Income Statement

September 2007 Income Statement

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As I hinted at last month, September was a great income month and a pretty decent month expensewise (click on spreadsheet below).

While my income was pretty boring this month, my wife raked in money from 3 different companies. First, she received a $1,057.94 commission check from her old job (with another $799 commission check from the same company on the way next month). Second, she received a final $1,778.75 check for last 3 weeks with company that just laid her off. And finally, she received a $1,211.54 check from her new company for her first 9 days of work. We were somewhat expecting a ~$700 commission check on a job that my wife referred to her dad’s company, but it will not be sent until next month.

October has the makings of a good month too. My wife is expecting a commission check on a job that she referred to her dad’s company (~$700) and another commission from her old job ($799.09). She may also be receiving a little commission check (<$50) from her new job for some small sales that she had her first month. In terms of expenses, I will be traveling for business for 2 weeks and my wife will be on the road a couple of days as well. With our employers covering all expenses for us when we travel, October could likely be one of our lowest expense months yet.

Net Worth

September 2007 Net Worth Update (+$8,496.14)

September has been a banner month. Our net worth increased $8,496.14 over last month to $25,763.37 (click on the spreadsheet below). We blew by our 2007 net worth goal of $22,000 this month! Now we can use the final 3 months in 2007 to start making progress on our 2008 net worth goal of $47,800. Our previous best net worth increase month was March 2007, with a $6,462.28 increase

What worked this month?
We have a lot to be thankful for. My wife was able to find a new job within a week of being laid off from her old job. Because of this quick transition, we experienced no lapse in paychecks and did not have to dip into our savings accounts. Our biggest gain in September came from an unexpectedly large $3,005.63 contribution to my 401(k) from my company’s profit sharing. Our retirement investments also received a boost by a $500 contribution that we did to my wife’s Roth IRA, completing her contributions for 2007, and a $500 contribution that we did to my Roth IRA. We also boosted our savings account balance considerably, by making a few extra deposits in September.

What did not work this month?
The Labor Day week heat wave sent everyone to the store to purchase air conditioners, including us. We spent $377.74 on a portable air conditioner.

What’s coming next month?
My wife and I will both be traveling for business in October. Since both of our employers cover 100% of our expenses while traveling, we should be able to save a little extra money next month.

Goals

Steady progress III

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As of today, our liquid assets total $30,433.46, an increase of $7,403.42 in just one month. A combination of company profit sharing, Roth IRA contributions (here, here, and here), and additional deposits into our saving accounts this month have made this possible.

To provide some consistency, I’ve decided to post Steady Progress updates to our liquid assets in $10,000 intervals. God willing, I’ll be able to post Steady Progress IV ($40K in liquid assets) sometime in mid to late 2008.

Income, Roth IRA

Wife’s 1st Paycheck At New Job

My wife just received her 1st paycheck at her new company. The $1,211.54 check she received was for 9 days of work. For the 1st 3 months of her employement, she is 1099. Therefore, her paychecks will not have any taxes taken out. After 3 months, she will be a salaried employee with taxes taken out of her check automatically. That being said, we will deposit $300 per check to our savings account while she is 1099 to ensure that we have enough for taxes in April.

After recieving her paycheck, we deposited $500 into our savings account ($300 for taxes and $200 to boost our savings) and contributed another $500 to my Roth. We have only $500 more to go to reach my 2007 max contribution of $4000.

Money Musings

Inspiration

My siblings and I were blessed to have grown up in a nice home in one of the better communities of my hometown. As a young man, it didn’t seem like such a big deal to me that our home was paid off. As I grew up, however, I realized that most of my friend’s parents still had huge mortgages in addition to a lot of consumer debt. Now that my wife and I have our own mortgage, I have an even greater appreciation for what they were able to achieve.

My parents ended up selling that house years ago and purchased a new home in a retirement community on a beautiful golf course. During a recent conversation with them, I learned that they only have a ~$23K balance on their mortgage and will likely have it paid off soon. Wow! Most people are lucky if they pay off one house in their lifetime and my parents are going to have done it twice.

Income, Roth IRA

Final Commission Check?

Great news! My wife received a final commission check from her old company today for $1,057.94. The first thing we did was log onto Vanguard and contribute another $300 to her Roth IRA , which completes her contributions for 2007 ($4,000 total). We also paid off the $377.74 air conditioner that we purchased earlier this month on our cash rewards credit card. The remainder of the check will be deposited into our saving account at the end of the month.

The good news continues. This is not actually be her final commission check from her old company. Her records indicated that three commissions were not included in the check. She called her old company and determined that these jobs are scheduled to be completed this month, so she will be paid commissions on them next month. She estimates that next months commission check from them will be $799.09.

My wife is a money making machine.

401(k), Roth IRA

Retirement Account Forecasting

To help keep myself motivated on our early retirement goal, I like to review our 20 year retirement account forecast from time-to-time.

I was happy to see today that our current retirement account balances (assuming no additional contributions) should be worth just over $100,000 in 20 years. I calculated this using an 8% average return rate, which I believe to be conservative given that the historical average return rate of the stock market is ~10%.

Obviously, we plan to continue contributing to our retirement accounts, and even hopefully increase our contributions; it’s just nice to envision what our sacrifices now will be worth later, God willing.

401(k)

2007 Profit Sharing

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I’ve been eagerly awaiting my company’s annual profit sharing. In the past, it has represented a $550 increase to my 401(k) each year. It’s typically paid around July, but my company was running a bit late this year because of administration issues.

Well, I woke up this morning and was shocked to see that my 401(k) balance jumped $3,000 since yesterday. I checked the transaction history and it turns out a $3,005.63 employer contribution was made!

I had heard that the profit sharing contribution was going to be big this year, but that’s quite a jump compared to previous years. I hope it is not a mistake. I’m not sure how each person’s share is calculated, but I’ve been told it has something to do with how long you have been with the company and that being in management helps too. I’ve been with the company over 6 years and have been a manager for ~1-1/2. I hope these are the reasons for the dramatic increase.

Assuming there was not a mistake, this would mean that we will likely hit our 2007 net worth goal of $22,000 this month, 3 months early. What a blessing!

Money Musings

Could Have Been Worse

Today is a busy meeting day for me at work (4 meetings total). I try to get my work done between meetings, making for a hectic day. In-between meetings, one of my co-workers popped in my office today asking “Do you know you have a flat tire?”. I thought he was joking, but unfortunately, he wasn’t. Since my day was packed, I figured I’d wait until after work to take care of it.

After work, I removed the flat tire and put on my spare tire – one of my co-workers was nice enough to lend a hand. I hesitated going to the tire store because I figured it would be packed with customers coming in after work. When I pulled up, there was not one customer in the office or a single car in the bay. They were able to patch my tire in 15 minutes, for no charge. Heck, they even saved me the trouble of putting my spare back under my truck.

What started off as a bad situation that didn’t turn out so bad after all.

Our path to financial independence and retiring early.