Paying Debts is Easier than Building Wealth

That’s been my experience, anyway…

The following is a modified net worth chart that only includes my checking account, my savings accounts, my credit cards, my auto loans, and any other debts that I’ve carried besides the mortgage dating back to July 1, 2007.

Really, this is my “actual” net worth not including all of the stuff that I have little or no control over.

The 401k isn’t included, the equity in the house isn’t included, the value of my cars aren’t included — I’m not even including the value of my private plane!

In essence, if I had to get my hands on some money on a moment’s notice, this is what I have to draw from.

So, at the end of July in 2007, I was around $22k in the red and it took me 12 months to break out of the red in July of 2008 when I finally had more available in my “pocket” than I owed on my debts.

Twelve months to erase $22k in debt is pretty impressive.

That’s averaging over $1800 per month.

But that number is slightly skewed as I barely made any progress for three or four of those months so I’m going to go all 10th grade geometry on you and drop in a slope line.

See that?

If everything had stayed on track after I broke out of the red, my wealth should be growing at an alarming rate.

I mean, it literally should have been “off the chart” back in December 2008.

That didn’t happen.

I continued on the right course, I just leveled off…

Take a look at the slope of my wealth building:

Sure, it’s still not bad but…it certainly isn’t “off the chart” either.

(By the way — these charts looked a lot cooler in my head… Hey, at least they’re better than the last time I worked slope into a post.)

So why is this?

I think it’s because I had a hard target to meet while paying down the debt. The goal was a balance of $0 and I did everything I could to hit that target.

Once the target was met, yeah, I tried to keep the ball rolling but I didn’t really have a set goal.

And I still don’t — and coming out and saying something like, “Yeah, I think I’m gonna shoot for $25k ASAP” just doesn’t work.

It’s too fuzzy.

Maybe that’s just me.

Anyway, I’m not really sure what to do about it (though tracking my expenses will surely help), I just thought it was interesting how my pace leveled off just as I found myself in the black (or green).

Coincidence?

I doubt it.

Posted on April 29th, 2009 at 6:30 pm by Brainy Smurf
Finance | 3 Comments »

Spending Report for April 2009

Last month I proclaimed that I would keep my expenses for the month of April under $2500.

I should have been more specific but, even still, I’m happy to report that my expenses for the month totalled exactly $2500.00.

I’ve put my wallet away until Friday so this is where the number will stay.

Here’s the breakdown for the month April:

• $1653.90 : Mortgage
• $153.59 : Natural Gas
• $124.01 : Business Expenses
• $112.91 : Electricity
• $109.26 : Cable/Internet
• $99.99 : Frivolous eBay Purchase
• $66.05 : Phone
• $66.04 : Gas
• $47.67 : Smurf Dolls
• $40.00 : Cash
• $26.58 : Grateful Dead T-Shirt

So, after just three months of paying attention to my spending, I’ve taken my expenses (that were previously an unknown grey area) from $4133 all the way down to $2500.

That’s a difference of over $1600!

Basically, I was blowing $400 per week on non-essentials… and thought I was doing a great job.

And really, even this month, I *still* managed to “blow” roughly $175 on Smurf dolls, some eBay junk, and a tie dye t-shirt.

That means that there’s still room for improvement…

Posted on April 29th, 2009 at 10:26 am by Brainy Smurf
Finance, Spending Report, Success | 10 Comments »

Cows are Delicious.

Every now and then while at work, I have to hop onto the internet to “look something up”.

Seriously, I’m not making this stuff up. It really is part of my job.

So, today, I happened across a website — the one I was looking for, actually — and was horrified by what I saw.

Here’s the link.

Check out their “featured” products at the bottom.

Don’t be fooled by the little link to the shoe-shining machine… (Besides, do people even have their shoes shined anymore? Seriously…)

Plain and simple, and I don’t care how they sugarcoat it, they manufacture torture equipment.

They even have video?!

More frightening, the company isn’t that far from my house…

Yeah, that’s right… There’s actually company not far from my house that boasts a product line with items with names like “Spinal Cord Remover” and “Kill Floor Robot”.

