Always know where your money is

I was talking to my friend the other day and it turns out that she doesn’t entirely know where all her savings and investments are.  Now, while this is usually a bad thing, it’s not the worst thing in the world for her.  She’s still young and is an expat, so it’s not terrible for her to have someone else managing her US based investments and taxes while she is abroad.  But even then, she should probably have some idea where her money is, as should us all.

Even George is frustrated with people losing him

Even George is frustrated with people losing him

For many of us, our parents managed our money when we were kids.  They co-signed the accounts, set up any investments, etc.  While this wasn’t necessarily the best option, as it didn’t teach any of us financial responsibility on our own, it did manage to keep money safe from crazy teenage spending sprees.  The problem is now, as is the case for my friend, we may not know where the money is anymore.

Another situation is that as we grow older, we simply forget where things are.  I know plenty of people that have a 401k somewhere.  That’s the extent of their knowledge.  They have a 401k somewhere.  Maybe it’s with Fidelity or John Hancock, who really knows?

Well, HR knows.  But that’s besides the point.  The point is that we need a series of action steps in order to find all our damn money!  So let’s put some stuff on paper.

1.  If you’re younger and have just left the house, ask your parents.  Have them put together a list of all your accounts, bonds, cds, precious metals, whatever!

2.  Contact the HR department of any old employees.  You may have an old 401k account that you could rollover into an IRA and don’t even know it!  I know way too many people that don’t pay attention to this.

3.  Check with National Association of Unclaimed Property.  Eventually, if you don’t touch your accounts, the bank or investment firm is going to report this to the state.  Eventually the state will just take the money and hold onto it, making sure that your bank doesn’t claim the money as its own.  Each state does this and each state has its own way of searching, so please look for whichever state you think works best.

4.  Now that you’ve found all of your money, consolidate it!  If you can, put it all under one roof (USAA is great for this).  If you can’t do that, at least try to keep it in no more than two different institutions.

It’s not all that hard to find your money.  What it really comes down to is a conversation with your parents about money (always awkward) and calling the HR department of the place that may have fired you (definitely awkward).  At least when you’re searching the unclaimed property registry you’re just dealing with an internet search.  Although, if they actually have something of yours, you’ll probably have to talk with someone from your local government (also awkward).  So yes, this will be an awkward and rewarding process.  But mostly awkward.  Good luck everyone! If anyone finds something ridiculous (insane secret inheritance held by the state?  Hell yeah!) let me know!  I’d love to hear some good stories related to this.

Cover Letters and Resumes

Well, I’ve decided to begin searching for a new job.  This is a thought I’ve had for a few months now and it’s been dragging on me heavily as I go to work.  I feel a sense of loyalty to my current job.  They took a chance on me out of college and gave me the opportunity to develop into the role I currently hold.  However, I’m on my fourth year, already a manager and my growth has kind of gone stagnant.

For the past few weeks, I’ve been spending my time networking and building contacts in other cities (Boston! New York, Chicago, Dallas, etc) and trying to find jobs that I’m actually interested in.  What I’ve learned is that it’s damn hard to get back into the market after several years off.  Although a huge part of my job is actually networking and building interest in my company and what we do, the jobs I’ve been looking at and the people I talk to tend to be outside of the leasing industry.

Granted, I knew this would come eventually.  Leasing is not really my cup of tea and although I’ve learned a great deal about corporate financing, structuring and other items that will help me as I continue my career in finance, I’m ultimately not as happy as I could be doing what I’m doing (partially leading to me starting this site).  In the end, I’d rather be working in an M&A department or at a private equity firm, sourcing and structuring deals.

At this point, I’m working on cover letters most days, trying my best to be confident in myself and my abilities and express that on paper.  While that might come easily to some people, I’ve never been terribly good at it.  So this is something a little bit new to me.  I’m hopeful that over the next few months, I’ll have some good experiences to write about here.  Experiences that I learned from and hopefully lead to me pursuing a new career path.

