Saturday, January 30, 2016

Savings Transfers Made This Week

Well this has certainly been a busy week!  I'd like to spread things out a bit but we'll see how things go.  End of the month may just be the time when I move funds.

This month I stuck to the plan for 2016 and transferred exactly what I *should* have:
-  Rewire Account - $55
-  G2H-FU Account - $55
-  2nd Home Account - $210

My 2016 goals can be found here, but I am to save $625 in each of my Rewire and G2H-FU accounts and an additional $2,500 in my 2nd Home account.  2016 is a catch-up/get-stabilized year so the savings and investment amounts are lower and will need to be supercharged beginning in 2017.


1st Mortgage Over-Payment Made (119 remaining)

I tend to calculate my mortgage information in percentages.  Mortgages vary depending on region and I live in a higher cost of living area.  The mortgage was high when I first bought my apartment but now it is at a semi-reasonable spot.  (Well at least I have enough in assets, albeit retirement assets, to pay it off if I had to.) In any case, percentages allow for a more apples-to-apples comparison amongst those seeking to payoff their mortgage early.

This month's over-payment equated to 0.20% of the mortgage.  It's tiny but it does add up!

2016's goal is to overpay the mortgage by 3%.  I'm on track to achieve this as I will be overpaying by about 0.19% to 0.20% each month and then I will put part of my tax return towards the mortgage to get me to the 3%.

KILL My Mortgage!!! Page has been updated.


Friday, January 29, 2016

Trades Made This Week

Below are the trades I executed this week:

Price Per Total
Date Name Quantity Share Cost
1/28/2016 Energy Mutual Fund 2.543 $39.32 $100.00
1/28/2016 High Dividend Yield ETF 3.000 $63.41 $190.23
1/29/2016 Intel Corp. 20.000 $30.28 $605.60
Total: $895.83
*I paid a $7 fee for the Intel stock (1.16% of the purchase price)

Brokerage Acct Portfolio Page has been updated.

**hope the table came out okay**

Thursday, January 28, 2016

Intel Corp - Time to Purchase More

Intel Corp (Ticker: INTC)

Closing price: $29.97/share (as of 1/29/2016)

Sector:  Technology
Industry:  Semiconductors

We all know INTC right?  If we have a computer/laptop, there is a good chance there is (or there was) an INTC sticker on it.  INTC is one of the largest semiconductor chip makers in the world.  I don't know anything really about technology.  But from what I've read INTC is still a decent buy.  

INTC's fiscal year end is in December.  So the figures I have reviewed are not audited (that takes time) but they look pretty decent.  First and foremost, they have a ton of cash (and short-term investments) - over $20 billion.  Right off the bat, they are probably not going to cut their dividend in the near term.  Good news for Pru!

(Once they release their audited annual report, I'll need to read that so this is just skimming the surface.)

INTC has had gradual revenue growth for the past several years (2012-2014).  Despite being in the technology sector, INTC seems to me to be a mature company.  So I don't expect a ton of growth.  I expect them to keep doing what they do well.  Expenses in 2012-2014 didn't change much so their net profit slightly rose (just like their revenues.  Through 9/30/2015, it was more of the same.

At 9/30/2015 their current assets are twice the size of their current liabilities.  This is good news - it means in the short term they can pay their bills!  Phew!  Even better, total liabilities for INTC at 9/30/2015 were about $40 billion but they have current assets (cash, investments, receivables, inventory, etc.) of about $36 billion.  So they can definitely pay their bills!  INTC's equity (or net worth) was a positive $57 billion.

I'm not super smart but I'd say that INTC's fundamentals are good.

Press is saying that in 2015 INTC acquired another chipmaker for about $17 billion (that's a lot of money!) but that it should help INTC to expand into different areas.  Acquisitions are always hard.  I mean they are like marriages....sometimes they work and sometimes they don't.  And if you live in the U.S., you got a 50:50 chance of either one.  This is something to keep an eye on.

Overall, I am happy that I own 5 shares of INTC.  But I would like to increase my holdings.  Need to clear this with my company (they have to confirm it's not a client etc. etc.).  If I get the OK, I'll grab some shares on Friday.