Yikes!

Now before anyone goes all anti-PETA on me, I think there’s something that I should clear up.

I’m a meatatarian.

No doubt about it, cows are delicious.

See, I’m fully aware that all of my favorite foods come from animals with cute furry faces.
I know that.

But after watching a couple of the videos, well, honestly, it made me feel sick to my stomach.

There… I’ve given you fair warning.

Really…

Don’t watch the product videos.

For the record, I’m still having a 100% beef hot dog for dinner tonight. Maybe I’ll even eat two.

- – - – - – - – - – - – - -
Pants in a Can Bovine Factoid:
The eighth annual Strolling of the Heifers parade in Brattleboro, Vermont is fast approaching! This year it will be held on Saturday, June 6. That’s barely more than a month away!!!

My complete recap of last year’s, ahem, “Cow Parade” can be re-read (assuming that you read it the first time) here.

Posted on April 23rd, 2009 at 6:00 pm by Brainy Smurf
Food | 2 Comments »

I-Bonds are a Decent Investment again, right?

I’m never really certain.

Back in 2005 I started making monthly I-Bond purchases, you know, under the impression that I was making a low risk but profitable financial move.

The routine lasted for over two years before I realized that the returns were terrible.

Now, though, I look at the little bit that I still have stashed there and it’s currently earning 3 to 4 times as much as the much larger pile of money that I have tucked away in an ING savings account.

So now, 4 years after the fact, they’re looking like a great investment. It’s almost a shame that I have so little in there…

So, this morning, I find myself with an extra $350 burning a hole in my pocket (a pleasant occurrance — due entirely to an increased effort to cut my spending — Thanks DD!) and I think I’ve decided that I-Bonds are the place to go…

Sure, the fixed rate for anything I purchase before April 30 is only 0.7% — currently half that of ING — but with the wacky variable rate that the government resets twice per year added to the equation, the rate is actually 5.64% for, at the minimum, the next 6 months. Read about it here.

The only downsides, that I’m aware of, are that I can’t get at the money for at least one year and if I cash out before the 5-year mark, I lose a couple of months worth of interest as a penalty.

Thing is, we’re only talking about $350 here.

Let’s be realistic… I can certainly survive a year without it and if I cash out before the 5-year mark, well, the lost interest is negligible.

And do you wanna know what’s really sad?

The biggest reason I’ve leaning this route this so that my I-Bond balance is 4-figures in the next net worth update, you know, to make that row look a little bit meatier…

And I can honestly admit to the fact that I’m utterly confused as to how the interest rates are calculated — even having “invested” in them for nearly 5 years now…

I figure that it’s better that I do this with the money instead, I dunno, of going hunting for something silly (yet expensive) on eBay…

The alternate plan tossed around (very briefly) was to buy some Ford and General Electric stock but I just don’t feel like $350 is enough to even bother with — especially with the associated fees involved…

I think I’ll just wait until I have $1k burning a hole in my pocket for that sort of thing…

- – - – - – - – - -

Pants in a Can Factoid:
An I-Bond is an inflation-indexed savings bond available for purchase from the US Treasury Department.

They have a fixed rate of return plus an inflation premium. The fixed rate and the inflation premium are adjusted every May and November by the Treasury Department but the fixed rate assigned when you buy the bond is good for as long as you hold it.

In my case, the .7% will be fixed for as long as I keep it. The inflation premium rate, however, will reset next month but I will continue to receive the initial inflation premium for the next six months and then it will reset to the rate that is to be determined next month. (See — this is the part where it gets kinda messy.)

The inflation premium, in theory, ensures that you don’t lose the purchasing power of your investment over time.

Still not making sense? Click here for all of the details!

Posted on April 19th, 2009 at 10:29 am by Brainy Smurf
Finance, I-Bonds | 4 Comments »

Photo of the Week: Squirrel…it’s what’s for dinner…

It’s almost wrong of me to continue a series of posts called “photo of the week” when I haven’t actually posted one since early February…

But this occurrence, a homicide of sorts, right in my back yard, was too much to ignore…

When I arrived home from work last night — the first warm evening of the year — I spent some time out in the garage preparing the BMW for it’s first car wash of the season.

