Financial

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

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.

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.

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.

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

My goal to make $1,000,000 in liquidable assets by the time I am 27 will be difficult to reach, but it is something I aim for. I’ve been told to set realistic goals, and I do make very realistic short term goals, but I enjoy making high demands of myself because they challenge me to go beyond what I know I can do.

So if you will excuse me, I have some more zeros to tack on my account balances :)

General Account: $1,453

Business Balance: $1,032

Spending Account: $461

Investment Account: $779

Permanent Savings: $3,000

Backup CD Savings: $5,036

Stock Portfolio Value: $5,715

Credit Card Balance: $0

Paycheck was distributed to permanent savings, investment account and spending account. I took $21.15 out of the general account and put it in the permanent savings to make it an even $3,000 just for fun. I have one more paycheck coming, and I will put a good amount of it towards the spending account since I will be visiting NYC this Christmas and New Year (NY is expensive!)

Thanks Trader Mike for the link on your website!

As of 11-30-2004 here are my current holdings:

Current Assests:

General Account: $1621

Business Balance: $675

Spending Account: $320

Investment Account: $653

Permanent Savings: $2,803

Backup CD Savings: $5,036

Credit Card Balance: $0

Stock Portfolio Value: $5,613

Changes:

I took out $500 from the Investment Account and put it towards stock. I bought 25 shares of Syntel at $19.05 (I got lucky and caught a nice $.54 dip) with the $500. This is in addition to the Syntel stock I already own.

Stock Portfolio News:

My total money invested is $4,800 but the portfolio is at a current 16% gain (It varies wildly througout the day). I am holding a very small postion in SCON which is a big loser so far, but will get better in the years to come. Dynegy is performing very nicely and Syntel is poised for a big move within the next three months.

Current Assests as of 11-23-2004:

General Account: $1,390

Business Balance: $676

Spending Account: $310

Investment Account: $1,093

Permanent Savings: $2,764

Backup CD Savings: $5, 036

Stock Portfolio Value: $5, 034

Credit Card Balance: $0