Investing

Stock Options Package

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The company I work for split into two companies a couple of years ago and both are still privately owned by the same person. Since the split, the Owner has hinted that some key people in management may receive stock options down the road.

My company has provided stock options in the past, but not while I have been with them. The recent splitting of the organization resulted in a new Board of Directors and a fresh look at offering a stock option plan. I found out last week that seven of us received a stock options package that will go into effect next September.

I was provided a large packet explaining how the program works and that I can exercise the option to buy up to 16 shares a year (beginning 9/1/09) for 5 years at $1/share. The current value of each share is $500. So, I can obtain up to $8,000 worth of stock each year for only $16.

Historically, when shareholders have left the organization, the company has bought out their shares at the current book value. There’s even been a couple of cases of existing employees selling shares back to the company at a slight discount to get access to the money. In fact, my old GM sold back almost $200K of his shares last year because he wanted to remold his home.

I’m really happy that my company included me on this opportunity, not only for the financial gain, but also because it’s nice to know my hard work is appreciated. This is another piece in the puzzle to reach our early retirement goal in ~19 years.

Debt

No More Truck

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We’ve finally sold my truck!

We negotiated with the buyer on a price of $12,600. Less than the $12,999 we wanted, but we were eager to quit wasting time. We’ve had four previous offers on the truck and all flaked out. It was starting to eat up more time that I had planned. In addition, the truck was smogged 2 months ago because we thought we had a guy that was serious about buying it. Since the smog certificate is only good for 3 months, we were working against the clock. Our 8 week ad on AutoTrader.com was also about to expire. It would have cost us ~$100 to get another smog certificate and place a 2nd ad on Auto Trader.

We had to pull $640 out of savings to pay off the balance we owed, but with the truck finally sold, we can begin saving an additional $293/month that was going to the truck loan.

Now, our only debt is our condo mortgages, 1 auto loan, and 1 student loan.

Deals and Bargains

Great Deal On A Dinning Table

Once again, my wife hooks us up. We’ve wanted a new dinning table for awhile, but have been waiting until we could buy one that was nice enough to take with us when we get a house down the road. She found a beautiful wood table that regularly costs $500, on sale for only $250. The table includes a couple of leaves, so we can scale the size up when we get a house. The 4 wood chairs she picked out were normally $120 each, but they were marked down over half price.

Unfortunately, there was a mix-up at the store and they neglected to load one of the boxes for the table. After getting home, my wife discovered the error and called the store to ask that they deliver the box at no charge since it was their mistake. The store offered to discount the table further, if she would be willing to come back to pick up the box. She agreed and picked up the final box.

What started off as a table and chair set that cost $1,000+ (with tax), was discounted down to $324 (tax included). What a bargin!

Income Statement

August 2008 Income Statement

August was our 2nd lowest month of expenses in this year (click on spreadsheet below). My wife was out of town 2-1/2 weeks for business and I was out of town 1 week for business; all of this business travel helped save us some money. While my wife was out of town, I was able to use her company car and gas card, saving us $125-$150 in gas.

We had another strong income month, which is especially nice when combined with a low expense month. My wife earned an “extra” third check this month as well as a $236.16 commission from her old company. We also received a $200 wedding gift that was totally unexpected, but appreciated, since we have been married a couple of years. With our savings account balance rising, we’re starting to see an increase in interest income; this month we earned $28.05 in interest income.

Next month my wife may receive her 1st quarterly bonus, although if she receives anything, it will be a much smaller bonus than what she can expect down the road. We should also earn cash rewards from our Citi credit card and HSBC credit card. The only major expense planned is a few hundred dollars for a new kitchen table and chairs.

Net Worth

August 2008 Net Worth Update (+$3,434.28)

August was another good month for our net worth. It increased $3,434.28 from last month to a new total of $42,207.72.

What worked:
I received my annual company profit sharing this month to the tune of $730.72, my wife received an “extra” third paycheck, my wife’s 6% 401(k) contribution (with a 25% match) began this month and we contributed a total of $400 to our Roth IRAs.

What did not work:
We still have not been able to sell my truck, but otherwise, no complaints.

Next month:
September should be a pretty straight forward month. We have not large expenses forecast or any extra money coming in. Actually, I take that back. There is a chance that my wife may receive her first quarterly bonus from her company, but it will likely be a fraction of what she can hope to receive after she has been in the field awhile.

Debt, Goals, Investing

What A Difference A Year Makes

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Last August, I posted about how our financial situation had significantly changed for the better from two years prior. What’s interesting about that post is that 10 days later, my wife was laid off from her job and we faced a potentially challenging time. Less than a week after being laid off, we were blessed with her receiving a new job, saving us from what could put our financial situation in dire straits.

Well, now I’d like to take a look at August 2007 compared to August 2008 (see below). Again, we’ve been greatly blessed and have seen our financial picture improve more than we could have even hoped. We’ve continued to increase our retirement investments and improve our savings. We’ve also eliminated our credit card debt and improved our salaries. Another major change from last year is that my wife now has another new job in a field that she is truly passionate about. Her new job has so many benefits, I can’t list them all here. The short list is company car and gas card, 401(k) with company match, and cell and internet reimbursements. What you can’t see in the breakdown below is that her annual bonus should be ~$20,000!

Goals

Net Worth Milestone – $40,000

We passed a net worth milestone of $40,000! When we hit our last net worth milestone of $30,000 in April, I thought we could hit $40,000 by October. It looks like we beat that guess by 2 months.

As of today, our net worth is $41,489.62. Helping us break $40K this month was a $900 deposit to our savings account from my Wife’s “extra” third paycheck and a $730.72 company profit sharing contribution to my 401(k). We are on pace to meet our net worth net worth goal for the year of $47,800.

Emergency Fund

Throwing Money Away. . .

. . .into our savings account! We deposited another $900 today into our E*Trade savings account with money from my wife’s “extra” third check this month. This deposit puts our total E*Trade savings account balance at $10,918.89. The funds in this account are a combination emergency fund/future house downpayment.

401(k)

Received My Profit Sharing

Good news, a $730.72 company profit sharing contribution was deposited into my 401(k) account today.

With the poor economy, my company only contributed $12K total to the plan this year, much less than last year. Therefore, I knew I would not be receiving the $3K that they gave me last year. Nonetheless, I was happy to relieve 6% of the total they contributed to profit sharing this year. There are close to 40 employees in the company, so I feel like I received more than my fair share.

I’m fully vested, so 100% of the money is ours, although we won’t be touching it for 20+ years.

401(k)

Almost Profit Sharing Season

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My company’s annual profit sharing contribution should process in the next week or two. I am anxiously waiting to see what my share will be.

Most of the years I have been with the company, my share of the annual profit sharing has been ~$500. Last year was my 7th year with the company and my first full year as a Sales Manager. I was surprised to see my profit sharing jump to $3,005.63. I don’t expect to receive that much this year because of the challenging economy that we’re in, but I still hope to get a nice little boost to my 401(k).

I’ll keep you posted.

Our path to financial independence and retiring early.