*Remember this blog is for entertainment.  DO NOT take anything written as advice!

Investing Strategy

Okay here is my game plan!

As of today, in my brokerage account I have 3 mutual funds, 1 ETF (exchange traded fund), and 5 individual stocks.  At least as regards this account, I do not intend to purchase any more mutual funds.  

Side note:  There is a lot in the press about ETFs and mutual funds and frankly I can't say whether one is better than the other.  At Vanguard you generally need to have a minimum investment of $3,000 to open a mutual fund whereas you can purchase a share in an ETF just like you do with individual stocks.  Right now I don't have $3,000 laying around that I want to use for a new mutual fund (nor do I want to go into savings for it) so ETFs are going to be a main vehicle for me to invest my money.  I will say that ETFs do tend to have lower expenses.  However, Vanguard offers certain mutual funds, called Admiral funds, where the expenses are the same as the ones in the corresponding ETF.  But you need to have an investment of $10,000 to go into the Admiral fund.    

My REIT mutual fund is an Admiral fund so those expenses are low.  (The STAR mutual fund doesn't have an option for an Admiral fund so that's moot.)  However, my Energy mutual fund doesn't have a big enough balance for it to be converted to an Admiral fund.  While I won't be adding any new mutual funds to this account, I do intend to increase my holdings in the Energy mutual fund so as to go above the $10,000 balance and have it convert to an Admiral fund with lower expenses.  (Lower expenses means I keep more of my money!)

I am particularly keen on the energy sector.  Yes it is being beaten up right now with the oil price so low but it is a sector that is extremely important to the world economy (and to just having a nice life!  Heat!  Electricity!  Plastics!).  Since I have a long-term horizon for investing, I will be making investments into the Energy mutual fund (and possibly some stocks) while prices are low.  

[Oil (and gas or let's just call it energy) are commodities. Commodities have cycles.  Well more like roller coasters.  It's down now but it will go back up.  Tomorrow, no.  Next year - possibly.  In 10-15 years - yes probably at some point during that time frame it will go a lot higher.  I don't need the money right now so it is best for me to focus on the far, far away future.]

Moving on....let's talk about what a perfect day looks like!  I've decided to focus a bit (or a lot) on dividends.  I mentioned before that it would be great to get the portfolio to the point where it generates a few hundred a month in dividends.  That's real cash - or income - that could be used for basic living expenses or for something fun.  I've decided to focus on fun :-)

For a lot of the purchase I make, I am going to translate them into how that would impact a future perfect day.  For example if I will receive $20 in dividends from one stock in a month (or $60 in a quarter), well that $20 can buy me...insert something.  This way the investing becomes more tangible.  And the best thing about dividends is that you don't sell the underlying stocks/shares.  So as long as the company doesn't cut the dividend, you'll get the same amount (or more) the next month or quarter.

And the more dividends I receive, the more perfect days I'll have in the future.  Win-win!

With this in mind, I will be investing in Vanguard's High Yield Dividend ETF (VYM) as well as in individual stocks.  VYM's most recent quarterly distribution was $0.60/share or $0.20/share on a monthly basis.  Sticking with the same example above, if I had 100 shares of this ETF I would receive $60 each quarter. Take that and give myself $20 each month and well that dividend would pay for a nice simple lunch.  Not bad although it does take time and a lot of money to get to 100 shares.

I am still looking into additional individual stocks that I want to buy.  I do not want to have too large a portfolio at this point.  I have 5 stocks so I could see myself increasing it to 15.  Not all in the same year since I do not have a lot of cash and I also want to invest more with the current 5 stocks.  

I will also invest in some index-type ETFs namely to have exposure to the total stock and bond markets (U.S. and the rest of the world).  That ends up being 4 additional ETFs.  The money that will go into these ETFs are more "set it and forget it."  They track so many companies/sectors that there is significant diversification.  Of course I won't completely forget it but it will be fairly mindless on my end.

