Quest for a Million – Net Worth – 7/2011
A funny thing happened on the way to writing this post. I was searching for an appropriate image to go along with this month's net worth update. My choices on Amazon came down to this book, which actually looks pretty good from the reviews, or the Net Worth Cock Ring Thong
The major change I made in the past month was to halve my 401k contributions. I did this for 2 reasons: 1) Increase liquidity as it is becoming increasingly apparent the firm I work for is going to be sold leaving me potentially jobless sometime in the next year, and 2) even if I don't lose my job, the way our plan's participants contribute will likely cause us to fail the ADP/ACP tests again this year meaning I'll be forced to take money out in 2012 that I put in during 2011. I'd rather not go through that hassle again so I changed my contributions such that I'll contribute about $13.5k instead of $16.5k. I wish I were maxing it out, but times are less certain than I would like so proper risk adjustments must be taken. Hopefully, this adjustment will help me reach my savings goal of $40k.
Year-to-date net worth numbers have shown an average monthly increase of 2.48% (excluding real estate). At this rate, and assuming my home holds it's current value, I'll hit my other savings target of $1M in about 5 years. That's nice, but so far in the future it's impossible to conceive. Additionally, I would anticipate a declining growth rate over time due to the increased base size so my guess is that it'll take a bit longer than that. More data points will help as will Monte Carlo simulation which I get to learn in a couple of weeks through my job! Yippee!
Nothing really to report in the table below.
Net Worth July 2011
| ASSETS | This Yr. | vs. Last Mth. | ||
|---|---|---|---|---|
| Real Estate | ||||
| My Home (Zillow) | $361,000 | -6% | 1% | |
| Savings | ||||
| All Accounts | $30,983 | -21% | -3% | |
| Retirement | ||||
| All Accounts | $232,065 | 14% | 3% | |
| Investments | ||||
| 529 Plan | $12,576 | 27% | 2% | |
| Brokerage | $5,139 | 4% | 1% | |
| Total Assets | $632,172 | 1% | 1% | |
| LIABILITIES | ||||
| Credit Cards* | ||||
| All Accounts | $5,085 | |||
| Student Loans | ||||
| All Accounts (1.5% and 2.5%) | $65,475 | -6% | -1% | |
| Mortgage Loans | ||||
| My Home (4.3875%; 30 yr fixed) | $298,416 | -1% | 0% | |
| Total Liabilities | $368,976 | -3% | -1% | |
| NET WORTH | $272,787 | 7.3% | 5% |
* Credit cards paid in full every month every time.
NC SECU Bridge Account Terminated
I am very sad to report that NC State Employees Credit Union is shutting down their bridge account program. Originally started in 2007, the account offered a relatively risk-free way to play the markets. It was great while it lasted. To quote myself:
Their stated reasoning for closing the accounts is because the credit union investment services has lowered the amount needed to open an investment account from $3,000 to $250. Thus, there is no need to "bridge" their members from deposit accounts to the investment accounts since the threshold is so low. I'm not sure I buy this though. There is a financial hurdle to investment accounts that is obviated, but the psychological hurdle is still present and bridging that may prove to a bigger problem now that the relatively risk-free bridge account is gone.
Historical returns were really quite solid. I will certainly miss this small part of my portfolio. For those of you still with accounts, you can keep them until January 2012 when the funds from your bridge account will be placed into the deposit account you designated when you opened the bridge account. I intend to keep my until the end.
Re-visiting the US Mint Direct Ship Coin Program
UPDATE: The US Mint announced today (7/22/11) they are ending the program. Blame NPR.
Many readers will recall I stopped participating in the gaming of the US Mint Direct Ship Program for credit card rewards on ethical grounds. Basically, I used to buy about $2k worth of $1 coins each month on my Schwab 2% credit card (earning $40 in rewards) and directly depositing the vast majority of the coins. Then, I'd pay the card off using the money I had deposited. There's more detail on the process in this post (Money Laundering for the US Government), but it's relatively simple. I stopped in May of 2010 once I became aware of the following disclaimer on the US Mint website:
The intended purpose of the Circulating $1 Coin Direct Ship Program is to make $1 coins readily available to the public, at no additional cost, so they can be easily introduced into circulation—particularly by using them for retail transactions, vending, and mass transit. Increased circulation of $1 coins saves the Nation money. The immediate bank deposit of $1 coins ordered through this Program does not result in their introduction into circulation and, therefore, does not comply with the intended purpose of the program.
So, doing this appears to be in direct violation of the spirit of the message above. However, take a moment to read and digest this article from NPR ($1 Billion That Nobody Wants). I don't know about you, but I found the article infuriating with regards to the waste and disgraceful legislation around it. These coins aren't really getting circulated. There's a massive backlog. The reality is if I'm spending/circulating 1 roll of the $1 coins for every $2k I'm buying, that's still better than having them sit in Federal Reserve vaults. With a problem this large, they should be thanking me for the minor role I'm willing to play in their circulation problem.
So, I'm back in the game. And yes, I'm violating the spirit of the terms by only circulating some coins, but at least I'm doing something.
PS If your mortgage is with a local bank, this is a great way to make your mortgage payments ostensibly by credit card.
PPS Dear Federal Government, if you ever want $1 coins to start circulating, you'll have to phase out the $1 bill.
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