November 2011 Net Worth: Update

Sorry, I have been extremely busy at work and have not had the time to devote to maintain the site on a weekly, much less a daily basis. My last update was June and from the chart above you can see the last few months have been an roller coaster ride for our net worth. These have been the most wild swings since I have started to log our net worth. This is mostly because our exposer to the precious metals, they swing pretty violently depending on what is happening in the world. Right now, I have us set up in the the McAlvany Triangle which is the 1/3 the "Foundation" – Precious Metals,  1/3 in "Savings" – Cash, Bank Accounts, and 1/3 "Growth/Income" – Stocks, Bonds, & Mutual Funds. Anyways, I have to admit that I have to ignore the everyday noise of the market and look at the long term. I still feel very good at the plan of attack and will change accordingly as we get closer to the crisis window.

Next month I will try and have a break down for our net worth.

Economic Armageddon and You

This is the best example I have seen of summing up the economic mess we are in. It is easy to understand and the average joe on the street should be able to grasp.

The Hidden Cost of War

1975 New York = 2010 California

Take the time and view this series, it is very scary. I know my generation doesn't know much history, much less situations like this. Especially events that happened before we were born, besides the major wars and the great depression. I ask anyone who was born after 1975 to watch this because this can happen and it will happen if we do not get our fiscal house in order. I believe that California will go first...

Found from iTulip.com TARGET="_blank">a new window

Money As Debt

This should be mandatory viewing in order to get a High School Diploma.

What Happens If The Debt Ceiling Is Not Raised?

Yesterday America just got permission to hit 100% Debt/GDP. The Senate approved an amendment increasing the US debt ceiling by $1.9 trillion. for a total of $14.3 Trillion. I was reading Zerohedge when someone asked what would happen if the ceiling wasn't raised? This is what came out of the comments section that I found very interesting.

(The following are from comments by readers on Zerohedge.com)

Short answer: Nothing happens (but you knew that)

Long answer: Current law requires a budget ceiling and a vote to raise it. Violating that law would open up violation of other similar laws. Not too far down the path of similar broken laws, the states start printing their own money. In US dollars. At which point hyperinflation ignites and the USofA ceases to exist as a functioning union. Much hilarity ensues.

The monetary system of the world (not just the USA) is based upon the illusion that there will always be greater fools available to pay the last greater fool.

The only reason people remain in the room that's about to be flooded with poisonous gas is the complete and utter belief (supported by group think and conventional wisdom along with healthy dollops of denial and self interest trumping rationality) that each person can get out before the gas can over come them.

As long as the majority continues to believe in the lie, the lie remains solid and fully formed. Thus the illusion is reality because the belief (and by extension the actions) of the people makes it real. One of the realizations one has when looking at this philosophically is that reality is simply what the majority says it is.

The banks are stable despite horrendously convoluted and distorted balance sheets and non-performing assets simply because the government says they are and people want them to be. Thus they are. If a rule or law threatens to upset the illusion, it's changed to conform to the group think.

What most people don't understand is that this "reality" is extremely fragile and will fail quickly. The Fed, Treasury and the President understand this extremely well. This is why this is considered a National Security issue and every lie, theft, payoff and Ponzi is encouraged and endorsed at the highest levels. Our reality is supported by a lie and thus by extension is a lie. Since there is no more real support under our economic reality, every effort must be extended to support the lie.

Do or Die! Seen from that point of view, everything that's going on is perfectly understandable.

The lie holds until the first person breaks the pact and heads for the exit. It takes no more than one. Then the stampede erupts because while nobody wants to be first, everyone wants to be second.

I think California is that "person" at the sovereign level. As goes Cali, so goes the nation, so goes the world and in rapid fashion. We will see, come summer, if Cali stays within the illusion or bails.

Someone pointed out this video as metaphor for our current situation:

Cunning lions await the herd as it lumbers forward, trustingly, behind their dear leader. If divided, the weak in the herd are slowly picked off, unless...

Anyways, if someone has a better explanation to what would really happen, send it to me!

