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| Wednesday, May 03, 2006 |
| Net Worth May 2006 |
I am very pleased with my progress this month. My investment accounts did well enough, but asset allocation needs to be worked on. I continue to make progress on my HSBC savings account - my home improvement fund. ING Direct is where my emergency fund resides and that is cruising along nicely. The great $25 ING referral link experiment is going well. I have a fresh batch of links listed.
Next month will be a tough one for my wallet. A planned vacation is expected to cost me. I will also be facing some large bills (car repair expenses and the investment condo tax bill). So I will enjoy the progress made this month and see what belt tightening can be accomplished to minimize the damage for next. |
| posted by Boston Gal @ 6:03 PM *
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| 7 Comments: |
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Wow, you do have an awful lot of cash. That $900 in the brokerage account looks really lonely, I think it needs some company!
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Another thought-- you have that mortgage on your first condo, and enough cash on hand to pay it off. Is the interest you're paying on the mortgage less than the interest the money is earning in a savings account? How would it affect your monthly outlay if you just paid off the mortgage? If the interest rate on the mortgage is quite low, maybe you're better off keeping it as is, but only if you are making more money with that cash by investing it. (Though with an investment property maybe there are other tax issues I'm not considering here...)
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Hi Madame X,
I know I need to do more investing. I am researching some funds and stocks now that I may purchase soon. We shall see...
About the condo mortgage - I have thought about paying it off. The two cash savings accounts have distinct purposes. The ING account (which has enough in it to pay off the condo mortgage) is my emergency fund. The amount is high, but this covers a protracted unemployment period (in my industry I have lived through long periods of unemployment before, so I am cautious) and also is a large enough amount to cover any unexpected costs for the rental. I would not be comfortable wiping that account out to pay off a mortgage.
The HSBC account is where I am saving for some upcoming home improvements. My house is a "fixer" and since purchasing it two years ago I have only done the minimum fixing. So I know I need to sink some money into the house - I am trying to save the cash for the projects instead of taking out a home equity line or otherwise adding to my debt burden. The account has maybe 1/3 of what I expect to spend - so more cash savings are in my future there.
To pay down the condo mortgage I have been toying with the idea of throwing extra payments at the principal. I have not started yet, but it would be nice to get that loan off my back...
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Are the accounts such as 401(k) tax-affected? In other words, is the balance shown at its value after the expected taxes? If not then the net worth is overstated.
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Hi Brett,
I think I responded to the same question in my comments back in March. I report my current net worth. I don't adjust my current net worth to account for some hazy future tax liability. I am aware that taxes don't end when you retire. It is a future cost and my retirement goal number assumes taxes will be an expense. So if I reach my goal I should have more than enough to live on AND pay my taxes (and future utility costs, and future health care costs, and future food costs...).
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I noticed you have accumulated a significant amount of money in your two internet savings account. Have you considered investing some of your internet savings into 28 or 91 day T-Bills? Your savings accounts are currently taxed at the state (10%) and federal level(25-35%), thereby signifcantly reducing your APR on these accounts. If you invest invest some of your savings into T Bills, you interest will not be taxed on your MA return. Also, the T-bill rates are slightly higher 4.57% for 28 day. (http://wwws.publicdebt.treas.gov/AI/OFBills)
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Congratulations on doing so well!
I'm in my early 40s worth $1.78 mil, but in my mid 30's worth less than your current net worth.
By being single...
I was able to work hard, get promoted and tripled my salary in 10 years. (You need to get to a management level where you get 10%+ bonuses and stock options)
Was able to work for a stable company with generous 401(k)matching and paid time off.
Rented a room until I bought my first house at 29.
Pay off primary residence (in 10 years), and called it a secondary residence.
So I could get primary residence rate on a good real estate deal.
Move every 2 years (in CA) do the real estate flip and take advantage of $250K tax free money.
Currently re-leveraged the paid off residence at fixed 10 year 5.49% and waiting for a good real estate deal to come in 2008+
Right now, I'm very negative on CA real estate, but think there will be buying opportunites once the bubble pops.
My only regret is not converting more $IRA money to Roth when I made less than $110K.
I think you need to use your good credit and refinance your investment condo taking out a 6.24% home equity loan for 10 years, via www.penfed.org. No closing costs just appraisal fee.
There is no better feeling than paying off the mortgage. You appear to be a good saver, so the less interest you pay, the faster it gets paid off.
Anyone can join by joining National Military Family Association (NMFA) to be eligible to join Pentagon Federal Credit Union.
Keep up the good work and savings!
...single girl in CA
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Wow, you do have an awful lot of cash. That $900 in the brokerage account looks really lonely, I think it needs some company!