May 2013 Net Worth Review

Wow....what a month!  Here's a quick review:

1.  The Professor went back to work.  Still not sure she will stick with teaching full-time but we both enjoyed getting back on a schedule and making some extra income this month.

2.  Logan went to his first full month of Day Care.  His "teachers", Elaine and Heather are very nice and his "friends" Henry, Nathan, Iyla, and Corinne make Logan a very happy boy and also very tired.

3.  We continued the house search.  We even almost put an offer on one.  The markets are kind of out of control and finding that "forever" home has been a challenge.  For the money, we want to get a "fixer-upper" but it's hard because there aren't that many houses with space in our price range.

4.  I decided to put my Graduate studies into over-drive.  By taking an extra class in June and one in the Fall, I will be eligible to graduate in December!!  I'm really excited to close out this chapter as it has been a major stressload and it is tough being away with the little guy! 

5.  The Pirates went 18-7 in May!  They are one of the best teams in baseball and continue to be a joy to watch!! Hopefully it can continue!!!

 

Here's to the Numbers!!

Cash - $20,689 ($2,589)

Investments - $114,279 (+$2,587)
Home Value - $197,000 ($0)
Personal Assets - $51,861 ($-251)
Less: Liabilities - $179,771 ($-1,221)

Assets -

Cash - We received three additional paychecks this month thanks to The Prof returning back to work!  Also, I reviewed the CSV on our Life Insurance policies and saw some incremental increases!  All in all, it was a good month although we had some larger expenses last month that needed to paid off and I made some extra payments on student loans (one interest only).

 

Investments - The markets were even for May.  Although we had some growth early, the markets fell during the last week as concerns about Bernanke's fiscal policy!  We continued to invest in our retirement accounts and saw growth within various accounts.  Slow and Steady wins the race in this game.

Personal Assets - 

No change here.  We are continuing to search for a new house, but no reason to alter the current valuation.  Also, basic depreciation holds steady for our cars.

 

Liabilities -
Mortgage - $130,354 - Another mortgage payment.....
Student Loans - $29,171- Lots of action, lot of action!!  First, we paid off a Student Loan!  One of our 6.8% graduate loans is paid down!  Boom!  Then, I made payments on the other graduate loans.  So, some payments had no interest attached and one $500 payment was interest only!  I guess that's what I get for waiting to make a payment.  Still on track to pay down all loans by July 2015!

Acura Loan - $19,978.  Below $20,000!!!!  Just another payment....

  

Total Joint Net Worth - $204,508!!  We crossed the $200k threshold!!! I'm so excited that I could do a little jig!!!!   

Property Taxes - Really?

The Prof and I are looking for a house.  We like our current home, but also know that it is not our forever home.  So, the Prof scours the Internet in search of the “dream house”. 

We live in an area that wasn’t crushed by the recent housing bubble.  Property values didn’t increase or decrease to a considerable degree over the past decade or so.  However, the area we live in has several of the top public school districts in the state.  Therefore, the home values can differ greatly depending on whether or not you are in one of these districts.

The schools make realty in certain districts very competitive.  Luckily, we currently live in one of those districts and have seen that home value appreciation in recent years.  However, that makes buying the “dream home” tough.

The biggest hurdle to our home buying process is property taxes.  We’ve found several homes that were very nice and crossed off a majority of key things the Prof and I required.  However, they also come with property taxes at over $12k a year. 

That’s the steep price of quality public education.

That’s so hard to wrap my head around.  For reference, our $170k home has property taxes of $3,500.  We’re mostly searching for $300k to $400k homes.  The mortgage and interest payment associated with homes in that range would be manageable and wouldn’t hinder our current living situation.  ON THE OTHER HAND – those taxes create some difficulties.

In my experience, that is one thing that real estate agents do not discuss enough.  Several of their websites only post monthly mortgage and interest estimates.  That is deceiving to a potential homebuyer.  Unlike a mortgage, you cannot pay down the principle of property taxes.  They are consistent, every year, and likely to go up every so often.

Failure to pay your property taxes is a serious issue and can result in foreclosure.  However, you don’t hear individuals consider the amount of property taxes when purchasing a home.

