56.48 / $52.24
EWZ: $308.16 / $273.94
KOL: $149.1 / $164.4
MCD: $206.55 / $196.1
PBD: $298.85 / $384.11 * ($100 was invested automatically in this account when I was gone)
GLD: $518.94 / $507.80
WFMI: $89.08 / $78.86
EPI: $183.74 / $144.81

As you can see, only my Coal ETF is making me any money. But it’s not enough to balance out all the other losses. I really don’t have a great deal of money invested in Sharebuilder because I’m starting small, it’s my Vanguard accounts that have the most of my money. And they are performing better, albeit not much better, than my individual ETF and stock picks.

I’m just going to leave the money in my sharebuilder account. I plan on investing slower, about $50 a month, in the clean energy ETF and the coal ETF, back and forth, because i figure either we’re going to get the energy we need from coal or cleantech, or both, but in the long run they’re probably pretty good bets. My Brazil and India funds are suffering, but if I ever get a raise I’d like to push more money into those while the economy is sucking. My coal ETF gives me enough exposure to Asia, though, as does my clean energy ETF. I’m a little confused as to Gold’s performance right now, as it had been going up before when the looming recession/depression was its own media gold, but now the ETF is kind of sitting there. I’m curious what will happen to it 20 or 30 years down the road. It just sucks that it’s going to be taxed as a collector’s item. I really need to get some of the gold ETF in my Roth so I don’t have to deal with that crappola.

Moving: The Latest On My Decision

I’ve decided to move.*

(*”decided” in the dictionary of me = decided for today. That could change tomorrow.)

I don’t want to live in a super-cheap living space, per say, but there are a lot of big-ticket items I want to buy within the next few years (including cosmetic teeth work and a condo), and spending $1300 a month just means that my dream purchases will not be possible.

I looked at a place for about $960 that I like, but it’s a bit out of the way and I feel like if I’m going to move, I might as well try to get something even cheaper than that. I’m not sure how cheap I can go… The $960 place at least has its own bathroom (just a shower, no bath), and anything less than that will undoubtedly be a shared bathroom situation.

There are plenty of random roomshares on Craigslist for about $500-$700, and some of them even include utilities, but the majority of them do not have kitchen “privileges.” I don’t really understand how using a kitchen can be a privilege, it’s not like you’re at college with a cafeteria to eat at. Not that I use my kitchen all that much other than to microwave something, but I still think I ought to get a place with a kitchen.

It’s looking like I’ll just move out at the end of June and look for a place in July. If I do manage to find a place for “cheap” I’m going to really be careful not to overspend throughout the year and instead to really focus on saving. That way I can save up to get my teeth fixed, maybe get some laser hair removal for my face, and finally one day buy a condo.

What Does a Multi Millionaire Look Like?

I pose the question as repeats of Patti Stanger’s “Millionaire Matchmaker” plays in the background. Immediately I picture someone dressed extravagantly, lounging in their decadent home, trying to figure out what to do with their time.

But, hello reality check. I seem to work with a few multi millionaires. I should have kind of figured that out (duh me) from the beginning, but I guess I’m a bit slow. Figuring this out doesn’t change my opinion of them at all (as I mentioned a bunch of times before, I really love the people I work with. The more I get to know them, the more I like the bunch!)

It’s just kind of crazy to me. Here I am at 24, feeling guilty for making $57k a year, give or take, and I’m working with people who, by the time they were in their mid-20s, already had, oh, a few hundred million dollars in the bank. At the least, it makes me stop feeling so damn guilty about wanting to make more money.

The cool thing about working for people who were so successful in the past is that you know they’re working for passion. My company is run by a lot of really successful people and I look up to all of them. It’s kind of crazy that I was just a wee little high schooler back when they were all making an internet product that I used frequently. And now, here I am, sitting in the same office as these brilliant folks, giving them my opinion on things.

I’m not quite sure what they all think of me. I really want to do a good job at this company, and to prove myself. I don’t think I’ll personally become a millionaire at this job, heck, I gave up any stock options on my latest contract in order to raise my monthly income by another few hundred dollars. I’m not complaining, really, it’s just that it’s tough for a… copywriter and community manager… to be valued in the same way, say, an IT person would. Which makes total sense — IT skills, esp top-notch IT skills, are worth a fortune. Copywriters are a dime a dozen. I think I’m a pretty good copywriter. I think I’ve found the right type of job for me.

My favorite part of my job is that I actually get to collaborate with people. Being a journalist was so damn lonely. I had to talk to people I didn’t know, which made me super anxious, and then the people I did know had no time to talk or work together to create something new. Now? If we’re all hitting a brick wall in the office in terms of new ideas, we’ll go into a conference room, down some candy and throw out ideas until we come up with something good.

