October 31, 2007

October 2007 Net Worth Update (+$1,409.31)

October was a pretty average month all around. We increased our net worth $1,409.31 from last month, to $27,172.68. We've already passed our net worth goal for 2007, so any additional gains are gravy.

What worked this month?
My wife continues to bring in multiple streams of income. She brought in a $761.50 commission check for referring a customer to her father's company and a $752 commission check from old job. Another plus this month was that our retirement accounts (401K and Roth IRA’s) increased by a total of $778.90. We also reduced our liabilities by the standard amount (~$1,000).

What did not work this month?
A $1,000 business expense that we've been expecting finally posted to my credit card. I was already reimbursed for it in June and had the money sitting in our savings account gaining interest. We also saw a ~65% reduction in the value of our shares of Adventrx Pharmaceuticals.

What's coming next month?
My wife receives and extra paycheck next month and may also receive her first commission check from her new job. I will be traveling overseas for 5 days (all expenses paid by employers) so we might see small savings there. My wife and I will also be taking a road trip to visit my family for Thanksgiving. A couple of big insurance bill hit next month: We will be pay for a years worth of car insurance for my truck ($880) and a years worth of insurance for our condo ($416).

October 22, 2007

Southern California Wildfires

Many of our friends have been evacuated because of the Southern California Wildfires. We are far enough away that it is unlikely our neighborhood will be evacuated.

However, I'm flying to the east coast tomorrow for a business trip so we prepared my wife just in case the fire heads in our direction.

Here's what we packed in a suitcase in case there isn't time to fully load up the car:

Water
Food / Dog Food
Extra clothing
Family Photos
Legal Documents
Insurance Documents
Emergency Cash
Checkbook
Toiletries
Flashlight
Lighter
Knife
Hand Gun
Pen & Paper

It's unlikely she will be in a survival situation, even if our area is evacuated. There are many evacuation shelters available. However, worst case scenario, she and our puppy can get by safely staying a night by themselves in the car. In addition to the items above, she would also have her purse, cell phone, computer, and chargers with her.

October 17, 2007

Auto Insurance

For the 1st time ever, we plan to pay my auto insurance bill in a lump sum payment. We typically finance the 12 months of auto insurance thru AAA, costing us an extra $58.73 annually. Here’s the breakdown:

$1,041.73 12 months coverage
-$103.00 AAA credit for 12 years of membership
$880.00 balance due

$58.73 cost to finance payments for 9 months
$938.73 total amount paid if financed

An added benefit is that we will have one less bill to pay every month.

October 13, 2007

Back Home. . . For a Week

I just returned from a business trip to the East Coast, adding another 6,212 miles to my Delta SkyMiles. This has been a good year for my frequent fly miles. I'm now at 37,580 miles on Delta and qualify for Silver Medallion benefits. I didn't realize this until I was automatically upgraded to 1st class and also did not have to pay the $50 charge for an overweight bag.

I fly back to the East Coast in a week for an 8 day trip, adding another 6K miles to my Delta SkyMiles (and hopefully another complimentary upgrade to 1st class). Two weeks after that, I fly to Europe on Delta for another large chunk of frequent flyer miles.

I'm working towards a couple of free (frequent flyer miles) tickets to Hawaii for my wife and I.

October 6, 2007

2nd Mortgage Payment Plan

One of our big goals is to buy a house in 5 years and hopefully keep our condo as an investment property.

Currently, our monthly condo expenses (mortgages, taxes, HOA fees, and insurance) total $2,697, Unfortunately, that is way more that we can rent our condo for. Therefore, we have decided to focus on paying off our 2nd mortgage ($52,755.81 balance) to help bridge the gap.

Of that $2,697 in total monthly expenses, our 2nd mortgage payment represents $411.33. The interest rate is 8.55%, so only $36 is currently hitting principle each month.

Here’s the plan:

We will use what we consider “extra” money each year to knock down the principle:

$2,000/year from my wife’s two extra paychecks
$3,761.40/year from my two extra paychecks
$1,219.11/year from cashing in 6 days of my vacation
$5,000/year from my wife’s commissions

This would result in $11,980.51 in extra principle payments per year, or $47,922.04 in 4 years, allowing us to pay off the 2nd mortgage by 2011. We may be able to pay it off even sooner because $5,000 is a very conservative number for my wife’s annual commission and we will likely receive annual pay raises.

Once the 2nd is paid off, we will focus on increasing our savings for a house down payment and create a reserve fund for maintenace of both properties. In addition to the $411.33/month we will save after paying off the 2nd, my wife’s car will be paid off in April of 2012, allowing us to bank an extra $450/month. My car will be paid off in June of 2013, helping with our cash flow once we buy a house.

Our condo is next to a major UC school, providing large pool of renters. We hope to be able to rent the unit for $1,800/month. We’d be taking a loss each month initially, but a combination of paying off the 2nd mortgage and tax deductions should help us get within a couple hundred dollars of our rent target.

If we are sucessful in our plan to pay off the 2nd, but find the numbers don't work out for renting the unit, we will sell the condo and buy a house. In the very least, we will have increased our equity in the condo and saved ourselves a lot of interest.

October 3, 2007

Rewarding Ourselves

My wife and I have decided to give ourselves a "bonus" this month for reaching our 2007 net worth goal 3 months early.

This extra fun money will come from an unexpected ~ $799.09 commission check my wife will receive from her old, old job. We plan to give some of it to our church and then split the remainder. Don't get me wrong, we're not getting lazy now that we reached our 2007 net worth goal, we're just rewarding ourselves for being consistent with our plan earlier in the year.

We're excited to already be making progress on our 2008 net worth goal ($48,700) while still only in 2007. If my projections are accurate, we should be over 60% of the way there (~$30,000) when 2008 actually starts.

October 1, 2007

September 2007 Income Statement

As I hinted at last month, September was a great income month and a pretty decent month expensewise (click on spreadsheet below).

While my income was pretty boring this month, my wife raked in money from 3 different companies. First, she received a $1,057.94 commission check from her old job (with another $799 commission check from the same company on the way next month). Second, she received a final $1,778.75 check for last 3 weeks with company that just laid her off. And finally, she received a $1,211.54 check from her new company for her first 9 days of work. We were somewhat expecting a ~$700 commission check on a job that my wife referred to her dad’s company, but it will not be sent until next month.

October has the makings of a good month too. My wife is expecting a commission check on a job that she referred to her dad’s company (~$700) and another commission from her old job ($799.09). She may also be receiving a little commission check (<$50) from her new job for some small sales that she had her first month. In terms of expenses, I will be traveling for business for 2 weeks and my wife will be on the road a couple of days as well. With our employers covering all expenses for us when we travel, October could likely be one of our lowest expense months yet.