USA watchdog Greg Hunter

Audio from Greg Hunter of USAwatchdog would take the time and listen to these men. They address the deficit's, spending and entitlements.



And David Walker, former Comptroller General of the U.S. On America's economic comeback. He is the guy in I.O.U.S.A, you can read more about that here.



Audio from Brad & Brit Show

National Debt

We recently just passed $12 trillion, keep stepping on that gas administration, no one is watching, we are all to busy watching American Idol and enjoying the recovery...

U.S. National Debt Clock : Real Time

Total: $12,030,203,408,433.00

Debt Per Person: $39,058.00

Debt Per Taxpayer: $110,681.00

July 09 Net Worth: $52k Assets - $35k Overall 9.23% Growth

Little over half the year and we are still rolling and still growing every month. It is such an amazing feeling to see my money growing in such a short period of time. Seems like we have a major purchase every month, and July was no different, we purchased a TV. I know that a TV isn't a need, but our main TV is broken and I need a TV before football season starts up(will save me money on not going to a bar, ha). On top of that, TV's are so cheap and we have the money for it. We have a lot of extra expenses coming up in August so I am not sure this month is going to be so kind to us as the past few. Lets break it down:

Cash & Savings: After falling off last month and not making my budget I finally had my budget balanced again. It did not grow as big as it has over the past as I moved over around $800.00 into my brokerage account(thinking about shorting the financials). This bracket holds the funds for my down payment on house, engagement ring, insurance, auto maintenance, Roth IRA(before I max it out), and vacation. This is why it can be deceiving, it also holds my monthly budget in it. It has about 16-17k sitting around as savings the rest are funds that are going to be used at some point over the year. The rest is used on a daily bases for covering expenses, rent, food, auto, etc...

Stocks/Brokerage: This reflects transferring around $800.00 into my brokerage account along with other stocks doing well for the month. I have around $2500.oo in my past employee stock option plan that I am planning on selling if the Dow goes to 10k.

Retirement 401k: We saw increase growth from the stock market last month and it is being reflected here. At the end of the day these are long term investments, so no need to stress or get happy if it loses or gain slightly. I am still throwing the idea around to pull everything back into cash if the Dow goes to 10k which at this point who knows what is going to happen. I have my old 401k with my old company which is the majority of my retirement at the moment. I need to it rollover into my vanguard IRA account. If the dow hits 10k I will roll it over and let it sit in cash until we see what happens. I truly believe we are going to see a major pull back in the market come fall/winter.

Retirement IRA: This area was up big time and it feels great, I cannot seem to get over 5k, but I will once I purchase some shares at the end of year to max out my Roth!

Debts and Liabilities - Vehicle and Credit still high

Credit Cards: Most of this is still the engagement credit card with a 12 month 0% APR, I am not going to put much of a dent into this debt until the 12 month, when I will pay it off in full. I have that money going straight into my saving account creating a little interest off of it till I pay it in full. As I mentioned in the overview we purchased a new TV that is where see the extra 1,200.oo, it will be paid in full before interest is assessed.

Car Loan: Same story as last month...slowly paying it off every month. It has crossed my mind to try and sell it(for a used better gas mileage vehicle), I just have a lot going on and really don't want and have to deal with it at the moment.

So there you have it, I am very pleased with where I stand! August is going to be a crazy month with some vacation, bachelor party, and the start of football season, so I am going to have to really watch my budget. Once again I want to show that if you know where your money is going you can start to create wealth. If look at my net work graph on the right it has been growing every month. Hope you are having as much success as myself, remember as long as your working towards saving the more growth you will eventually see!

Related Post:

Debt Cancellation/Debt Jubilee: Would You Be For It?

You Cannot Multiply Wealth by Dividing it

Main Resources for Creating Wealth

Budgeting Tools

I have two major tools that I use every month that help me track my money management. They are my monthly budget and net worth calculator. I started this blog to keep myself accountable for my own money management, but I also started it so people could see a diary of my daily struggles and victories with creating wealth, purchasing a house, and saving for retirement. 

