January 19, 2010
I forgot to add the Lending Club account to my net worth snapshots, so I’ll be adding them this month under the investment services tag. I’ve had the account for about 5 months and forgot about it since I only funded it with $50 of promotional money.
Pictured above is my 2009 year end review. So far, my only note, a Grade A paying 7.74% note is coming along nicely. I wish I’d had a chance to help fund MoneyFunk’s loan, it would have been nice to help out a fellow blogger but she whipped up 85 borrowers and fully funded in 16 hours!
I’ll go ahead and check out potential new loans this month to commit another $100 or so to it. I’m sticking to A grade loans, I don’t have any need to take major risks for an additional 5% at this point, 7-9% is perfectly adequate.
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Daily Exercise Update: Ran many errands in the cold and wet. If I were in this for the weight loss, I’m sure I burned many calories trotting from store to store, and a bonus sum from shivering. I’m not so I’m counting it as stiff upper-lipping in nearly-extreme weather conditions instead.
December 23, 2009
It’s a little lame that I’m still sitting on ten whole shares of KO (wishing I’d bought many more) and $1050 in cash since my first foray into building my own portfolio five months ago.
Bor-ing.
No, I didn’t expect a whole lot of excitement in this quarter knowing that I wasn’t willing to risk much cash right now but all the reading and researching of how to invest over the years had me wound up like a top: ready to go for ….. well, not broke, anyway!
It’s just a bit of a letdown that I bought right before the market rallied (then fell, rallied again, then dipped, and rallied yet again). That’s what you’re supposed to do – buy low, so all’s right on that end, but I haven’t done anything since. Nothing has dropped enough for me to buy a substantial number of shares. It’s so bad that I’ve been glaring at the ticker, willing the market to tank just a little bit.
The real problem here is less that I don’t have a lot of ready cash to invest, and more that I get bored/distracted easily where there’s not a lot of action. The TradeKing account is the least action-y account I own. Even my Vanguard accounts are more interesting to watch. The flip side of the boredom is the distraction: if the market is running low, I might not even notice because I zoned out 12 days before.
The solution is finding the sweet spot in between the two: acting out of boredom is an entirely emotional decision – that’s usually a bad thing around here. Not paying attention because I’m bored is also bad.
So! I’ll set up a watch list, actively monitoring and recruiting possible investments and setting reasonable target Buy prices. That should give me enough to do to stay on point, and then I’ll be set up to buy on a moment’s notice.
December 17, 2009
My personal CD ladder is a work in progress. The ladder’s steps aren’t regular like most folks’s every three months, or every two months, or every month. To be honest, it’s rather haphazard: cash gets rolled into a CD when I spot a good “high” interest, short term (12 months or fewer) rate. It’s not conventional but the reasoning behind this strategy is sound for me, and I’ve always made financial choices that worked best for me and mine.
My priorities
– only the money in my emergency fund can be invested (~$36k)
– I always need to keep enough on hand to cover $2k/month until the next CD expires.
– I only want to invest the most money at the highest rate possible.
My current CD holdings
– $10,000 at 3.0% APY expiring 06-2010
– $3,000 at 2.75% APY expiring 08-2010
Available cash
– $8,000 at B&M bank (investable)
– $14,000 at ING (investable)
– $5,500 for expenses (not investable)
Given those priorities, there’s no point in my setting up a traditional ladder, convenient though ING makes it:
The immediate drawback of using the convenient ladder above is that my savings accounts are earning 1.3% APY. The 6 and 9 month CD terms are earning less than that, so there’s no point in using those. Then all the terms after 12 months earn less than 2% APY, only marginally more than the 1.3% APY.
I’d rather throw something like $15k into a 12 month CD now, leaving $12.5K to get me through the next 6 months.
I don’t expect to spend $2k per month from savings, it’s just a comfortable average amount I use for estimating monthly expenses. I might only spend $500 per month for a few months, but then an emergency could pop up costing a few thousand. If so, I still don’t have to worry because my total available cash covers it. Meanwhile the seed money earmarked to go out and earn “big” can continue to do so.
