During the month of February, my income continued to be strong but some one-off expenses and depressed MSFT stock price put some clouds over this otherwise good month in my personal finance journey. Although the $4,646 monthly net worth increase is the smallest in the last four month, I am still well on track of my retirement plan and 2005 financial goals.

BALANCE SHEET RESULTS

(Starting from 2005, I am comparing monthly results to balance sheet one year and one month ago for better visibility of progress. Please refer to definition of balance sheet line items.)

IMPORTANT BALANCE SHEET MOVEMENT DISCUSSION

1) Cash/Saving: Cash and savings, combined, are almost flat as we are making an conscious decision to divert most of our savings toward 401(k).

2) Roth IRA and Brokerage: Some of my individual holdings lost some steam, resulting in a bad month for my portfolio.

3) 401(k): The $5,000-some increase is mostly driven by increased 401(k) contribution, and to a much lesser extend, some investment gains in international equity funds.

4) Stock Option: MSFT stock price dropped a full buck during the month. Even though I have a new match of stock options vested in February, my stock option account balance is almost flat.

5) ESPP: Continued contribution to exploit small but steady gains from the program.

6) Loans: I still have about $4,333 outstanding in my Discover card, enjoying the last month of the 0% APR deal. The one-time expenses during the month also adds to the credit card balance, which, of course, will be paid off completely on the due date.

7) Tax Liability: This account still holds about $800 tax due for tax year 2004. The rest are tax liabilities for my stock options and individual positions in my portfolio.

BRIEF DISCUSSION OF EXPENSES

We spent a total of $7,120 during the month, which made February 2005 the second highest spending month in the last two years. (Our most lavish month was August 2003, in which we bought the house and paid out all the closing cost.)

Actually, our lifestyle didn't suddenly become lavish. Compared to January's multi-month low of $5,475, the spike in February is mostly caused by two one-time expenses: first, both my wife and I underwent some complicated dental work and our copayment part is close to $1,000. Second, we brought our kid to a professional photographer for some photo shot and this sent us $350 down.

IMPORTANT PERSONAL FINANCE ISSUES IN MONTHS AHEAD

- I'm 95% done in my 2004 tax return but still need to iron out some details. Especially, I just realized that my web site advertising income is subject to self-employment medicare tax. (Actually the income is subject to social security tax too, but I already maxed out social security tax from my job income.) I look forward to completing my tax return by the end of March but I am open to the idea of paying out the approximate amount and filing for an extension if it can help me to secure a correct return.

- It has been nine months since I took out Discover's 0% APR balance transfer deal. The 0% APY will end in the next 30 days and I will pay back the full balance of $4,300 in the next couple of weeks.

- I also need to cancel my United MileagePlus Visa Signature card. This no-annual-fee-in-first-year card helped me to gain 15,000 MileagePlus miles but I am not going to pay $60 a year to keep this card while there are better no-fee reward cards available.

- H1 property tax is due by April 30. I will pay the tax online at http://www.metrokc.gov.