On a final note, I wanted to just mention spending vs. investing.  For a variety of reasons, I am really trying to get myself out of a spending mentality.  (Not that I spend that much....)  There is very little I need and I should be at the point where I am comfortable with what I have.  So instead of seeing a pair of shoes and thinking "oh they're nice!" and whipping out my credit card (paid off in full each month but still...), I want to be transferring little bits of money here and there into the brokerage account.  I believe that if I can do this, I will quickly grow this account.

Not bad, not bad - at least I know have a plan!


Wednesday, January 27, 2016

First trades!

And we are off!

I transferred over $700 to my brokerage account and it arrived today.  Went ahead and placed two trades.  I did it at 10 pm so they will happen tomorrow.  I still need to decide on an additional trade that I will place Friday morning (probably). 

Will post the final figures and update the appropriate pages this weekend after the trades have cleared and I have the final numbers in :-)


Sunday, January 24, 2016

First transfers...set up!

Today I have initiated a few transfers!  It's a Sunday so nothing is happening today but at least they are in the works :-)

-  $700 will be transferred to my Brokerage account.  (A little more than I expected but I had previously allocated $200 from my 12/31 paycheck without realizing it.)
-  $55 will be transferred to my Rewire savings account.
-  $55 will be transferred to my G2H-FU savings account.
-  $210 will be transferred to my 2nd Home savings account.

Those transfers mean that I'm on track for 2016 goals!

I have also written my mortgage payment and have put in the allocated extra over-payment.  Goal is 3% over-payment in 2016 and this month's extra amount equates to 0.20%.  It's a start!

Next weekend when I have a bit of time, I will update all relevant pages and will add some trackers to the site.

On my way!

Saturday, January 23, 2016


This link isn't about finance or investing but let's face it, if you aren't employed or haven't been employed, for the most of us there is a good chance that there isn't much or anything to invest.

This is a forum post addressing the best way to employment.  The responses to the question are absolutely great.  I personally would never recommend that someone do what they love or what they are passionate about.  My advice would be to do what you are good at since I believe that you can find contentment in competence.  But above all people need to be flexible because the work world is changing and you never know when you may need to find a new job or a new career.

The Boglehead Way of Employment

(Btw the Bogleheads are fans of John Bogle who founded Vanguard.)


Stocks/Portfolio update

It appears as though Vanguard is all ready to go.  My stocks and cash transferred over this past week.  I have about $200 sitting in cash in the settlement fund ready to be deployed.  This cash came from previous dividends on the stocks I own as well as the sale of partial shares of stock which I completed this week.  (I was only able to transfer whole shares of stock to Vanguard.) 

My old brokerage account is technically still open but I am hoping to get that close this upcoming week.  It has taken a lot longer than I had expected!

Below are the (very small amount) of individual stocks that I currently own.  Everything is valued as of Jan 22, 2016:
  • Intel (INTC) - 5 shares - $149.63 value
  • Pepsico (PEP) - 1 share - $95.85 value
  • Starbucks (SBUX) - 20 shares - $1,183.40 value
  • Unilever (UL) - 10 shares - $422.60 value
  • Walmart (WMT) - 1 share - $62.69 value
Total value $1,914.17
It's not a lot but if I needed the money, I'd have the shares to sell.  I started buying the individual stocks for fun and I'm glad that money was spent in the stock market vs. on *stuff*.  And it provides a good starting point to continue investing.

I'd like to continue buying PEP, SBUX, UL and WMT.  I'm on the fence about INTC.  Because Unilever is the cheapest, I will probably start there since I have less money and I need to take into account the $7 fee/trade.  At some point this year I would like to add Proctor & Gamble (PG) to my holdings.  Between UL and PG, I will have a lot of the cleaning world covered!  And I think we all plan to take showers, clean our homes, wash laundry etc. for a long time to come so these are good long-term stocks.

I initially bought SBUX when the stock was much higher a couple of years ago.  I had 10 shares then the stock split 2-for-1 and I ended up with 20 shares at half the price of the stock (at that time).  The price of the stock has since risen which is nice.  (Although not back to its original levels.)