The risk here is committing the rest of my investable cash ($15k) to a 2.0% CD means that I won’t be able to open up another CD at a higher rate later on if one becomes available between now and June 2010.
Then again, had I just sent all that cash to the 3% APY CD six months ago, we wouldn’t be talking about committing to a lower interest rate now! 🙂 So it’s guesswork from here.
Option A: Invest all $15,000 now
Option B: Invest part now (how much?), invest the rest later
What would you do?
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My mac ‘n’ cheese post was featured in this week’s Make It From Scratch Carnival hosted by 11th Heaven’s Homemaking Haven.
October 7, 2009
I’m doing a quick vertical analysis of my Vanguard accounts which include the tax deferred 403(b) and 401(a), a Rollover IRA integrated into the 403(b), and my Roth IRA.
The column showing my account purchases/withdrawals since February 2006 = 34,938. There haven’t been any withdrawals, by the by.
The column showing my investment returns to date = -63.
Total? Less than I’ve contributed over a 44 month time span.
I’m going to put my full-of-hope hat on and be glad that I’ve squirreled away at least that much, mostly pre-tax, and be glad that I haven’t seen such numbers like –$1,571.82, –$1,908.34 or even –$3,711.14 in a good while.
How close are you to breaking even? Or has anyone’s portfolios returned to full health?
October 1, 2009
| Retirement Savings |
Roth IRA: $4,137
401(a):$30,814
Total: $34,951 (33,611)
|
| Emergency Savings |
Catastrophe: $ 35,887
Problem Cushion: $ 1,000
Total: $36,887 (36,963)**
|
| Short Term Goals |
Car Maintenance: $2,244
Insurance: $2,467
Travel/Con: $568
Taxes: $3,590
Moving: $3,994
Total: $12,863 (12,144)
|
| Long Term Goals |
House Down Payment: $102
|
| Investments |
TradeKing: $1,094**
Prosper-ish Loan: $12,630
Personal Loan: $1,500
Savings Bond: $362 (current accrued value)
Total: $15,586 (15,542)
|
| Total Assets |
Illiquid: $34,951
Semi-Liquid: $15,586
Liquid: $36,887
Expense Acct: $7,506
Goals Savings: $12,963
Total: $ 107,893 (105,862)
|
| Debt and Liabilities |
AmEx: $144
Chase: $2,510
Rent: $1,360
Total: $4014 (1,770)
|
| Net Worth |
$103,879 (104,092)
|
A few thoughts …..
Yodlee is all over the place. A few weeks ago, I got an invitation to try their Beta and it kept locking me out of my account. When I gave up on the Beta, the original version kicked me out too! Now it’s showing me bills due two weeks ago that it didn’t think were important until now. Thanks!
Bills-owing are at an all-time high thanks to the school bills (>$1000), and the unexpected traffic fee. That’s eaten into the gains made in the retirement accounts. I’d better hit the books even harder, that quiz I took last night made me sweat!
**Dividend!! My stocks paid out a fat $4 dividend. Marked this one ‘specially because I’m excited. Whoo!
Wonky math. Somewhere in the emergency funds, we’ve got math gone wrong and I can’t figure it out. I never take money out of that account, or at least haven’t yet, but it’s down by a handful of dollars. No time to work on it today, unfortunately.
Changes. This snapshot is useful tracking, but everyone doesn’t need all these details. It’s time to consolidate more accounts and simplify both the system and reporting while preserving the subaccounts I love so much. Currently, my money is spread across ING/ED/Citi/Wamu.
I get free checks from Wamu, Electric Orange can’t serve all my checkwriting needs. Citi is the easier B&M from which to bank with linked checking and “high” interest savings accounts, while the ING/ED accounts have marginally better interest rates. It’s nice to have the flexibility of looking for either Chase OR Citibank branches when I’m travelling rather than hoping for one or the other.
