financial stress

I wrote about some goals in my last post, and one of them has been to keep things simple.

I have not been doing this, rather I’ve been over analyzing my financial situation. Day after day I agonize over whether I’ll be able to save enough to hit my goal.

It is ridiculous. It is coming to an end now. No more looking at forums every morning, no more spending hours staring at an excel budget, and no more button mashing on Google finance.

The enemy of a good plan is the quest for a perfect plan. Maybe I will not save enough. Maybe I won’t have the best allocation.

That’s okay!

From here on out the following will be done:

1. Forums will be checked on Saturday
2. Excel sheet will be updated daily close to 345 pm on weekdays.
3. Time will be spent on something non monetary. I don’t care what.

On Patience

I’m not a saint, buddhist monk, nor someone who pretends to be patient. One thing I would like to do is become more patient. I’d like to learn to wait for the perfect moment, that one moment where I deal the most damage. No, I’m not talking about fighting.

You see the above is the problem with what I think of patience. Patience is not about striking, or fighting. Patience is analogous to equanimity, it’s about being calm, being able to watch without hinderance. Yes, transitioning from waiting is action, there is no other course, but before that we must understand patience.

Much of what I face nowadays isn’t anything new. Stress is not new, demands aren’t new, nothing has changed. How I act has changed. I’ve become a man on the defensive, placing blame on externalities, rather than where the blame is due. I’m my own albatross. I’m the exact opposite of patience.

In the song, “I’m the sunscreen”, the lyrics state the many things we worry about never come to fruition, rather it’s time passion along that blindsides us. Worries plague our thoughts, yet sweet, precious time flies by. If only we could let things go, let them play out, and use that time to enjoy ourselves. What a novel idea.

Again, patience is being able to observe as things happen. Watch as events unfold, allow yourself to view it all without emotion, and when that crucial moment arrives, act.

2014 Goals

Last year, 2013, turned out to be a great year financially, but there are some areas of improvement. I wrote about a video on the secret to happiness, and that’s where I’d like to focus most of my effort.

As a recap the secret to happiness is based on four things:
1.Faith – Wondering about the transcendental
2.Family – Close ties with loved ones.
3.Community – Making friends, and being charitable.
4.Work – Creating value. Rather, feeling of creating value.

When looking at these four different areas, it’s not difficult to draw a plan around them.

1. Faith – Meditating daily, and attending a monastery every Sunday morning.
2. Family – Calling my family every week to say “Hello”, and catch up with what they’re doing. Also emailing distant cousins, and local cousins.
3. Community – Going out to eat brunch on weekends, or playing Frisbee with work friends. On being charitable, contributing to good causes, but also taking people out to eat on occasion.
4. Work – Try to get onto project that make me fulfilled. If this isn’t possible, look for another job.

From the Above we can come up with a schedule.

Daily:
1. Meditate Daily
2. Seek fulfilling work

Weekly
1. Call friends
2. Call family
3. Attend monastery

This isn’t where I want to draw the line, as I have some financial and other goals that are hobby based.

I would be lying if I said that I don’t enjoy finance. It’s part of who I am, that being said, I would like to diversify my hobbies as well.

My other hobbies include the following:
Finance (already mentioned)
Reading
Toast Masters
Exercising
Traveling

Incorporating these into the schedule adds the following:

Daily:
1. Meditate Daily
2. Seek fulfilling work
3. Reading
4. Exercising (Daily push ups, chin ups, planks, and bicycle riding)

Weekly
1. Call friends
2. Call family
3. Attend monastery
4. Finance (Try to avoid reading forums daily, wait until week end)
5. Toast Masters (Attend every Tuesday meeting)

Quarterly
1. One international Trip
2. Three domestic trips

There we go, now we have something of a schedule. Everything on here is measurable, excellent. Now to add some more!

I mentioned that I would like to save $22,000 a year. I’ve considered adding other financial goals like generate X amount of income per month or per year, but that’s too much tracking, and subsequently work to be done. F that! I’m going to save $22,000 a year and call that my financial goal.

I’ve considered investing in some single stocks for fun, with only a small amount of play money.

Daily:
1. Meditate Daily
2. Seek fulfilling work
3. Reading
4. Exercising (Daily push ups, chin ups, planks, and bicycle riding)

Weekly
1. Call friends
2. Call family
3. Attend monastery
4. Finance (Try to avoid reading forums daily, wait until week end)
5. Toast Masters (Attend every Tuesday meeting)

Quarterly
1. One international Trip
2. Three domestic trips

Finally.. some other goals that I have:

1. Keep things simple. As much as I want to chuck money into individual stocks, it’s too much work. I don’t want to unwind positions anytime. I’d rather just throw money into a preset allocation and call it a day. This is also true for credit cards. I’m not against taking advantage of credit card rewards, but I can do that in better ways. I won’t be canceling cards, but i’d like for all spending to be on one single card. Finally, close any accounts that aren’t being in use like my fidelity account. It serves no purpose to me.

