The Financial Oracle

Young and inspired striving for financial freedom and all the perks that come with it, all while still having fun before I die and leave all of my hard earned money to my unborn children.

Monday, January 22, 2007


I held the first of hopefully several ebay auctions last week to get rid of some stuff I haven't used in forever. First up was my Xbox. I haven't played it in probably 2 years and I've been thinking about selling it for awhile now. It felt so good once my auction ended and I ended up making $112.50. The transaction went smooth and I just shipped it today. The best part is that the money from the auction was already transferred to my ING direct account and it's now earning interest. Next up is my Nintendo 64. It's scheduled to end this Saturday the 27th. I'd put a link up to it but I'm sure nobody really cares. It's currently at $40, and whatever it sells for will also be stashed away with ING. I'm trying to look for other stuff that might be worth selling, but besides my sports card collection I can't think of anything. I'd have a really hard time parting with the basis of my entire childhood, so I might just end up holding onto those.


Tuesday, January 16, 2007


This morning I had to drive to City Hall where I used to live to file my Regional Income Taxes. Turns out, I owe nothing because the city I used to live gives a 100% tax credit toward local taxes. It was a big waste of time, but also a relief because that could have put a damper on our goals for the year ahead.


Thursday, January 11, 2007

Net Worth Forecast for '07

One of my main goals for 2007 is to increase my net worth to $100,000. I thought I would write down a forecast of how I'm going to do this, which will also show me how close I'll get to my target and identify ways to make it more realistic.

As of today (January 11), my net worth has increased from the beginning of the month due to debt payments clearing, etc. I'm starting with a rough estimate of a net worth of $66,000, give or take a few hundred dollars (this is just an exercise!).

Debt reduction:
-$3495 auto loans
-$3456 mortgage principle reduction
-$4000 credit card balance reduction

Total liability reduction: -$10,951

Asset increase:
$1550 ING emergency fund
$400 life insurance cash value increase
$7308 401k + company match
$2720 conservative estimated rate of return on 401k. This estimate is an 8% increase of its current value.

Total asset increase: $11,978

Total forecasted net worth increase: $22,929

This wold set my net worth at nearly $89,000, so I'd fall $11,000 short of my goal. This amount assumes a number of things:

1.) I won't get any sort of raise/bonus (which I'm supposed to get and if I don't I'll be looking for a new job).
2.) I'll only contribute $125 into my emergency account each month.
3.) A very conservative credit card reduction. After our cars are paid off this will be very aggressive.
4.) I will not hold several ebay auctions throughout the year to get rid of stuff I haven't used for years.
5.) The stock market will not be as bullish as a lot of investors are predicting.

I set my goal high so it would be a challenge. This is going to be an exciting year. Stay with me to see how it turns out!

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Wednesday, January 10, 2007

December 2006 Net Worth Update

This is as the end of December. The credit card balance is much more accurate because I sat down and added up every dollar of credit card debt we have. I expect my net worth to take a nice turn for the good next for next month's update, and on through the 1st quarter of 2007 (depending on the market).

This year we will pay of our cars (by October) and I expect us to concentrate on building up our emergency fund along with pay down consumer debts.

On a sort of related note, I received a letter in the mail yesterday from RITA (regional income tax agency in Ohio) telling me that I need to go to City Hall to file my regional taxes for 2005. This made me mad because I have never had to do this before, and I didn't get any notice before yesterday. I'll supposedly owe money, which I'll have to put on credit, so that's not going to help my goal out from the start. More on that later.

I'm already looking forward to next month's update to see how the first month of the new year goes, and to really get an idea of what it's going to take to reach my goals.


Thursday, January 04, 2007

Goal Outlook For the New Year

To give myself a good chance to reach my financial goals for 2007, I thought I'd look into how I am actually going to try to accomplish them:

In order to reach a net worth of $100,000, I must depend a lot on the market return of my 401k. I'm sure most people with net worth goals depend on the market, so that wasn't supposed to come across as a naive comment! I'm contributing the David Bach recommended 10% of my gross income to my 401k already, and I hope to increase that to 11% by mid 2007, once some of our debts are paid off. That brings me to my next avenue of increasing net worth:

Pay our credit cards down by 50%. This will increase our net worth by a nice chunk, with the biggest chunk of debt to be knocked off in the final 2 months of the year, after our cars are paid off (which also increases our net worth because we won't any money on them anymore!). They're scheduled to be paid off in October, but there's a chance we might be able to pay them off a month or two ahead of time.

Contributing to my 401k and reducing our debts are the two biggest factors (the we are in control of) in increasing our net worth. Smaller factors include contributing to our emergency saving account and paying down the mortgage (with bi-weekly mortgage plan).

Setting up an additional account to use for "fun" stuff will be easy...I just have to do it! It's not the biggest priority right now because 1. we just bought a house and we've been buying a lot of stuff for furnishing and decorating, which falls into the "fun" basket (although I could think of things to do that way more fun than that), and 2. funding the emergency account and paying down debts are much more important.

All in all, I'm excited to start 2007 off with a bang, and I'm really looking forward to trying my best to reach my goals for the year!

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Tuesday, January 02, 2007

Getting Real With Myself

First off, Happy New Year to everyone. 2006 was a good year and I'm hoping to make 2007 even better!

I haven't been 100% accurate since starting to track my net worth in October, most notably my credit card debt. This isn't because I wanted to skew my net worth to make myself think I am worth more than I really am, nor to ignore my actual credit card debt in the hopes of making myself feel better about it. It was simply because I didn't know what it exactly was, until last night.

If you've been reading this PF blog, you'll probably know that my wife and I bought a house in October. Things were hectic and unorganized. Our home "office" is still a pile of chaos, mainly because we have not bought a desk and everything is spread across the floor. As I was watching Michigan getting routed by USC in the Rose Bowl, I thought I'd finally check it out and see what our overall credit card debt really is.

Drum roll please...

$12,605 and some change.

That's not all that far off from my $10,000 estimate. We put $1,500 on one card to buy our living room furniture, and we're still waiting for a refund check from my wife's parents because that was our "house warming" gift from them. So when (if, hoping...) we get that and put it toward our debt, I was a mere $1,105 off my guestimate.

As noted in a previous post, one of my goals for 2007 is to decrease my credit card debt by 50%. Let's put a number on that:

If we do not get our $1,500 "refund," the number we're shooting for is $6302.50 (half of $12,605). If we DO get the money for our furniture, the goal is to eliminate an additional $5,552.50 (half of $11,105).

More to follow soon on this topic soon...

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