My Personal Finance Journey

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


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Monthly Review - November 2005 ($394,298, +$40,622)

Contributed by mm | December 3, 2005 10:03 AM PST

Another 40 grand climb on top of last month's home-sale-driven improvement of almost 90 grand marked a good start of my new journey on this side of the Pacific Ocean. Admittedly, most of this month's outsized gain is of one-time nature:

- $15,000 net after-tax income as one-time relocation cash bonus
- $8,000 after-tax value of overtime cashout at my last job
- $11,500 stock option gain thanks to MSFT's impressive performance lately (or 9,000 after-tax value)
- $3,800 from other investment gains (or $3,000 after-tax value)
- The balance is regular savings from monthly salary income -- this month's regular savings was suppressed due to setup cost in the new location.

Now I am looking at passing the $400,000 milestone in the next 30 days.

2005-11-net-worth.gif

IMPORTANT BALANCE SHEET MOVEMENT DISCUSSION

Cash & Savings: While this bucket receives most of the one-time income and regular savings, I also redirect part of the significant balance to investments.

Brokerage: I made some sizable purchase of mutual funds and stocks in the month to redeploy my cash proceeds from the recent home sale to more rewarding venues.

401(k): The 2.2% monthly gain is purely market driven -- I am no longer capable of making more contributions.

Stock Options: MSFT almost gained 2 bucks in the month of November and drove value of my stock option holdings up substantially. Still, none of these options will expire before 2011, so I am more likely to hold them for an extended period of time.

Receivable (Payable): The decline is due to reimbursement of certain moving expenses.

Credit Card Loans: The balance includes $16,000 free cash from multiple 0% APR deals, and some recent purchases still in grace period.

Tax Liability: The increase is triggered by the gain in stock option and other investment accounts.

IMPORTANT PERSONAL FINANCE ISSUES IN MONTHS AHEAD

AD&D Insurance: When I was reviewing the benefits from the new statutory company I now belong to the other day, I realized the insurance coverage is subpar compared to that from the previous company (the U.S. subsidiary). I already have term life insurance secured for my wife and myself, but I need to acquire some extra Accidental Death and Dismemberment insurance to cover the risks.

Investment Reporting: Now that investment income is taking a larger portion in my monthly net worth movement, I am working on some new reports to keep investment performance on my radar of monthly reports. Hopefully, I can adopt a new format of monthly report at the start of 2006.

2006 Plan: It is planning season again. I will soon start working on my 2006 Financial Plan. Is half-a-million an achievable goal or the bar is too low? I should be able to find out in the next two months.

This Post Has Received 20 Comments. Share Your Opinions Too.


Caitlin Commented on December 4, 2005

congratulations! you've had a great 12 months period...impressive results :)


fatboy Commented on December 4, 2005

If you can survive on 1/3 of your gross income, which I'm guessing is at least $50k, I think the half-a-mil bar is just right for 2006. You will have to raise it in upcoming years. If this were true, you would be hitting the million-dollar mark in 5 years! Time to revise your target age of 36.

Now that you have sold your house and cars, will you be renting in Shanghai? I assume you are currently living in temporary housing provided by your employer. Do you plan to buy a car or two? Perhaps you can shed some light in your 2006 Financial Plan.


Latin Guy Commented on December 4, 2005

Fatboy, MM's combined monthly gross in the U.S. was 18k, and because MM is not an expat, he is probably earning now a good salary in Shanghai but in local currency (he is also having expenses in local currency, so he is hedged). Therefore your guestimate of $50k is maybe exagerated.


D-Man Commented on December 4, 2005

If you have sufficient Term Life insurance, what is the reason for needing extra AD&D insurance?


MM Commented on December 4, 2005

D-Man- I don't need accidental death coverage, but i need accidental disability coverage -- what if I lose both of my hands and cannot work on my finance profession (and this blog)?

Latin Guy- 50k is an underestimate.


D-Man Commented on December 5, 2005

concerning AD&D,

Is there a reason to use AD&D versus long term disability insurance?


pfadvice Commented on December 5, 2005

The personal finance bloggers net worth rankings are up for November. Also included is a new October to November net worth change ranking.


Loi Tran Commented on December 7, 2005

Congrats, looks like you're doing good. Looks like you have a large cash position, are you slowly investing in the market over a period of time?


Matt Hartrich - Buffalo, NY Commented on December 7, 2005

You've definitely had a good year.


MYD Commented on December 9, 2005

Hi,

It looks like you're well on your way! I like the idea of tracking your journey and I added your blog to my personal finance directory:

http://www.manageyourdollars.com/directory

I also run a personal finance forum that rewards its loyal members with cash. We'd love to have someone with your expertise as a member!

http://www.manageyourdollars.com/talk


Latin Guy Commented on December 10, 2005

MM and Fatguy - my apologies I thought you guys were talking about a $50k MONTHLY gross income. My educated guess for a Shanghai assignment (non-expat) is about $15k all-in monthly gross income.

MM, I am in a similar job situation down in Brazil, so I will try to contribute the best I can to the benefit of the forum.


jason Commented on December 13, 2005

Nice site. FWIW I've got a couple years on you and I have the same goal. I'm about 100k ahead but you're gaining fast. Sold an investmeent house Sept 1 and netted $215K after taxes(Cal.) Invested all proceeds - 75% in equities, 25% cash managed by myself and have returned 3.8% so far. It sounds like you're in a similar situation. Curious to see your path and results. I'll check back in.


Seattle Commented on December 16, 2005

You have made impressive progress toward your goals! I especially enjoy the financial detail you post to support your progress report.


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