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 »

Flashback: $28k+ Credit Card Debt Eliminated

One year ago today, following a $508.13 payment, I posed that I’d eliminated $28000+ worth of credit card debt.

I even included a neat little graph to show how awesome my progress was.

That’s right — I said “awesome”.

In a four month span, I absolutely destroyed over $13k in debt. That was awesome.

(In reality, it was just a ton of momentum… Once I saw the debts falling, things started moving faster than I ever could have imagined…)

The good news is that my total credit card debt is still $0.

The bad news is that I don’t feel like I’ve progressed very much since then…

Sure, I paid off my auto loan in full (no car payments! woo-hoo!), I knocked nearly 10% of my mortgage balance out, I finally secured conventional homeowners insurance, and I somehow even managed to grow my savings account to 5-figures but for whatever reason, I dunno, I thought that once the credit cards were under control, I guess I thought I’d have, oh, say, a couple grand each month to spend on whatever I fancied.

It hasn’t worked out that way.

I wonder if that’ll kick in when I polish off the mortgage? Hmmmmm…

Either way, that’s still a long way off…

- – - – - – - – - – - – - -

Fun PIAC Financial Factoid: Sure, the past week has been pretty kind to everyone’s investments but even without the recent uptick in the markets, my investments have done better in 2009 than they did for the same time period in 2008. Crazy, huh?

From January 1 through March 22, my investments were down $1098.85 in 2008.
This year, not even including this week’s gains, from January 1 through March 22, they were only down $120.40.

Perhaps that says something about my personal investment strategy but I still think it’s clear that things aren’t nearly as bad as they might seem.

Posted on March 27th, 2009 at 6:37 am by Brainy Smurf
Credit Card, Finance, Success | 3 Comments »

A Big Sigh of Relief…

Valentine’s day is over and I survived…

No, I’m just kidding… (I did survive, though…)

I’m actually breathing easier these days because I’m pretty confident that the dark cloud that I used to call homeowner’s insurance has finally blown over.

After 5 long years…

Yep, it’s officially been three months now with the new carrier — a conventional one, not a bottom-of-the-barrel State run one — and I haven’t been treated like a piece of crap or cancelled for no apparent reason yet.

This is a good thing. It’s new for me.

And, best of all, I’m actually covered should anything happen.

At least, I think I am…

Posted on February 15th, 2009 at 8:10 am by Brainy Smurf
Insurance, Success | No Comments »

Reviewing 2008′s Financial Goals

Well, 2008 is all but over so how’d you do?

I did pretty well on my goals for 2008. I mean, I certainly can’t complain.

In order of completion, I managed to increase my 401k contributions to 15% of my income, I eliminated all of my credit card debt, I paid down enough principle on my mortgage to have PMI removed (though it never actually happened), and I paid off all of my auto loans.

That’s a pretty decent set of achievements and I’m proud of every single one of them!

But there were a couple more goals on my list…

One, that I considered lofty, was to have $10k in savings.

Here, on the last day of the year, I’m finding myself in a bit of a grey area. I don’t feel that I accomplished the goal but by a technicality (my paycheck was deposited today instead of tomorrow because of the holiday), I actually have $10k at my disposal.

Just saying that blows my mind but, honestly, it doesn’t feel real.

And it isn’t all in my savings account right this minute, but it could be, so that goal was pseudo accomplished as well.

The final goal was to increase my passive income. That was a wishy-washy goal from the get-go and though my “side income” decreased by over $13k this past year, I managed to increase my 100% passive income… by just $63 over the entire year.

Hey, it’s better than nothing, right? It’s not like I “worked” for it…

So, with that, I can’t say that I accomplished all of my goals, but I think I took care of the big ones.

Hopefully 2009 goes even better — though my goals for the coming year are far less specific.