It’s been in storage all winter.

As I backed the car out of the garage, I couldn’t help but notice the number of crows in the trees above causing a commotion.

Looking up, there were certainly a lot of angry birds milling around and thought it was a bit unusual, strange enough that I even walked around the entire garage trying to figure out what the big deal was…

And then I saw it… standing on top of a telephone pole.

That’s no robin!

I went inside to get the camera (to take all of these pictures).

By the time I returned, a dog-walking neighbor had stopped to admire the bird. He called it a hawk.

Another neighbor, joining the crowd (yeah, this is probably the most exciting thing to happen on our street in well over a year), thought it was a falcon.

I just thought it was a big bird — and not the yellow variety.

Seriously, does anyone out there know what kind of bird this actually is?

So we’re all just standing there as the crows dive bomb this magnificent bird on the telephone pole until we finally lose interest.

My wife and I get in the car, put the top down, and drive away.

When we return, maybe 45 minutes later, the crowd of neighbors is gone. The cawing crows are all gone too. Things seem pretty quiet — back to normal.

And then I see that our bird friend just so happens to be peacefully eating dinner — a poor squirrel — right in the center of my backyard…almost exactly where that giant mushroom grew last year.

I won’t describe everything in detail, a picture is worth a thousand words, so here are some of the more interesting ones…

I think I’ve been spotted… Thankfully, I’m a lot larger than a squirrel. But really, if this bird wanted a piece of me, I’m pretty sure he could get one.

Mmm… that meat looks about as well cooked as a burger from Chili’s.

For this next one, I’m just taking full advantage of having loads of professional equipment…

Best of all, when he was finished, the bird cleaned his plate.

I won’t even have to pick up a carcass before I mow the lawn (possibly this weekend)!

Posted on April 18th, 2009 at 8:39 am by Brainy Smurf
Photo | 2 Comments »

Success on the Scale

Way back in September, I mentioned that the Biggest Loser was a guilty pleasure of mine.

I’d originally become hooked to the show due to a pseudo celebrity crush that I had on one of the contestants — but that was three seasons ago and I’m still watching it each and every Tuesday night.

Now I’ve never been very heavy — never even hit the 200 lb mark — so I can’t really claim to be able to relate to the contestant’s demons but, thinking about it now, it’s almost funny how I became a fan of the show just as my own waistline was swelling right before my eyes.

Five “new” inches on my waist and an extra 50 or so pounds.

In the span of a year…

Yeah, I was well on my way to becoming a potential contestant…

The good news, though, is that so far in 2009, I’ve dropped nearly half of that extra weight.

No, it wasn’t a new year’s resolution.

And, no, it’s not because I’m exercising or eating right.

Please… that’s not my style.

I’ve lost the weight just by going to work everyday.

Yep, I lose weight and get paid pretty handsomely to do it. It’s as simple as that.

Could it get any better?

Actually, yes.

The weight loss is entirely due to stress…with a pinch of unhappiness too.

I haven’t been able to pinpoint exactly what it is at work that’s suddenly (and for the past five months) taking its toll on me — no, it’s NOT the economy — but if the side effect is getting my “stick” figure back, well, I guess I shouldn’t complain…

Posted on April 16th, 2009 at 7:57 pm by Brainy Smurf
Health, Life | No Comments »

Pants in a Can turns Two!

Wierd that it falls on April 15. Total coincidence, though…

It’s amazing how much things can change in the short span of two years, not just from a financial aspect, but all-around.

For now, though, I’m going to stick with the financial stuff.

When I started, I had $7215 in credit card debt, owed $4014 on a high interest personal loan, and I still had $9700 to pay down on one of my cars.

Total non-mortgage debt was $20929.

Though I said then that I could see the light at the end of the tunnel of debt, now, I can’t fathom how I was so comfortable with my finances.

My head was apparently in the clouds…and had been for quite some time.