I track my budget every 2-4 days and I balance my check book those same days. I have found that keeping a hold of your budget is the single MOST important thing you can do for starting to create wealth for yourself. I can honestly say that I never understood how people saved money. Before a budget I never saved any money, I tracked my spending based on how much I had in left in my bank account before the end of the pay period. The minute that I create a budget was the minute I started saving money. It took me complaining to my sister about how there is no way that I could save money living in California with my salary. My sister sat me down and told me to stop whining and to create a budget. She helped me understand how a budget worked, and showed me that I could save money if I wanted, even with a little bit of debt.

I am making my budget and my net worth templates available for you to download and use for your self. I hope that for anyone who doesn't have a budget that you use this to your full advantage and start saving today! Trust me, starting is the hardest part, once you have a budget you have somewhat of goal to start either paying off debt or saving for wealth.

• Download Budget (google) Budget (excel - will post later today)

• Download Net Worth (google) Net Worth (excel - will post later today)

Here are some other great money management resources from other blogs 

Fi$cal Fizzle Monthly Reports

J. Money is bring Sexy Budgets Back

Man vs Debt ask "What’s The Actual Point Of Budgeting?"

I will be adding more of these so check back! Contact me if you have any tools that I can share with my readers and I will link to you directly. If not, leave a comment and let people know your strategies to saving and creating wealth!

Super Target...Where have I been?

I know I will be pretty late on this one but where have a been the last few years and why have I not been shopping at Super Target for my groceries? I have to admit I was pretty skeptical when my fiancé suggested going there to get our groceries for the week. Not that I hated Target or anything, but I had never been to a Super Target where they had groceries. I was only doubting it because I wasn't sure they would have everything we needed and the quality that I had wanted. We had shopped at Super Walmart before but the quality of their fresh produce and meats just were not up to the standard that I prefer.

Well, I was proven very wrong with only one shopping experience. Our weekly grocery bill is somewhere between $100.00 and $115.00 at normal stores like Harris Teeter with their club cards. We have gone to the Super Target for the past 3 weekends and our prices have been easily $10-$20 cheaper. I also have been enjoying the "fresh market" brand food just as much as my normal brands (thats saying a lot, as I am a brand whore). I would even say that their brands are better, for instance, their yogurt is way better than the Harris Teeter brand we used to get.

On top of lowering our grocery bill every week we can also pick up cheaper items like trash bags, cleaning supplies, personal hygiene, etc...at a reasonably lower price than at a regular store.

The Super Target is a tad bit out of our way but I think it makes up for it in the little bit of money that we will save every week, month, or year. I would recommend anyone like me that has a certain standard of quality for their groceries to give Super Target a chance.  I am pretty certain that you will be turned into believer just like I was. I have to admit that the produce could be slightly better as I prefer farmers markets to grocery store's anyway, but I cannot complain with the amount of money that we are saving and enjoying the food as much as before I tried Target.

Any other places I am sleeping on? Post a comment and let me know!

Purchasing a Diamond Engagement Ring: Part III

This is the third of a three part post which I give you my whole story of purchasing a diamond ring for my now fiancé. This post describes how I am using a credit card to buy the diamond ring.

One of the most important thought process is thinking about what you, as a couple can afford (even though you are paying for it). One of the last things you want to do  in this new phase of your life is begin with new debt or more debt. This is very hard to consider when you have a PR scam that says that the cost of an engagement ring should at least be 2 months salary and that you want to give them the best. I took a hard look at my fiances and choose a price range that was slightly higher than I had saved up for but realized that I would just have to be tighter with my budget...but I could afford it. I would say to anyone who is nervous that their someone special wants an expensive ring that you cannot afford, is to have in place a special way of letting them know that if money wasn't an object that you would give them the world. You are going to be with them forever and money is going to be a huge part of your marriage so don't start off on the wrong foot. You can always upgrade a diamond 5yr, 10yr, and so on for anniversaries if you like.