Posted on December 31st, 2008 at 1:14 pm by Brainy Smurf
2008 Goals, 401k, Credit Card, Finance, Mortgage, Savings, Success | 4 Comments »

Keeping Up with the Jones’

I don’t like to think of myself as someone who does this sort of thing, but I must admit, I’ve been in a pretty active “lawn-care” competition with the people across the street for a few years now.

Sadly, I’ve been “pwned” in the green lawn department. I just haven’t been able to recover from the damage left by the contractors and it’s driven me crazy.

But I totally destroyed them in the leaf raking department. This year, they tried the mow and mulch method. It was disastrous for them. I’ve tried that method in the past too with limited success… Not sure *what* they were thinking…

In the meantime, we blew all of our leaves into a HUGE pile and had them picked up by a lawn care service. We’re done. They’re not.

So for 2008, I guess we’ll have to call it a draw so far.

In a few more weeks, though, we’ll be right back out on the field, snow shovels in hand, jockeying to have the best cleared driveway…

Of course, all of these actions are more time-oriented rather than finance-oriented…

The reason I bring up “keeping up with the Jones’” today, other than to continue the “Jones” theme I’ve got going this week, is because one of my ‘friends’ on Facebook recently posted some photos of his new house.

He’s a few years younger than I am, living in a more expensive area (Boston — where you can spend twice what I spend on the mortgage to rent a place half the size), he was recently married in a lavish ceremony, and he’s also fresh out of school — he took a number of years off to, um, find himself or something… It involved a lot of skiing — if that means anything.

Anyway, here is the entry way to his “new” house:

I know, it looks more like the kitchen to me too… What’s with the green monolith in the middle of the room? Maybe it’s an apartment… I dunno.

But regardless, it looks pretty nice. Pretty nice…

Especially when you compare it to my entry way — and being that I know this guy relatively well (my rule on Facebook is that if I don’t know you well enough to remember your middle name or the street address of your childhood home, you can’t be my friend) and that we grew up with essentially the same standard of living, I can’t help but compare my living situation to his and ask, “Where did I go wrong?”

But did I go wrong?

I’m not so sure.

No, I don’t know all of his “financial” details. I don’t know where he works. I don’t know what the rest of his house, err, apartment looks like. I don’t know if his new bride comes from money. Basically, there are a lot of things that I just don’t know.

At the same time, since I’m not willing to put my entry way photo on Facebook, he doesn’t know how crappy my house is, but he also doesn’t know that I own my cars, I have zero credit card debt, no student loans, and that my house is on schedule to be paid for in full within the next 6 years.

Perhaps I’m just not competition for him… But I can’t help but wonder, is he really ahead?

It might seem that way now, but looks can be deceiving…

I mean, I even own an airplane… That’s gotta be worth something?!

But seriously, I’d like to revisit my friendly competitive comparison in 2015 and see where we both stand… I have a very good feeling that our roles will be reversed.

I’m not keeping up with the Jones’ — I’m preparing to leapfrog right past them…

Posted on November 18th, 2008 at 7:30 pm by Brainy Smurf
Life, Success | 4 Comments »

Okay, a Little More on this Economic Mess…

Watching the presidential debate last night, responding to a question regarding the current economic situation, Barack Obama mentioned something about businesses not being able to make payroll because they aren’t able to borrow money.

I don’t know, where I come from, if you need to borrow money to pay your employees, well, you’re not running a very successful business.

It’s as simple as that.

Even in a booming economy, a business like that certainly can’t be classified as profitable.

Earlier, on the nightly news, they highlighted a “small-business” owner in Florida. Apparently, due to the credit crunch, he’s having to close his 13 tile and carpet stores and lay off 40 employees.

Fair enough, but do you think he’d be fine if, say, he’d only opened 5 stores to begin with? You know, and operate within his means?

It doesn’t take a rocket scientist to figure it out. It’s just like the folks that bought more house than they can afford.

They gambled and lost.

It happens.

Taking a risk or a leap of faith isn’t, well, it isn’t risk-free.

