Friday, February 15, 2008

Don't Forget You Could Win one of My Favorite Books

Don't forget any comments posted on any of my other post topics between now and February 22nd make you eligible to win the book The Millionaire Next Door, see my previous post for details.

Happy Commenting! I really do appreciate your thoughts and comments.

Found A New Blog to Start Reading -- Banker Girl

Found a new blog I'm going to start reading...Banker Girl. According to her About profile she's an early thirties real life banker from the Midwest and has been"preaching to my friends about the importance of reigning in unsecured debt, coaching clients on how to improve their FICO scores, and explaining to business owners the importance of liquidity ratios." But in her own worlds is "a financial hypocrite . To date, I haven’t put my money where my mouth is."

Banker Girl's Blog is the journey to financial independence which I can completely relate to. She promised to"dish up advice, include a few (anonymous) client anecdotes, and link you to financial resources that I have found helpful."

I hope you'll enjoy her blog as much as I have discovered.

(photo borrowed from her blog logo)

Thursday, February 14, 2008

Income vs. Goals in a Relationships ---- Food For Thought

Warning: This is a financial post, the appetizer (aka background) is just fluffy and coincidentally falls on Valentine’s Day.

So my mom is the type of mom who no guy is ever really good enough for her baby and for some reason is always on the look-out for someone “better” so they’ll take care of her baby in the lifestyle that my mom feels is normal (affluent). Apparently she doesn’t think her baby girl can take care of herself --- but that’s for a different post. Beyond always being on the look-out for someone else, my mom’s never really liked any guy I’ve ever dated, and a few of them were actually guys my mom set me up with – go figure! This is an ongoing issue so I do not take it to mean anything against the guy I’m currently dating and have been dating for the last year.

(Financial stuff coming soon…I promise)

So the current guy I’m dating, we’ll call him “Mr. Be-Mine” in nod to the holiday, is probably the most compatible guy I’ve ever dated, but still different enough to make life interesting. My friends even agree. One of the many ways we’re compatible is financially. We have very similar outlooks towards saving and spending. Long term I think this is probably one of the best things for a couple - love aside because that’s pretty important and can overcome most everything but finances are also very important, especially with all the studies conducted about money arguments being one of the top reasons for divorce. One article even claims that 57% of couples divorcing site money issues as the main cause.

Well even this doesn’t keep my mom from her usual “tricks” of constantly trying to find someone better for me. One of my mom’s co-workers has a son and my mom wants me to meet him. Of course I’m not going to but she still carries on and on about whoever it is she wants to fix me up with, so she’s feed me full of info about this new guy, we’ll call him “New Kid” on the Block. According to my mom “New Kid” is an investment banker and he’s in my mom’s words “bringing home the big bucks”, drives a new BMW, and recently bought his mom and dad a new plasma TV. She also has listed several other characteristics that are in line with mine including a big involvement in community service, but I won’t get into that since this is supposed to resemble a financial blog post and not some self-help girly blog post. My mom sees “New Kid” as security, but I can’t help but wonder what his net worth is like, is this guy saving or is he so deep in debt he’ll never escape. But since I don’t know and it really doesn’t matter since I’d never go out with “New Kid” I can only conjecture so let’s assume he’s at least breaking even with no consumer debt but isn’t aggressively savings for long term goals.

So here’s the financial question that I’m wanted to bring to you all to ponder:

Would it be better to be in a long term committed relationship (like marriage) with someone who is on the same page with you regarding your views on money and your financial goals but who’s income will never peak much beyond what it currently is or someone who doesn’t necessarily share the same goals and views on money but apparently has a large income and who’s income potential is enormous?

All things including finances aside, I already know what I’m doing between “Mr. Be-Mine”, my mom and “New Kid”. But the question is definitely good food for thought.

What’s your thought on my financial question?

Wednesday, February 13, 2008

Question on How I started Saving

Thought I’d share a recent question I received about how I started saving.

As mentioned before I really love Weasabe, its really helped me be able to track my monthly expense. Plus I love the group discussion portion of it as well since members can all post questions and get everyone’s insight.

(To clarify Weasabe is not a sponsor of my blog, in fact they probably don’t even know I’m alive – I’m just a very satisfied client and wanted to offer the idea to everyone else just like if I found the most amazing restaurant in town I would be bragging about it to my friends forever until they tried it and agreed with me that it was amazing).

Anyway recently a member posted a question called “Stock’s for Newby’s”. I think you should be able to view the whole discussion even if you are not a member yet.

Below are my highlights:

Original Question:
Hey guys,
I'm 18 and working 2 part-time jobs, I have no real expenses and save pretty much whatever I make (I think I've spent a total of 12 dollars in the last 6 months). I am interested in the stock market, so I was wondering if you guys could send me on the right track.
Ps: I know nothing of stocks and have no idea where to start :S

My response:
I'm in the same boat as you, I'm clueless about picking specific stocks that's why I stick to mutual funds and target date funds which take all of the guess work out of the equation. I use vanguard and they have target date retirement accounts so its as simple as finding the 2045 fund (which is around the year I plan to retire)and selecting it.

My one word of advise those it before selecting do a little homework and discover the fees and the asset allocation first to ensure they are consistent with your goals. Other than that enjoy.

A different member chimed in with this in response to my post:
I went to your blog spot... wowowow your doing a very nice job on the blog and on your savings........How did you get started in the saving track? Someone must have helped you along the way? Vanguard is a good stop to save on Mutual Funds. I also like TRowe Price and Fidelity.

Happy Savings

I then responded: Thank you very much for checking out my blog. I hope you'll keep reading.