One of my problems I had was how was I going to actually pay for this purchase, cash, credit, or financing. I started saving up for the ring a little late but when I got serious about it I really tighten my buckle and beefed up my "wedding ring fund" every paycheck. At the time I was saving for the vacation trip as well, so I wished I would have started saving earlier...dont we always say that. I had, sitting in my "wedding ring fund" about 1/3 of the cost I had budgeted and I had the other 2/3 sitting in my saving account that I did not really wanted to tap into, especially in these economic times. I have 2 credit cards that are fully paid off and are only used for points. I started to look for credit cards with 0% APR for the first 12 months and found the one I wanted. I have great credit, so fortunately I was able to open it up and put the ring on the card. So this might not seem like a good idea but here is my full thought process of why I decided to put it on plastic.

1) I knew that it would help my credit and with trying to purchase a house later this year every bit helps these days. (I know I could still use credit to purchase and pay it in full so I don't have any debt.)

2) I could write a check and pay it off today if I needed to. Meanwhile my money is sitting in a high yield saving account with ING Direct. So I am borrowing money interest free and making money off the interest I am making in the saving account. 

3)My monthly payment is 2.5% of the remaining balance on the credit card so I only pay the minimum every month. I am acting as if I am sending the full amount by sending the 2.5% to the credit card and putting the remaining into a savings account which is creating some interest for me. On the 12 month I will cut a check for the remaining balance that is left on the credit card from my savings account. At the end of the day I am borrowing money interest free to invest for a 2% return.

Just as an example, let just say the ring cost $1000.00. Divide that by 12 months, around $83.30 a month. My credit card payment is 2.5% of that, so it is about $25.00/month. I send the remaining $58.30 to my saving account to make interest for me. So at the end of twelve months I have paid  around $300.00 to the credit card and have made interest off the remaining $700 sitting in the saving account. I write the check for the remaining 700 and have a few dollars from the interest I made.

4) With borrowing  interest free I can still have more cash on hand if something were to happen to my employment.

So there you have it, overall I would say that it is a very nervous, exciting , and really cool experience for purchasing something that is a) so important and b) so expensive. These three post might sound like I am just concerned with spending money on something that is very materialistic, I am just giving you my personal experience. Just remember that at the end of the day, if you can not afford a diamond, it is ok. It's not so much about the diamond but about your love and the statement to their family and friends by saying, 'I have found the one person I am ready to settle down with and start a new life with.' I hope you have gain some inside knowledge with making that next step, so please leave comments and suggestions to others.

Related Post

Purchasing a Diamond Engagement Ring: Part I
Purchasing a Diamond Engagement Ring: Part II
Purchasing a Diamond Engagement Ring: Part III
Should you Calculate a Diamond in your Net Worth?

 

Movie Review: I.O.U.S.A

Knowing I had a long flight out to Los Angeles last week for vacation, I decided to watch a movie a friend recommended to me a couple months ago: I.O.U.S.A. - One Nation. Under Stress. In Debt. I highly recommend watching the movie in whole as compared to the 30 min byte sized one on their home page. Everyone should watch this movie and realize how scary the facts are about how much debt individuals and our US government are in. 

I believe that all of us who are personal finance bloggers know how serious debt is. We know that with being debt free we start to create wealth for ourselves and family. It is a shame for our government not to be run the way a business is to be successful. If a business or individual goes into debt they start being enslaved by it. Every time they get money flowing in, they turn around and send it right back out and eventually if they cannot save more than they are consuming the only option is to fail and go bankrupt.

I.O.U.S.A. goes into great details about our 4 main deficits - Budget, Savings, Leadership and Trade. The mixture of the four deficits creates a toxic mix that threatens our country and our families future.  They use a lot of animated charts and graphs to explain all of these areas which makes it a whole lot easier to understand. At least for me since I am a visual learner.

Here is the byte size version but like I said earlier I would watch the full movie

Here is just one of the examples of trade deficit using Warren Buffet's parable Squanderville vs Thriftville.

For more information here are some more links.

I.O.U.S.A. The Movie

The Real National Debt

National Debt Clock Runs Out of Digits

Owen and Payne

Vacation's Over but Life is Just Beginning!