2. Keep things clean. Looking at my room, it’s an absolute mess, granted, I’ve been sick for a good while. I’d like form good habits that revolve around keeping things clean. This is also true for my car. The funny thing is that this stuff doesn’t have to be rocket science, doing things as they come up can easily solve both these issues.

3. Being healthier. I tackled meditating and spirituality, but as my good friend from Austria says, I need to be more positive. Being honest with myself, I’m a pessimist, and I see the absolute worst in things. I should be cooking better food, and all around, enjoying life.

December 2013 Net Worth

Finally a close to the year, and another month of savings for the net worth chart.

My original plan was to post a net worth update along with a 2013 “in review” in one post, but I’ll make it two.

Asset Allocation

First thing first, I made some more portfolio changes (I know, enough already!). I switched out of domestic stocks funds where I could into Total World Stock funds as I’d prefer to be more diversified. I switched out long term treasuries to Long Term Zero Coupon bonds, my reasoning is that these are ~50% more volatile than treasuries. With all of that being done, below is my total portfolio allocation.

Total Portfolio Allocation

It seems that I have a large chunk of assets in cash, which I’m fine with for both emergency fund purposes and dry powder. In the future the proportion of gold and cash relative to the portfolio should go down as more money will be pushed into world stock and municipal bonds.

 Performance

I don’t track year to year performance as it’s too much work. Rather I track performance from inception.

Since 2011 my IRA’s have returned 2.61% annualized.
Since 2012 my 401(k) has returned 9.51% annualized.

My IRA’s which are in the Permanent Portfolio had a down year for 2013, while my 401(K) which is 50/50, stocks to bonds, had a fantastic year. The net of the two for this year means [unrealized] money in my pockets.

Passive Income

I started to keep track of passive income from sources like credit card rewards, checking account rewards, amazon affiliate payments, and healthmiles (work related). In the future i’ll include my taxable account dividends.

Passive Income

 Revenues / Expenses

Below is an image of my revenue and expenses for the month. From now I expect my average spending to be around $1200 a month not including travel.

Revenue and expenses

I’m extremely happy to see a saving percent of 58%. I don’t think in my future months I’ll be able to save as high of a percentage, but one can hope.

Net Worth

Putting everything above together, we end up with a net worth update. For the month I’m up $1951.64 which is fantastic! I started this year with the goal of having a net worth of $38,000, and later revised that goal down to $36,000. I’m happy to note that I hit that revised target by the skin of my teeth.

Net Worth

And thus concludes the month!

Thoughts / Comments

What do you think? How did you net worth fare for the month?

 

The Secret To Happiness

I watched the below video. I don’t tout this video as a guide to happiness, rather, I find that the video is thought provoking.

The Secret to Happiness by the American Enterprise Institute

I wasn’t a huge fan of the free enterprise message, but that shouldn’t take away from the spirit of the message.

Faith – Wondering about the transcendental
Family – Close ties with loved ones.
Community – Making friends, and being charitable.
Work – Creating value. Rather, feeling of creating value.

I believe Arthur is correct in saying to create habits that facilitate the above. How many times have we seen Ted Talks that bring up a new formula for happiness? How often do we say we’ll do all of the above, but never get around to it?

How can we create habits to facilitate the above pieces of happiness?

Faith – Attend a religious institution every week.

Family – Call a different member of your family on a regular basis. Still have both parents? That’s two days out of the week.

Community – Take your friends out for lunch or dinner when you can. Switch it up, so you aren’t always paying. Schedule brunch or breakfast every saturday morning.

Work – Do something that you enjoy. Out of the four listed this is the hardest for me. I unfortunately can’t bring up some magic formula that will accomplish this.

Anywho, what do you think?

Retirement Changes

In the past my choice of retirement account was always the Roth option. My reasoning was that I didn’t want to accrue any tax liabilities on my balance sheet to pay off in the future. Upon debating this topic back and forth with a good friend of mine, I’ve come to the conclusion that a traditional IRA and 401(k) will be advantageous.

Currently my contributions look like this:
2011 Roth IRA – 5k Contribution
2012 Roth IRA – 5k Contribution
2013 IRA – 5.5k Contribution
Future Contributions: 212.53 per paycheck for a total of $5499.78 (22 cents short of a full contribution) towards traditional IRA.

