My Money Blog Goal

My 6 month goal as part of Jonathan's experiment on My Money Blog isn't off to the best start. With the new mortgage and the holidays coming up, we had to downsize our $250 per month savings into the ING Direct account to $125 per month. Along with the holidays approaching, we started the equity accelerator program through our lender, so after we make our first payment tomorrow, the next (half) payment will be coming on December 20th. I still plan on reaching my goal of $2500 by mid-May, but it's gonna take a lot of determination. Our annual bonus is up in the air as to how much it'll be, so this should be interesting. Whatever it is, I plan on saving half and using the other half toward improving our home.

All My Money is Gone

The big move is this weekend. I'm really excited about it. It's our first house, and most importantly, we can stop spending so much money on fixing it up. For the most part, it's finished. Let me rephrase, it's move-in ready. The new carpet is in, the new flooring is down, and the inside has been re-painted from top to bottom. Our house appraised for $207,000 when we bought it a month ago. I wonder what it would appraise for now since we put in so many upgrades?

Still to come:

• New lighting for the kitchen, foyer, dining room, upstairs hallway and 3 bathrooms
• Pedestal sink for the downstairs bathroom
• Quarter round to complete the look of the flooring and the hide the imperfections
• Stainless steel dishwasher
• Window treatments for the entire house
• Guest and master bathroom painted
• New family room furniture

Is that all??? I need a second job.

Bi-Weekly Mortgage Program

Last night I officially signed up for the bi-weekly mortgage program through my lender. Actually, it's semi-monthly with a little added to the principle at each draft, so it equates to the same thing as a bi-weekly draft. It will cut 7 years off the life of the mortgage and over $60,000 in interest savings, and that's if we decide to not put any additional payment toward the principle. After our cars are paid off, I'll be looking to tack on an extra $100 toward the principle per month. Most importantly, this program will build equity in our home 3 times faster than making a regular payment! I recommend everyone do this. Not only because of the reasons above, but because it will make it MUCH easier to budget our money and it lightens the one time monthly hit on your checking account. It cost us a one time setup fee of $195 to enroll, and it'll be worth every penny!

Making Your Holiday Donation: The Eddie Johnson Memorial Foundation

It's that time of the year where generosity lurks in the air, either for the gratification of doing something good for someone else or for squeezing in one last tax write-off before the end of the year. Whatever your motivation is, charitable donations go a long way to help those less fortunate. For those who wish do donate, my recommendation is The Eddie Johnson Memorial Foundation. I have proudly been able to be apart of this organization since it's inception in 2001 when it was The Eddie Johnson Foundation.

Let me backtrack a bit. Eddie Johnson was a linebacker for the Cleveland Browns in the mid-1980's-early '90's. He died during a second stint of colon cancer in January of 2003. Eddie was known as "The Assassin" on the football field, but he wanted to be known more for what he did off the field. He loved kids, and was very active in helping kids in need. He was a great player, but more importantly a great person.

Today the EJMF holds two events per year to raise money for kids with cancer, but donations are accepted all year long, and 100% of all donations go directly to the cause. There are no "administration" fees that some charities charge to pay their board members, so you can feel good that what you give goes to what it should be going to. All donations are tax deductible because it is a 501(c)(3) organization. If a receipt is needed, email the EJMF's webmaster here.

Mortgage Protection

This is something I never thought I'd consider: mortgage protection. The purpose of mortgage protection is to pay off the remainder of your mortgage if you die, become disabled and can't work, and in some cases, make your mortgage payment in case of unemployment. The reason I'm considering this is the latter. I've only been working in the private sector for about 10 months now, and it's much different than working for the government like I used to. You could probably kill somebody on the job and not get fired working in the public sector. Luckily I was able to land a job with a higher salary and much more potential, but there are plans in place to start outsourcing 90% of IT in my company starting in 2010. Now I know I still have 3 years, and it's not a guarantee that I'll be laid off or even be with the same company when that comes, but I'm a bit of a worrier when it comes to supporting myself and my family. I don't know if it's a great idea to pay a premium on mortgage protection when I could be putting that money toward the principle, but I sent the form in to get more info anyway.

