Monthly Archives: May 2008

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June 2008 Net Worth Update

Wow — talk about squeaking one out in the end…

As hoped for, the seemingly common end of the month upswing in the markets propelled me to yet another positive month — up just $42.

It’s not great, but I’ll take it.

Obviously the huge drop in the value of my home had a lot to do with this month’s totals — it’s not easy to cancel out a $4500 drop in value. Thankfully, the 401k did manage to cancel out over half of it!

On the plus side, motivation-wise, I’m pretty happy that I was able to reach my short-term goal (since readjusted) by knocking $1000 off the car loan and adding $1000 to savings.

I’m also quite proud of the fact that I was also somehow able to wipe my credit card balance back down to zero after racking up over $1k in charges just a couple of weeks ago.

In the end, June is looking to be a rather bland month financially. Sorry — not too much excitement on the horizon.

My new focus will be more on the mortgage, but at a very relaxed pace as we’re also going on vacation this month, so the more I have in the checking account available to me, the better…

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Teenage Mutant Ninja Turtles — I used to love these guys…I’m over a week late with this latest PF blogging trend that has been making the rounds…

I think it started with J.D. on Get Rich Slowly, but I could be mistaken…

My entire living situation in 1998 is almost impossible to compare to the situation I find myself in now. Really, 1998 was the starting line for me.

At the time, having dropped out of university in February of 1997, I was back living with my parents in my old bedroom. I was just getting comfortable at the job I still hold today and was recently made a salaried employee after an entire year of making just $6/hour.

It was an exciting time. Back then, only those on salary were offered health insurance so now I could boast that my job had more than just long hours, it had benefits too. The company had also just implemented a 401k plan and I was invited to participate. Most excellent.

My only monthly bills at the time were my car payment — $223/month for my VW Jetta loan (which my dad co-signed on) — and my auto insurance. I didn’t have the need for a cell phone, and at that time, I’m not sure our neck of the woods even had service anyway.

It was also in the Spring of 1998 that I received my first paying job for the online company I started in my bedroom late one night. It was through a consultant that had worked with my dad.

Basically, all I did was set up a website for their Oracle consulting firm — earning $100 for the task. In hindsight, they got a great deal. Sadly, they also went out of business around a year later. Can’t say I was surprised, though…

I mean, I understand that Oracle is still around to this day, but technically, so is Atari. They’re both teetering on irrelevancy. To me, the writing was on the wall back then for Oracle developers — middleware had a short shelf life and their targeted industry wasn’t large enough to sustain the initial popularity.

But that experience really boosted my confidence in what I was doing and what I was capable of — hey, if this legit company was going to use me to be their presence on the internet, I’m sure others would be willing to use me, and pay me, as well. Before long, I had another client — and another website under my control. The portfolio was growing.

I then started hosting the sites of my clients to generate a monthly income rather than couting on sporadic checks to roll in as projects came about and then used my profits to purchase numerous domain names — many of which I still hold today.

My company was a real “dot com” now. I even incorporated. I even licensed my software. Yes, I actually bought Adobe Photoshop 3.0 for the full price. Even my copy of WinZip is registered. I’m not sure I know another person who actually paid for that wonderful piece of software.

Then, proving that my company really was the real deal, my company was threatened with legal action by a Fortune 500 company for trademark infringement.

Wow, if they only knew that the company was just a 22-year old kid hogging his parents’ phone line with a 56k modem in a room with bunk beds and Teenage Mutant Ninja Turtle posters still hanging on the wall. It scared the crap out of me.

I stood my ground though, and eventually met up with them. I remember looking through the phone book looking for something like an internet law expert with no luck. They just didn’t exist at the time — at least not this far away from Silicon Valley.

When the time came, I walked into the fancy office of my oppressor completely unprepared, and walked out with, get this, a new client. Wow.

No longer was I pulling in maybe $25/month from this side business of mine, now I was pulling in a few hundred dollars each month and gaining traction. It was crazy. Some months I’d make more on my own that I did from my regular paycheck.

With the extra money, I wisely opened an account with Fidelity. I honestly can’t remember why I did it. Or why I even chose Fidelity. I initially put $2500 in towards a tech mutual fund (Fidelity Select Computers was the name, I think) and set up my first ever auto-payment for Fidelity to pull $150 each month from my checking account and put it towards the fund.

