Finance

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I was thinking that I should probably post my financial goal for 2007.  Sure, we’re well into the calendar year now, but it’s not to late to set a goal for the year.

It’s been a long journey since I decided I’d had enough of debt. Sometimes I wish I’d logged it all better so as to pick up more momentum just from looking at the results.  It’s all in there in my Microsoft Money file, and I can tell you, once you decide to change your ways, there really is a snowball effect.

To think, no long ago, I was shelling out over $400/month in finance charges to credit card companies. 

That’s over $10/day… for nothing!?  Nothing?!   Never again.

So, my goal for 2007 is to raise my net worth, not including the mortgage or house, to $100k.  It’s not a very ambitious goal, but we’ve got some expensive home improvement projects coming this summer and likely our first child on the horizon in 2008 as well.

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The digits for January 2007 are on the right. As of the numbers on April 15, I’m 31% of the way there having increased the net worth $15375.

By January 2008, I hope to have the credit cards hovering around the $300 level and ‘other’ loans (currently a home improvement loan at 15.5%?!  Ouch!) at $0. I’ll keep paying the auto loans regularly as the interest rate is so low (less than I’m currently making in an ING Direct account), there really isn’t any advantage in paying them early.  If all goes as planned, the additional home improvement will be paid out of pocket for the most part and contributions to savings and the 401k should increase as the debt disappears.

Something I thought I should mention — I’m afraid some readers might look at these numbers and finance posts as “bragging”.  Far from it.  I know we’re doing alright, better than a lot of households across the fruited plain, but at the same time, I’m also aware of the fact that $1 million dollars is within grasp of nearly every resident in the country, regardless of income.  I’d bet everyone reading this has a neighbor that has over a million in the bank somewhere.  I’m not there yet, not even close, but I’ll get there, and logging it all down along the way will help keep me focused.  Then, maybe then, I’ll have a number worth bragging about.

Point being, these are not high numbers in the grand scheme of things, and I’m not looking to brag.  I’m looking to show how easy it is to accumulate wealth — if you’re willing to put in the effort.

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Headlines all over the place are touting yesterday’s surge that put the DJIA over 13,000. And then, just a few lines into the articles, every one of them taken from the AP wire, they drop the line, “But appearances can be deceiving, and there may be more reason to worry than rejoice about Wall Street’s latest accomplishment.”

I disagree. While it is odd that it’s taken less than 7 months to go from 12k to 13k (it took like 7 years to go from 11k to 12k), I don’t think it’s realistic to call this a repeat of the dot com era.

Last night, CNBC was essentially calling this bittersweet, dropping in references to the rising energy costs (I still think gas is very affordable), the slumping housing market (it’s not slumping, people are just overpricing their homes), and the sub-prime mortgage issues in the news lately. On those, hey, if you fell for a 5-1 ARM mortgage, it’s not like you didn’t see the day coming when the rate would go up. You gambled and you lost. I like to think the number of people out there with this problem are greatly exaggerated in the media.

I’m also not one to get excited because the Dow hit a nice round number. Honestly, 13k is no more exciting than 12.5k for me. I love how they drop stats like it was the “35th record close since the start of October.” Talk about meaningless filler!? Did you know I just reached a new record for breaths taken since birth? Yep, I just raised it again. One more. And again.

Don’t get me wrong, any day that has a 1% gain is huge — my net worth for next month, should the pattern hold steady, will show that. The number 13k, though, is meaningless. Love it — a meaningless headline.

My real point though is that this is *nothing* like the dot com era. I made a lot of money before it came tumbling down, but I lost my shirt on stocks like Pets.com (what was I thinking?). The past 6 months or so of gains haven’t come from the Amazons, Googles, or Yahoos. It’s been the staples, Boeing, Pepsi, Corning, etc… That’s a big difference. Those aren’t volatile stocks.

And this talk of the economy tanking just doesn’t hold any weight in my wallet. Things are cruising along just fine. And no, the price of gas hasn’t changed the way I live my life. Not one bit.

Neither has this latest milestone.

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April 2007 Financial Specs

Nearly three years into this, I’m starting to actually see the light at the end of the tunnel of debt I managed to find myself in. It’s funny, once you change your whole outlook on money and finances and the ball gets rolling — and you keep track of the progress — it starts to become, well, almost exciting and fun at the same time. Maybe it’s just me…

One million dollars is actually a very easy, not to mention realistic, amount to reach for nearly anyone. Income doesn’t really matter so much, and I’m aware that I won’t be able to retire early on it or anything, but for now, it’s a goal. A reachable goal. One I don’t think I’ll get bored with and abandon in a couple of years. When I hit it, I’ll raise the bar.

While I’m still tanking on the Assets side of things, over the past month I managed to put a pretty large ding in the debt I’ve been carrying. Being that this is the first mention of my finances, it’s basically been like this for the better part of three years — so when it’s coming down in $6k increments and there’s only around $21k total in non-Mortgage debt, well, it’s almost time to celebrate the first leg of the climb and prepare for the next climb to $1,000,000.

For explanation sake, since this is my first financial update, I don’t include the house as an Asset. Mostly because it’s too much of a pain to figure out what it’s actually worth on a month by month basis, and even if I were comparing it to local real estate sales, it’s really a hit or miss guesstimate. The actual mortgage, however, is something that’s easy to track, so I include it as a liability.

For the total Net Worth though, I omit the mortgage from the calculation, as technically the Asset of the house should theoretically cancel out the mortgage and then some. Make sense? I hope so.

Hopefully, a few more months from now I won’t be so cash poor.

Can You Dig It?

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