Updates on this will follow...

6-Month Goal

Jonathan over at My Money Blog has a little experiment he's doing. It's very simple, just write down a 6 month goal for yourself in the comments section, check in at the 3 and 6 month marks to update the status on your goal, and win a prize just for playing! Can't get much easier than that, and here's mine:

Accumulate $2,500 in my ING Direct account by May 16. As of this writing I currently have just under $800. Right now I'm putting away $250 a month into that account which would actually leave me just short of my goal, but I'm hoping for a little bonus at work and a positive tax return that will help me get there.

What a Bunch of Bull

The market, that is. It's been a great week so far for retirement plans across the board. Four days in a row our friends on Wall Street have been making gains for the betterment of mankind. Well, not really, but it feels good if you're a 401k junkie like me who checks almost every day to see how things are doing. I know that may not be the healthiest thing to do from a financial standpoint, but I just can't help coming into work and checking the retirement update after logging into my Google homepage and seeing green under the stock market section!

401k News

After a slow start, I think I finally have my 401k asset allocation in order. About 3 months ago I took a good look at how I had been contributing to my 401k and found to be investing too much in balanced funds. In mid August, before I started this blog, my year-to-date return was just over 3%. Not very good! I could have been making more money not contributing to my retirement plan and instead going with an ING or Emigrant Direct saving account. I couldn't beleive it, and I decided to be more aggressive...a lot more aggressive. I moved a big chunk of assets in my balanced funds to aggressive growth funds, namely American Funds EuroPacific Growth Class A (AEPGX) and T. Rowe Price Small Cap Stock (OTCFX). Don't get me wrong, I still have plenty of balanced funds in the mix, but in about 3 months my year-to-date return went from about 3% to 9% as of today. I'll be extremely satisfied if my portfolio stays at or above 9% in a year where Wall Street only expects single digit returns.

Traditional, Roth or ETF

This January I'm going to set up a retirement plan that my wife will contribute to. Currently, she has no retirement plan in place as her employer doesn't offer one. I have a few things in mind: the traditional IRA, the Roth IRA or an ETF like Nasdaq's QQQ or the S&P's Spiders. I know the tax benefits of the Roth vs. the traditional IRA, but I've also been researching investing in ETF's as well as they seem to be growing in popularity. I'm all over the place with these and can't make up my mind as to which one to go with. It'll probably come down to personal preference. Check back and see in a month or two to see what we come up with.

Wall Art for Sale??

When I calculated my net worth when I started this blog I purposely left out about $9,000 in savings because we were planning on using that money specifically for purchases on things for the house. We had (and still have) a lot of things we needed to buy:

New carpet for the upstairs: check.
Flooring for the downstairs: check.
Paint and supplies: check.
TV and stand: check.
Refrigerator: check.
Family room furniture: check.

Not a bad start. What I didn't count on were all of the re-visits to Home Depot and the paint store because we were constantly running out of supplies. All those little purchases really add up, which is yet another reason I can't wait to finally move in. Out of our approximately nine grand that we had, only about $500 remains. That's cool and all because we are very fortunate to be able to have all these things, but it'll be nice to get things back to normal once we're settled.

Still need: pedestal sink for downstairs bathroom, 220 volt connection for our electric stove, miscellaneous plumbing repairs (nothing serious or very expensive), probably more paint, miscellaneous home decor.

All that being said, I'm looking to buy some inexpensive, yet cool and contemporary wall art if anybody has any laying around. Keep in mind I'm not looking for expensive stuff here, but if a nice piece is collecting dust in a closet I'd be happy to work out a deal.

House Update and New "Toys"

Unfortunately we were only able to work on our house one day this weekend because of a family wedding. Dont' get me wrong, I enjoyed the wedding (and by wedding I mean the reception) but my mind was on getting our house up to "move-in" standards. I got the wood flooring down in the dining and living rooms, and my wife started priming the family room. I'll get some pics posted a little later. If you want to make some money in the stock market this month, try buying stock in Home Depot because I seem to be spending all my money there making a half dozen trips every weekend.