This move made me a lot of easy money and would eventually become the down payment on my first house in 2002 — even though its value plummeted after the dot com bubble burst. At one point, I’d say I quadrupled my money. In the end, when I cashed out after things came back to reality, I had still doubled it.

My day job was on the up-and-up, my own fledgling company was starting to take flight, and my expenses were minimal. Basically, things were pretty good.

I’d estimate that, at the time, my net worth was still positive (no student loans, thankfully). My checking account routinely held less that $1000 from month to month and with the mutual fund thrown in too, best case scenario, my net worth would have been maybe $2000. (I’m certain that I owed more on the Jetta than it was worth in 1998.)

Shortly thereafter though, it would dip sharply negative as I started abusing the credit cards (as they all started to increase my limits), going on $10k vacations, and purchasing BMW’s and, well, all of those mistakes have been well documented here already…

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Nintendo WiiOne of my more recent readers, Magic Penny, is a self described 50-something woman trying to come to grips with her financial situation. She’s very new to the blogging world, but she is certainly getting things together in a hurry with a set of goals, a budget plan, and a debt reduction plan.

I almost had to laugh out loud when I read her “Falling off the Wagon” post just three days after getting started! Hey, it happens to everyone.

No specific numbers are given, but it doesn’t really matter — she’s on the right path already. Of late, she’s been beating herself up over a recent impulse buy — a Nintendo Wii.

I ordered a Wii … there’s no getting around the fact that this was not in the budget and that I just put $344 on my credit card when this is the week I’m supposed to be facing my debts and planning to REDUCE them … I can have compassion for myself about this, but the fact remains that these are emotional buys, not needs and not thoughtful purchases.

We’ve got a Wii in our house. It was a gift from my wife for Christmas, and while I’m sure that she spent a fortune on it, I don’t really look at it as an un-wise purchase and here’s why…

First, sometimes you need to go out and treat yourself. Most everyone likes to spend money. It feels good. And as long as you’ll be able to pay for it down the road, there really isn’t anything wrong with spending a few hundred bucks now and then. I sometimes find myself falling into a miser category and in some ways, I think that’s a worse path than being a flagrant spender.

For me, yeah, I’m really tight when it comes to most things, but to keep me balanced, I’m also pretty well known to go out and blow a few hundred bucks each month on dirty polyester. Keeps me sane.

And second, while the upfront costs of purchasing a Wii are obviously high, if you’re wise about the games you purchase, you will most certainly get your money’s worth in the long run.

For the first month or so, the game the unit comes with was plenty of entertainment for us. We bowled. We played baseball. We played tennis. We golfed. We didn’t box very much though… it’s just not that fun in comparison. But the point is, that first game, that FREE game included with the system, provided us with probably 30 hours of entertainment in that first month.

Using Magic Penny’s purchase price of $344, that works out to about $11.50 per hour of entertainment. As we lost some interest in those original games (and our sore shoulders told us to take it easy and recover), I went out and bought Guitar Hero III. With shipping, that cost me around $100.

That game too has superb replay value. We played it for hours on end for a couple more months — say 35 more hours of gameplay time. Now, with $444 invested in the Wii, the hourly entertainment cost was already down to $6.83/hour. And in only 3 months time.

Then I got stupid. I went out and bought Super Smash Brothers for $50. With all of the hype surrounding its release, I relapsed to my 6th grade self (when Double Dragon was released) and just bought it the first week it was available.

The game sucks. I mean, it *really* sucks. Just a bunch of random button smashing. It isn’t any fun at all and I’d even say it has no replay value. None. My wife won’t even play. It’s just not fun. Seriously. I cannot stress enough how bad this game is.

Lesson learned, though. The Wii is a total money pit if you’re going to end up going out purchasing games for $50 each on a regular basis. But if you’re going to sit back and make wise purchases on games you’ll play over and over and over and over, it’s amazingly a pretty good value.

With kids, as Magic Penny has, the entertainment value is well worth the money — but the key is making wise game purchases.

Up next for us, probably sometime in August or September, is the latest MarioKart game or WiiFit — two more titles that look like endless fun.