Be careful in your home search to do your due diligence and ensure that the home value is reasonable, but also that the taxes are management as well

April 2013 Net Worth Review

Logan started his first day of day care today.  It really reminded me how important our personal finances are and that I REALLY want to eliminate debt and grow our net worth.  The sooner I can get the Prof. out of the classroom and home with the man, I will be a happy camper.

Cash - $18,100 ($596)

Investments - $111,692 (+$1,146)
Home Value - $197,000 ($0)
Personal Assets - $52,112 ($0)
Less: Liabilities - $180,992 ($-1,645)

Assets -

Cash - Very interesting.  The only month in which the Prof did not receive any funds on her maternity leave, our cash balance increases.  The only additional funds we received was a $400 tax refund from an amendment I processed on my 2010 tax return.  I did sell my golf clubs and win a Masters Pool, so that could explain $200.  Otherwise, we would have broken even.

 

Investments - More growth in the markets!  Also, we did transfer some money around this month though.  I cashed in our investment in Muhlenkamp Fund and made our annual IRA contribution, for the 2012 tax year.  So, $4k has been transferred from Investments to Retirement.  The only negative is the progress of our "wedding present".  Shares of II-VI have plummeted based upon March 31 financial results and the stock continues to be beaten up for its low earnings potential in 2013.  Very frustrating.

Personal Assets - 

No change here.  We are continuing to search for a new house, but no reason to alter the current valuation.  Also, we'll review the cars next month on the bi-monthly cycle.

Liabilities -
Mortgage - $130,734 - Another mortgage payment.....
Student Loans - $29,384- Very nice to see this fall below $30k!  Also, I'll be paying off one of the Graduate Loans on May 2nd!  As I said last month, its time to get aggressive with this.

Acura Loan - $20,486.  Back to the usual $550 payment.

 

The Prof and I have set out on becoming debt free.  As we have gotten serious in the house search, we have realized how much farther our money would go without these payments every month.  The minimum pay-off period is set at April 2016.  Three Years from today.  That's the minimum!  I hope to get it done in 2015.  It's going to be hard, but I know we can do it!  I'll break down the amortization some other time.

 

Total Joint Net Worth - $197,983

OHHHH!! Almost at $200k!!  That would be awesome!!!  The wife starts her job again in May - so the extra income will be nice!  We're still on track for our 2013 goal of $225k!

Let's Do This

I am tired.

I am tired of feeling like I have no money.

I am tired of disappointing my life because she thinks we have no money.

I want to enjoy life.

I do not want to stress about making debt payments.

I do not want to cringe every time my wife wants to look at a house.

I do not want to see the look on her face when I say we can’t afford it.

I make $62,700 a year in a job I do not love.  I enjoy it at times.  However, I don’t get any satisfaction from it.  I worry that I won’t find my passion.  I worry that my passion won’t be able to provide for my family.

I have a $20,000 car loan and $30,000 in student loan debt that needs to be paid off.  I have a mortgage for $131,000.

My wife wants to buy a $360,000 house.  It’s a great house.  It has lots of space and the neighborhood is fantastic.

How come all I can think about is “how the heck am I going to afford the mortgage?”  How can I pay those taxes?  How much is insurance going to cost me?

I don’t want to live like that.  I don’t want to live like this.  I need to change.  I need to do something.

I’m going to start blogging again to try and find my passion.  I am going to vent more.  I am going to research things more.  I am going to have fun more.

I’m not going to solely talk about money and finances.  I started this blog to talk about everything.  I’m going to post my weight-lifting goals and achievements.  I’m going to research home-brewing and bourbon.  I’m going to talk about money – because it comes up – but it’s not going to consume me.

I’m not going to settle.  I’m not going to be average.  My little boy upstairs is not going to have a dad who is miserable and can’t provide for him.

I’m going to be better than that.  My son deserves better than that.  My wife deserves better than that.  I deserve better than that.

List of topics I want to blog about by the end of April:

1.     Property Taxes and how they effect the home buying process

2.     The weight lifting program I need to get into beach shape.

3.     The best bourbon for my dollar.

4.     The Pirates

5.     Derivatives.

I am tired.  So, I’m going to go to bed.  April 17, 2013 is the beginning of my journey to make sure my wife can be a stay at home mom.