Hopefully the business owners out there who never overextended themselves will thrive in this “new” economy and find the fortune they’ve deserved all along.

And seriously, would it kill either candidate to actually answer a freakin’ question?

I was turned off by both…

Posted on October 8th, 2008 at 12:31 pm by Brainy Smurf
Current Events, Finance, Success | No Comments »

I’m in the Black, not just on Paper, but for Real!

I did it.

I’d claimed that I was going to finish off the car loan on a slow and steady pace but, this morning, I fell back into my old ways: Red Zone Finances.

It has been driving me crazy for a few weeks now seeing a $1k balance just sitting there waiting to be wiped out.

As today was a pay day, and there are no remaining bills for the remainder of the month, I had the funds available to take action.

This was the first car I purchased where I’d actually made a sizeable down payment. It was also the first car purchase that I had a car to trade-in too.

Even still, back in July of 2005, I financed $15210.32.

Wow — thinking about that now — Scion xA’s were/are really expensive…

But it feels good, you know, now that it’s paid for.

But it’s not just the auto loan that I can put in my rear view mirror…

The original snowball plan that I started back in November 2007, which had a total balance of $23085, and included the auto loan, can now be put to rest. All of it. Done.

I’ve had the “schedule” taped to my desk under my keyboard at work so as to keep it fresh in my mind five days a week.

This morning, I peeled it off and replaced it with a picture of my wife. She costs me *way* less money… And less worry too.

The original end date on my debt plan was set for October 2008. Two thousand dollars per month was going to go towards debt. I thought that was being a little too optimistic when I started, but I stuck to it.

Then, after a few months, I didn’t exactly stick to the plan…

I paid a few of the credit cards out of order…

I “broke up with” my highest paying client that was essentially funding the whole debt payment plan in the first place.

I started putting money into savings instead of towards debt…

I increased my 401k contributions when I couldn’t really afford to…

I even blew through tons of cash on vacation — and that was just a couple of months ago…

And who could forget all of the money that I foolishly threw at the mortgage (which was never even part of the snowball plan)? Yeah — that worked out well… Not.

But even though I strayed way off course, the concept of a year long debt plan got me pointed in the right direction, and look, here we are in September 2008 and I’ve already hit the target. A whole month early.

Okay, fine. A whole week early if you want to be technical about it… Sheesh…

Right now, Thursday evening, the only non-mortgage debt I’m carrying is an $824 balance at 0% on a Chase credit card. Yeah, the remaining balance from that ill advised birthday check I wrote to myself to further initiate the elimination of PMI from my mortgage. (more on that here)

But still… It feels good.

It’s like I’m coming out of the water or something. My top half is dry and warming up in the sun. That pig up in the top left hand corner of the screen, yeah, his snout is dry. Oink!

It blows my mind that, on short notice, I can get my grubby hands on over $5000 (checking, savings, and i-bonds) and the only money I owe is $824 total to a credit card company.

I’m not sure I’ve been on this side of the zero line before. Definitely not in the past 11 years.

I mean, I’m in the black, not just on paper, but for real.

That feels awesome.

I’m not sure I thought this day was even possible when I was carrying $32k in high interest debt on January 1, 2007…

Looking forward to when that $824 balance is gone too…

(Declining markets and home values of late aren’t bothering me in the slightest — neither affect my day-to-day, month-to-month, or even year-to-year finances… Sure, my net worth might be dropping like a brick, but my finances are in better shape than they’ve ever been!)

Posted on September 25th, 2008 at 5:47 pm by Brainy Smurf
Finance, Motivation, Success | 10 Comments »

Even a Soft-Cap Spending Limit can Pay Off

Last year I mentioned that I had a hobby — an expensive hobby.

I collect game worn hockey jerseys.

I sure some, actually MOST, are saying, “What? There’s a market for such a thing?” Amazingly, yes. And they’re expensive. Really expensive.