Just a few months later, though, my credit card debt alone would swell to over $20k.

Talk about moving in the wrong direction…

But this site kept me in line. Just posting the numbers each month, even if no one was reading them, forced me to hold myself accountable so I kept at it…

Amazingly, at the one year mark, I was well on my way to being 100% non-mortgage debt free and proclaimed that by this anniversary/birthday, I would be.

Guess what?

I am.

Let’s hope that year three brings even more success.

And that I continue to feel shame everytime I overspend on something silly…

Posted on April 15th, 2009 at 6:05 pm by Brainy Smurf
Blogging?, Success | 4 Comments »

Banking on Cord Blood?

As we’ve come to learn, when you’re having a baby, you seem to get a lot more junk mail than usual.

The number of individual diapers and/or canisters of Similac that have come in the mail over the past few months is just crazy…

Of late, as the big day grows closer, we’ve been receiving countless glossy inserts in the mail heralding cord blood.

More specifically, “banking” umbilical cord blood.

For those that don’t have a pregnancy in the family (or haven’t in the past decade), the idea is that blood collected from the umbilical cord shortly after birth can cure diseases that may come up in your child’s earlier years so, in marketing-speak, it’s in your best interest to “bank” it for the future.

A surprising number of companies, at least ten, offer this seemingly sci-fi service and they’re all vying for my business.

The pitch is always the same.

They use guilt to sell their product.

It’s pretty creepy actually…

The most recent, which arrived yesterday, is from a company called ViaCord.

The photo on the front is of a baby on the floor where an electrical outlet “should” be. In the picture, the outlet is about 6 feet up on the wall with the caption, “Protect baby. That’s what mommas do.”

One sec, I’ll scan it…

Okay, fair enough.

It’s kind of creative, I’ll give them that, and certainly more appealing to the eye than, say, an umbilical cord oozing blood or something.

Inside the fold, they claim that saving your baby’s cord blood is something “you’ve just got to do.”

Bluntly, all of the advertisements sugarcoat the exact same message, “If you don’t do this, your baby will DIE!” followed by an evil laugh.

In their words, it protects your baby (and apparently other family members too) from “over 70 diseases like Leukemia.”

Forgive my ignorance but I had no idea that there were 70 diseases like Leukemia.

I’m pretty sure that’s not how they meant it to be interpreted. Or maybe that was their plan.

Maybe there actually are 70 diseases just like Leukemia? I just don’t know…

The text continues, “In addition, cord blood is emerging as a treatment option for Type I Diabetes and Cerebral Palsy.”

“Your baby’s cord blood is priceless.”

Hmmmmm… funny that they don’t list what they’ll charge you to harvest it and then bank it…

I guess the real way to think about it is as insurance — a new-age kind of health insurance, of sorts.

I’m still not sold on it.

Neither is my wife so it’s very unlikely that we’ll invest in it when the big day arrives in a matter of weeks.

Furthering my confidence in our decision is the fine print:

The odds that a family member without a defined risk will need to use their child’s cord blood are low. There is no guarantee that the cord blood will be a match for a family member or will provide a cure. Autologous cord blood stem cells will not guarantee suitable treatment for all inherited genetic diseases.

Um… so why would I pay hundreds (or even thousands) of dollars to do this?

It costs money but doesn’t guarantee anything…

Seems a little like snake oil to me…

(Or insurance, frankly… The kind that doesn’t actually cover anything.)

Posted on April 14th, 2009 at 7:44 pm by Brainy Smurf
Finance, Insurance, Smurfling | 3 Comments »

You Lost Me at $21k…

When I first came across a personal finance blog, which happened to be Jonathan’s My Money Blog, just over two years ago, my most anticipated post was the one that comes at the beginning of each month — the net worth update.

At the time, I was in 20-something thousand dollars in credit card debt and seeing updates like his — how his finances were on the up-and-up each and every month — really inspired me not only to start Pants in a Can but to get my own finances in order and start really keeping track of not only of my finances but my progress too…

I also felt that I could relate to his situation (and many others too) as it seemed that we were all in the same boat. A decent income, a nice retirement plan already in place, and some HUGE debts.

