Explanation Of Accounts

All of these are seperate checking and savings accounts I have:

General Account - When any money comes in or out, it goes through the general account. There is always at least a $400 cushion in the general account for a rainy day.

Spending Account - This is the money I have available to spend on any frivolous thing I want. 20% of my paychecks go here and 20% of money generated. $40 per month is also automatically deposited. By 11.17.2006 I plan to use this account (with the same percentage rate) to pay for all general living costs.

Spending Account 2 - This account was created for larger purchases related to spending such as Christmas gifts, vacations, birthday gifts etc.. I have started putting about $20 per week into this account through automatic transfer. This account should most likely build year-round until big events come along.

Investment Account - I keep a minimum of $500 here at all times. I put a mandatory $240 every month and 30% of other income. When the amount tops $1K, I generally infuse the money into my stock portfolio. Any purchases that make me money are charged to this account also.

Bill Account - I’ ve got bills to pay, and this is where I pay them from. There is approx. $10 per week being automatically transfered to this account.

Permanent Savings - This is the ultra-secure savings account which will not be exposed to risk. I put a mandatory $160 in here every month plus 30% of other income. I will never touch this money until I am over the hill.

Charity Account - This account slowly builds money all for the purpose of giving it away to charitable causes. Making money feels great, but giving it away feels better!

Stock Portfolio – My current brokerage account value. This can vary wildly as stock prices rise or fall.

ROTH IRA - My ROTH IRA account which I buy stock, bonds, index funds etc. I will never touch this money till retirement.

Emigrant Direct Account - This is another permanent savings account, but not hosted with Bank of America. I keep this account aside because it gives decent returns and no risk.

Credit Card Balance - This will always be zero or negative because I pay off my credit cards before charges are even made.

Business Holding - This is the amount of money I OWE to the company that fulfils all my online business orders. Since bills usually come 2-3 months later, I sometimes leverage this money for play in the stock market. This money CAN be used, but I generally do not.

Blog posted on: December 14, 2004

15 comments on “Explanation Of Accounts

  1. Jack Miller

    I’m 54 and have made several million dollars in my life. I lost a few million too. I over-leveraged in real estate and had to really struggle to stay out of bankruptcy. Through the grace of family and friends and the hard work of my wife and daughters, I squeaked through. I am now ready to retire to a life of helping others. You have a plan and will do well. I will enjoy tracking your progress.

  2. flipping70

    I agree with Jack. It sounds like you have a good handle on your accounts. Do any of your accounts cover miscellaneous bills? These are those that come up beyond a monthly basis such as a club membership The idea is to divide the bill by the frequency it occurs and set that money in a supplemental account. For example: If a health club membership is $30 every three months, then $10 would be the monthly amount. Then when the money is due it keeps the budget intact each month. A lot of this depends on if your a homeowner and have a family as more bills are required to live.

    I wrote some information on this in my web site Flipping70 Budgeting and Personal Finance

  3. All Knowing Goddess

    Hi there, Just curious, what is your online business? It seems to do a bit of income for you.


  4. Neville

    Counting my business as an asset is confusing and misleading in my opinion. It makes me think I have more money than I really do.

    EmigrantDirect.com is an online bank that offers about 4% interest on their accounts. I keep this account as a permanent cash savings account, aka an extremely safe and reliable account that is not exposed to ANY risk.

    This account has a low return, but no risk. I have other accounts with higher return but higher risk. I try to balance myself.

  5. Anonymous

    What type of savings account offers a higher rate than EmigrantDirect.com’s 4.5% savings rate? Just wondering ..

  6. Anonymous

    EmigrantDirect is currently 5.05%
    as is HSBCDirect.
    UFBDirect.com is 5.17%

    Question: Why exactly do you need to pay off your credit cards before charges are even made?
    I don’t carry balance, but my money is invested until I have to pay off my credit cards.

  7. credit card debt

    Nice to see when somebody has a zero credit card balance because he pays off everything. May be that is because everything is so well organized?

  8. Anonymous

    Why make $100 in separate accounts?? I would rather put all of them in to emigrant direct account so they work as much as they can. You can connect other accounts with your emigrant one and when neeeded you can transfer money wherever needed. I do the same and make lot more interest than if I do it your way.


  9. Anonymous

    I have been doing been doing curb number painting for sometime now and as i was googling different companies in the area that do the same i came by your page…..

    truly inspirational person..

    but i feel that there are many haters out there…
    keep doin what your doin..
    expect nothing but greatness

  10. OldSkool

    Dude you already got the master plan, College was just a exercise for you mind. Now that your mind has developed. I think you need a television progam to develope others.You can call it Money Millitant or Money factory .


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