The “best” one in my collection right now would pull in nearly $10k at auction right now. Think about that. That’s crazy!

Back then I said that I’d spent well in excess of $75k on this hobby over the years. And though I never mentioned it, it was also about that time that I put a soft cap on my spending to try to curb the excessive amount of money I was throwing into it.

The limit was two hundred dollars per month. Hardly frugal, but most often times not enough to purchase anything that would interest me.

For a few months I went well over that spending limit, but I was always telling myself in the back of my head that $200 was the limit. Try not to go over $200. You can’t afford it.

It didn’t take long for me to start making deals with myself. Well, I’ll spend $350 now and then next month I won’t buy anything.

Of course, that didn’t work at all.

Something would peak my interest on eBay or in a memorabilia auction, often times less than a week later, and I’d plunk down another $750 for some dirty and torn polyester.

Still, it was progress. I was, in fact, spending less using this wishy-washy method.

Then as I saw my debts falling (and the credit card balances evaporate), I started to think, “Wow, in a few months, when I reach my goal and I’m totally debt free, I’ll be able to blow like $2k per month on hockey jerseys!”

That was in May.

May was also the last time that I purchased a jersey.

This is the first time since the summer of 1997 that I’ve gone an entire month (let alone TWO!) without acquiring anything.

Now, this shirt-less streak originally started because I was reminding myself of the reward (the $2k budget) at the end of the tunnel. That kept me from reaching for my wallet (and keeping tabs on what was on the market).

But now, since it’s been so long since I’ve been active in the buy/sell/trade world of the hobby, I’m finding that I don’t really miss it all that much.

That isn’t to say that I’m abandoning my collection or that I won’t still actively pursue certain jerseys that I’d like to acquire, but I’m no longer salivating over a sweet $2k/month budget either.

For my future finances, that’s a good thing.

And you know what? It’s a good thing for my collection too.

Posted on August 6th, 2008 at 8:22 am by Brainy Smurf
Cutting Costs, Finance, Hockey Jersey, Motivation, Success | No Comments »

I drove my BMW to work on Friday

Why is this a big deal? Well, it isn’t. Not to me, anyway.

But, right or wrong, it does have a profound effect on how I’m perceived by my co-workers and others that work in the same office building.

See, I haven’t taken this car to work since, hmmmm, probably sometime over the summer in 2005. And even then, it was for just one day.

But I’ve had the car for 9 years. That’s a long time.

People knew I had it back when I first bought it. I drove it, maybe twice a week, but then it disappeared from view. Rather…their view.

Though it was rare for someone to ask, “Hey, you still have that little convertible?”, it would happen on occasion — maybe once every six months.

I’d be honest and say, “Yep, it’s the elephant in the garage.”

But today, as I peered out my top floor window down at the lot to make sure no one parked “too close” (I’m paranoid of that sort of thing), I couldn’t help but notice people turning their heads in confusion as they walked through the lot…

That’s where Brainy parks… Someone must’ve taken his spot…

I caught one woman, who I don’t even know, take a picture of it with her phone… That was little weird — it’s not a Ferrari or anything…

But I can’t tell you how many people have made their way past my office today — many who I haven’t had a real non-work related conversation with in months — to say *something* about my car in the lot.

Some are as simple and innocent as, “Nice wheels” or “That must be fun to drive!” or “Does it have stinger missiles behind the headlights?”

Others are laced with jealousy, saying things like, “Must be nice to be born with a silver spoon in your mouth,” though they have no idea where I came from or of my background.

Still, others make stuff up like, “Yeah, my brother in-law’s friend’s cousin raced the M5 version with his bitchin’ Camaro and smoked it…” to put it down as if to boost themselves or something through an imaginary acquaintance.

And some are just plain obnoxious, “Wow you must get some nice tail driving that,” or “Trying to compensate for something?”

(Thankfully, there are select few at work that know the truth — that I worked really, really, really, really, really, really, really hard to be able to buy that car. But even they were shocked to see that I *still* had it.)

