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 - May 2004 ($149,010, +$4,384)

Contributed by mm | June 1, 2004 4:03 AM PST

SUMMARY

My net worth grew 3.0% in the uneventful May 2004. Disciplined spending and a small portfolio gain contributed most of the $4,384 net worth increase. With this improvement, my Month-to-Retire reading dropped to 144 months, or exactly another 12 years before I can reach my million-dollar goal.

MONTH-END BALANCE SHEET

(See definition of balance sheet line items here.)

  Mar-04 Apr-04 May-04 Change Change %
Cash & Equivalent  $         1,603  $         2,396  $         1,025  $        (1,370) -57.2%
Saving  $       12,079  $         8,617  $       10,613  $         1,997 23.2%
Brokerage  $       20,174  $       18,890  $       19,507  $            617 3.3%
Roth IRA  $       15,269  $       15,455  $       15,640  $            185 1.2%
401(k)  $       13,588  $       14,141  $       15,518  $         1,377 9.7%
Stock Option  $         1,306  $         2,686  $         2,801  $            115 4.3%
ESPP  $         3,873  $         5,164  $         6,455  $         1,291 25.0%
Home Equity  $       68,798  $       69,248  $       69,842  $            593 0.9%
Other Assets  $         9,250  $         9,100  $         8,950  $           (150) -1.6%
Receivable (Payable)  $         4,278  $         5,860  $         5,920  $             60 1.0%
Reserve Funds  $        (2,334)  $        (2,684)  $        (3,034)  $           (350) 13.0%
Loans  $        (2,033)  $        (1,924)  $        (2,214)  $           (291) 15.1%
Tax Liability  $        (3,562)  $        (2,324)  $        (2,014)  $            311 -13.4%
Net Worth  $     142,292  $     144,626  $     149,010  $         4,384 3.0%
Liquidation Value  $     116,197  $     118,114  $     122,170  $         4,056 3.4%

INCOME STATEMENT

Total monthly operating expense is back to normal at $4,323, a $1,600 drop from last month's $5,971 (last month's total expense was skewed due to refinancing). May monthly expense is a bit higher than normal because there are five weekends in May (and we do lots of weekend shopping). The effect is partially offset by the reduced housing expenses thanks to the refinancing.

BALANCE SHEET

Balance sheet change is comparatively insignificant and fits the regular pattern. Some details about irregular changes:

1) 401(k): I increased my 401(k) contribution from 6% to 15% in the month of May, so a meaningful portion of the net worth gain is reflected in the 401(k) account balance increase. The contribution percentage change is used to shield more funds from immediate taxation because of lack of good investment opportunities around. (In the past, I appreciate the investment selection flexibility in non 401(k) accounts, so my contribution % is quite low -- 6% is the minimal to take advantage of the maximum employer match.)

2) Tax Liability: Upon review of my current income tax status, I realized that I over-accrued $500 in my tax liabilities account. A reversal was included to reflect the true tax exposure. (Details about the gap: my current withholding status will result in around $1,200 more than the anticipated tax for my salary and anticipated income. Since I accured extra tax liabilities for ESPP sale and other realized capital gain/loss, I am effectively over-accruing $100 per month.)

Regarding other lines, Receivable (Payable) line includes a large annual bonus anticipated in August/September. I also expect to sell the ESPP shares in early July, which will move most of the ESPP line balance to the saving line.

INVESTMENTS

Will be discussed separately.

IMPORTANT PERSONAL FINANCE ISSUES

- Overall, I expect June to be another peaceful month in terms of personal finance management.
- I'm planning a short trip to Vancouver in late June or early July, which will add approximately $600 to the monthly expenses.
- I expect to cancel Citi Credit Protector Program in June.

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