I’m looking for a single bank with B&M and online access, free checkwriting (paper and electronic), ability to manage sub-savings accounts with good interest rates, and no fees. Too much?
July 16, 2009
It’s been about a month in the making, but I’ve finally committed. My TradeKing account is open, funded, and I executed my first trade. You’re reading the words of the proud owner of ten shares of KO. 🙂
Ohhh yeah, that’s right. A whole ten shares. Because for a thousand dollars, I seemed to think I’d start a slightly diversified portfolio with two kinds of stocks with only two in mind to start. Further research revealed that whole thousand dollars still couldn’t buy half a Berkshire Hathaway B class share. I should have just bought 20 shares of KO and been done with it. (Already with the hindsight, here.) If/when the price drops below $48 again, I’ll go ahead and nab a few more.
To be honest, it’s amusing that this first purchase is so exciting, but I can’t help it. This is my first step on a (one hopes!) long investing journey of dividends, splits and income. This isn’t a blog about hot stock tips or the latest investing tool, so you don’t have to worry about that. It remains a blog about all things financially exciting and novel in my life, you can rest assured that the carrying on about rather mundane things such as saving money and creating growth income shall continue.
June 4, 2009
Every time I get set in my financial plan, I turn my mind one-quarter turn to the right and find myself seeing it in a slightly, or wholly, different way. That change of focus is, in many cases, a good thing.
So … I thought I had too much cash? No, not really, it was more like I finally realized that my previous worrying was excessive. Not unjustified, just rather obsessive. I am a slightly obsessive personality. Normally, I vent, develop a game plan, set the course and go! This time, I tinkered with the game plan, started off and kept second, third, and fiftieth guessing myself. For months. No wonder I was going slightly mad.
No small part of that is that there’s enough uncertainty in the job market, aside from the rather certain rejections I’ve had, to keep me guessing about how confident I should be.
More, reading articles about folks who planned well, saved, and still couldn’t find a job after months and even years of pounding the pavement catalyzed panic mode. I could literally taste my every fear coming to life: of following my family’s footsteps into unemployment and drudgery, of being the last bastion of support, and spiraling into financial and health failures … just like they did.
That’s one reason I haven’t even mentioned the layoff date to my family. I have no answers for them, other than unemployment +savings, and I can’t even mention the savings because my lousy brother will take that as an excuse to coast even more. The irony, of course, is that I’m hiding a major life event from my family that I support and still live with, yet I still haven’t forgiven my dad for lying to me about his job losses and indebtedness.
After spinning my mental wheels for a while, that steam wears out and leads to more productive thinking like, I can probably take a little of that stash and start investing now. I know that I haven’t maxed out either of my retirement vehicles yet, but with a dwindling income stream, I’d prefer not to lock up any more cash in the 403(b)/401(a)/Roth.
I’ve been wanting to buy some dividend stocks for years. Not on a grand scale. But what am I waiting for? Someone to take my hand and lead me through it? That’s not how I operate and that’s definitely not how I learn. I can read all I want about the schools of thought behind investing, but what I want is basic: to create income and protect assets. I’m looking for dividends and lower prices for companies that are basic and sound.
The temptation is to do it up big: throw five grand in the pot and create a diversified portfolio right from the get-go. But that dips far too heavily into the emergency pot for something that is essentially a business venture, non-essential, and a bit of an analgesic for the financial fear that swamps my common sense every so often.
So! The plan: open up an account with TradeKing using a referral from Sun at The Sun’s Financial Diary, deposit $1000, and buy some stocks. And hold them. No day trader am I.
Simple. Quick, except for setting up the ACH transfer capability which has always seemed rather primitive to me. Easy.
It’s all about finding the comfortable zone between being ultra-safe and taking some risks. I’m not going to get anywhere by stashing all my money in retirement accounts and CDs, nor will I throw caution to the wind. It’s just time to get in the game. More importantly, it’s time to work on things I can do.
