Liquid Net Worth Growth (not including condo nor blog/graduate fellowship unpaid income tax savings)

In October of 2011, I had to make a fairly significant change in how I calculate my net worth and asset allocation percentages each month. The change pertained to the cash I consistently save up throughout the year in a high interest online savings account (Dollar Savings Direct) in order to pre-pay self-employed or unpaid (from my graduate research fellowship) income tax to the government in the form of quarterly tax payments. What was happening was that the balance in this tax savings account (which was being counted in to the cash portion of my asset allocation) was becoming too large, and it started to skew my asset allocation calculations. 

Keeping this important change in mind, let’s continue…

Overall Net Worth Growth

Important Note: In general, I operate on the belief that I shouldn’t compare, measure, and/or gauge my financial success based on the performance of any market index. In particular, this comparison should and is not used to make changes in my financial planning. Instead, as I mentioned above, I prefer to think of if I am/am not doing well by if I am meeting the specific financial goals I set out for myself. However, I still do think it is interesting to track how the market does, and for that reason, I include the S&P500 performance in my progress updates. 


From 27-December-2011 (when the last portfolio update was computed – see link below for more information) to 11-June-2012, the S&P 500 index increased 3.45%. Not too bad I suppose!

My Personal Finance Journey – November-December 2011 Portfolio and Net Worth

During that time period (January-June 2012), my liquid net worth (excluding condo ownership and unpaid tax savings) increased 7.92%.

Overall, I am very satisfied with this result, as it reflects the hard work I have put forth so far this year towards my financial goal of maxing out my Roth IRA contributions ($5,000).

Condo Equity Growth

I now currently have 19.60% home ownership in my condo (up from 9.07% at the beginning of 2011), with this accounting for 28% of my real net worth (so net worth subtracting the condo loan – this is different from the net worth figure discussed above).

Permanent Portfolio Performance Update

While holding the Permanent Portfolio from 27-December-2011 to 11-June-2012, the Permanent Portfolio increased in value by 3.60%. During this same time period, the S&P 500 index increased by 3.45%. So, looks like it only performed slightly better during this time period. 

Update on Financial Goals for 2012

Overall, 2012 has been a good year so far. A big thanks to everyone’s help for keeping me motivated and accountable! Below is a short summary of some of the big progress I’ve made so far. 

• I am well on my way to maxing out my Roth IRA for 2012, with over $4,000 contributed so far. 
• Donated close to $1,500 on my own money to the Multiple Sclerosis Society. Raised ~$6000 towards my MS150 fundraising bike ride in early June. 
• Saving money for and executing on my scheduled estimated quarterly tax payments.

Review of Current Asset Allocation (excludes condo and tax savings)

• Overall Fixed Income / Equity Allocation
• Currently, 29% of my net worth is invested in fixed income instruments (cash or bond funds), and 71% is invested in equity.
• This is 4% off from my targets for these categories of 25% (fixed income) and 75% (equity). So, while it is still within my +/- 5% allowable band limits, I will keep a close eye on this overall level in the coming months to increase the amount of equity holdings I have compared to fixed income to match my targets. 

• Equity Allocation
• In the equity portion of my portfolio, 72% is invested in US Domestic Equities with the remaining 28% being held in international equities. 
• This is almost perfectly aligned with my equity breakdown targets of 71% and 29%, respectively, for US Domestic and international holdings (only 1% off). No action needed at this time. 

My next moves for the July-August 2012 time frame will be to do the following:

• Contribute the remaining $800 to max out my Roth IRA contributions for 2012. Should be able to do that in July easily. 
• Once I finish contributing to my IRA for 2012, my financial attention will then turn to the following question – Do I use my extra money to pre-pay large amounts on my condo home loan, OR start investing in my tax-deferred Individual 401(k) account?
• I still am not sure what is the best answer here. What are your thoughts?
• Use my 1% home value home maintenance fund to fix various small things that are broken around my condo after 2 years of use. 
• These things include a closet door off the hinges, the light-switch in the bathroom not working all the time, and some pipes under the sink that need to be re-caulked. Once I get these things repaired, I will then need to replenish the depleted funds in the home maintenance account. 

Wish List 

• At some point, purchase the Vanguard Total Stock Mkt Idx (MUTF:VTSMX) to replace S&P 500 index fund, whenever more money is needed to increase my domestic large cap asset class holdings. This gives better, broader diversification to the US stock market.