Hopefully this week is lighter and I will be able to write more here.  Unfortunately, I can’t say for sure that I will but, just in case, keep checking into this space.  I should have something else up soon that has more to do with personal finance!

Money doesn’t equal happiness

I feel like this should be obvious but let’s just get it out there: Money does not equal happiness.  Happiness is attained.  It’s a state of mind. Money is simply a tool that we use to help us attain happiness but even then, it’s not necessary.

I mean, I wouldn't be mad if someone handed me this bankroll, it just wouldn't solve everything going on

I mean, I wouldn’t be mad if someone handed me this bankroll, it just wouldn’t solve everything going on

You don’t need Financial Independence to be happy.  Yes, becoming financially independent will be amazing and it will be fantastic to not have to go in to a 9-5 everyday but if you’re not happy before you get there, then you probably won’t happen once you arrive at your destination.  You’ll probably be excited for a little bit but then that will wear off and you’ll be left just wondering what the hell to do.

Take a lottery winner for example.  We all know that they have a higher tendency to go bankrupt than a normal person but are they really happier?  I doubt it.  Before they had money, often, they were slogging through their day to day lives, waiting to hit that retirement boat at the end of the journey, the one they most likely hadn’t saved up for.  When they won the lottery, they attempted to use the money to buy themselves happiness.  They buy fancy cars, big houses, and go on spending sprees.  After about 5 to 8 years, all the money is gone because they didn’t know how to take care of it in the first place.  And they still aren’t happy.

My point is that, like I said above, money is simply a tool to help us in our journey for Financial Independence and, ultimately, some sense of happiness and contentment.  It’s not going to simply provide it for us.  Just as we have to work on our budgets and investments, we have to work on being happy.  We have to put ourselves in positions where we know we can be happy.  Are you happier if you’re working out?  Join a running group or a crossfit and be a part of a team.

I think the biggest thing any of us can do is to make sure that every day we do something to make us happy.  Otherwise, we’re wasting our own time!  If you’re scrimping and saving and investing wisely, all to reach financial independence, then you better be happy.  If you haven’t reached some measure of general happiness with yourself, money will not suffice as a substitute.  It will only treat the symptom and not the disease.  Take some time and think about what has been dragging you down lately.  Think long and hard and try to see if this is something you can change.  Chances are, you’ll find that it’s within your power to fix.

 

Image courtesy of 401(k) 2013

Refinancing my car

I’ve been tinkering with the idea of refinancing my car.  This ties into what I was talking about on Monday and really comes down to my desire to maximize cashflow.  Despite my hatred of debt, cashflow is king to me right now.  And looking at this as if I were a business, the best thing I could do would be to refinance the debt to a longer term at a lower debt rate, reducing my interest expense and my principal repayments each month.

The Stocks and Cents mobile

The Stocks and Cents mobile

So I’ve been working with a firm, Blue Harbor Auto (Not an affiliate link, I swear), to get this done.  So far, they’ve offered me very competitive rates on 48, 60, 72 and 84 month terms.  Considering I only have 51 months left, all of this seems a little ridiculous.  However, if we’re talking about investment return vs debt payment, there is something to be said.  The 84 month term would only carry a debt rate of 2.85% for me, a pretty big drop from what my current loan has (6%) and would free up $200 of monthly cash flow.  Even more ridiculous, I’d actually still pay less interest (only about $200, but still) than I would pay in the remainder of my current loan.  Even adding three and a half years to the loan term doesn’t reduce the financial benefits of refinancing.

The additional $200 a month would be a huge step forward for me.  It would increase my current savings dramatically each month and would hopefully grow at a much larger rate than 2.85%.  If my investments only grow at an annualized rate of 7% for the next 51 months, that extra $200 a month will add up to just under $12K.  Even if I keep my current loan and then invest the full value for the three years after, I still will not save that much money.  From a pure numbers stand point, this is a no brainer!