All of these stocks pay dividends which is nice.  They pay quarterly and most of them pay during the calendar quarters (March/June/September/December) although there is maybe 1 at a slightly different time frame.

In Vanguard, all of the dividends have been set to reinvest in the same stock.  It isn't a lot given the small holding but over time it does add up.  Below is a list of the most recent dividends paid in the quarter (and annualized to get an idea of the projected dividends).
  • INTC - $0.24/share; $0.96 annualized
  • PEP - $0.70/share; $2.80 annualized
  • SBUX - $0.20/share; $0.80 annualized
  • UL - $0.32/share; $1.28 annualized
  • WMT - $0.49/share; $1.96 annualized.
I will have to do a post on yield since that is what I will be focusing on for dividend stocks.  Of my 5 stocks, SBUX has the worst current yield while INTC has the highest.  Hmmmm...may need to revisit INTC to determine if I want to buy more.
In any case, this weekend I'm stuck inside as there is a blizzard in effect and I am still not feeling 100%.  This means lots of reading.  I'll probably post a few links of good articles that I read and liked.  I'd also like to finalize my first purchases.  I'm hoping to be able to make a trade by the end of next week so will need to figure out which ETF I will buy, the total money to transfer, get that done and then make the trade.  

In terms of stocks, I am going to use the cash that was transferred from my previous brokerage account (the ~$200 mentioned above) to purchase a stock.  For simplicity, that $200 will be included in my overall calculation of how much I've invested as part of this blog's ultimate goals.


Wednesday, January 20, 2016

Slowly, slowly Vanguard brokerage account is getting there

Finally effective today my full shares of stock were transferred over to Vanguard.  It has taken f.o.r.e.v.e.r for this to happen!

I only have a handful of stocks - literally a handful because they were only worth about $1,500 give or take.  But I will update my holdings page this weekend.

I am still sick so things are fairly quiet with me and not a lot of research or reading going on.  Hope to pick this back up this weekend and make some more decisions.  Next week my other brokerage account will hopefully be closed which puts me in a good space to either execute a trade end of next week or the first week of February!


Saturday, January 16, 2016

A regular paycheck!

Yesterday I received my first normal paycheck.  It is so nice to be able to now finalize my 2016 budget.  Unfortunately, the paycheck was less than I had expected.  I originally thought that it was taxes but I realize that it was because of certain pre-tax deductibles - like health insurance.  

My HR dept is...well....hmmm...Let's just say that the information I was provided on the costs of health insurance etc. was incorrect.  The amount that was deducted from my paycheck is what I expected to pay for the entire month based on the presentation that was given to me.  So effectively the price I am paying is now double.  (I'm not too surprised since the person that I *think* did the presentation is the same one who sent out wrong information, wouldn't respond to me, was really annoyed when I followed up, and finally caused me to miss a sign-up deadline for another benefit.)  Now that I am remembering, the slide was weirdly worded and it made me flip back to another one to confirm whether the price was per paycheck or per month.  The other slide indicated it was per month.


I have been sick this past week and had an unexpected health expense arise today.  Well actually several if I add up the amount I have spent on over-the-counter medications...  But this involved an appointment and a medication.  Plus more money spent on OTC!  So unless I can manage to massage my budget, it will mean that I've borrowed a bit from next month's budget (i.e. this paycheck).  Sadly this will come out of my savings/investing since there is nowhere else for it to come from.  Life happens!

I'd like to be in a position to execute a trade at the end of the month (i.e. with the next paycheck).  This involves me finishing the research/reviewing of ETF funds.  But also my account at Vanguard seems to be locked as they are transferring my shares from my former brokerage over to them.  (My former brokerage account is locked as well!)  So that needs to be finalized for me to even transfer cash in.  It should clear up in the next couple of days (well by Tues/Wed since Mon is a holiday here).


Thursday, January 14, 2016

Links - Cash Money Life Roundup!

These are from Cash Money Life and I found quite a few to be interesting.  There is always a question of whether or not to pay off or pay down debt.  I think that like most things in life you have to go with what feels right and what helps you to sleep at night.

