The Bottom Line

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The Bottom Line

Josh puts it right: “we are coming to the end of our net worth exploration and have generated a fairly specific map of where we have been financially and will soon be plotting course for the terrain ahead” … well summarized, Josh! ūüôā

What’s Josh doing right/wrong? What can you recommend?


cash-flow-josh2It seems we are coming to the end of our net worth exploration and have generated a fairly specific map of where we have been financially and will soon be plotting course for the terrain ahead.¬†¬†My networthiq graph shows the¬†progress made since February 2008.¬†¬†Since then, I’ve put into practice¬†what I learned on this blog and others. There isn’t much¬†I would have done differently, I just wish I¬†would have done everything a lot sooner.¬†¬†Saving, investing¬†and actively learning¬†about¬†investments¬†are some key actions I would¬†have preferred to start¬†in Pre-K rather then¬†my last semester¬†in college.

I still need to work on¬†basic money management. Better budgeting for items I need to buy in order to maximize the amount I’m able to save and invest. This also includes money management for my internet business. This topic is approaching in the curriculum I’m studying in order to become a member of the CFA which has taken up ALL of my available time to do anything other then study, so¬†learning more on¬†that subject¬†should solve two problems at once.

Before moving ahead in this experiment, lets record our current position.

Current yearly net earning from full time job: $31,300

Expenses include:

  • Cell phone:¬† $720 per year ($60 per month)
  • Car insurance:¬† $1500 per year ($125 per month)
  • Gasoline: $ 1440 per year ($30 per week at worst)
  • Food + other: $3600 per year ($300 per month)
  • Cleaning Expenses: $480 per year ($40 per month, this is¬†my¬†share of¬†a house cleaning service)
  • Charity: $4800 per year ($400 per month, this is 10% of my gross income)

Total Expenses = $12,540

Income – Expenses =¬† 31,300 –¬†12,540 = $18,760 per year (this does not include my 401(k) savings plan, which is automatically subtracted from my bi-weekly check and acts more as a retirement safety net.)

My Net Worth as of March, 2009

  • Cash: $1,000 (I like to keep this around, just in case there’s a good poker game…just kidding)
  • Stocks: $5,000 (this was down to about $3,000 in February, but has now recovered to about $5,000)
  • Retirement: $12,000 approximately in a SDRA.
  • Cars: $8,600 (just replaced the Audi with a 2002, 330xi. The Audi was totaled in a car accident, had to put in about $1500 out of pocket after insurance gave me what they thought the car was worth + cash from selling the crashed Audi + help from family.)
  • Personal Property: $1,000 (TV, computer….stuff)

Liabilities = $0

Assets – Liabilities = $27,600

Recording this information is in itself exciting and motivating.  I look forward to reading the suggestions, comments, and questions of those participating, following along or just stopping by.

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Reader Comments

Wow Josh, how in the world did you get an 02′ 330xi for 8,600.00?? The e46 330xi has been our plan for quite some time as a replacement for my company leased BMW when the lease is up in a little over a year. But we haven’t been able to find anything near as low as that, even in cars with 120k miles or more or with a salvaged title.

Scott, it was on Ebay when I crashed the Audi and watched it on the last few hours of the auction. I always bid within the last 20 seconds to keep the price down but I’m sure the mileage is what kept the price low (120,000). You may be able to check it out if you look up the auction number 220368840288.
Just registered the car on Monday of this past week and already enjoying it. When you go to buy yours, be sure to check the front suspension, a normal ware point in these cars. (not to expensive if you do the job yourself, but without a lift it’s definitely a pain in the neck to replace)

Josh, sorry to hear about the accident. Glad you made it out OK, without having to visit Scott’s business. ūüôā

The new car looks great, enjoy it. Glad to hear it’s working out for you. I’ve bought two cars on eBay in the past. One work out great, the other was a disaster. My wife has banned me (permanently) from buying vehicles on eBay as a result. ūüôĀ

I think you are getting a great jump on things, so don’t worry about starting “late.” I wish I had become as interested in learning about stock investing at as early an age as you are.

You’re off to a great start. I look forward to watching your success.

lol, yea ebay can sometimes be a hit or miss.
Thank you for the encouragement Jeff.

Josh, we just saw your car, you got a killer deal man! We have been keeping an eye out on ebay and autotrader for a while now to get extremely acquainted with the price of the e46 330xi and 330ci convertibles for next years purchase. We will be buying in a little over 1 year when the company paid lease is up on my 328i, so I hope we can find a deal like yours. Or we’ll buy yours if you want to sell it next year!

I love that you designate 10% of your income to charity.

Scott, thanks man. With patience on your side, your bound to find a good one for a great price.

Debbie, It’s always a joy to give. It’s also a Biblical commandment. I do it for both reasons.

@ Josh – Great job so far! You have basically no expenses and no liabilities, which is an incredible spot to be in. Your income is sure to rise and as long as your expenses don’t rise too much along with it you will have increasingly more cash to invest towards your number. Also very cool that you tithe.

@ Josh – Not much advice to you, because there aren’t too many variables to play with here; you already recognize that you need to increase your income (good luck with the trading!) in preparation for when your expenses DO start … and to estimate those, I suggest that you look at Ryan’s and Mark’s income / expense lines as they appear in their upcoming posts and plan around something that looks like those (young guys on their way up … one with / one without dependents, I think?).

I presume that you can pretty much do what you want (as far as selecting investment types/activities) with the $12k in the SDRA? Otherwise, you may want to think about ‘relocating’ those funds to someplace that you CAN use them …

Ryan, looking forward to your post…like a window into my future.

Adrian, I would like to remove those funds, but I figure I might as well wait until next year when the remaining 33% of my employer match is fully vested. Then the funds are really mine. Until then I will continue to trade with them.

@ Josh – Sounds like a plan ūüôā