memoryloot

It’s that time again! Well, actually this would be the second time doing this ever but I finally found some time to figure out how much my retirement nest egg has made. I would have given a report for the 1st quarter but since I’ve been too lazy, I’m combining this with my 2nd quarter results.

1st Quarter
My entire retirement income went up 5.49% since the end of 2006. When you subtract all my contributions as well as my company’s 401K match, the gains was a measely 0.40%. Definitely nothing to be proud of. The first 3 months was when the market pretty much traded sideways. There wasn’t alot of movement at this time as far as from my part. I was only contributing 7% to my 401K since I needed to squeeze out my paycheck due to vehicle maintenance expenses and setting aside some cash for my 6 months emergency fund.

2nd Quarter
My entire retirement income went up a whopping 20.21% since the end of 2006! That’s a 14.72% jump since the end of 1st quarter. After my contributions and company match were taken out, that gain was down to 7.98%. So what went right this time?

1. I was given my annual review and got a bump in pay for that.
2. I was also promoted and that further bumped my salary up.
3. I paid off all my vehicle maintenance bills.
4. The stock market also went bullish and is still doing so.
5. Completely funded my emergency fund.

All these events made it possible for me to increase my 401K contributions to 30% of my take home pay. Yup the max! The best quarter I’ve had since I began monitoring my earnings.

Looking Ahead
I’ve got a vacation and car insurance to pay for that will suck up some money for this next quarter. Besides that I should see another steady increase since I will still be contributing 30% until I reach the maximum pre-tax cut-off. That probably won’t happen until early to mid 4th quarter. Just in time for Christmas shopping for some extra cash.

Last month I decided to bump my 401K contribution up to 30%. This change took place in my last pay check 2 weeks ago. And you know what? It wasn’t so bad. Getting promoted certainly help since my bump in my salary may have eased the pain a bit. This was good timing since I fully funded my emergency fund at the time of my promotion and I was going to contribute this amount regardless if I was getting promoted or not. In reality, a savings of 30% a pay check translated to only a decrease of $300 of my initial take home from last month. This will also decrease my taxable income for next tax season so I don’t give the government more than they deserve of my hard-earned money. Unfortunately, they cap the total amount of pretax dollars you can put in your 401K to $15K per year. I’m guessing they will stop me from my 30% savings by time Christmas roles around. This would be great timing since I’ll have extra cash for presents! It’ll be like a bonus every holiday season. I’m also not strapped for cash these days. I actually have a good amount of pocket change that is more than enough for a typical week’s miscellaneous expenditures.

Next step, buy investment properties…

2006 was certainly a year for me to remember. It was the year I finally became debt free. It was also the year where I learned how to manage my retirement money and began to seriously analyze and save for my future. My goal is to make my first million in 10 years. So far so good.

I am happy to report that my investments from 2006 went up 7.76%. This amount did not include contributions. With contributions, my portfolio rose 11.01%. The first quarter of 2006 I was up 5.74% from previous year’s amount. Second quarter performance sunk my portfolio down to -0.30% when the market sold off. By third quarter, I recovered my losses and was up 2.46%. I began making contributions to my 401K again in the 3rd and 4th quarter.

Based off of Robert Kiyosaki’s “You Can Choose To Be Rich” workbook, I was able to come up with the following analysis of my financial state.

HOW MUCH DO YOU KEEP? I kept 10.6% of my income.
Goal: Increase the percentage of income you keep.

DOES YOUR MONEY WORK FOR YOU? 2.5% of my income is working for me.
Goal: Increase your percentage of passive or portfolio income.

WHAT IS YOUR INCOME AFTER TAX? I pay 35% in taxes.
Goal: Decrease the amount of tax you pay.

HOW MUCH OF YOUR NET INCOME GOES TO HOUSING? 24.7% of my income goes to housing (thanks to coming back home to live with the folks).
Goal: Keep housing costs under 33% of net incoming.

WHAT IS YOUR RETURN ON ASSETS? My cash-on-asset return is 3.67%
Goal: Increase your cash-on-asset return.

HOW WEALTHY ARE YOU? I can live for 9.26 months without worrying about my expenses.
Note: Once your monthly passive income exceeds your monthly expenses, you’re infinitely wealthy because your assets are working for you.
Goal: To purchase assets that generate passive and/or portfolio income in excess of your monthly expenses.

If I was to give myself a grade, it would probably be a B or B-. I think I can do better as far as saving more and improving on these numbers. Let’s see what 2007 will bring.

On a side note, one of my guilty pleasure is being cancelled. Last episode February 22nd.