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Garmin Nuvi 260So last night when I arrived home from work, a package was waiting for me on my front porch.

I could tell, even from a distance, that it had come from UPS as the box was crushed.

Is it just me, or has the quality of UPS gone downhill? Seems every package they have delivered in the past decade has gone through some sort of physical trauma — the USPS should take advantage of this.

I hurried inside and tore open the already partially torn open box to unveil my latest stupid purchase — a Garmin Nuvi 260 GPS unit.

(This is where a chorus of angels sings)

I opened the box within a box in one fluid motion and hit the power switch — ‘GARMIN’ — it said, and then “Loading Maps…”

Then it died.

Would it kill them to ship it with a charged battery? Sheesh.

So I grabbed the included car charger and ran back out to the car…

Plugged it in, started the car and turned the unit on again.

“GARMIN”

“Loading Maps,” it said.

“Locating Satellite…”

And then I saw my little blue car right there on the screen, sitting right in front of my house. Sure, it had my car pointing in the wrong direction, but it was still *very* cool.

I idled there in my driveway for 20 minutes time pushing the little plus sign, then the little negative sign. Sure, I’d just paid $4.27/gallon to fill up my tank yesterday, what of it?

Hey, I never said gas was overpriced

Neighbors were arriving home from their workdays around me, likely wondering why my car was running. I paid them no mind.

I then proceeded to back out of the driveway and drive around the block as the unit barked out directions, “Turn right on Oswego Drive. Turn right on Forge Drive. Turn right on Aberdeen Street. Turn right again… arriving at home.”

Yeah, I’m a dork like that.

Eventually, I shut things down and headed back into the house to eagerly await the arrival of my wife.

In the meantime, I prepared the “Garmin Friction Mount” I’d also purchased (it arrived via USPS long before the UPS shipment came in).

It’s a goofy looking thing — essentially nothing more than an overpriced beanbag contraption.

The clumsy thing is made of the cheapest nylon and fake leather I’ve ever seen — not anywhere near worth the MSRP of $39.99 or the actual $27-something I paid for it.

Anyway, it works great on the kitchen table.

My wife arrived home, I did my happy dance, and out to the car we went for our “maiden voyage.” (That phrase would be better suited if I’d purchased a Magellan unit instead, huh? Do they even teach kids who Ferdinand Magellan was anymore? I doubt it.)

At first, we put the friction mount on the passenger side. Not exactly ideal — it didn’t seem really secure and it was sitting right on top of the air bag. (Btw, we’re idling in the driveway again.)

Then we tried the driver’s side.

It wasn’t covering the airbag there, but it still didn’t seem really, I dunno, stable? I mean, if I were to really punch my 4-cylinder engine at a stop light or something, it’d surely fall down into my lap, the cord would tangle in the steering wheel, and things would get a little hairy from there.

My dashboard just didn’t seem to work well with the mount — which is very odd because my dashboard is very wide and relatively flat too. Maybe the friction mount is just a piece of crap?

So I took the unit off the little holder and just handed it to my wife, “Here, hold this.”

Those were my exact words, swear to God.

Now I may have read her expression incorrectly, perhaps, but at that moment, I think I saw a glimmer of gratitude on her face. A little extra twinkle in her eye. I needed her.

The Garmin wasn’t replacing her — and she knew it.

While no longer the only navigator on board, she was still an essential member of the team. She was now the official Garmin holder.

Yep, that’s right. I’m keeping her.

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Car Shows are great FREE entertainment!Another few days like the past few on the markets and I just might squeak out another positive month in my net worth calculations.

Crazy how things always seem to swing up at the end of the month and I’m hoping the trend continues.

Right now I’m down $440 for the month and I’m not expecting any additional income to come in by week’s end — though I am owed in excess of $700 by the hockey team. 59 days late and counting… You never know, it could be in the mailbox tomorrow, but I’m not counting on it.

I also don’t have any expenses on the horizon either. Bills are paid, gas tank is full, and all of the entertainment plans for the weekend are free. Yes, FREE!

This weekend, it’s going to be a local car show. Not nearly as fun as a parade, but still pretty enjoyable and pretty time consuming too.
If the weather is nice, I can’t really think of many things that are better (especially for FREE!).