While money is all about the math - sometimes it isn't.  Currently, my only debt is my mortgage.  I think that given my salary, my earning potential (i.e. if I leave my job I will most likely be able to earn the same at another company in the same field of course), and the monthly payment - my overall mortgage is acceptable.  Except it's not.  To me it's a crazy large number.  Yes if I focus on the fact that the actual monthly payment is affordable I can *somewhat* manage to lower my blood pressure.  Knowing that I bought this place more as an investment and it is a good investment also helps.  Even so, I want it paid off - tax deductions be damned!

Why I still have debt and don't plan to retire early
It's logical but we all need to be really careful when we start focusing on "I can afford the monthly payments" especially when that logic is used to justify mortgage, car, student, and credit card loans....  For some the tipping point is reached very quickly.

Five reasons to not pay off your mortgage
Ensuring I have liquidity is one of the reasons for this blog.  I was previously focused so much on paying down my mortgage that I got to a point where I got scared because it's not like I can quickly sell my home and that is where all the money is!  Having money in savings and in the market will help me feel much more balanced.

Are you investng in assets or stuff?
Let's all raise a hand for assets!


Monday, January 11, 2016

Dividends and the future

I have this plan in mind.  But I also know how Life tends to scoff at a mere human's plans.  And 10 years out is a looooooong time away.  Even so, I know that this plan to save and invest will come in handy because it is far better than just spending the money on *stuff*.

This past weekend I spent far too much time looking at Vanguard's ETFs.  And I still haven't finished!  It's all good because I am still finalizing my investing plan and determining where to put my money.  (More on that once my decision is made.)  One thing that I realized is how receiving a monthly dividend is important to me.

Dividends are basically like paychecks and it would be nice to get one every month.
(Currently all dividends received are set to reinvest (i.e. buy more of the same fund/stock).  This way I don't get the money and then have to decide how I want to reinvest it.  Because at least in the near-term, once I determine where I am going to invest, I don't want to deviate from that plan - well at least for some time.  I just can't go changing my mind every month.)

Going back to my first point about Life, if I'm not working (or have left my current industry to work in a more relaxed industry - and thus taken a pay cut!), getting a few hundred dollars a month would sure be helpful.  Even if that money just became my *fun* money. 

However, the most likely scenario would be that dividends are received quarterly since that is when most are paid.  This means that I would need to think about how far that quarterly dividend would stretch on a monthly basis.

I haven't set a dollar amount goal for receiving dividends.  Too much of that depends on how much I have to invest over a 10-year period.  So being somewhat vague and just saying that a few hundred a month is my starting point.  But it will be hard to get to a few hundred a month in dividends.  It will require discipline to not spend that investing money elsewhere and it will require a lot of luck!

As a simplified example if I have 1,000 shares of a stock that is priced at $50, my investment is valued at $50,000.  If those shares pay a 25 cents dividend every quarter, that works out to $250/quarter but only $83/month.  $83 is $83 and I'll take it but it isn't a whole lot of money in the grand scheme of living.

This also means that I need to look at how much I spend per share (stock or fund).  Because assuming I had invested $50,000 but the price of the stock was $100 (at the time of each purchase), then I'd only have 500 shares.  Again assuming a quarterly dividend equal to 25 cents per share, I would get $125/quarter or $42/month.  Big difference!

Since I am relatively new-ish to this, it will definitely be an interesting learning curve!  Hopefully I don't have too many lessons or make too many mistakes!


Sunday, January 10, 2016

Links - Kiplinger's Roundup!

Oh my I do love a good financial read!  The below links are from Kiplinger's.  Some are depressing like that I should plan to pay 85% of social security to Uncle Sam and Aunt Samantha (aka taxes) :-(  but other are just interesting!

Beat the bad guys to your tax refund in 2016
Last year it took forever for me (like six months!) to get my state tax refund because of they were triple checking tax filings due to tax fraud/thieves :-(

18 smart ways to invest $1,000
This is one of their annual articles.  It's always a fun read!  And always take from it what you can - if you don't have $1,000 could you still take the same idea and spend $100?  Something to think about!  (I just did one of these and am currently passport-less awaiting my renewal!  I especially like the aging in place idea - something you can and should do with say a tax refund - if you start early enough, you can spread it out over several years.)

