Entering the second month of the year, the new decade is officially underway. It’s time to peek into my bank accounts and investments to see how I’m doing so far. But first, I should take a quick look at the goals and resolutions I set for myself this year.
The first goal is to maintain a six-figure income outside of my day job. According to Quicken, I earned over $11,000 this month from various sources not including the work I do from 9:00 to 5:00 or so each day. This month’s income was likely higher than it will be on average for the rest of the year unless I make some significant changes to my life and some progress on new projects. For now, it looks like I’m on track to reach this goal.
My next goal is to maximize my 401(k) investment, and that hasn’t presented a problem so far this year. My non-financial goals are presenting a problem, however. I haven’t made much progress in my attempt to get into shape and I haven’t reached the point where my apartment is consistently in a presentable appearance.
Here is my net worth report. I post this every month to keep myself accountable. The bottom line is down this month, mostly due to estimated taxes paid and a lack of growth in my investments. Although I surpassed $300,000 at the end of 2009, I’m back below that mark for January.
Continue reading to see the numbers. [click to continue…]
Yes, you can time the market. The S&P 500 benchmark provided an admittedly handsome 27.76% annual return in 2009. However, if you invested in a diversified index mutual fund when the market was at its low point in March more than when it recovered towards the end of the year, you probably beat the market. When the market was at or near its lowest point earlier in 2009, I invested in the market as much as possible with my 2008 SEP and Roth IRAs.
These purchases paid off well in 2009. The Vanguard Total Stock Market Index in my Roth IRA was my biggest winner judged by percentage simply because I invested $4,000 in March and $1,000 in April. Now that the stock market has mostly recovered, I’m nervous about my next investment moves. While I am investing with a distant time horizon within my retirement accounts, when it comes to my IRAs I like to try to ensure I’m getting a good deal.
My 401(k) on the other hand is on auto-pilot, investing a percentage of my salary every two weeks regardless of the market’s situation. This coming year I’d like to change aspects of my 401(k). First of all, I haven’t rebalanced my portfolio in a long time. But before I rebalance, I need to decide whether my investment allocation is appropriate. My contributions are allocated between a large cap value stock mutual fund, a large cap growth stock mutual fund, an international stock mutual fund, and a commercial real estate fund. The company’s matching contributions are split into two sections. The first half invests solely in company stock, though that can be sold and rebalanced within the portfolio, and the second half invests in the same allocations as my portions.
While this combination has performed well for me recently, the funds are more expensive than index funds. There is an index fund available in my 401(k), so that may be a better choice from the long term than the large cap funds.
Here are my investment account balances and performance numbers as of the end of 2009. [click to continue…]
At the end of every month, I review my personal finances, including bank account balances, investment performance, income and expenses, and I share some of those details here. This was the original purpose of Consumerism Commentary: to track my own finances publicly and hold myself accountable for my financial decisions. I wasn’t aware at that time that within a few years Consumerism Commentary itself would become a large part of my financial development.
I ended 2009 with a “modified net worth” of over $300,000, and increase of more than $100,000 since the end of 2008. A recovery in the stock market helped raise the value of my investments, greatly contributing to that increase. This modified net worth doesn’t include things like tax liability. the value of my possessions other than my car, or the value of my business if I were to sell it. It does however represent a metric that is meaningful for me to track over time.
Like last year, I add some history to my financial report to show long-term progress. The data in Quicken go back to 2001. At the end of that year I had just recently left a low-paying job at a non-profit organization and, like many people today, was unemployed for a few months. As you can see in the chart I had no savings and a few thousands dollars of debt. [click to continue…]
This week, Consumerism Commentary is matching your charitable donations up to $4,000. Here are the details.
It’s time again for checking in with the state of my finances. Although a few months ago, I changed the format to isolate my “side business” from my personal finances, I’ve changed my mind yet again. It makes more sense just to leave all my accounts grouped together. I don’t do a very good job of keeping things separate. For example, although I have separate bank accounts for personal and business accounts, some business income still comes into personal accounts. Once in a while I transfer money from business accounts to personal accounts.
In terms of income, November was a bit under my expectations. I’m hoping to find new ways to diversify the sources of income from all that I do outside of my day job, but the ideas I have mostly require more dedicated time and effort. I’ve already mentioned that I plan on making the jump to work for myself full-time within the next few months, but it’s probably going to take more growth before I’m comfortable with the switch.