It got to the point where I started to think, hey, if so-and-so can knock down $XXX off of their credit card balances each month, why can’t I?

Just weeks later, I was doing the exact same thing — following their lead — and it took less than two years to wipe all of my debts off of the table. It was an awesome exercise.

Another blogger’s net worth that I’ve followed pretty closely for the past couple of years is Flexo’s over at Consumerism Commentary.

He’s been doing the net worth updates since 2003 and really started from scratch with a net worth bouncing around the $20k mark for the first few months.

That has to be pretty relatable for those just starting out.

His whole journey of building wealth from that $20k mark has been really amazing — each month he just kept plugging away.

It’s also been quite motivational, giving me the feeling that, hey, I can do that too…

Until recently…

You lost me at $21k…

See, Flexo’s last two monthly updates have listed “other income” of over $21k for each month. That’s in addition to his salary.

Yes, in February and March, he brought in over $42k of “extra” cash.

Our net worths aren’t that far apart but I’m not even close to having made even half of that this entire year — including my salary.

I can’t relate.

Now I’m not knocking Flexo’s site or even his success — it’s downright amazing and I’d like to shake his hand — I’m just saying that I can’t “personally” relate to his situation anymore and I’d bet that that’s the case for a lot of readers out there.

I mean, I’ve had a few great months here and there where I’ve brought in over $10k in the span of a month but… $21k consecutively? In a down economy? (I can’t believe I just said that…)

He’s doing something right, that’s for sure.

It just doesn’t feel like it falls under “Personal” anymore. More like, “Small Business” or something…

I dunno, maybe it’s just me.

Posted on April 12th, 2009 at 9:38 am by Brainy Smurf
Finance, Motivation, Success | 10 Comments »

Stereotypes in the Parking Lot… And Christopher Lowell too!

It’s crazy how nice people can be — even if it’s phony.

My wife just happens to be 8-months pregnant right now and I know how you hear about how all kinds of people will come up to you and want to touch your tummy and stuff but, seeing as I’m not the one with the huge protruding belly button, I hadn’t really experienced much of that first hand.

Until last week.

It was Sunday morning and we were on our way to Toys ‘R’ Us to search for, you guessed it, Smurf dolls.

The store closest to home let us down, as it often does, so we were driving across the state to check out the next closest location.

On the way, passing through a town with a much different demographic than any town I’ve ever lived in, at 70 miles per hour, we saw a Burlington Coat Factory.

It looked kinda ghetto but that didn’t matter…

I like Burlington Coat Factory.

We stopped.

I’ve never bought any clothing there, never even tried anything on but they always have that huge section of good quality towels, curtains, sheets, and crap that you could pay twice as much for if you went to a place like Bed, Bath, and Beyond.

That, and going into a Burlington Coat Factory always gives me the opportunity to do my Christoper Lowell impression which makes me crack myself up every single time…

Speaking of Christopher Lowell… What ever happened to that guy? He used to be on television all the time…

If you’re lost as to why I do a Christopher Lowell impression (funny on its own — trust me) at Burlington Coat Factory, it’s because he has a product line available there and, years ago, it wasn’t uncommon to run into a life-size cardboard cutout of him in the decorative pillow aisle.

I’m giving myself the giggles right now just thinking about it…

Anyway, also of interest, especially now, at Burlington Coat Factory is their extensive baby section. It’s not any cheaper than the regular stores and, for the most part, they have all of the same brands that all of the other stores have. The biggest difference is the selection. Burlington Coat Factory has it all.

So we pulled into the pitted and potholed parking lot.

There weren’t many cars there but a woman had pulled into a parking spot just before us and was headed towards the door.

She was a heavy-set black woman. She had her hair all done up and bling to the max draped across her chest — perhaps in case she encountered one Mr. Christopher Lowell, though, I’m pretty sure he’s not really into the ladies…

She had lose fake 4-inch nails on and some super high heels on too, I dunno, I guess to make her appear slimmer. It wasn’t working. Basically, she looked a little like Mary J. Blige, except 100 pounds or so heavier.

