My Personal Finance Journey

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Financial Plan 2008: Net Worth Growth Goal = $220,000

Contributed by mm | December 30, 2007 5:51 AM PST

plan08.jpgSo far I have spent three posts in our Financial Plan 2008 series to elaborate the key driving forces of our financials in 2008 (part 1, part 2 and part 3). It is time to put everything together.

In summary, we are looking at $212K net worth increase in 2008, which will likely drive our total wealth to about $1.1M by the end of the coming year. The speed of the growth, however, will be slower than that of 2007, due to a number of headwinds, including:

1) Slower growth of job income, primarily due to change of stock compensation program at my employer;
2) 30% less business income, due to changing industry environment;
3) Unlikely further appreciation of vested employee stock option grants;
4) Higher expense expressed in USD when expensed in Chinese Yuan.

Partially offsetting the unfavorable changes will be a couple of favorable developments:

1) Likely higher income from our self-managed portfolio, mainly due to expanding portfolio size;
2) Reduced tax bill, thanks to more tax gross-up on certain benefits and less tax for employee stock option grants.

The key assumptions and the resulting annual financial planning model are included below. (2007 year-end figure is estimate. Final result will be available in a week.)

2008planfinal.jpg

Recognizing that setting a slightly stretching goal is a virtue, I'm hereby announcing that for next year, we will be shooting for the goal of:


Net Worth Growth of $220,000


I will announce the extra absolute net worth dollar goal we will target once we close 2007 results.

P.S. I'm also happy to announce pj as the "Closest to the Pin" winner of our "Producing My 2008 Financial Plan" contest. His conservative estimate won him a $50 Amazon gift certificate. (A notification email has been sent out to his email address on record.)

P.P.S. Group wisdom vs my own on our 2008 financial plan. Nevertheless, thank you again for those who participated.

2008plancompare.jpg

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This Post Has Received 7 Comments. Share Your Opinions Too.


SingleGuyMoney Commented on December 30, 2007

Good Luck with your 2008 financial goals. Achieving your goal will put you in the Millionaire Club!!


moom Commented on December 30, 2007

Aren't US taxes on US expats rising next year? I keep reading about it in the media.


2million Commented on December 30, 2007

MM,

does your wife's business/consulting fall into your job income or business income category?


pj Commented on December 30, 2007

Thanks for the Amazon gift card!

(I will probably use it to buy a the Harvard MBA casebook on private equity and venture capital, so I can prepare for the corp fin practice of the consulting firm I will start working for next year.)

And being able to call a 220K net worth increase conservative in your early 30s is, well, wow! I hope to be there too in 10 years.


drchunger Commented on December 30, 2007

damn it, pj.. you beat me ever so slightly.

you 235,845
me 244,929

looks like i was the next one... any runner up prize?

congrats...



MM Commented on December 31, 2007

drchunger, i couldn't offer more prize or I will have to revise my annual goal to $219,950 :-)

But you deserve an honorable mention ... you asked a couple of good questions in the comments.


MM Commented on December 31, 2007

2million, the Expact Services Co. is included in the business income bucket. We had a good year in 2007 -- already at the right mix between the money earned and my wife's optimal work/life balance to keep family commitments -- we expect 2008 to be marginally better.



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