My Personal Finance Journey

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Monthly Review - January 2006 ($426,753, +$26,206)

Contributed by mm | February 2, 2006 3:42 PM PST

Throughout my documented personal finance journey, five-figure monthly net worth growth had been a rarity in 2003, 2004 and most part of 2005. Stars recently align differently: the $26,206 improvement in January marked the fourth five-figure growth in five months.

Not surprisingly, January's monthly improvement is delivered by both regular savings as well as investment gains:

• $10,000 from regular savings (earned income - expenses)
• $7,800 from investment gains
• $14,100 from employee stock option value (thanks to solid quarterly earning release)
• ($5,500) tax reserve to account for investment and stock option appreciation.

IMPORTANT BALANCE SHEET MOVEMENT DISCUSSION

2006-01-net-worth.GIF

Cash & Savings: More cash-like balance has been moved to investments. The remaining balance includes about $17,000 in my offshoring accounts in China for daily expenses/emergency fund, $5,000 in my US checking accounts, $20,000 in US Savings Bond holdings at Treasury Direct, and another $22,000 in high-yielding savings accounts at ING Direct and alike.

Brokerage: Growth comes from net contribution from cash accounts, regular savings and investment appreciation.

401(k): Solid improvement of 5% thanks to my heavy exposure to international equity.

Stock Option: Monthly gain includes $1,000 from a newly-vested batch of options, and $13,000 from MSFT stock appreciation.

Receivable: Receivable is mounting as I am waiting for reimbursement for some 2005 year-end medical expenses and business travel expenses -- reimbursement cycle is long for overseas subsidiaries, so I anticipate Receivable will remain at high level for the next couple of years.

Credit Card Loans: I snapped on a no-fee lifetime 1.99% balance transfer deal from Citi for $10,000. The proceeds have been moved to high-yielding accounts. At about 4.5% APY and 28% tax rate, we are talking about $100+ risk-free annual gain.

Tax Liability: Tax liability is adjusted to account for investment and stock option gains.


IMPORTANT PERSONAL FINANCE ISSUES IN MONTHS AHEAD

Tax Document Collection: It is tax season again. As an expatriate benefit, KPMG will prepare and file my tax, but I still want to prepare my own tax just for practice -- the international relocation offers tons of opportunities to implement different tax strategies, and I can surely benefit from more tax knowledge.

Investment Tracking: Since investment performance is becoming a larger portion of my monthly net worth movement, I will soon introduce a monthly scorecard to keep track of investment results.

This Post Has Received 10 Comments. Share Your Opinions Too.


CPA1298 Commented on February 2, 2006

MM - you never cease to amaze me with your savings rate. $10,000 of savings per month? Though I know you never will post it, I would love to see what your cost of living is each month, or what percentage of your take-home pay you are stashing away. Of course, living without a house and cars and receiving expat housing benefits would have its benefits.


Neo Commented on February 2, 2006

Just so you know, your title states your net worth as $426,573 but the chart shows it as $426,753.

Neo


MM Commented on February 2, 2006

Good catch Neo. Fixed.


Neo Commented on February 3, 2006

By the way, congrats on another month of increases in your net worth. I will post yours along with other PF bloggers to my site shortly.

Neo


FCC Chal Commented on February 3, 2006

You are a very conservative investor and do not make your money earned as hard as you can. If I were you, I will switch the $44,000+ in US saving bonds and ING saving into the Vanguard large cap, mid cap, small cap, and international growth indices. You will make a hell of lot of money over your life time, assuming you are young and rich, than the US saving bonds and ING Direct can give you.


himay Commented on February 9, 2006

MM, would you care to elaborate more on your credit card money-shifting deal? Did you actually transfer a $10k balance or did you get a $10k advance or something different?


Neo Commented on February 11, 2006

Personal finance bloggers net worth data (chart and graph) has been posted.

http://neos-nest-egg.blogspot.com/2006/02/personal-finance-bloggers-net-worth_11.html

Neo


moneysmartz editor Commented on February 12, 2006

You also made the top ten in the Personal Financial Bloggers' Net Worth Index! 6.5% increase and almost the largest $ gain in the month. Congrats!


Jack Commented on February 27, 2006

You mentioned that you got a no-fee lifetime 1.99% balance transfer deal from Citi. I am interested if you can point me to that offer... I think it is a no brainer.
Great move!


Muniman Commented on February 27, 2006

I think given your income level you should consider investing in muni bonds instead of ing direct. A california muni money mkt has a yield of nearly 3%. Assuming a 41% marginal tax rate, you are looking at over 5% pre-tax yield, with flexibility to withdraw as appropriate.


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