A flea market comes to mind though and, actually, now that we’re past Memorial Day, I’m sure I can find one of those for Sunday too. Sounds like a plan.

Back to the car show…

I’m not a gear head by any stretch so I couldn’t possibly care less about what’s under the hood, but as with the parades last weekend, there’s always a good crowd to look at, some live music, and lots and lots of old classic cars (without the politicians!)

It’s a good time — though sometimes I wish we didn’t live in the apparent Mustang/Camaro capital of the New England.

There might be one European car in the show, if we’re lucky, and if there is, you can bet I’ll post a picture here proclaiming it the “Best in Show.”

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My house is protected by PMI!The more I think about it, the more I want to focus on paying down the mortgage.

When I paid off the last of my credit card debt, the house just happened to become the top priority. Not for any real reason other than the fact that I already had an automatic payment plan in place. With the extra money around, I just increased the size of my payments.

After around a month, though, I realized that it wasn’t exactly the wisest path to take. I switched things up and started paying down my auto loan instead. I also increased my savings rate.

But now, I’m starting to lean back towards the mortgage again…

Yes, all of this flip-flopping in just 2 months time. I should run for office.

I haven’t put anything into place just yet, but while going through my records, I noticed that my mortgage holder (CountryWide) does their escrow analysis on my account each year somewhere between October and November. For the past 4 years, anyway, it’s been one of those two months.

Now, my whole point of paying down the mortgage quickly is to eliminate the monthly PMI that I’m paying out of that escrow account.

Private Mortgage Insurance (PMI) – PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home’s value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI.

PMI plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership. With this type of insurance, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment. This means that you can buy a home sooner without waiting years to accumulate a large down payment.

Under HPA, you have the right to request cancellation of PMI when you pay down your mortgage to the point that it equals 80 percent of the original purchase price or appraised value of your home at the time the loan was obtained, whichever is less. You also need a good payment history, meaning that you have not been 30 days late with your mortgage payment within a year of your request, or 60 days late within two years. Your lender may require evidence that the value of the property has not declined below its original value and that the property does not have a second mortgage, such as a home equity loan.

Eliminating the PMI from my mortgage bill would essentially ensure that an additional $85.15 would go towards principle each month. (Technically, my minimum mortgage payment would go down after the analysis, but I’d continue to send in the same amount on my own — resulting in the $85.15 per month increase.)

That sounds like a good thing, right?

Well, considering that my regular payment applies less than $300 towards principle each month, an additional $85.15 is like increasing my payment by over 25% — and that’s without sending them an additional dime. That makes it very attractive.

As of today, I have $1901 more to knock off the principle before I can safely request that they remove the PMI from the calculation.

To be safe, I think I should press to reach that goal by September, at the latest, to ensure that I get there before they kick off their analysis procedure.

(I’m aware that I can request that PMI be removed any time after I reach the 20% level, but the escrow analysis locks in my monthly payment for an entire year. If I don’t make it by the upcoming analysis, what was going towards the PMI will just sit in the escrow account and result in an escrow overage. In that case, they’ll send me a check of the difference in November of 2009 after the next analysis — not exactly ideal which is why I’m trying to avoid the scenario all together.)

So, with most of my income for June likely being sucked up by our upcoming vacation, I’m thinking that, to be safe, I’ll have to send around $2000 extra towards the principle spread accross July, August, and the first few weeks of September.

That’s a definite possibility if I scale back the current plan of $1000 towards the car and $1000 towards savings each month.

Actually, if I were feeling really daring, I’d just take the $2000 I have in savings right now and send it right to Countrywide and call it a day (or year?)… Nah, not feeling it…

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NHL Credit CardNow that the 3-day holiday weekend is behind us, it’s time to get back down to business.

I rolled into work early this morning, completely forgetting that I’d tied up every loose end before I left the office on Friday. Yeah, I’m that type of person.

No one else is in, so I’ve had a little time to myself. Know what I did?

Well, in true PF blogging fashion, I paid off my credit card balance. Again.

Yep, the one I used to finance my $1k spending spree about a week ago.

So, along the lines of my original debt payoff post ( a couple of months ago already?!):

The tickets are paid for. The Garmin Nuvi is paid for. The new computer is paid for. The plumbing project is paid for. Even those silly cocktail croissants are paid for! (Can you say impulse buy?)