So we are back from our vacation in California and have had a blast. We probably over extended ourselves a little and my budget is not going to look pretty this month, but its all worth it because we just got engaged! We (the fiancé and me) will both be doing double time on not spending any extra money this next month so that we can keep our budgets in tact. 

So I will have some new post in the upcoming months about buying a Diamond for the first time, combining finances, marriage budgets, and other post that fall into these categories. We are also looking to purchase a home this year before the first time home buyer tax credit expires.

If anyone has some good advice or suggestions for us please let us know...I have bookmarked a few blog post other bloggers have written on some of their experiences and will post some in the future. Any advice or tips would be great because after all, this is a blog that I started not only to start a conversation with others but to help me out with finances in different stages of my life.

I am also hoping to get up and running a little better with postings, right now I am at about 3-4 post per week but want to see if I can make it at least 5 post a week. Please keep posting comments and please give me all of your feedback!

How will you spend your 10$ Tax Credit?

The "Making Work Pay'' tax credit, which amounts to around $10 a paycheck, took effect Wednesday, as part of the economic recovery package that Congress passed in February. This is a different form of stimulus than the one the last administration gave , which was all one lump sum. Individuals making less than 75k are eligible for the full credit and those making 95k get a reduced rate. Couples making 150k get full credit compared with couples making 190k.

Last year when I received my stimulus check I deposited it right into my money market account. I'm sorry I didn't need to purchase anything at that moment and thats the only reason I would use it. I could have easily gone out an purchased a brand new surfboard and loved the feeling, but I did not need one I have enough boards already. So I'm sure I did not help jump start a failing economy then and I will not be spending it now just because I see it in my paycheck.

When I moved back east I received a pay increase with a decrease in the standard of living. When I moved, I kept the budget I had in California as not having a pay raise. I used the same amount that I used to live off of out there, to live here . I had an extra amount coming in from my raise and I decided for it to be deposited into my money market and that I wouldn't ever feel the effects of it being in my primary bank account. Not only that, but I found out that I could cut the fat out of my budget and live more than fine.

Everyone has heard the more money you make, the more problems you have. In reality, it is not actually the money that is the problem, but it is the amount that you spend because you are now making more.  So if I receive $10 or $1000 I am am going to keep my lifestyle and spending the same(I must admit I live pretty good). Now if I have a kid or something that forces me to adjust my lifestyle then I will adjust my budget as well, but I will not allow money to dictate my lifestyle. (may I say,not at the current moment, ha!)

So what am I going to be doing with the few extra dollars that I get...I am going to stimulate my wealth and spend my hard earned, hard saved money on something I really want when I want. Not just because I see a bigger paycheck. So what are you going to do with the $10 Tax Credit, let me know in your comments!

My 10 favorite wines for under 10 dollars

If you love wine like myself, you are always going into the wine section at the grocery store and looking for the wines that are on sale to purchase. Working with a wine brand I usually look for wine on the 3rd shelf based off of knowing that they want to be on the 3rd shelf. If you don’t know, stores put the ratings of the wine from top to bottom with top shelf being the most expensive and the better wines. The cheaper lower rating wine are put down towards the bottom. Most of these wines sit on the third shelf depending on where you buy your wine. I am not a wine snob, but I have foud these to be much nicer than a bottle of yellow tail which seems to be the masses choice for inexpensive wine. Well I have compiled my fovorite best 10 wines for under 10 dollars.

1. Big Red Monster

2. Ravenswood Zinfandel

3. Robert Mondavi Private Selection Sauvignon Blanc

4. Castello di Gabbiano Chianti

5. Beaulieu Vineyard Bv Cabernet Sauvignon Coastal

6.Salneval Albariño

7. Francis Coppola / Niebaum-Coppola Merlot Diamond Collection Blue

8. Fat bastard Cabernet Sauvignon

9. Voga Quattro

10. Chateau Ste. Michelle Riesling

Do you have any favorite wines for under 10 dollars? Let me know as I am always looking for a good wine to go with a nice dinner!.Leave your comments!