March Net Worth Review

Here's an updated picture of the reason we are all here:

There he is!!  It's amazing how fast they grow up!  It's true though - all the investment monitoring and budget checking is done for him.  So that he can grow up with the necessities he needs to grow up strong and with the same opportunities that his mother and I had growing up.  I want him to go to college and not be stressed about loans or food money.  I want him to dream big and then work to achieve those dreams!

For the March breakdown:

Cash - $17,504 (-$3,837)

Investments - $110,546 (+$6,715)
Home Value - $197,000 ($0)
Personal Assets - $52,112 ($1,289)
Less: Liabilities - $182,567 ($-2,087)


Assets -

Cash - Lots of greenbacks flying around this month!  So, March is the month my bonus and raises go into effect - so that was a nice bump to offset the loss of the Prof's pay since she's not back working.  The major change is just a re-allocation from cash into RLS's 529 Account!  The original contribution of $3,000 was set aside in Growth, so not a big deal.

Investments - On March 30, 2012, the S&P set an all-time high!  The markets are doing their thing and we are doing ours!  As I said before, we set up RLS's 529 Account.  We have a good mix of growth mutual funds to help him pay for ND in 18 years!  (That's probably a good blog post in the future - the funds I picked and why).  Otherwise, I am still contributing to retirement and I made a small transfer to House Fund.

Personal Assets - 

I have no idea why the cars would go up in value.  The Sonata was only driven 3x, so it shouldn't be depreciating too much - but that's not really how it works.  It's really just odd.

Liabilities -
Mortgage - $131,100 - Another mortgage payment.....
Student Loans - $30,112- I nice decrease here.  An extra $500 payment made this balance decrease sharply.  The Prof and I talked about paying down high interest loans faster and trying to get debt free in 3 years.  So, I'm going to take a more aggressive approach to these bad boys so that I can buy a bigger house and make larger college and retirement savings contributions in the future!

Acura Loan - $20,988.  I paid down an extra $200 in order to get the balance below $21k!  Every little bit helps!!
Total Joint Net Worth - $194,596

Well, well, well!!  Not too bad considering the wife is on maternity leave!  Obviously, our investments are making greater headwinds as the Joy of Compounding Interest takes effect!!  Otherwise, we're going to continue paying down loans and paying less interest!!

February Net Worth Review

I'd like to introduce RLS!!!!

 

Isn't he the cutest thing EVER!!  It's amazing how awesome he is!  I feel so lucky to have him and my wife in my life!

 

That being said - I should probably get down to the reason we are all here - the February Net Worth Review!!!  (crowd goes wild)

 

February was an interesting month.  Obviously, we have our son, which led to some changes within our financial spectrum.  First, the Professor went on Maternity leave.  So, she received pay for the first 4 days she worked this month and one disability benefit payment.  Also, we are hermits now.  RLS isn't vaccinated, so that means we are spending our nights at home just enjoying him.  It's awesome - plus, everyone (mostly grandparents) have been super kind and made some very delicious dinners for us to enjoy.  Lastly, I filed our Federal Income Tax Return for a refund of $1,447!!  It's less than last year, but still a nice pay back (See post from last year on getting a refund!)

For the breakdown:

Cash - $21,341 ($11,755)

Investments - $103,831 (+$893)
Home Value - $197,000 ($0)
Personal Assets - $50,823 ($0)
Less: Liabilities - $184,654 ($-1,290)


Assets -

Cash - I thought we changed this to avoid these crazy swings!!  We did.  However, we received a Life Insurance policy from grandpa Prof that has a cash surrender value of $11,918!  So, we had to add that to the breakdown - which encompassed the entire gain in February.  Otherwise, things were pretty good considering Prof didn't get her usual pay this month.  Plus, our balances actually grew, but we're putting most of the money aside for tuition.

Investments - It was actually a very wild month for the markets.  The Sequester begins March 1, and everyone is afraid of the impact it will have on the economy.  Therefore, the markets were constantly in a state of flux based upon latest governmental headline.  We are still investing in retirement and saving for the next house - but I'm keeping that money more liquid right now until uncertainty eases.

