March 2008 Net Worth Update (+$82.80)

The roller coaster stock market continued in March. Thank God we were able to eek out $82.80 ahead of our net worth last month, bringing us to a net worth total of $27,776.61 (click on spreadsheet below).

What worked this month?
Thanks to my wife’s $1,292.50 commission check, we were able to contribute a total of $800 to our Roth IRAs for the month. So, even with the rough stock market, our Roth IRAs are up $490.20.

What did not work this month?
While we contributed $212.40 to my company 401(k), we ended down $216.664 for the month. Our savings account also took a 14.55% hit because we had to pay the 2nd installment of property taxes ($1458.40).

What's coming next month?
Next month is a pretty typical month for us in terms of income and expenses. The big question mark is the stock market. Who knows what will happen?

Change in 2nd Mortgage Accelerated Payment Plan

We have been on a good roll with our 2nd mortgage accelerated payment plan, paying down an extra $1,930.53 in principle since January 2008. The extra payments to our 2nd mortgage were great to pay down the principle, but cannot be pulled back out in case of an emergency (it’s not a HELOC). So, due to the current U.S. economic situation, we have decided to deposit future funds earmarked for our 2nd mortgage accelerated payment into our savings account.

We’re doing this to temporarily increase our emergency fund during this volatile time. That way, if the economy gets so bad that people start losing jobs, we will be a bit more prepared. Once the economy straightens out, we plan to pull the earmarked funds from savings and apply them to our 2nd mortgage.

I hope we never have to touch the money, but know we will sleep better with a bit more of a cushion right now.

Property Tax Refund Received

We’ve been eager to receive our property tax refund check, but didn’t expect to receive it so soon.

The tax assessor’s office told us it could take 60-90 days to receive the refund; it only took 21 days. In addition, we were expecting ~$354, but received $384.44. Thank God! We deposited the $384.44 into our E*TRADE savings account to help bolster our emergency fund.

Since property taxes in San Diego County can only increase 2% a year, we just saved ourselves a bunch of money while we own the condo. And, if property values continue to fall, we will likely ask that our condo be reassessed again next year to further reduce our property taxes.

I Can Tell You My Net Worth Within $1,000,000

I enjoy listening to talk radio, primarily the business talk radio. Yesterday, I was listening to The Ray Lucia Show when he received a call from a gentleman that wanted to discuss saving money on taxes.

The gentleman is 45 and owns his own company that profits $250,000/year. While he does not have any retirement savings, he owns his home outright and has rental homes and a commercial property that are nearly paid off. Pretty awesome, especially for a 45 year old. What threw me off was when Ray asked him his net worth, the gentleman replied $3,000,000 to $4,000,000.

I didn’t even hear Ray’s answer to the tax question because I couldn’t get over the insanely wide range of $3,000,000 to $4,000,000. Granted, the gentleman was put on the spot and, with the instability in the housing market, it is difficult to know exactly what property is worth. But not knowing your net worth within $1,000,000 seems incomprehensible to me. For us, that would mean the difference between retiring and not retiring.

Time Flies By

American Airlines informing me that my 11,316 American Airlines Aadvantage miles were in jeopardy of being lost since I have not flown with them within the past 18 months.

I have been flying almost exclusively with Delta and racked up a number of Delta SkyMiles. Nonetheless, I didn’t want to loose my American Airlines Aadvantage miles because there is a chance I may fly with them in the future.

I checked their website and determined that if I use my miles to redeem something, I get another 18 months before the miles expire. Unfortunately, I did not have enough miles for a free flight, but they have special offers online that you can trade your miles for. I used 1,700 of my miles to order a 1-year subscription to Time Magazine.

Not a bad deal. If I never fly with American Airlines again, I have enough points to keep a free Time Magazine subscription going for another 5 years or so.

Saved Money On Property Taxes

Our original property tax bill was for two payments of $1842.84 ($3,685.68 total). We just received our revised bill for two payments of $1,458.40 ($2,916.80 total) after having our property value reassessed. That means we saved $767.20 on our property taxes this year.

We mailed a $1,458.40 check for the second installment. Since we paid our first installment for the original amount ($1,812.84) back in December, they will be issuing us a refund for $354.44 within 60-90 days. Good stuff!

I Can’t Afford A Stay At Home Wife

Why? Because my wife is way too profitable.

She just received a $1,292.50 commission check from her company. That’s some serious extra cash. Instead of going out and buying a home theater system (because we already did that last week), we’re going to be more responsible with the money. Our plan is to tithe a portion of the commission, put a portion into savings for taxes, and the rest will go towards funding our Roth IRAs.

If my wife keeps this up, maybe I can be a stay at home husband.

Trying to Rationalize Splurging

Our condo is getting some major work done, paid for by the HOA, but we've lost use of our family room for a couple of weeks.

The splurging all began when, in the process of moving our furniture out of the family room, we broke our cheap IKEA entertainment stand. We found a nice, smaller replacement stand for only $99. Not bad, but we figured our 15-year old speaker towers and clunky 4-piece stereo/DVD system was going to look poor on the new stand, espcially hooked up to our 1-year old plasma (last years splurge). So, we bought a 5-channel Panasonic Home Theater System at Costco for $399. It's sweet, and here's how we rationalized the purchase:

Pros
Nice sounding and looking
Requires less than 1/2 of the space as our old system
iPod hook up so we can have all of our music available at the touch of a button
$60 of the cost was covered by selling our old stereo system

Cons
Price
Our old system still worked

We probably could have got away with using our old system a couple of more years but what the heck, we treated ourselves. We can't wait to get our family room back so we can watch a movie using our new home theater system. It will also be nice to have more space in our little condo.

Citibank Wants To Give Me Money?

I used to have a ton of credit card debit (click this link to read the details). Thankfully, those days are long behind me. While I never got behind in any of my credit card payments, keeping track of the statements/payments for 6-7 credit cards was tough.

Well, it turns out that back in 2004, I overpaid my Citibank credit card when closing the account. I guess I moved addresses immediately after closing the account, because Citibank lost contact with me. Last week, I received a letter from Citibank stating that they have been trying to track me down to give me a $92.80 refund check for my overpayment in 2004. Wow, nice surprise.

Since I’ve moved 4 times since the address that had in their system, they required that I get a form notarized proving who I am. The notary cost me $10.00, but I should get the $92.80 check in about 4 weeks.

Thank you Citibank.

Don’t Be A Baby

This blog is officially 1 year old! Just a baby compared to most blogs.

I began 1MansMoney 12 months ago with a post about our negative net worth. Since then, we have turned things around and now have a positive net worth. We also have one year under our belt towards achieving our goal of financial independence and retiring early.

I give credit for our financial success to God because this is all His anyways, to my wife because she's my inspiration, and to our families for their guidance. I also have to give credit to this blog for helping us keep better track of where we were at and where we are going.

For those of you that want to get out of debt and plan for retirement, I encourage you to consider starting a blog. Any goal worth achieving requires a plan and follow thru. I find that this blog is a terrific tool. I liken it to a financial diary that, since others read it, helps provide accountability and feedback.

I can’t wait until a year from now when 1MansMoney is in its terrible 2’s.