That’s what I love. Being part of that collaborative process. There’s nothing better.

Anyway, I just realized that not only do I work with a bunch of rich people, I work with a bunch of multi-millionaires. I mean, I don’t know how much they all are worth, and that’s really none of my business, but the point I’m getting at is that you’d never know just by meeting these folks. They’re so laid back, t-shirt and jeans types. I hope that if I ever do become successful, on whatever level, I’ll be able to remain as humble and grounded as they are.

Saving for a House… or a Condo?

I’ve always wanted to save up enough money to buy a house outright, without dealing with paying double for the house because of mortgage rates. I don’t like the idea of buying anything piece by piece and paying more for it.

How hard would it be to save up for a condo on my own? Well, pretty hard given the cost of living in the Bay Area, but is it entirely impossible?

I probably should get my rent down quite a bit if this is my goal, for wasting $1050 a month on rent that could be put towards monthly house payments seems to be just as ridiculous as paying interest on a mortgage.

This is the first time in my life (as soon as my raise kicks in) that I feel like I’m making more money than I need. I’ve always spent too much as it is, but yesterday when I was re-doing my budget I found that I had the luxury of liberally deciding where to place my hundreds of dollars of savings per month.

I feel guilty for making so much, but when it comes down to it $60k after freelancing and working 40 hours a week is not *that huge* of a paycheck. It’s certainly more than I ever expected to make, and yet I know people my age making much more. What do they do with all that money? I guess the only thing to do… other than living frivolously… is saving for a house and retirement.

Of course, I’m making $62,400 a year between my 40-hour-a-week gig and my stable 10 hours a month marketing writing job, plus any extra freelance pay I take in over the year… but all that’s without any benefits. Last gig I was making $50k plus the $400 a month for the freelance gig, but I had great health benefits at no cost to me. So in the end I think now I’m making just a little more. Plus, I’ve chosen a crappier health insurance so I’m not spending as much on that as I would had I chosen to stay on COBRA.

In any case, if I keep doing a good job at my current gig, and gee I hope I will, I’ll only be looking at raises down the road. Who knows how much… and I’m not sure the marketing writing gig will last forever… but it seems fairly stable (I work for my uncle and write for four different newsletters he designs and sends out each month for his marketing company and the only reason I’d stop writing them is if he loses a client).

I feel overwhelmed with the money I’m making. It’s not that much, yet it’s way more than I know what to do with. Except I certainly could spend it all at the mall in one day, given a slip into depression and a pick-me-up shopping spree.

Instead, I really want to focus on saving. It’s tough seeing my Roth IRA, stocks and mutual funds slipping, but it’s nice to have some extra cash to play with. The major question is, where do I put the money? I know they say to max out your Roth first, but that seems kind of silly if you want to go to grad school or buy a house. This year, for instance, I’ve put $4000 in my Roth, so I have $1000 left to contribute. Next year, though, I’ll have less savings up front to dump in my Roth. I’ve put $7000 in there total for the last two years, I think. It’s down to $6800 or something right now.

Meanwhile my CDs, even those with crappy interest rates, are obviously up a few hundred dollars after being locked away for a year.

To buy a house, and to make money off my money, it seems the Roth might be the wrong place to put my money. Of course I want my savings to multiply towards my retirement, and it’s nice to think of what the money would do over the years if I max out my account every year… and I don’t have a 401k at work or anything, so it’s up to me to save my money for retirement.

It’s funny, because my boyfriend isn’t thinking about any of that yet. Every time I try to tell him to start saving his money in a Roth he gets all defensive and doesn’t want to talk about money matters. He thinks I’m being preachy. Meanwhile, I’m just trying to educate. Oh well, he usually isn’t so stubborn about things, but when it comes to money he wants to figure it out on his own. Fair enough. I just consider him the man I will one day marry, and if I’m going to have money in retirement and he won’t, that will make for one lousy retirement.

Of course, I might die well before retirement (hopefully not) or he might (no!) or maybe we won’t get married at all. Life has too many uncertainties to put all my eggs into one tax-free basket. Right?

But still, the question remains… how do I save $500k for a house so I can pay off the house (or at least most of the house) up front?

I really wish I could save $500k and my boyfriend could save $500k and then we’d both buy a $1 million house. How long would it take to save $500k?

If I save $2000 a month, that’s $24,000 a year.

So it will take some time. It will take 21 years.

So I could buy a house in 2029 when I’m 45. That seems in poor rational.

But… what if somehow I get a raise and I start saving $3000 a month somehow? That’s only 13 years. So I could buy a house in 2021 when I’m 36.

The sad part is that house prices will likely go up by then. Now, and in the next few years during this recession, is the best time to buy. The money I’ll end up paying on inflation and such might end up matching what I’d pay on a mortgage.

I don’t understand how I could save for a house.