2012 Roth 401(k) – All contributions
2013 Roth 401(k) – Some contributions
2013 401(k) – Remaining Contributions
Future Contributions: 10% of salary towards traditional 401(k).

My reasoning for this is due to the fact that congress or the IRS may change rules in the future to tax income. I’d rather realize any benefits I can obtain at the present moment, and invest the tax savings.

November 2013 Networth

Seems like I’ve been missing my updates on this blog, so here is yet another try at updating.

For November I decided to make a large purchase, my bike. So far through November and December, I can count the number of times I’ve ridden it on my fingers (Due to weather.. people). In the long run it will pay off both monetarily, and more importantly with my health.

Let’s take a look at some charts.

Below is a bar chart of my expenses. Note I spent the most on “shopping”.

Screen Shot 2013-12-15 at 3.50.43 PM

 

Below is also a breakdown of expenses, but this time listing the amount.

Screen Shot 2013-12-15 at 3.51.38 PM

Below is a chart of my networth. Note the small increase for the month.

Screen Shot 2013-12-15 at 3.48.35 PM

Finally this is a chart for percentage of salary.

Screen Shot 2013-12-15 at 3.49.17 PM

 

Overall I didn’t bring out too many gains. I don’t see the month as overly bad as these investments will bring out positive networth months in the future.

August 2013 Networth

This month’s net worth was up (luckily) even considering the dip in the stock market, and paying for two places to rent. My spending was not as tight as i’d like for it to have been, but who I am to complain so much?

Below is an image of my spending:

As you can see my rent was a bit insane at over $1300. Luckily starting in October my rent will go down to only $550 which is all inclusive. I was fortunate this month to have three paychecks as oppose to the usual two. As a result my income was up, and no other major expenses hit (cough cough.. insurance.. cough, i hate you). With that extra money I was able to weather the extra rent expense, and the higher than usual food expenses. Other notable expenses for this month was a travel visa to India, and a CPA expense to prolong my examination date.

Below is a chart of my net worth.

 

Most of my gains came in the liquid side of things, it seems like I stockpiled quite a bit of cash. On the retirement end, my mainly stock portfolio didn’t fair to well, although I’m glad to see that I didn’t lose money.

For the end of this year I’ve set a goal of achieving a net worth of $38,000. I’m on the fence whether I’ll be able to hit it or not, but try I will. Next month (now) I’ll have a large outflow for Insurance (thanks Statefarm..~$600), and will also have a large inflow ($2000). I might have an unusual expense for fixing up my apartment, but it should be low. With my new found savings (~$600) a month in rent / utilities, will be a large catalyst in making up the gap from where I’m at now to where I want to be at the end of the year. Wish me luck!

July 2013 Networth

July was a good month after losing a couple of hundred dollars in June. This month I switched away from tracking expenses in Google Docs to using Mint. Below is a screenshot of where I’ve spent money.

July 2013 Spending Report

As you can see the main culprit for spending is my rent, currently at $800. Following that is my money pit of a hobby, traveling. Third up is food. My aim is to reduce rent over the following months by moving in with a room mate. As for travel, I may look into some other credit cards for some good deals. Ideally I should travel less, but considerable time will have to be spent pondering whether it’s worth it. Finally on food, I feel like ~$2XX is about right for a month. I try to eat eat out at least once a week, but for everything else I prefer to cook myself. I could cut the food budget down a bit, but I don’t think it would be worth it.

July 2013 Networth

From my networth statement you can see that I had a nice $1.6k for the month. A lot of it can be attributed to rising markets, and contributions to my roth 401(k). I suspect that in the future there should be larger monthly increases due to lower rent, and no utility payments. At the same time there is a $2000 liability for my sign on bonus that will be off my books on September 10th. That should be a nice boost to my net worth along with an extra paycheck in August. Overall, I’m happy that my investments are growing behind the scenes, and that I have a good cash buffer if anything should happen. Something to always remember, cash is king.

Compound tasking

I was reading this thread on the everday system forums and it mad me start to think of rolling cleaning into the activity. So far I’ve created three chains on chains.cc, 14 minutes of the cleaning, shovelglove, and walking. I think adding to cleaning after the task is complete will help me get to my backlog of cleaning that needs to be done.
I was a bit motivated so decided to do my 14 minutes of cleaning a little earlier today, and it’s amazing how much you can get done when you aren’t distracted. I ended up cleaning my closet and had some spare time so went around my apartment picking up various items and putting them where they belong. Nothing fancy or hard, but definitely effective.

Let’s see how far I can go with this and if I keep it up.