My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.

By Topics

0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)


Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)


The 2006 Financial Plan

Contributed by mm | February 11, 2006 4:16 AM PST

The annual financial planning process is one of my annual rituals that I really enjoy, and this year is no exception. I firmly believe that good execution starts at good planning, and it is always beneficial to take a step back from time to time to examine the big picture.

It may look like an act of procrastination that I only make public this annual plan in mid February. The reality is, the harder I think about the new year, the more uncertainties I see:

First, like you already noticed from our recent monthly reports, investment gains or losses have been among the top drivers of our month-to-month net worth changes -- they will continue to do now that we have over $400,000 in investment accounts.

Second, the high-paying job I have right now, while secure, has a larger portion in variable compensation. In other words, my job income can swing in five figures in either direction.

Third, my wife's choices for her personal fulfillment (full time job, family business or back to school) has its financial consequences that cannot be underestimated either.

On top of that, as we are settling in Asia, cost control has its unique challenges -- our recent experience indicates we will probably spend as much as we did in the US to maintain a good lifestyle.

Long story short, let me share the final plan. The following table encapsulates the output of the ground work to plan for our household income, expenses and taxes. For reasons I discussed before, I grayed out details of our earned income streams.


For the first time, I'm presenting the annual plan in different scenarios. Scenario analysis appears to be the only tool I can really deploy to highlight the uncertainties lying ahead.

P.S. This follow-up post includes the details behind the numbers.

More PFBlog Articles You Might Find Interesting ...

This Post Has Received 8 Comments. Share Your Opinions Too.

Anony Commented on February 11, 2006

Shouldn't you reverse the expenses from worst to best...meaning the worst case has the highest expenses and best case the lowest?

That would seem more intuitive.

2million Commented on February 11, 2006

I am guessing mm is actually planning higher expenses in the best case scenario. For example if his wife has a full time job in the best case scenario then mm probably expects additional expenses from dining out more, housekeeping, daycare, etc, but still nets a higher income so its labeled the best case scenario.

guest Commented on February 11, 2006

How about S&P drop 10% a year? Still investment gain instead of loss?

Early Riser Commented on February 11, 2006

I would keep investment gains / losses out of your financial plan. Focus on the things you can control.

Dawn Commented on February 24, 2006

This is a question. I am a single parent of one 8 year old girl. I make about 16,000 or so a year at my current job which (please don't laugh) is with money managers. I am (well was) going to college full time and am relatively smart. However I have was never shown anything about credit, loans, etc... growing up and made mistakes along the way. The problem is that I need a loan for $5000.

I am figuring $1,000 to pay for my car repairs (cheaper than buying new)

$1000 to catch my rent up (I am behind because of the car which I have been making payments to the mechanic on - every penny I make)

$1000.00 for daycare for my little girl for summer so I can go to college.

and $2000.00 to put up in a bank account for emergencies so I don't have to borrow again.

Banks pretty much laughed at me.

Any clue where I could apply or what I could do? Any advice would be greatly helpful to me - As you seemed to be very knowledgeable.

Thank you,


Jane Dough Commented on February 24, 2006

I am impressed that you have forcast your future tax burden along with everything else. I would assume that the international move would make taxes more interesting - but obviously you did your homework on that one.

All In Commented on February 25, 2006

After looking at your stock portfolio and savings,
here is a stock idea that is available once in a lifetime for one to two weeks;
I presently hold 10,000 shares NovaStar Financial
(NFI). The stock closed at $26.39 2/24. At this
price the dividend for 2006 will be 37%, which will pay me $80,000 and the funds for this level of dividend are already in their bank. There is a reason the stock price is depressed, they had to delay 2005 full year and 4th qtr earnings to resolve a tax issue with independent auditors.
The earnings report is due out 1-2 weeks.

By investing a large position before the release
you will have the advantage of price target of $45
to $55 by Dec. plus locked-in lifetime dividend of 30% +.



Car Loans Commented on April 25, 2006

This comment is in response to "Jane Dough"'s post above. I believe, as long as your credit score is higher than 500 it should be relatively easy to get a loan. More often than not the interest rate is going to be ridiculously high but there are a lot of lenders out there that cater to sub-prime applicants.

Read More ... 139 Posts In The Same Category

This page was last rebuilt at January 27, 2014 07:38 AM PST.



Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar


Error 403 - Forbidden

Error 403 - Forbidden

You tried to access a document for which you don't have privileges.

Copyright 2003-2014, All Rights Reserved. (Privacy Policy)