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Calvin’s Net Worth, September 2013

This article was written by in Naked With Cash. 3 comments.

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

Calvin is in his early 40s, earning an annual salary of $120,000 plus bonus as an IT project manager in New Jersey. He recently finalized a divorce and has a teenage child. Read his bio here. Calvin is on Team Sara, with Certified Financial Planner Sara Stanich.

The net worth report below and following commentary refer to the last full month, August 2013. Last month’s report analyzed Calvin’s progress during the month of August. Continue reading this article to see Calvin’s latest net worth report for the month of September, including his own analysis. The special topic for the month is estate planning.

Calvin’s thoughts are followed by Sara’s feedback and advice.

Sara Stanich, CFP appears courtesy of Stanich Group and Cultivating Wealth.

Calvin’s analysis and comments

First I want to try and address some of the comments from the financial advisors from the previous month or two.

The money that I withdrew from my stock plan was put into the bank to help me pay for expenses since I am still running short each month. I withdrew about $10,000 of stock which resulted in about $6,000 after taxes into my hands. Some of that money was used immediately to pay for some large expenses from the summer: my daughter’s camp and a short vacation.

I ended up putting about $4,000 into savings to help bridge my monthly shortfall. I still have about $3,500 in savings of that to make it through the rest of this year and the first couple months of next year.

There have been some other comments from readers about why don’t I liquidate my stock and options and use that money to pay down debt. The problem is that although I report all of the options and stock as assets, they are not all instantly available. They vest over time and only a part of them become available to me each year. Next year my budget should be at a point where I can use that small windfall to pay down debt (at least that is my hope).

Also there was a comment about being overly optimistic about my company options. I think that is a fair comment, but I don’t believe that is what I am doing. I currently have 1,000 stock options that are barely in the money; if I exercised them today I would end up with slightly more then $1,000 after taxes. The way I am looking at it is that $1,000 isn’t going to make a significant impact in my current situation. It won’t improve my cash flow to reduce one of my debts by $1,000.

I guess it’s a form of gambling, but I am thinking that if my company stock pops, even briefly, it could easily become something that would make a difference and potentially pay off some debt. So for that reason I am not cashing in those options right now. If the time comes when I “need” that money to pay my bills each month, I would definitely cash those options in. In fact, that has been something I have been doing for the past couple of years to help make ends meet.

Another comment that was made by Luke about the timing of the reporting of my numbers is absolutely true. I have been sometimes sending in numbers from the end of the month when my checking account is full because I haven’t paid for the next month’s rent or alimony. Sometimes I have been sending in numbers from the end of the first week of the new month after I have paid my largest monthly expenses, so my accounts are mostly depleted.

Going forward I will report the numbers from my bank accounts at the end of the month prior to paying my new month’s expenses. It will cause the trend to be more consistent month over month for accurate comparison.

One other thing that was throwing my numbers off was the fact that I have been laying out a lot money for my daughter’s medical treatment and my insurance has been slow in reimbursing me. My insurance company had, at one point, owed me more then $2,000. I recently received a check for $1,200, so I am now getting caught up with them.

Now onto the new topic of estate planning. I honestly don’t do very much estate planning. I have life insurance through my employer which is equal to 6 times my salary. Though my divorce agreement I am required to carry an additional amount of life insurance to cover my alimony obligation in the event of my death.

Other than that, I don’t really have a plan. I have never taken the time to make a will. My daughter would be cared for by her mother in the event of my death so I am not worried about who would get custody. I don’t really feel like I have significant assets at this point where I would need a will, but I know that I should have one anyway — if for no other reason then to make sure that all of my assets make their way to my daughter. I will make that a goal for the next year to make sure that I actually get a will drawn up by an attorney.

Feedback from Sara Stanich, CFP

Thanks for the explanation, Calvin. I felt I needed to call you out on things a bit last month. It seems like your “monthly shortfall” has been going on so long that it feels normal, and I don’t want it to feel that way for you. It’s also interesting to note the difference between the gross and net (after-tax) value of the stock options, which was another part of the reason your numbers did not match up from my perspective.

But back to estate planning. I’m glad it is already a goal of yours to get a will next year. Based on what I know about your finances, you are right that you don’t need to worry about some of the more “advanced” estate planning techniques like estate tax planning and charitable trusts.

But as the parent of a minor, you should be considering the basics of estate planning. Here are some of the questions you may want to discuss with an attorney who specializes in wills and trusts:

  • Who would be the guardian for your child if something happened to both parents?
  • Who would be an appropriate executor?
  • What if you were incapacitated? Should you have a durable power of attorney and living will?
  • Are beneficiary designations for your retirement plans and life insurance policies up to date? (These are often changed after divorce)
  • What would be the impact of probate be on your estate?
  • Is the use of a living trust appropriate?
  • Is the use of a testamentary trust appropriate?
  • Is the use of an irrevocable life insurance trust appropriate?

This communication is intended only for the person or entity to which it is addressed. Any taking of any action in reliance upon, this information by persons or entities other than the intended recipient is not recommended. Any information provided is for informational purposes only and does not constitute a recommendation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision. Raymond James and Sara Stanich, CFP, are not affiliated with and do not endorse, authorize or sponsor any third party websites, their respective sponsors, or user comments found on this or other sites.

Feedback from Luke Landes

Thanks for the explanations, Calvin. It does help provide a context for the numbers. Numbers at the end of the month — or at some other time of the month, consistent timing or not — only tell part of the story.

What I see this month is that you are no longer in the red. Given how the reporting timing makes the numbers pliable, I’m not sure if this really matters, but it’s symbolic. You’re above the line by almost $600, and perhaps that’s enough to keep you in positive ground moving forward. I like that this month you made a new dent in your medical bills. Keep paying off that debt, and keep building that emergency fund, and your net worth will remain positive.

Being able to produce a report with a bottom line over zero can be motivational. It could create a feedback loop of good feeling that encourages more behavior to keep that number above zero. Thus, even though a snapshot taking at a different time of the month might produce a different number, keep focusing on the positive — positive in terms of value and in terms of emotional level.

Your goal was to get a positive net worth by March of next year. Maybe even thinking about that goal this month helped you cross that bridge early.

Updated June 22, 2016 and originally published October 24, 2013.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 3 comments… read them below or add one }

avatar 1 Anonymous

Great Scott! If you’re not fudging any of the numbers and you’re being completely honest, it appears as though you made a sizeable dent in September. I had my doubts that it would happen, so have to bow and give you proper kudos. Keep it up! Line #1 under “Liabilities”: Do me a favour and beat the hell out of it. I’ll buy ya a beer! :)

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avatar 2 Anonymous


Thanks for the encouragement! I am paying those damn debts as fast as I can.

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avatar 3 qixx

Way to hit the black (if only on paper). That is one of my next goals.

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