Personal Assets - No changes here.  Mostly because I haven't had the time to review the car values.  I feel like every other month is adequate time period to jot down depreciation - especially since we probably only put 100 miles on the car this entire month!  On the other hand, we did have a realtor come through our house to get an idea of the market and what our house would sell for.  She gave us a listing price of $225k with idea that it sell for $215k.  I'm not boosting our value herein though.  I believe her, but just don't want to get false sense of security yet.

Liabilities -
Mortgage - $131,491 - Another mortgage payment.....
Student Loans - $31,052 - Another modest decrease here - although we had a lot noise from these accounts.  Since I'm only taking 3 credits this semester with the baby - my loans went into repayment/grace mode based upon losing my half-time status.   Not that big a deal since I'll gain the status back in Summer - but it does mean I had to pay $69 toward undergrad loans now.  Actually, it turns out my payments based upon loans now would be $394 - just a tad more than I'm paying now.  I still plan on making my payments and using excess cash to reduce high interest loans, but I was glad to hear the payment terms aren't outrageous.

Acura Loan - $21,693.  Another payment.  I'll probably make larger payments on this as well.  No benefit from this guy (unlike tax benefit from student loan interest).

Total Joint Net Worth - $188,341

Not too shabby!  This gain was mostly due to CSV on Life Policy, but we still had modest gains in February elsewhere.  Also, RLS's Savings account is not included within this calculation - which is awesome to see the little guy making money!!!

January 2013 Net Worth Review

2013 is going to be a great year!! Little guy is set to come any down now!  It's so exciting!  I can't believe the pregnancy has gone so fast!  The nursery is fully stocked, the diapers are organized, and Mom and Dad are anxious to meet him!  With all that established - its time to review our finances!!!  YEAAA!!!

Cash - $9,586 ($-10,464)

Investments - $102,938 (+$4,863)
Home Value - $197,000 ($0)
Personal Assets - $50,823 ($-578)
Less: Liabilities - $185,944 ($-2,578)

Okay - let me explain...

Assets -

Cash - I've changed the presentation of cash in the Net Worth calculation.  Within our Growth account, I've set up various sub accounts for future liabilities (ie. Auto Insurance, Property Taxes, and Education) and it doesn't make sense to keep including these as Net Worth when I know they are going to be subtracted in the near future.  In addition, this should eliminate the drastic swings in Net Worth that occur within various months when I make a Tuition payment.  Overall, cash actually held steady.

Investments - Go Market Go!!!!  We only made one small contribution ($500) to our house account, but the markets grew nearly 6% in January!  It was one of the best months since pre-2008!  We continue to invest in retirement and I've noticed bigger gains as the accounts have grown, compound interest baby!!!

Personal Assets - Small amount of depreciation on our two vehicles.  Ho-hum.  We have been going to open houses in our neighborhoods, which has got me very interested in selling our house.  I'm intrigued by what the real value of our house/neighborhood is.  However, I don't want to take on a bigger mortgage right now with new baby and other debts in line.  The Joneses can have their fancy crap, we'll live in comfort and harmony for our entire lives!!

Liabilities -
Mortgage - $131,882 - We made our first mortgage payment on the refi and saw a $362 reduction to the original balance, which is much better than the $200 reductions we were seeing on the old mortgage. 

Student Loans - $31,405 - Big move here as I used a portion of our Christmas gift to make a $1500 payment in January.  Seeing the balance drop so significantly really got my juices flowing for more debt reduction.  It's like an addiction - I want the balance to be ZERO RIGHT NOW!!!
Acura Loan - $22,191- Double payment made in January.  See above.  I might have a problem - or I"m a genius!!  I hate paying First Commonwealth $50 a month for the right to use my car....

Total Joint Net Worth - $174,639!

So, we saw a slight reduction in NW, but only because of the reclassification of the accounts.  Overall, we saw massive gains in our investment portfolio, our debts were greatly reduced, and we still live comfortably and happily.  Unfortunately ND lost in National Championship game, but we still had a great time!  The little guy can't get here soon enough!!!