General

Veterans Day

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Happy Veterans Day to my Dad and all of the vets out there!

My Dad joined the Army as a young man and was the first recruit in Los Angeles to earn a perfect score on his entrance exam. I remember as a kid looking thru my Dad’s boot camp photo album at the photos of them firing rifles, throwing grenades, and crawling through obstacle courses. That was back when they really fired live ammo over your head as you crawled in mud under barbed wire. Because of my Dad’s high test scores, he served on an intelligence team in Japan & Korea during the Korean War. He lived the kind of stuff you see in spy movies, except if a mission was compromised, he or one of his team members could have been killed.

Serving in the military is very tough work that most of us regular citizens could never handle. Often times, we don’t have a clue of the sacrifices they make to protect our freedom. We should thank your vets and troops every chance we get. This Toby Keith song American Soldier is dedicated to you: American Soldier video

Thanks Dad for what you did for our country!

Investing

Sold Our 15 Shares of Toyota Motor Corporation

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We sold our 15 shares of Toyota Motor Corporation yesterday morning for $82.81/share. Not too bad considering we bought it for $63.71/share just 19 days prior. We ended up made $260.67 after subtracting $12.99 for purchasing the stock and $12.99 for selling the stock.

Toyota’s stock started dropping shortly after we sold and today hit a low of $64.80/share. So, we put in a buy request for 15 shares at $61/share. Unfortunately, it never got that low, but there’s always tomorrow.

Money Musings

Good Drivers Really Do Pay Less

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After we sold my truck, I took over my wife’s car since she now has a company vechicle. When I called for an insurance quote a couple of months ago, AAA told it would be $1,157 for 12 months of coverage on the car.

I received my bill from AAA, but it was for much less than I expected. I spoke to one of the AAA agents and it turns out that I had an accident on my record, but it recently came off. So, they reduced my 12 months of auto insurance coverage by $434, to $723. What a blessing.

Income Statement

October 2008 Income Statement

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While our net worth in October dropped considerably, our expenses for the month were pretty low (click on spreadsheet below). We spent a total of $ 6,165.89, which is good, especially considering we splurged on a $301.69 vacuum robot and a $196.18 hotel room for my wife while she was in Vegas.

Our incomes this month were pretty standard. In addition to our paychecks, my wife received a $90.00 reimbursement from her company and we earned a $25 cash reward from our HSBC credit card. The interest income of our E*TRADE savings account was $29.30.

Next month, our incomes will be standard but we have some large expesnses: a $1,157 annual auto insurance bill, $439 condo insurance bill, and a $1,169.14 property tax bill. We plan to cash in 5 of my vacation days to cover most of the two annual insurance bills and pull money out of savings to pay the property tax bill. Some of our other expenses should be lighter next month because I will be out of town ½ of the month.

Net Worth

October 2008 Net Worth Update (-$3,598.11)

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As with most people, October was another brutal month for our net worth. It decreased $3,598.11 from last month to $35,299.10, a 9.25% drop (click on spreadsheet below).

What worked:
We both still have our jobs. Seriously, with unemployment at 7.7% in California, we are blessed to be working. We deposited $661 into our savings account and subsequently pulled $1,000 out of saving to open a stock trading account. We purchased 15 shares of Toyota Motor Corporation (ticker TM) for $63.71/share It is currently trading at $76.09/share.

What did not work:
Our retirement accounts declined by $4,536.50, even though we contributed a total of $1,513 to our 401(k)s and Roth IRAs. No big deal, we’re not touching this money for 20+ years. I’m glad we were able to put some extra money toward retirement while the market is cheap.

Next month:
We have a couple of big annual bills due next month: $1,157 for auto insurance, $439 for condo insurance, and $1,169.14 for property taxes. We should be able to cover most of the insurance bills by cashing in 5 days of my vacation and the property tax bill will come out of savings. I will also be out of town ½ of November on business, so our food and gas should be below budget.

Money Musings

We Bought A Robot

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We decided to take advantage of technological advancements and purchased an iRobot Vacuum Cleaning Robot from Costco for $279.