Here are the numbers, without further discussion. Feel free to ask any questions or leave your feedback in the comments below. [click to continue…]
Although it’s a little late this month, it’s now time to share my personal finances. I’ve been doing this roughly every month since Consumerism Commentary started in July 2003. I did recently make one important change — I am no longer counting my “business” bank accounts in my net worth. I’m trying to separate my business, which consists mainly of Consumerism Commentary, from my personal accounts.
October was an interesting month. I traveled to my brother’s wedding in California, so there were a number of extraordinary expenses related to the event. I do have some good news, however. The IRS has approved the reclassification of my side business from a sole proprietor LLC to an S-Corporation. this should result in a refund of over $8,000 from my 2008 tax payments.
It could take a while to receive the refund, so I’m not planning anything for it yet, but it will most likely stay in a savings account for a while.
Here are the numbers. [click to continue…]
Earlier this year, I added my investment portfolio to the group of reports I publish on Consumerism Commentary on a regular basis. Every three months, I share my investment balances and performances. I include Quicken’s calculation of the year-to-date average annual rate of return for an idea of how each investment is performing this year.
I add to my investments periodically, depending on the investment type.
I invest in my 401(k) every two weeks when I receive a paycheck. Out of the investments listed below, I only add to four investments, in equal amount: Large Cap Value, International Equity, Large Cap Growth, and Commercial Real Estate. My employer matches up to 4% of my salary. Half of the match is invested in company stock and half is invested to match my allocation rules.
At the beginning of each month, I invest $1,000 in the Vanguard Total Stock Market Index Fund (VTSMX) at Vanguard. This automatic investment usually receives the fund price on the last day of the month, but the funds are not deducted from my linked bank account until the first day of the following month.
Those are my only automatic investments. I also invest in an IRA once a year after completing my tax return.
Here are my investment account balances and performance numbers as of September 30. [click to continue…]
Now that I am working with an accountant, I have been making some changes to the way I track my finances. By the end of the year, I hope to have all of my business-related finances in QuickBooks. Although I am not quite at that point, I am working to separate my personal finances from by business finances. Currently, I tend to move money from my business bank accounts to my personal bank accounts as needed, which makes it difficult to track.
The report I publish on Consumerism Commentary each month will no longer contain anything business related. Any business bank accounts or credit cards will not be listed. I also won’t be publishing my business income online.
This change has affect by net worth numbers going back several years, so if you compare today’s report with any prior month’s report, the bottom lines will be significantly different.
September was another good month in terms of income. My online business continue to diversify and grow. Even with a significant payment to the IRS for quarterly estimated taxes, I managed to bring more in money than I spent. While I won’t be including a full income and expense report, I will post a quarterly investment report shortly.
[click to continue…]
You may have noticed that over the past few days, Consumerism Commentary has been featuring a number of guest authors. A few weeks ago, I wrote about the cost of funerals, inspired by the passing of my paternal grandmother. My maternal grandmother entered hospice care around that same time, and a few days ago, she passed away. I decided to travel to California on short notice to be with my family on the west coast for a short time. I appreciate the assistance with Consumerism Commentary provided by our writers Smithee and Jeff as well as the guest authors.
Every month, I publish personal finance reports to keep myself accountable for my financial decisions, and the travel I mentioned above is the reason August’s report is a little later than it would be otherwise.
2009 continues to be a successful year, but I have some room for improvement. My “modified net worth” includes the balance of all my bank accounts, investment accounts, invoices I have sent out to those I do business with that have not been paid yet, invoices I have received that I have yet to pay, and credit card expenses which I pay off every month. This “modified net worth” is reflected on the bottom line of the first report.
While August’s net worth is up, I expect September’s to be down due mainly to the quarterly tax payment that I will be sending to the IRS. September’s expenses will also reflect the airfare for the flight to California, which was purchased only one day in advance. Most airlines do not offer bereavement rates, or if they do, they are inconsequential discounts off a full fare. I’ll write about this in a future article.
In terms of income, August was a healthy month for my side business, but there is a lot of unexplored opportunity yet to be tapped. With all the projects I am involved in, it’s increasingly difficult to keep track of and manage everything. Additionally, I seem to be getting headaches more often, possibly due to spending too much time in front of computer monitors. At the end of last year, I decided to let the recession play out before deciding whether to leave my full-time job and pursue my side projects full-time. We’ll see how much longer I can continue both aspects of my life.
I’ve also noticed that the automated charitable payments I had been making seem to have stopped, and I’m wondering if that is a result of a change in my credit card number. Once I have a chance, this is something I’ll need to look into.
Continue reading to see my balance sheet and income statement without any further commentary. You can click on the reports to zoom in to full size. If you have reasonable questions, feel free to post them and I will answer. [click to continue…]
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