My Personal Finance Journey

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Monthly Review - June 2004 ($152,219, +$3,209)

Contributed by mm | July 1, 2004 11:06 AM PST

SUMMARY

June 2004 saw a number of changes in the finance picture of my family: first, I bought another car and financial wise, it means giving up some short-term liquidity, an immediately hit of sales tax and increased monthly expenses. Second, my defensive portfolio lost quite significantly in the month, but more than helped my increasing value in my stock option account. Third, my wife started to work in the last week of June, and will start to bring more income (although largely offset by daycare and car expenses).

Nevertheless, my net worth continued to display healthy improvements, growing another 2.2% (or $3,209) to close the month at $152,219 and bringing the Month-to-Retire reading dropped to 143 months (May 2016).

MONTH-END BALANCE SHEET

(See definition of each balance sheet line item here.)

  Apr-04 May-04 Jun-04 Change Change %
Cash & Equivalent  $         2,396  $         1,025  $         1,276  $            251 24.5%
Saving  $         8,617  $       10,613  $         2,524  $        (8,090) -76.2%
Brokerage  $       18,890  $       19,507  $       17,672  $        (1,834) -9.4%
Roth IRA  $       15,455  $       15,640  $       14,507  $        (1,134) -7.2%
401(k)  $       14,141  $       15,518  $       16,994  $         1,475 9.5%
Stock Option  $         2,686  $         2,801  $         7,158  $         4,357 155.6%
ESPP  $         5,164  $         6,455  $         8,084  $         1,629 25.2%
Home Equity  $       69,248  $       69,842  $       70,685  $            843 1.2%
Other Assets  $         9,100  $         8,950  $       16,622  $         7,672 85.7%
Receivable (Payable)  $         5,860  $         5,920  $         5,215  $           (705) -11.9%
Reserve Funds  $        (2,684)  $        (3,034)  $        (3,221)  $           (188) 6.2%
Loans  $        (1,924)  $        (2,214)  $        (2,369)  $           (155) 7.0%
Tax Liability  $        (2,324)  $        (2,014)  $        (2,927)  $           (913) 45.3%
Net Worth  $     144,626  $     149,010  $     152,219  $         3,209 2.2%
Liquidation Value  $     118,114  $     122,170  $     124,056  $         1,886 1.5%

INCOME STATEMENT

My total monthly operating expenses added up to $5,641, or $1,300 higher than last month's $4,323. The variance can be entirely explained by the car purchase: $878 in sales tax and licensing fees, $300 immediately recorgnized depreciation and $200 immediate accrual of maintenance expenses.

BALANCE SHEET

The above-mentioned changes bring some noticeable changes in my balance sheet, namely:

1) Savings: The car purchase burned a $8,000 hole in my short-term liquidity. (The purchase itself is $9,000 drive-out, offset by some short-term savings.)

2) Investment Accounts: My brokerage and Roth IRA accounts depreciated $3,000 due to loss of value in my bearish options plays. On the other hand, my stock option account appreciated $4,000+.

3) Other Assets: Grew $7,672 due to car purchase (offset by $300 immediate depreciation recognition).

4) Receivable: The decline is associated with my signup of automatic payment plan with EverBank Mortgage: I will pay my monthly mortgage of the 10th of every month, resulting in a $1,000 payable entry at every month end.

5) Reserve Funds: The increase maintenance accrual from two cars and house are partially offset by $300+ major brake service on my Camry.

6) Tax Liability: Tax liability increased due to appreciation in my stock option and ESPP.

Besides, my 401(k) and ESPP accounts continued to grow due to consistent monthly contribution.

IMPORTANT PERSONAL FINANCE ISSUES IN MONTHS AHEAD

- July will see my wife's first full month of working in a while. THe extra income will be mostly consumed by increased day care expenses ($940/month minus 25% tax benefits), car expenses (~$500 incremental for second car) and additional living expenses like more dining out and clothing.

- Another ESPP contribution period ends on June 30 and I will cash out my ESPP shares in early July.

- My auto and homeowner insurance will end in August and July is a good time for comparison shopping. (I don't necessarily want to change my insurance company, but just want to verify if I am still paying a competitive premium.)

This Post Has Received 1 Comment. Share Your Opinions Too.


jason Commented on July 1, 2004

Congrats! 2% Improvement is a nice clip when your portfolio goes against you. Luckily there was MSFT strength.... About the ESPP I am thinking MSFT has some strength in it, consider EU progress. Good luck sir!


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