Plan to pay taxes on social security
Ugh!  Okay I misread this title it's that you pay taxes on up to 85% of social security (not 85% of social security goes to taxes).  This article is dated (3 yrs ago! why is it on the main page!) but the ideas behind it are very much relevant.  Something to keep in mind for myself and Darling Parent.

10 reasons you'll never retire
Double ugh!  I am doing everything to avoid this!  Some of the pics alone are enough of a motivating factor!


Saturday, January 9, 2016

Indexes and ETFs

As I mentioned in one of my launch posts, for me part of this journey is a learning one.  Thus from time to time I will post some information that I can easily look back on.

I don't have a lot of money to work with.  Thus for me, it makes sense to invest most of my money in funds vs. individual stocks.  (I'm still going to buy some individual stocks though!)

Currently, I have 3 mutual funds at Vanguard.  I've decided to switch to purchasing ETFs because the expense ratio is slightly lower (I get to keep more of MY money!) than in their mutual funds.  (The mutual funds are actively managed which means that although they are very similar to the ETFs Vanguard offers, you are effectively paying experienced asset managers to try to ensure that specific fund earns x% a year - generally speaking.  Thus the higher expense ratio is paying for those experienced asset managers.)

Needless to say those 3 mutual funds are going to just sit there and keep earning their dividends (which are reinvested).  Hopefully the value will grow over time.  But I don't need the money now so I am not going to sell them.

Exchange Traded Funds or ETFs (link to Investopedia) essentially trades like a stock but its purpose is to track an index.  (Mutual funds do not trade like stocks.)  Because ETFs trade like stocks, their value goes up and down throughout the trading day.  

Similar to mutual funds, ETFs own a bunch of stocks (or bonds or ...).  So by owning an ETF (or a share of an ETF) you indirectly own those stocks (or bonds or ...).  What an ETF owns varies.  For example, you can have an Energy ETF (owns only stocks of energy companies), or a Healthcare ETF (owns stocks of energy companies), or a Large Corporate Bond ETF (owns bonds from large corporations) or ...  There is so many options that can be underlying the individual ETF.  

My plan is to stick to simple ETFs that I can generally understand and identify what they own.

ETFs receive dividends (or interest) just like individual stocks so if you are invested in them, you will also receive a dividend.  If you own a Bond ETF, you are effectively earning interest since you indirectly own the bonds that the corporations issued.  (A bond is debt so think of it like a loan...)  Dividends (or interest) are paid either monthly or quarterly depending on the ETF.  

Vanguard offers its own ETFs as well as non-Vanguard ETFs.  The Vanguard ETFs are commission-free to buy and sell.  This is important to me as it saves me money on fees (I get to keep more of MY money!).  Because of this, I will only be buying Vanguard ETFs.

At $7/trade, the fees are expensive but in-line with several other brokerages.  Not paying that fee for an ETF is huge!  Because of this, when I do buy an individual stock, I need to try to buy more than one.  As an example, if I buy 1 stock that costs $100, the $7 fee is equal to 7% of what I paid.  But if I buy 2 stocks, then my fee per stock reduces to 3.5%.  

At least for the foreseeable future, I won't be able to buy more than a few stocks at a time.  Keeping this in mind, I will probably only buy one company at a time and at a maximum of 1 trade per month.  When I receive a bonus or a tax refund, then that is an opportunity for me to buy a lot of stocks at once.  But for ETFs, as long as I have the cash I can purchase them.

Generally, I expect to purchase either ETFs or individual stocks 2x per month.  Or when I get my paycheck.  I'll be using January to see how much I can allocate per check to investing.  Most likely one paycheck will be used to pay bills with the other one used primarily for investing/saving/paying-down-the-mortgage/funding other life goals.


Monday, January 4, 2016

Budgets! Spreadsheets!