To answer your questions:
- I got started on the savings track when I was in high school because I knew that I would be 100% responsible for all of my expenses including tuition so it was up to me to figure out a way to go to college, and then from that it progressed. In college I was fixated on savings because it would mean I could work less so I could go to school longer and finish up and now my focus is on retirement. I talk a little about this in some of my older posts on my blog.
- As for as someone helping me I wish I could say that I had someone help me along the way. It really boiled down to seeing the example that several of my family members made of being deeply in debt and struggling to find a way to retire that made me so debt adverse and want to save heavily for retirement. Beyond that it was getting involved with finances from reading EVERYTHING I could get my hands on. Plus Wesabe has definitely helped me a lot in tracking my expenses.

Hope I answered your questions. Thanks for checking out my blog, I’m glad you enjoyed it

Just wanted to share some insight with everyone else about how I started saving. I’ve been planning for some time to write a post about how I came to have saved over $90k and only be in my early twenties (okay maybe I’m a little north of early twenties but close enough). So keep checking back because the questions in the discussion gave me extra motivation to hurry up and write that post about how I started saving.

Tuesday, February 12, 2008

Mid-Year Performance Review Update

Well no real news to report on the Mid Year Review front. I met with the Boss man, according to him my work is doing awesome and that I'm already performing at the next level so there's no tasks or project I need to master before I can get promoted. Okay I'm thinking if that's they case why am I not promoted yet? So I polity try to ask this question but just get blown off. So now what do I do???? On top of this come April I'm getting transfered to a different department with different job descriptions but the one good thing is my soon to be new boss man, "Mr. VP", recognizes me as a high achiever. RRRRGGGG that was no help - so it looks like I'm going to bide my time for now.

Monday, February 11, 2008

Progress on Goals for 2008

Alright all, its officially been over one month since the start of the new year so thought I should check up on my action plan for achieving my goals especially since some of them had January and February due dates so here goes:

1. Have Net Worth of $105,000 – My net worth is increasing (yeah!) and a very quick calculation of my net worth is over $90k. I have not been as good about saving the $100 a month outside of my retirement accounts, so I need to establish some set plan to prove that I’m saving the $100, be it via a phony withdraw listed in my accounts etc so that I don’t touch this money. I plan to have this plan established before the end of February.

2. Fully Fund my 401k and Roth IRA – I’ve confirmed that my 401k automatic deduction is still set at 27% which will allow me to save the max. When I get my annual cost of living increase I will have to decrease so that I don’t reach the max too soon and loose out on the company matching but the cost of living increase won’t happen until September, so no action is required until then. I have investigated the most economical way and easiest way for me to contribute to my Roth IRA and that is with a once a month automatic transfer from my bank account to Vanguard. Because I’ve signed up for electronic statements there is no cost to do this. So every month on the 22nd $417 is withdrawn from my bank and invested.

3. Diversify Roth IRA – I’ve made no progress on this one other than to check into other mutual funds. This one will require some more investigation on my part as far as the way to do this economically via Vanguard. I know the minimum transaction required to start a different fund in vanguard is $3,000. So I will need what the best method to procure the other fund (i.e. sell some of my S&P 500 fund and invest in the other or lump sum contribution). I plan to have this work complete by February 29th. Does anyone have any advice on how you did it?

4. Get Promotion – I’m working hard towards this one no only am I 1. Continuing to do an "amazing" job on every task but I also have my mid-year review coming up on Tuesday where I plan to work with my boss to 2. List my responsibilities and compare to established tables for positions 3. Talk to my boss about the discrepancy I find in responsibilities and position and request to know the steps I need to take to make it to the next level (additional tasks to take on, people to talk to etc). 4. Continue to Ace my Performance Review and take the opportunities that are offered to me

5. Get Ready to Buy a House - I’ve pretty much deleted this goal from my list. (read my Rent, Don't Buy Post to better explain my reasoning). I’ve decided to rent for one more year, continue to save for a down payment (above and beyond 20%), and wait out a raise and hopefully promotion to have more monthly cash flow.

Well what do you think, am I on my way to achieving my goals for this year?

Monday's Money Funny - Who Needs a 401k? I'd Rather Have A Castle

I've started a feature on my blog called "Monday's Money Funny" which are humorous (or at least humorous to me) articles/jokes/just about anything (real or satire) that I've discovered over the weekend when I catch up on all my on line reading that spark a need for knowledge. For example last week's a satire on the government's plans to spark the struggling economy. This week's is a book review on "House Lust: America’s Obsession With Our Homes” by Daniel McGinn.

I hope you enjoy the fifth of the series from NY Times

Below is a preview of the article, click on the link above to see the article in its entirety:

Putting a modern-day finish on this propensity is “House Lust: America’s Obsession With Our Homes” by Daniel McGinn (Currency, $24.95), which chronicles an epic of satirical, if not quite biblical, proportions.

“How did home renovations come to routinely turn families’ lives upside down?” he asks. “Why do thousands of us now watch reality shows about home flipping or house hunting? Why did so many people decide to start investing in real estate, or quit good jobs to seek a fortune selling houses?”


“Our homes may no longer be making us rich,” he writes, “but living through an era when we thought they might has resulted in a permanent shift in thinking — one that will leave many of us happily obsessed with houses for years to come.”

The millions of Americans currently facing home mortgage foreclosures will probably regard such unbounded optimism as the eighth deadly sin.

I don't know about you, but after seeing this book review, I've already consolted my library to be added to the waiting list to read this book. It raising interesting questions of oneself (especially for me since I'm planning to buy a home some time in the near future) about how much of a home is really needed and what's the best strategy for purchasing one. I'm personally a huge fan of Money.MSN and found an article by Liz Pulliam Weston about how big should you really go.

Stay tuned for next week's Monday's Money Funny. Also if you run across any Monday Funnies please email them to me at and if I use them I will give you credit and link to your blog.

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