This thing is as neat as it sounds. You input a cleaning schedule and it crawls around the house daily vacuuming the carpet and travertine. We were amazed how much more stuff the robot picks up because it can reach under places we can’t get to with the vacuum. It even has a side brush that reaches into corners to remove dirt, hair, etc. Another cool feature is that it comes with two small towers that serve as virtual walls. The vacuum will not pass the invisible beam emitted from the tower. We found out how important this can be when we left our front door open and the robot scaled the door jam and cruised down our sidewalk. Thankfully, my wife caught it before it ventured too far. This thing even finds its way back to its docking station to recharge once its done vacuuming. How cool is that?

My wife has bad allergies and our dog shed quite a bit, so it’s important to keep our place well vacuumed. The iRobot is a great time saver and actually does a better job vacuuming than we do.

We want to do a better job of taking advantage of technology, especially technology that saves us time. Another thing my wife and I have begun doing is watching some of our favorite TV shows online because there are no commercials. In a 30 minute program, that saves us 8 minutes or so in commercials.

Next up, a car that drives itself so I can blog on the way to work.



Investing

Bought Some Stock

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With the market beaten down pretty bad, we figure now is a perfect time for us to buy some individual stock with a little “play money”.

We took $1,000 out of savings and opened an E*TRADE stock trading account. My wife and I have had our eyes on a few stocks, but ended up choosing Toyota Motor Corporation (ticker TM) because we feel it is a strong company and will likely recover nicely when the economy turns around. We purchased 15 shares of Toyota on Thursday for $63.71/share. In the last month, it dropped from right around $90/share to its current price of $67.10/share. 12 months ago, it was at around $114/share.

We’ll see where it goes from here. With the volitliy of the market, I’m sure it will shoot above and below our purchase price. We hope to take some profits if it works its way back up to $90/share.

Investing

Update On My Friend Who Pulled $100K Out Of The Market

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My post regarding my friend who pulled $100,000 out of his investments when the Dow plummeted last week received a lot of comments. Therefore, I felt an update was warranted.

I spoke with my friend yesterday and it turns out that he reinvested the money almost immediately. He might have lost a few bucks, but the bulk of the money is back in the stock market. Obviously, I was really happy that he made that decision. We ended up having a pretty good talk about money. I appologized for butting my head into his business, but he understood that I’m just trying to help and he said he appricated it. I reminded him that having this much invested at his age puts him ahead of the curve and that it’s going to be worth a boatload when he needs it for retirement in 20-30 years.

Thanks to everyone that commented on the original post. As always, I appreciate the input and feedback.

Deals and Bargains

One Advantage Of The Depressed Housing Market

Last year, we were able to get our property tax reduced $767.20 by simply filling out a one page Property Tax Assessment Appeals Application.This year, we had planned to complete another application because our property value decreased again.

To our surprise, the County Tax Assessor’s office automatically reduced our property taxes this year by $578.52. We didn’t have to file any application. Our property taxes went from $2,916.80 (two payments of $1,458.40) to $2,338.28 (two payments of $1,169.14).

Man, I was impressed with the County Tax Assessor’s office when dealing with them last year, but now I am really impressed.

Investing

In A Panic, My Friend Pulled $100K Out Of The Market

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My best friend inherited $100,000 when we were in college over 10 years ago. He blew through the money quickly and ended up with nothing to show for it. A couple of years ago, he received a 2nd inheritance of ~$160,000 and swore not to make the same mistakes. He immediately worked with a financial planner, investing $100,000 and depositing the remainder into a savings account.

During our conversations over the past couple of years, I got the impression that he was slowly spending the money in his savings account. Since he is in between jobs and will not likely receive another inheritance, I was worried, but knew that he at least had the $100K invested in a diversified portfolio. Whenever we spoke about money, I reminded him that, if he leaves his investments alone, he will be set when he retires.

Last week, he called to let me know after the Dow plummeted, he freaked out and pulled all of the money out of his investments. I explained to him that it was only a paper loss until he pulled the money out and that with his timeframe to retirement (25-30 years) it doesn’t matter what the market does short term.

It’s tough to see a good friend make such a huge mistake. I’m half convinced that he is going to deposit the money into his savings account and slowly bleed it dry. Because he’s like family, I’ve got to talk some sense into him. I’m going to call him back this week to encourage him to reinvest the money and leave it alone (no matter what the market does short term).

Our path to financial independence and retiring early.