The good thing about this is that there are no prepayment penalties if I pay extra or pay the loan off early, so I can still tackle the debt while investing if I choose, just utilizing a much smaller debt rate.  After doing some number crunching here, this means that if I choose to pay the exact SAME amount that I pay now, I’ll actually have my loan paid off in 45 months, as opposed to 51.  So if I were to refinance at the 84 month rate and still pay my current amount, I’d actually save myself half a year of payments.

Chances are I will probably go through with refinancing my car through these guys.  They did, however, try to sell me on an extended warranty which I declined, so I think I figured out where they actually make their money.  I’ll keep you updated as I go through the general negotiations involved with this.  I’ve never done it before but I’m hopeful this is significantly easier than trying to close a bank account with Bank of America (for the record, it’s near impossible).

 

Image courtesy of Stradablog

Invest or Pay down my debt

I’m not sure if you’ve noticed this about me through my writing but I tend to think a lot, sometimes too much.  This blog is limited to personal finance mostly but still, you’ve probably noticed that I go back and forth on concepts and ideas, wavering on the execution and which strategy is best for which time.  Which brings me to my current dilemma: should I be investing my money or putting every extra penny into paying down my debt?

I go back and forth on this all the time.  I’m already paying extra into my debt to knock it back but still, I feel like I could do more.  I look at the $750 a month I spend there and literally drool at the investments and returns I could be making.  I already put away $400 a month outside of my 401k, so if I was able to put aside $1150 a month?  Now we’re talking.  At the same time though, I enjoy putting money into my investments.  Watching my $400 a month grow into something is exciting and gives me hope that I just might be doing something right with my money!

When I look at how my net worth has changed over the past year, what I see is that my debt has just slowly, moderately decreased, while my investments in my 401K and Vanguard account have led a massive charge forward.  Since I started tracking my net worth like a crazy person, in January of 2012, my debt has decreased by only a total of $7,900 while my investments have risen by $12,500.  There is a huge disparity here and while I’m not going to say I dislike it (I do like having more money as opposed to less), I tend to think about the road not traveled.

The thing is, my investments massively outperformed the interest I paid on my stocks.  Since January 2012, my investments have paid a return of over 22%, outpacing the weighted average of 5.25% of my debts (not taking into account the tax deduction for student interest).  I can look at those two numbers alone and know that my money is being put to better use by investing it.  The bigger question now is, now that I have enough savings to feel safe in case something truly awful happens, should I just do it?  Should I just go for it, cut my 401k and my investing and just knock away my debt?

I’m honestly not sure about this.  On the one hand, I hate debt.  I truly loathe it!  It’s one of the only things that can keep me up at night and I don’t even have that much of it!!  I hope I never have a mortgage, otherwise I’ll never sleep.

If I choose to jump on the debt, this is how I'll do it.  A ridiculous avalanche off of half dome.  That's right Sallie Mae, I'm going to dump your body off half dome in the middle of winter!

If I choose to jump on the debt, this is how I’ll do it. A ridiculous avalanche off of half dome. That’s right Sallie Mae, I’m going to dump your body off half dome in the middle of winter!

On the other hand, I love watching my investment account grow.  I love having money as opposed to giving it away.  In the end, I’m almost positive that I will take stashing money into a Vanguard account over paying off my debts any day.  The more quickly that account grows, the quicker my net worth heads towards positive and the less I will worry about my debt just hiding off to the side, slightly out of view.

Opinions here are appreciated.  What do people think?  I know a great deal of people choose murdering debt while others would rather build up their cash stash.  Let’s hear it, what road should I take?

 

Photo courtesy of somewheregladlybeyond

Net Worth Update – April 2013

Well, the rent debacle continues.  It turns out there was some sort of computer error that added an extra month onto everyone in my buildings rent.  Lucky for my, I hadn’t set up auto-debit yet, otherwise I’d really be pissed off.  The problem now is that, while they attempted to fix the charges in their system yesterday, they forgot to clear the old charges when they put in new ones!  So now my total due is over $5,000.  I live in a decent place, don’t get me wrong, but I definitely do not owe that much.  Hopefully this gets fixed correctly today.  If not, I’m going to just assume that nothing changed on my rent, walk downstairs and give them a check and hope it all works out.