I am a big proponent of budgets.  I simply could not be where I am today without them.  And what I love more than spending time with my spreadsheet is having a peek at your/his/her/insert someone spreadsheet.  It's so nice to see what others are doing and determine if it makes sense for you to incorporate that into your spreadsheet/budget/planning etc.  Best way to learn sometimes is by observing others :-)

With that introduction, go check out Slowly Sipping Coffee's Exel Planning Worksheet post.  (You can download their spreadsheet!)


Saturday, January 2, 2016

Pages Added

I have added the following Pages to the blog header:

Ultimate Goals

KILL My Mortgage!!!

Brokerage Acct Portfolio

Note, the Brokerage Acct Portfolio page is still influx so this one will be updated in the second half of January.


Brokerage Account Opened!

I went ahead today and opened a brokerage account.  I did a bit of online research into a few brokerages and ultimately decided to go with Vanguard.  My understanding is that Vanguard may not have the best research tools which is really unfortunate.  However, its mutual funds and ETFs are fee-free and while I do intend to purchase individual stocks, I'll also toss some change into the former as well.  The trading fees at Vanguard are $7/trade which is about what I was looking at with other brokerages.  However, I do have my retirement accounts at Vanguard so the hope is that eventually, my cost-to-trade will be lower due to the fact that Vanguard aggregates all your account balances before deciding what it will charge you.

I had a teeny-tiny bit of money invested with another brokerage so I have requested that it be transferred to the Vanguard brokerage.  (Always good to have all your accounts in one place!)  That could take up to 10 business days to be finalized.  That's about when I will get my next paycheck so the time frame works for me.

Also, I moved a few non-retirement mutual funds that I had in a separate account at Vanguard to the brokerage account.  Again my thinking is that it is just easier to have it all in one account.  These accounts have a balance of about $35K - built up over several years.  But that balance doesn't count in my brokerage account goal of investing $100,000.  (Nor does the previously mentioned transfer.)  It's only new money that counts.

So expect buying of stocks, ETFs (Exchange Traded Funds), and mutual funds to begin in a couple of weeks.  It will be very small trades but they will happen nonetheless.


Friday, January 1, 2016

2016 Goals! AKA that's a good question!

2016 is going to be an interesting year for me - namely it's a transition year for my finances.  

I was unemployed (by choice) for 7 months in 2015.  I used part of my savings to support myself.  I started a new job in mid-December 2015 and so 2016 is about getting back to the level I was at previously so that I can spring forward.  This basically means replenishing a savings account that is not part of this blog's goals.

It also means figuring out how much money I have to play with.  I made the decision with this current job to take a step-down in total compensation in exchange for what I hope will be slightly reduced responsibilities.  The ultimate hope is that this will translate into more flexibility in my personal life to explore areas that are important to me.  From a financial perspective this translates into me receiving a much lower bonus (it's going to be less than half of what I received previously) and it means I cannot supercharge my goals.  I managed to keep my base salary the same; however, I am working in a different geographical area and my taxes have gone up.  So my paychecks are lower - how much lower I will only know in January once I have a normalized paycheck.

(Note in 2016 I may not receive a bonus.  This is due primarily to the date that I started work as well as the fact that my company has a different fiscal year end date and thus pays their bonuses during a different part of the year.  Anything received in 2016 would be a token - say $2,500 or so.  To be conservative, I am assuming nothing for 2016.)

The other issue that will impact 2016 is my 401k monies.  I won't be eligible to contribute to my 401k until July 2016.  Since I normally contribute, this means the paychecks I will receive in Jan-June will be higher than they will be going forward.  My plan is to invest a portion of those monies into a mutual fund I already own (not part of this blog's goals) to sort-of mimic the 401k contributions.  This mutual fund will be different from my IRA which I will contribute to separately.  It just has the effect of reducing my take home salary.

Ultimately, all this means is I have no real clue what my budget is going to look like until July 2016 :-)  But I will manage and adjust as the year goes by.

This is a bit of a crap post about 2016's financial goals but I'm a little bit in limbo because of all of the above.  