She even had the diva strut and attitude to match.

Realistically, based on first impression, I think I could safely say that we had pretty much nothing in common — besides being in a Burlington Coat Factory mood on a Sunday morning.

Anyway, with that on my mind (not really, at the time she was just the lady in front of us with the huge butt swinging from side to side), we followed her to the interior airlock door (you know, in that space where they keep the shopping carts. I suppose it’s like a mudroom for big box stores), which she tugged.

It didn’t open. She tugged again.

In an accent that I suppose can be considered local, but isn’t a dialect that I would ever use, she openly questioned what time it was.

Being that we were the only other people in the room (airlock?), we assumed that she was asking us. Maybe she was just being loud.

She was pissed — you could tell. She even did that head thing — it was classic.

(Really, I could have put a check mark next to every single stereotype out there — she fit the bill on all of them.)

My wife began to dig through her purse for her phone (neither of us wear a watch) and it turned out that we were all there a good half hour before they would be open. Sigh…

Dejected, we turned around, all three of us, and headed back to the car which was parked one space away from her car — a mid 90′s sedan.

Totally expecting to walk back to the car in silence and continue our planned trip to the toy store, the woman said to my wife, “You look so beautiful and healthy, when are you due?”

Wow — well, that came out of no where…

We shot the breeze on stuff like that for maybe 15 seconds on the way back to the cars.

It wasn’t a long conversation.

It wasn’t very detailed either, just a bunch of fluff (thankfully she never got the chance to start listing off names that we should think about), but even if the entire conversation weren’t really genuine, that woman in the Burlington Coat Factory parking lot went out of her way to be nice to complete strangers.

So much for stereotypes…

As we got into our cars, she smiled at us, lipstick on her teeth and all, and wished us luck. That was really cool of her.

Somehow, though, I think all it was due to my wife looking so bloated.

That’s too bad.

Posted on April 11th, 2009 at 6:41 am by Brainy Smurf
Life, Smurfling | 3 Comments »

Welcome Back!

Yep, that’s right, I’m welcoming myself back.

I feel like I’ve been on vacation except that I haven’t…

Anyway, I’m a few days late with this but remember how I mentioned that I’d tossed in $5 to be included in on of those March Madness bracket things?

While I may not have finished “in the money”, I’m quite proud of where I landed — out of 60 participants, I finished in 7th place — considering my chosen method of selecting who would win each game throughout the tournament.

For the early rounds, I picked teams that I had t-shirts for.

Yep, it’s true — it was as simple as that.

So that cheap ($7.50) Michigan State t-shirt that I bought on a whim at a Steve & Barry’s in, I’d guess, Michigan almost paid for itself 40 times over.

It’s actually too bad that I let my personal feelings towards the University of Connecticut men’s basketball team get in the way.

I have a UConn t-shirt in closet too. Had I chosen them to go further in the tournament (they reached the Final Four), I’d have won the whole darn pool…

Don’t worry Steve & Barry’s… I won’t hold it against you.

It was my fault.

I really miss that store.

Even the smell.

Posted on April 10th, 2009 at 8:01 pm by Brainy Smurf
Bargains, Current Events, Sports | No Comments »

PIAC Update

I’ve never been a fan of how some bloggers come on and blab about themselves with all kinds of self-importance, or whatever, as if their readers really care about where they went or what they’re up to but here I go…

Regarding the complete lack of posts this past week… I’ve just been really busy.

It’s that simple.

And my finances have been rather flat over the past week too but, no worries, I should be back to moaning about them before week’s end.

So if you’re one of those out there that’s eagerly anticipating every one of my typed words, yes, all five of you… hang tight.

I kid… No, really, I truly appreciate every reader. I do.

But ya wanna know what’s really peculiar? (and a bit discouraging, actually…)

My traffic has actually increased over this past week…

Go figure?

Maybe I shouldn’t post…

Posted on April 8th, 2009 at 11:25 pm by Brainy Smurf
Blogging? | 3 Comments »