Comments like these are the main reason that I don’t drive this car to work. I don’t want the attention. I don’t particularly like the attention. Actually, complementary or rude, they all make me really uncomfortable. It’s embarrassing.

But I will say one thing — it’s refreshing to know that all it took was driving a different car to no longer be thought of as the guy who sports a “home haircut” and shops at Steve & Barry’s (and is willing to admit to both)!

Now to some, I’m Ricky Schroder.

To others, I’m the guy who’s “gay” because I prefer euro-cars over muscle cars.

And still, to some, I’m just the guy who has a car shaped like a penis.

But if I’m lucky, maybe one or two people will make the connection that yes, wearing $7.50 t-shirts and knock-off sneakers and working hard, five days a week, does have its perks…

Now to count down the two hours until 5:00 when I’ll drive away with the top down trying my best to look un-cool even though to some, now, as of today, I apparently am…

Another couple weeks, well, people will forget and my image will be back to being that “cheap” guy again…

Oh, and how come no one takes pictures of my daily driver? Sheesh, its book value is almost double that of the BMW…

Oh yeah, perception is a mysterious thing…

Posted on August 1st, 2008 at 3:02 pm by Brainy Smurf
Life, Success | 18 Comments »

An Entire Year of Doom-And-Gloom… or not.

For much of the day yesterday, the headline on CNBC’s website read, “Wall Street Hangs On As Credit Crisis Hits 1st Year”.

My first thought was, “Has it really been a year?”

I don’t really remember all of the non-stop doom and gloom reporting starting until well into the fall. Looking through the PIAC archives, I didn’t really make mention of a “credit crisis” until March of this year when I wished the Fed would stop screwing around with interest rates in a feeble attempt to control things that were never in their control anyway.

So, since it has apparently been an entire year, I thought I’d go back and reflect on how far I’ve come (or gone) since then. You know, with the economy in free fall, home prices dropping, and credit apparently impossible to acquire, how have things gone?

Back on July 31, 2007, we were in the midst of having $26k worth of work done on our house. In fact, I’d just written the check for the final payment on the project.

Heading into August, my net worth had dropped 12% for two consecutive months. Ouch.

Not exactly how you want to start off a recession… though no one was calling it that back then. Still, in hindsight, one would have assumed I was headed for disaster. It’s like I stumbled before I even reached the gate…

My credit card debt was riding high again hovering at $18,820 — some at a high interest rate. All of my debts combined totaled $147,627.

But things weren’t spiraling downward. Not to my knowledge, at least…

A few months passed, the media started talking up foreclosures, the “crisis” word was thrown around, and Jim Cramer went ape on the live television.

Later, the government would send me a check that I didn’t really need, a bank I’d never heard of would fail, and more people would lose their homes — a friend included (though they totally deserved it.)

So now, one year into this “mess”, my debts only total around $115k.

That’s down $32k from 12 months ago.

No, I didn’t even cheat by filing for bankruptcy or something. No government assistance either. No freebies at all — well, except that Stimulus Check, but I didn’t ASK for that…

I’m pretty proud of the pace that I’ve maintained…

And at this rate, I’ll take a credit crisis, recession, mortgage-meltdown, or whatever other name they have for it today any time.

Sure, my 401k has remained pretty stagnant for the past 12 months, but that’s long term stuff anyway. Doesn’t affect my day-to-day finances at all. Warren Buffet has long said that he doesn’t care about the next quarter — it’s the next 20 years that really count. I’ll have to agree with him on this one.

Work hard, stick to your guns, and don’t try to cheat the system. That’s what I did. That’s also what others in my situation (i.e. doing just fine) have done too.

By doing that, none of this mindless doom-and-gloom reporting has really mattered in the short run. If anything, it’s lining us up to be in an even better situation once things turn around…

If you’re interested, here’s the CNBC link to the story I took the headline from.