The blogging goals for 2012 were as follows:

• Read and interact with (comment) 25 partner blogs per week.
• Not on track. Need to be better at commenting on more blogs.
• Continue active participation as a proud Yakezie Personal Finance Blog Network member.
• Not on track as much as would have liked. I’ve had trouble having time to comment in the Yakezie Forums as much as I’d like to. I need to be better about this!
• Publish 3-5 blog posts per week.
• On track, although a lot of the posts recently have been guest posts. I’d like to have time to write more of my own articles during the 2H2012.
• Obtain 800 unique visitors per day average by end of 2012.
• Not on track – Currently averaging about 400 visitors per day. Not bad at all, but not quite to this year’s goal yet!
• Host all personal finance blog carnivals (Festival of Frugality, Best of Money, Tax Carnival, Carnival of Personal Finance, Totally Money, Carnival of Retirement, Carnival of Financial Planning, Carnival of Passive Investing, etc).
• On track – Have hosted Best of Money, Carnival of Retirement, Totally Money, and Carnival of Personal Finance this year so far.
• Continue organizing Carnival of Passive Investing in 2012. Offer hosting of the 12 editions for 2012 to guest hosts. If you’re interested in hosting, October, November, and December 2012 are still open and in need of hosts! You can view the schedule by clicking here. Also for the Carnival in 2012, my goals are to a) continue getting passive investing authors involved and b) start reaching out to financial journalists (maybe from Kiplinger’s or Money Magazine, etc) and/or financial reporters on TV.
• On track – Have all of the guest host slots filled except for the December 2012 one.
• We’ve had a couple passive investing authors help judge the articles this year, but I haven’t had as much time to follow up on this as I would have liked.
• Continue to spread word about benefits of passive investing over active investing. Get involved in BogleHeads forums as well.
• On track. Need to participate more in BogleHeads forums though.
• Write 1 guest post for another blog per month to expand reach of my ideas.
• On track – Have guest posted for Consumerism Commentary, Good Financial Cents, Budgets are Sexy, and Enemy of Debt so far this year.
• Create an eBook on one of the following topics – a) Ways to be Frugal, b) Investing Strategy, c) Steps to Buying a Home, d) Getting out of Debt, or e) Financial Prioritization / Account Hierarchy.
• Not on track – Have not had time.
• Possibly transfer blog to WordPress hosting. First, migrate Carnival of Passive Investing for practice before do My Personal Finance Journey.
• Not on track – Have not had time.
• Create and publish monthly newsletter – “Intelligent Financiers Newsletter.”
• Not on track – Have not had time.
• Attend blogging, marketing, finance, or real estate classes at local community college or nearby conference locations. Particularly, I would like to take a class or two to learn more about Search Engine Optimization (SEO).
• Not on track – Have not had time to follow up on this.
• Submit blog posts to 5 blog carnivals each week (or after generate 5 new un-submitted posts) to expose my blog to new audiences and build links.
• On track. Have been doing very well at remembering to submit to carnivals whenever I have a critical number (5 or so) of articles published.
• Successfully execute Tour de Personal Finance in July this year. For 2012, plan further ahead of time to gather more entries (max = 64) and get some sponsors involved. If get sponsors, donate 50% of the earnings of the event to a charity chosen by the yellow jersey winner of the event and also offer prizes for top place entries and jersey winners.
• On track – Will take place shortly. Keep an eye out!
• Do Easy Like Sunday Morning Roundup and Recap 2X per month minimum.
• Not on track – Have not had time.
• Improve social media presence on Twitter and Facebook. Establish a more regular M-F posting schedule for those outlets.
• On track – I’ve been sharing much more content on Twitter and Facebook and have also been submitting the articles on this site to social media sharing sites such as Reddit, StumbleUpon, etc.
• Feature one Cheapskate Jake Frugal Ramblin’ per month.
• Not on track – Have not had time. 
• Run 10% Blog Income Give Back Project each month. Continue teaming up with local charities to build relationships. Try to get other sites interested in doing something similar and also begin to look for sponsors for 1-2 of the giveaways.
• On track. I’ve really enjoyed doing this!