I was a little worried when the balance totaled up to $1159.57 at the end of last week but right here at the tail end of the month, the credit card balance is back to zero. That feels pretty good — but I’m not about to make a habit of charging that much each month.

Sadly, though, with vacation on the horizon, June’s high mark will probably be far more than I can dig out of quickly with a couple of double-clicks right at the buzzer before the statement comes out…

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Couldn’t make it to a Memorial Day parade this year? Don’t worry, I’ve got you covered…

The one thing I like best about the American flag-waving holidays is all of the unavoidable free entertainment. This Memorial Day, my wife and I attended two different parades. TWO?!

I like parades. I like to watch people, I like marching bands, and I like big trucks. What better place is there for those three things than a parade? And thankfully, parades are still free.

The first stepped off at 8:30 am. It was the parade that I used to go to growing up — not the one I actually marched in with the high school band, but the one I’d consider the “parade of my childhood”.

It featured some veterans, some Brownie troops, a bunch of fire trucks, and some tractors. A few images from the festivities are below:

Memorial Day 2008: The Korean & Vietnam War Vets

The Korean & Vietnam War Vets

Memorial Day 2008: The future Vets

The future Vets — not sure why they needed to be packing…

Memorial Day 2008: High School Marching Band

The FHS band — half marched in this parade, half in another…

Memorial Day 2008: Classic Car

Can there be a parade without a local politician in a classic car?

Memorial Day 2008: Brownie Troop

Seems as each year passes, the more casual the Brownie uniform becomes… Would it kill them to wear the whole outfit for a parade?

Memorial Day 2008: Vintage 1937 Fire Truck

The father of a childhood friend actually drove this fire truck when it was still in service. He passed away a few years ago, but I think I can say that his father is why I consider this parade my hometown parade.

Memorial Day 2008: Tractors on Parade

Tractors aren’t really my thing, but it’s always fun to watch a bunch of them drive by. What I couldn’t figure out is where they all came from? Seems that all of the farms in the area I remember have turned into McMansion farms or Walmarts…

After a quick stop at home (I mowed the lawn), we walked down to our local parade and took up a nice comfy spot on the curbside and waited for our “new” hometown parade to begin. Step off was supposed to be at noon, but I think things got going a little bit late.

This one, again, featured a few veterans, a bunch of Brownies, some fire trucks, but no tractors…

Instead, this one had lots and lots of military equipment, a bunch of local pageant winners, some horses, and a crazy military helicopter doing tricks above the crowd:

Memorial Day 2008: Holy helicopter, Batman!

I captured some nicer images of the helicopter, but this one gives a little perspective as to how low it was flying. Thankfully it didn’t get tangled in the power lines.

Memorial Day 2008: Small town parade.

The parade steps off. See how low the helicopter was? Really, it flew around for about ten minutes. I’m not sure I’ve ever seen a military one flying around that close-up before.

Memorial Day 2008: Military Might?  Where the heck are the tanks and missles?

Some of the previously mentioned military vehicles.

Memorial Day 2008: Fire Engine

I’ve always kind of wondered what kind of chaos would ensue if ever there were a fire in town during one of these parades. While it’s obvious that not all of the firemen are in attendance, all of the trucks seem to be.

Memorial Day 2008: Little Miss Whatever

Our town seems to have an endless supply of little girls in tiaras riding in horse drawn carriages. It’s weird, I’ve lived here for almost six years and I have yet to stumble upon one of these beauty pageants in progress, but based on how many winners we have, they must have at least one per week.

Memorial Day 2008: Neigh!

I wonder if the horses have any idea what all the fuss is about?

Afterward the parades, we drove around in the convertible for the remainder of the day. Actually, we drove around until my forehead turned bright red. I’m feeling it right now. Ouch.

In the end, if I omit $49.18 fill-up on the car, we didn’t spend a dime on Memorial Day this year, but we still did a lot of enjoyable things.

And now it’s time to finish off the day perfectly — watching game two of the Stanley Cup finals. Go Penguins!

Memorial Day 2008: Game Two of the Stanley Cup Finals between the Detroit Red Wings and the Pittsburgh Penguins.

Can You Dig It?

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