Posted on July 31st, 2008 at 7:42 am by Brainy Smurf
Current Events, Finance, Life, Motivation, Success | 1 Comment »

Debt Payment: Check | Savings: Um, Maybe Next Year…

I’ve just updated my side bar progress for my
2008 goals and so far, I’m well ahead of pace.

My financial goals added up to $30846 this year. To date, I’m right around $21k of the way there or just under 70%.

We’re just over the half way point of the year, so things should be looking great, right?

Well…

Starting at the top, I have finally conquered the credit card monster. I’ll never again approach my all time high of around $28k. I’m done with that forever and by “that”, I mean carrying a high interest balance.

Since paying it off in full, I’ve run up around over $1k every now and then, only to pay it off in full before the statement is issued.

Moving down to my savings goal, I dunno, lately I’m just having a hard time imagining this goal coming to fruition in the next 5 months. Simple math tells me that it can be done (at the rate of $2k per month).

That number seems crazy-high to me, but it’s right around the amount that I’ve been throwing towards debt for years now. With the debt gone (just around the corner), it shouldn’t be a problem but for some reason, I just can’t imagine throwing that kind of money towards savings on a monthly basis…

Ahhh, the PMI…

While I’ve reached the goal I set back in December, I can’t yet claim that I’ve eliminated PMI. It’s been an on-going process and I’m still sending additional money towards my mortgage to make it finally happen. (please?) So, while this goal may appear to have been completed, it continues to suck up a large portion of my monthly budget which would otherwise go elsewhere…

The last goal is my auto loan — listed last because it has *always* been the lowest priority.

That’s about to change though as I’ve already initiated a payment plan that will see it drop a minimum of $900 per month starting this week and being in my “Red Zone“, it will be done and over with by mid-September and possibly even sooner.

In the end, three out of four isn’t bad. I’ve mastered debt repayment already, but getting the hang of saving is still a work in progress…

Maybe next year…

(I know, I know… It’s only July…)

Posted on July 21st, 2008 at 10:16 am by Brainy Smurf
2008 Goals, Finance, Life, Savings, Success | 1 Comment »

Red Zone Finances

Sometimes I find myself going into a sort of “kill mode” when it comes to debt.

You know, when you stray from the steady payment plan and just recklessly throw every last penny at one specific balance…

Know what I’m talking about?

For me, that happens every time a balance falls below $4k. And when that happens, well, it’s game time.

I have quite a bit of experience at this sort of thing. Not something to be proud of, really… I mean, who wants to brag about having carried many, many, many $4k+ balances in recent years? (Me.)

But the one thing that it has is exposed is a debt repayment pattern of mine:

An old MBNA credit card’s balance fell to $3563 back in May of 2006 and two months later, it was gone.

My Bank of America credit card’s balance fell to $3267 in December of 2006. By January 2007, it was gone.

More recently, my Citi credit card balance was $4500 in December 2007. I wiped it out in January 2008. Wow.

And my last remaining credit card debt, the Chase account… Well, in February it had a balance of $3518. But by the April statement, it was holding steady at $0.

See what I mean?

But the last few months have been sort of ho-hum for me on the debt re-payment front. Things are moving, yes, but they’re not very exciting…

I thought I was making great strides in the past few weeks in my quest to eliminate PMI by knocking off an extra $6000 off of my mortgage balance over the year, only to find out that I need to knock off another $2500. And even that might not do it. Not happy about it.

But in the meantime, my auto loan balance has snuck through the $4k’s and now sits with a balance of $3986.

You know what that means?

Time for the red zone offense to take the field.

Yep, two months or less until Toyota mails me the title.

This is my red zone.

(Yeah, yeah… I know this is the wrong time of year to make football references… Go Bears!)

Posted on July 16th, 2008 at 7:43 am by Brainy Smurf
2008 Goals, Credit Card, Finance, Success | 8 Comments »