Monthly Archives: December 2004

Need to be Productive

On this recent post I detailed what progress I should be making after final exams finished. I am at home in Houston now and have somehow been distracted everyday.

This is no good. I’ve set out goals for myself and I have not met them. This needs to change. With whatever small amount of spare time I get during my two weeks in New York, I should try to:

  • Finalize updates on Timber Trace website.
  • Inquire about best options for opening 2nd brokerage account.
  • Get Resumite ready to do business (finalize all sample sites).
  • Add new content to online business everyday.
  • Finalize traffic alleviation proposal on I-35 in Austin.
  • Create new investment ideas.
  • Have fun.
  • Meet my goal of making $5,000 by 12-31-2004.

If you see me moseying around anywhere, make sure you ask me if I have first completed ALL of the above!

Asset Update

My weekly transfer of…

  • $60 to investment account
  • $40 to permanent savings
  • $10 to spending account

…went through on Friday like it does every Friday. I got a $150 check for some web design which I evenly distributed through the savings, investment and spending accounts. I also get a $300 check sometime next week from work.

Total assets went up $856. Keep in mind that total assets include my business balance, a.k.a. the money I OWE the fulfillment company.

General Account: $1,821

Business Balance: $1,683

Spending Account: $303

Investment Account: $983

Permanent Savings: $5,170

Stock Portfolio Value: $8,134

Credit Card Balance: $0

Total Assests: $18,094

Meeting Goals

One of my goals was to finish by Dec. 15th. It is mostly done, but I need to add content and upload the sample sites. I am a bit dissapointed that I did not do this earlier.

I don’t really expect to do any business with Resumite until I get back to school. This Dec. 15th goal was simply an arbitrary date I had picked. Next time I make a goal, it should be completed by a relevant date.

Steady Income

Investing in stocks and making my saved capital appreciate is great, but it doesn’t help me pay expenses. I like to invest and re-invest money for my future, but what about the expenses I have now?

After I graduate, to pay bills I will need some steady income. So far I have thought of these three steady income ideas:

  1. Getting a Job: Easiest way to make money. The monthly paycheck can be used for savings, investing and paying the bills. You can also simultaneously run a small, low maintenance business on the side.
  2. Real Estate: Difficult entry. Renting out a piece of real estate provides a great monthly income, but it can also be a big cash drain. This method would go along well with having a job, since the real estate generally requires little attention once established.
  3. Small Business. Intermediate entry. I personally like this one the best, because owning a business gives me the feeling of earning my money. All my risk and labor will come directly back to me with a small business. This method can also go completely wrong, and is very risky if it is your sole income.

After college, I plan on doing all three within two years. As of now, I already invest, run small businesses and hold a job. Some real estate needs to be added to my current situation. Perhaps I will buy a small apartment or condo in an emerging area soon.

Longterm Investment Idea – GE

I generally don’t like large-cap stocks, but with my new long-term portfolio in the creation I am taking a peak. Look at the 10 year chart for General Electric (GE) and it’s steady growth over the last two years.

After a major correction, I believe GE will continue to follow its regular growth path…and let’s not forget about the dividend. Tell me what you think.

Having a PhD

I found this article about Mario Gabelli interesting. One quote I particularly liked was:

Gabelli made it clear that his firm only hired PhDs – and by that he means

poor, hungry and driven.”

I love it!

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.

Do I HAVE to use it?

Credit cards. Ughh.

I’ve been using my own check card since I was a senior in high school, and I love it. Transactions are immediately posted online and you can only spend what you have. I’ve only recently got a credit card to help build my credit, but I’ve barely used it.

Since I have to use it, I fight the tactics CC companies use to make you overspend and borrow their money. Two of my tactics:

1.) Pay before you buy. I will pay off my credit card before any charges are posted. I will have a negative balance, and work my way up to a $0.00 balance as I charge items.

2.) Counteraction. Everytime I make a charge, I go home and immediately transfer the funds into an account I have for paying off the credit card. When the charge finally posts to my account, I always have the funds to pay it off.

I still believe credit should be used for buying assets only, not a new Gucci wallet.

Savings Restructure

Today I cancelled a $5,000 CD account I started over a year ago. To date, I earned only $39 from interest. The interest varied every month between .5% and .75% annual interest. With rates that low, I feel some of the money would be better off in a different investment vehicle.

For the time being, I put the money in my permanent savings. I will leave half of it there, and start my 2nd brokerage account with the other half. My 2nd brokerage account will be my longterm account. The stocks or funds I buy for this account will be held for 2+ years at least, if not 30+ years.

Current Asset Structure:

General Account – $ 1,259

Business Balance – $ 1,683

Spending Account – $ 243

Investment Account – $ 873

Permanent Savings – $ 8,080

Stock Portfolio Value – $ 5,100

Credit Card Balance – $ 0

Business Golf

Today when golfing with friends I realized how much I like golf just for the business aspect of it. The comfortable, open and semi-formal aura of the golf course makes it an ideal spot for personal and business talk.

On another note,

Everytime I view NevBlog, I feel it emulates The Kirk Report more and more. This is not a bad thing since I greatly respect his dedication to the market and desire to help the little guy.