• Start and grow personal finance group speaking service. Generate ideas for speaking topics. Offer to local community first and build from there. Create page promoting service on My Personal Finance Journey.
• Not on track – Have not had time. 
• Continue to try to find other ways to help people with their finances away from the blogosphere. One thing I’ve applied to do is become a volunteer credit counselor with Credit Education.org. However, I have not heard back from them, even after submitting my application multiple times. Another option I could pursue is offering general advice on finances from a life coach perspective – lifestyle, frugality/money saving tips, life values and dreams, etc. You have to be very careful in making it clear to not offer advice on specific financial instruments since you must have the correct certifications for that (which I do not have). This might be hard for me to resist delving in to the specifics, but it could be fun! I would definitely need to learn more about the legal aspects first though.
• Not on track – Have not had time. 
• Start building smaller sites – one about blogging tips, finance from a scientific perspective, running, and my family’s genealogy as time allows (this is a lower priority goal).
• Not on track – Have not had time. 
• Network with other bloggers, with a particular focus on physically meeting them to build relationships. The bloggers I have met in person so far are really interesting people!
• Not on track – Have not had time. 
• Incorporate affiliate resources in to posts where relevant.
• Not on track – Have not had time. 
• Negotiate advertising deals for other sites.
• Not on track – Although I’ve done a few, I haven’t had as much time to actively pursue this so far this year. 

Looking over the various progress I’ve made and haven’t made thus far in 2012, the first conclusion that can clearly be made relates to PRIORITIZATION.

• For example, since blogging is not my full-time job, I’ve unfortunately had to let some of the blogging initiatives slide, not because I’ve lost interest in blogging (quite the opposite actually!), but because 1) I prioritized my day-job and personal goals ahead of them and 2) I decided that I didn’t want to stay up until 2 AM each night after working a full day doing research in graduate school. 
• However, during the whole process, I was up front with myself about what I was and was not going to do. For example, I placed a high priority on meeting the commitments I had already promised on for the year in continuing to organize 1) The Carnival of Passive Investing, 2) The Tour de Personal Finance, and 3) my monthly 10% blog income give back because I strongly believe in what they stand for. I’ve realized that doing this prioritization exercise with myself makes me feel less stressed during the day and less frustrated in not being able to accomplish enough.

Another question/conclusion that pops in to my mind when reading through the progress update above is this – were the blogging goals I set for myself at the beginning of 2012 too ambitious and not realistic? And, I suppose a follow-up question to this would be – do I regret setting these goals?

• Looking back on the blogging goals, I realize that they were indeed a little too involved for someone that only blogs part-time and for fun. If, on the other hand, this was my full-time job, I have full confidence that I could have been on track with the majority of the more strategic/innovative goals I set. 
• However, I don’t regret setting such ambitious goals, and I don’t feel bad about not achieving all of them. In fact, I view this list as running place to continue to keep track of ideas that I can develop and follow-up on as time is freed up in my schedule. 

How about you all? How have you been progressing on your blogging/personal/professional goals you set for yourself in 2012? 

Share your experiences by commenting below!

***Photo courtesy of http://www.flickr.com/photos/lululemonathletica/4508096755/lightbox/

According to the Office for National Statistics (ONS) in the UK, fewer people in the are taking time off work due to sickness. Could the reason for this be that workers are now more concerned about losing their jobs than they were ten or twenty years ago?

Statistics

In 1993, the average worker in the UK missed 7.2 days from work every year as a result of injury or illness. In 2011, at a time of great economic uncertainty, the average British worker missed just 4.5 days. Assuming employees have not become more resilient to health problems in recent years, the most obvious explanation for the improvement or reduction is that people are more insecure about their jobs than they were during periods of relative prosperity.

In total, employers in the UK lost 131 million work days last year, compared with around 137 million work days in 2010, which happened to be a World Cup year. As absences from work have fallen steadily in recent years, the value placed on employment has risen sharply. Nobody wants to become unemployed in a flagging economy, so people are doing everything they can to ensure that they keep their jobs. This is no truer than in London, where only 1.3 percent of total working hours are lost each year.

Good or Bad?

A distinction should be made between genuine sickness or injury and conditions that have been made up or exaggerated by workers, but clearly, providing accurate figures on such a comparison would be difficult if not impossible.