Without fully crunching numbers that I don't yet have, I have decided to just write down some goals and start working towards them.  Frankly, if I can be consistent with making any sort of contribution towards these goals, that will be a step in the right direction.   

2016 Financial Goals:
1) Overpay my mortgage by an extra 3%.
2) Invest $6,250 into my new brokerage account.
3) Save $625 into my Rewire account.
4) Save $625 into my G2H-FU account.
5) Save $2,500 into my 2nd Home account.

This adds up to $10,000 plus my mortgage over-payments.  It's far less than what I would ideally like to do in a year but I do have other financial goals in 2016 (like replenishing a separate account) that should not appear going forward.  If I can do more great!  I will just try not to do any less.

One thing to note is that I am putting in less cash to my Rewire and G2H-FU accounts but offsetting that with a little more into my brokerage account.  My investments in the brokerage account will give me dividends that are far more than the interest I would earn on a savings account.  It makes sense to me to invest more in the brokerage account in the beginning to reap this benefit.

Here's hoping 2016 is a very prosperous year for us all!

What are your financial goals for the new year?


My goals for this site and a few more comments

A quick word on what this blog is not about or won't do.  This site will not have lovely pictures or tables.  I spend my days staring at a computer and when I get home the last thing I want to do is put together a chart.  Nope I'm all about words.  This blog also won't discuss the itty bitty decisions I make on a day-to-day basis that enables me to have money left over at the end of the month (money that I will then save or invest).  This blog comes after all that stuff, and will be focusing on how (and why) I choose to direct those left over dollars to this investment or that investment.

Part of the reason that I have started this blog is to self-educate - namely with investing.  While all my retirement monies are in mutual funds, I'd like to own some individual stocks as well.  I'd also like to always make sure that I am able to manage my own investments - be they mutual funds, ETFs or individual stocks.  But this requires that I actually put in the time to study the companies whose stock I buy as well as the general financial landscape.  It won't happen over night but it can happen and this blog will allow me to post what I've learned (links etc. - namely for myself to look back on) as well as keep me accountable.

My 5 financial goals for the next 10 years are as follows:
1) Pay off my primary mortgage.  'Nuff said!

2) Invest $100,000 into a new brokerage account.  (This is the amount I want to invest not necessarily the balance of that account at the end of the 10 year period since the market goes up but also goes down pretty often.)

3) Save $25,000 in a new "Rewire" account.  This account will help me launch a new life in 10 years...whatever that new life will be :-)

4) Save $25,000 in a my G2H-FU account (stands for go to hell..f-u...).  This account gives me a different type of freedom and if the job gets crazy, I might need to pull the trigger, quit and then drain this account.  I am seriously hoping that isn't the case.  Because if I can avoid touching this account, this will be a back-up to my Rewire account.

5) Save $50,000 in my 2nd Home account.  This money will be used for the down payment/closing costs/furniture/etc. for a second home.  My current thought is that in 10 years, once my primary home is paid off, I will rent it out.  This income (after-tax) would probably be between $1,000-$1,500/month in today's dollars which (I hope) would be enough to cover my future basic costs.  And it would give me more freedom to make the switch to "rewire" and move to a different industry/different area if I choose to.
*For now I'm okay keeping #s 3-5 in cash because inflation in the U.S. is at an acceptable level.  Should things change over the next 10 years, I will have to change my strategy.

Okay that's a lot of money!  I know!  But it's over 10 years.  It means that I will be scrimping and saving, but also trying to increase my income with raises.  I will be using tax refunds and bonuses to help me reach these goals since I cannot do it on my current salary alone.  (I don't plan to receive any inheritances in my life time so yeah Pru isn't counting on that...)

I will put up some trackers for the above goals.  I will report my mortgage in percentages.  But for the rest of them I will post when I actually move money and update the trackers too.

My salary is paid 2x/month.  Ideally, I will be moving money 2x per month.  But I'm not 100% sure of that.  I think one of my paychecks will be used primarily for my basic living costs so I may try to use one paycheck to apply to the above goals.  This all relates to how frequently I will post.  Probably at least once a week but more likely a good 2x per week.

Next up is my goals for 2016!