With today being the kick-off of the Holiday shopping season, many people are out there shopping to their hearts content. Not really bitten by the shopping bug like my sister and girlfriend, I decided to go take my car in for a free rotation and balancing of my tires. For some weird feeling I knew I was going to need to spend some money today. Unfortunately my hunch was correct when the service guy told me that all my struts for my car is leaking. I also had to flush out my brake fluid and adjust the rear brake rotors. The struts job will cost nearly $800 and to flush out my brake fluid and adjust the rotors cost about $80. I opted for the cheaper service only because I still have to pay for my bike’s service tomorrow. So for the rest of the year, I’m going to need to buy or pay for the following transportation service and items:

$750 – Valve adjustments and tune-up for motorcycle
$800 – Replace my car’s struts
$500 – Motorcycle insurance
$70 – Motorcycle registration
$400-$800 – New motorcycle helmet since my helmet is “expired”

This doesn’t even include my Christmas shopping that I need to do. It looks like I won’t be saving any money until the new year.

What I thought was a sure thing turned out to be a pretty big mistake. I lost 4.1% of my position in GLD in a matter of 6 days. Talk about volatile. I’m still watching GLD, XLE, and now EWJ which focuses on Japan. It’s looking like Japan might be starting a new trend pretty soon. But I’m going to be a little bit more cautious about this one.

I’m also learning that I have to be constantly monitoring my 401K’s portfolio. Within the past 2 months, my mutual funds have crept up higher and higher and now would be a bad time for me to jump into them since they seem to be overbought. Oh well, lesson learned.

After seeing signs that I can make a few bucks from GLD, I decided to jump back into the fund. The signs are there for a good upswing: the price today crossed the 200 day moving average, entered above the upper Bollinger Band, RSI indicates that it isn’t oversold or overbought, and finally the cross in the MACD line indicating a potential bullish uptrend. Don’t forget to look at the price. We’ve got 6 consecutive up days.

Finally sold my energy position yesterday at a loss. Can’t believe XLE fell over 3% in one day! Thank goodness SHY’s dividend will help ease the pain. I suppose the news that they found more source of oil may have caused this recent downturn. In any case September-October is suppose to be historically bad months for the market. I’ll just sit in cash and international position and watch. So far international isn’t so hot either.

An attempt to recapture the Vegas feeling, I went back to Hustler and played a round of NL poker. Busted out my $50 buy-in in about an hour. Man, what a string of bad luck. I haven’t won since the eve of my birthday camping trip. When you’re not catching cards, you’re not catching cards. I was fairly content with how I played.

Made my move today. Gold fell down to it’s 50 day moving average so I got out at $61.15. A 3% loss for GLD but very minimal damage to my overall portfolio. Looks like XLE is heading south as well. If it reaches its 50 day moving average, I’ll be out as well.

I was just looking over my choice of funds in my 401K and positioned myself in for GIEIX. This fund has been doing very well in the past 2 months since I dropped it from my portfolio nearly 60 days ago. It’s gone up a good 13% since June 14. I might be in it too late, but it looks like the trend is up for this fund so I’m taking a gamble on this one with 33% of my 401K. In any case my stop loss is in place just in case my hunch is wrong.

This past weekend I was at the Bay Area with the first intention of attending a wedding and hanging out with a couple of friends. The cool weather was very welcoming considering the that Southern California was hot and humid the week before. We spent some time hanging out by the pool on Saturday and attended the reception party. It was a nice wedding. The food was good, the bride was pretty, and everything seemed very organized. We had our typical 10 course meal (although really 9 course since the mango pudding never came ) . The drive home was relaxing and mellow. I didn’t do much driving up but took about 3/4 of the drive back. Unfortunately the ability for photos was lost during a recent migration to another server, but I’ll have my guy help me resolve this issue when he gets back from vacation in Asia. In the mean-time you should be able to view some photos on the bride’s MySpace.

On another note, my ETF positions have been doing good for me. It went over the 1% mark for my entire IRA portfolio. I know that doesn’t seem like alot but considering only 25% of my portfolio is helping me gain that 1% profit. I’m still positioned in since I feel that energy and gold still have a ways to go as far as gaining more profits. As of the end of trading today, both was yielding a 2.8% gain. If either one loses 1/2 I may make that my exit point.

This past weekend I was at a wedding party and eventually the party diverted their attention to a friendly game of Monopoly. Even though we lost (it was a couples game), I had alot of fun. It reminded me how this game is so beneficial to kids. The basics of capitalism is creatively captured and day to day math skills are necessary to succeed in this game and in real-life.

Unfortunately Parker Brothers decided to make a disastrous change in this game, in my opinion. Instead of the funny money that we were all accustomed to, they are using Visa credit cards and computerized calculators. The management of cash flow and money was the main focus of this game. I mean seriously. What are we trying to teach kids these days? Its already bad to see your mom and dad pull out the plastic to buy crap that they can’t afford, but to have that confirmed in a board game is out right sickening. Its no wonder people are up to their necks in debt in this country. I guess this was inevitable since so many people out there are putting everything on credit. It’s just sad to realize that a whole generation of Monopoly players will forget about cash and depend solely on credit.