If workers are genuinely sick or injured, they must decide whether their being at work is sensible or not. A nasty flu or cold virus could cause havoc in an office, so few employers are likely to be pleased with members of staff who turn up for work and proceed to sneeze, cough, and spit on work surfaces. It is also inadvisable for workers to attempt to operate dangerous machinery with, say, a broken arm. Sometimes, people need to stay at home.

Employers are, however, often impressed by behaviour that may be described as committed or dedicated; knowing that workers are prepared to ‘go the extra mile’ or ‘give 110 percent’ can be enough to make many managers squeal with smug satisfaction. Missing an important meeting or failing to show up for work on Monday because of a ‘migraine’ might not go down too well with some employers, especially if there is an obvious reason why the employee might be absent (e.g., England happens to be playing Argentina in the World Cup Final).

There are growing concerns that workers who fear redundancy do all they can to avoid missing work due to illness or injury. Ultimately, this cannot be good for the British economy. If people work through ill health, they are less likely to attain job satisfaction. They might also become more stressed – and possibly even more ill – by deciding to venture into work when really they ought to be at home. A workforce that is desperate to impress might also be desperately unhealthy and that is no good for anyone, least of all the economy.

• Contribute $5000 (or ~$420 per month) to my Roth IRA with Vanguard this year (maximum allowed).
• On track – have contributed $4,205 so far in 2012. Only about $800 left to contribute!
• Normally, I max out my Roth IRA long before the timing for this year, so that has been a slight change for me. But, all in all, I suppose 6 months isn’t too bad! 
• Reach net worth target for this year (not displayed here).
• On track (hopefully, if market cooperates).
• Maintain target 6-9 months of expenses in cash reserve emergency fund in Dollar Savings Direct account.
• On track.
• Rebalance mutual fund portfolio to meet asset allocation target %’s (75% equity, 25% fixed income overall). 
• On track.
• Obtain 30% ownership / equity in condominium. Pay $500 per month for condo mortgage payment.
• Not on track. Currently, I have only 20% equity.
• However, I am OK with not being exactly on track with this goal because I have been committing money to a good cause by investing in a my Roth IRA. 
• Put together a will and have it reviewed by a lawyer.
• Not yet done. Need to investigate. 
• Continue to save money for trip to Grand Canyon. Currently, I have $470 saved up for this trip.
• On track – Currently have saved $820 for this trip. 
• Invest $500 in Microloans with Microplace.com to support Latin American micro entrepreneurship. This equates to $41.67 to invest per month. 
• On track – I’ve been investing in a microloan that pays 2.5% per year and helps fund Nicaraguan entrepreneurs. 
• Donate $1,150 to Multiple Sclerosis Foundation in 2012 (5% of take-home pay in my graduate school research assistantship job).
• Done – Donated probably close to $1,500 this year. I need to add up this total actually! haha
• Fund raise $7500 for MS 150 bike event in June 2012.
• Not on track. Currently have raised $5,050. 
• Likely to end up being over $6,000 after company matches. 
• Close to the goal, but not quite there! I’ll have to try again next year! I have some innovate new ideas to try for next year’s fundraising to get even more of the community involved. 
• If you’d like to donate to my event, I still have until July 12th to collect donations. If you’re interested, just click here. 
• Save 3% of take home pay each month (after taxes) for Dream Account.
• On track. 
• $30 per month save for doing running races as part of health life values account.
• On track and doing a good number of cycling events and running races. Nice! 
• $20 per month save for buying fresh vegetables as part of health life values account.
• On track – Just went to the Farmer’s Market this weekend actually get fresh veggies! 
• Save ~33% of blogging income (if any) + untaxed graduate fellowship income from my research job in a high yield online savings account in preparation for 2012 taxes.
• On track – Saving 33% of income.
• This is an extreme buzz kill each month since it is slightly more than I need to be saving to pay my estimated quarterly tax payments. However, last year, I really needed the cushion that 33% savings afforded me, so I’ll keep it at this level for the rest of the year.
• $30 per month save for trips to visit friends in other states I have not seen in a long time.
• On track. 
• $10 per month save for purchasing food for backpacking trips in the Blue Ridge Mountains.
• On track financially, but need to start backpacking since the weather is nice now!! Stop being lazy Jacob!
• Contribute 20% of blogging income to Individual 401(k) with Vanguard.
• Not on track. Have not put any money in to my 401k yet this year. 
• Instead, I have been prioritizing my investing to my Roth IRA first. 
• Once that is maxed for the year, then I’ll start to focus my attention/extra money here.
• Investigate and execute any business tax deductions I can for 2011 taxes.
• Done. Deducted home as a business expense with the help of my accountant.
• Use 1% home value home maintenance fund to fix various small things that are broken around my condo after 2 years of use. These things include a closet door off the hinges, the light-switch in the bathroom not working all the time, and some pipes under the sink that need to be re-caulked. Once I get these things repaired, I will then need to replenish the depleted funds in the home maintenance account. 
• Not yet done. Need to investigate.
• Execute 4 estimated tax payments for blogging + graduate research fellowship income on the following dates – 1) April 17, 2012, 2) June 15, 2012, 3) Sept. 17, 2012, and 4) Jan. 15, 2013.
• On track. Have paid the 1st and 2nd payments with no problems. Will continue paying going forward. 
• I’ve realized paying estimated taxes is actually no big deal at all, once you get used to it and know you have to do it (which was the hard part for me!). 
• Organize move in of my girlfriend in to my condo in June-July 2012. 
• Done. She moved in this past week in fact! 
• Start saving a little money each month to attend the Financial Bloggers Conference, 2012 in Denver in September. 
• Cancelled due to lack of vacation in graduate school. 
• Although I was making good financial progress saving $111 per month to attend the conference, I realized that I didn’t have enough vacation days left in graduate school to be able to attend. Sucks! I was really looking forward to going this year! 
• Save $111 per month until have a total of $1600 for health expenses for new Greyhound we adopted (for annual health checkup, Frontline/Interceptor, and miscellaneous health emergencies/treatments needed – Greyhounds can have a lot of health issues because they were bread for racing!)
• On track – It actually worked out pretty well since I just am using the money that I was accumulating for the FINCON12 above towards savings for the dogs. 