The new toys for the house include a Craftsman lawn mower and wet-dry vac, and wow does that thing suck! I highly recommend investing in one of those, especially because you can get a good one for around $35. It was a pretty successful weekend, and I'm already looking forward to the upcoming weekend in continuing our quest to making our house a home.

Goal Setting Entry #1

It's been a long day, but I think I can find some energy to identify some goals for myself. Long and short term personal, professional and financial goals are included. Keep in mind that these are all off the top of my head, so more could be added soon:

Personal Goals
#1: Lay new flooring in my new house to completion, without succumbing to pay someone to do it for me, and still make it look like it was professionally installed.

#2: Move into my new house by no later than November 25, 2006.

Professional Goals
#1: Obtain my Oracle Database 10g DBA OCP (Oracle Certified Professional) by March 3, 2007.

Financial Goals
Short term
#1: Pay off auto loans.
#2: Pay off credit cards 100%, cut those suckers up and never carry any more consumer debt.

Mid term
#1: Accumulate $15,000 in savings in our ING Direct money market account to use for emergency purposes.
#2: Start a "dream" money market fund to use for future vacations, both large and small.

NOTE: If you are reading this blog and are interested in opening an ING Direct savings account with a minimun deposit of $250, please email me at jkickel@gmail.com for a referral link. ING Direct will deposit $25 into your account with a referral, and I'll get $10 for referring you. We both win!

Long term
#1: Put our kids (who aren't born yet) through college.
#2: Retire by age 55 with $2 million in liquid assets (I'm 27 years old at the time of this writing).

Our New House

Here are some pics of the new house. I'm so proud to be a homeowner. This house will contribute to my net worth significantly, and with appreciation I should get a good return on my investment. These pics came off the MLS listing. The new 1.7 mile commute to work is a pretty cool perk too! Inside pictures to follow...



Specs:
1906 square feet
818 square foot finished basement
210 square foot 3-season sun room
10,123 square foot lot size

3 "Baskets"

Ok so I'm taking this from David Bach's Smart Couples Finish Rich and want to share how we're taking advantage of this.  The 3 baskets consist of the retirement basket, the security basket and the dream basket.  As of this writing, I am contributing 10% of my gross income into my 401k as my retirement basket, $250 a month into an ING Direct money market account with a 4.4% return, and my wife and I are actually in the process of cleaning out our dream basket to fix up and furnish the house we just bought.  We started the ING account on September 15, 2006.  This will be used for emergencies only, and my goal is to accumulate at least 6 months of expenses (not income) to use for a rainy day.  I plan on putting my annual bonus (March '07) and my income tax return (also around March) into the ING account as well, just to give it a little kick.  The dream account will be refunded when the improvements on our house are finished, at approximately $100 a month, and I plan on increasing my 401k contribution to 11% starting July 1, 2007.

1st Post

I'm creating this to give myself, and maybe others, some insight on financial freedom. I figure if I write it down, lay everything on the line so I can visualize my finances, assets and debts, I will enable myself and my family to be more financially sound. I encourage feedback, stories and suggestions from everyone. I am using this site to track my own net worth (and lack thereof), but feedback is always appreciated. I am not a financial guru, but I have surrounded myself with friends and family that are, so while not claiming to be an expert, I have a good idea of what I'm doing.

I suggest everyone read The Automatic Millionaire by David Bach. It provides readers with the basic knowledge of how to become financially free, over the period of your life, and how "finish rich." It has already helped me, and I will be better off in the future for have reading it.

Net worth update:

This is a pretty good estimate of my net worth as of the end of October 2006. While the credit card debt may seem high, over half of it is on 0% interest credit cards. I couldn't resist buying a new DLP HDTV to go with our new house, but I'll have it paid off well before any interest would be applied to the card.