But on to better things!  I owe you guys a Net Worth update.  April was a crappy month.  My car got impounded, I bought some plane tickets to go back to Boston and in general, spending just wasn’t where I wanted it to be.  As always, Template courtesy of J Money at Budgets Are Sexy.

So close to positive territory I can almost taste it

So close to positive territory I can almost taste it

Gah, almost all green except for my checking account.  And I’m almost in positive territory.  Way better than I initially thought but still way off where I want to be.  This is the third month in a row my cash accounts (checking and savings) have declined and that is not a situation I like.  Hopefully May will be better all around!

Checking Account: If you take out the plane ticket I bought back to Boston ($500) and the total cost of my impounding extravaganza ($405) then this goes right back into the green category.  Obviously I’m going to be paying much closer attention to street signs from now on in order to avoid that mess again.  With flying home, well, I only do it once or twice a year so I’m fine with the cost.  Really, I look at it as though I’ve been saving up for it (I have). So throwing out the negatives, I would have hit a slight positive in April.  Although it’s not actual money in the bank, I’ll take it.

Savings Accounts: Solid growth from my contribution, not the interest. Once I hit $2,000 I think I will actually stop the contributions in here and direct it towards either my debt or my investments.  I haven’t quite decided yet.

401k: Ah, the 401k.  It’s such a driver of my net worth yet I cannot touch it.  It’s right there but no, no touchy.  I haven’t changed my allocation but I’m keeping an eye on it to see if my stocks or bonds get a bit overheated and start taking over.  I’d love to just set it and forget it but I’m not like that unfortunately.  I’ve got to check it AT LEAST once a month 🙂

Vanguard: I’m pretty happy about the growth this month.  Most of the month my account was looking pretty crummy.  The only gains were from my contributions and I was actually taking a loss on them.  Then, finally, the market woke up and pushed my money up nicely.  While the gains in this account keep coming, I don’t expect it to stay this way.  I’ve got some plans on diversifying this and protecting my cash a little bit more but won’t be unveiling them until later.

The Acura: This is ridiculous.  The value of the car went up.  Up!  I didn’t even drive 400 miles last month.  I’m liking this trend, it makes me feel like the car may not be underwater too much longer.

Liabilities: Consistent drops, I like it.  I did use my credit card for my flight this month but I paid it off.  It’s an airline card, so I got some extra miles, free checked bag, priority seating.  You know, fun stuff.

Overall, I think April was OK.  I felt pretty crummy about my finances most of the month, so to see such positive changes at the end makes me pretty happy.  I’ll keep pushing myself for more positive growth and change over the next few months and we should see some good stuff come along!  Hope everyone else had a good April!!

Today’s post is delayed

So, I woke up this morning with the idea that I would quickly put together my April Net Worth post and put it up.  Unfortunately, I received an email that completely threw this idea out the window.  On the first of every month, I receive an automated email from my Apartment Manager showing what I owe.  It’s usually just my rent, plus a few dollars for water for the month.  Today it was not.  Guess how much extra showed up on the bill.

$1700.

WHAT?!?!?

There’s no breakdown or explanation, just an open hand saying “pay me.”  The leasing office opens soon and you can bet your ass I’ll be making a fuss. I have literally no idea where they could get $1700 in fees but I’ll be finding out, contesting every single one and making sure I don’t pay a cent of this.  In the meantime, I’m going to be going back through my leasing contract to see what the hell they could possibly be charging me for.  We’ll just consider it prep for later in the day.

You’ll probably get my Net Worth update later today or you’ll get a double posting tomorrow.  We’ll see how this works out!