• Continue contributing $5000 to Roth IRA each year and using dollar cost averaging.
• Reach intermediate net worth target (not displayed here, but is 2X my current net worth).
• Own a rental property by 2016.

• Obtain a net worth of $1,000,000.
• Own a home free of mortgage payments.
• Own a vacation home in the mountains or a ski resort.
• Accumulate enough funds not have to work, but will probably anyways because I would get bored. 

-Darrow from Can I Retire Yet? posted about 7 startup business lessons.  

-Missy from Frugal Quack posted about 4 good income ideas aimed at web-based workers. 

-Andrew from Money Crashers posted about how to live a frugal life without being too cheap.

-Anthony from Fiscally Sound posted about how to save on ATM fees.

If you would like to guest post on my site, please click here to read more details about how to kick off the guest posting process. I’d love to hear from you!

There are many ways in which a contract can be breached by those who are subject to it. Equally, there are numerous types of remedies available to those who have been adversely affected by any such breach. Understanding the intricacies of contract law is a matter for solicitors, but knowing when and what action can be taken ought to be a concern for any individual, group, or company.

Contract law can be extremely convoluted, but its basics can be grasped quite easily. If a term, warranty, or condition of a contract has been breached, the affected party can claim for damages.

Employment contracts are often subject to claims of a breach, with employees taking their employers, or vice versa, to court or tribunal over various issues. Problems arising from contracts of sale or service are also common. Indeed, many aspects of civil litigation are founded on interactions between merchants and consumers.

A contract of sale might be breached when the buyer receives a product that is different from the item he purchased, especially if the goods are not fit for the purpose stated or for some other reason. A contract of service, meanwhile, tends to involve more complex breaches, the most basic of which occurs when one party fails to perform as agreed.

Sometimes, a breach is not always a breach. Contract law in England and Wales has evolved to accommodate exemption or exclusion clauses, which often seek to prevent a party from pursuing a claim in court. An exemption clause might, for example, remove the buyer’s right to a refund if he or she has used a product (though statutory rights remain unaffected).

Some exemption clauses may be considered unfair or unduly onerous. The Unfair Contract Terms Act of 1977 (UCTA) deals with most such clauses, but the common law has also devised various rules by which negligence cannot be avoided in contract. Conditions written in small print, for example, cannot always be relied on in court, as important clauses must be effectively communicated to all parties. It is also unlawful for any person to restrict or exclude by reference to a contractual term his liability for death or personal injury arising from an act of negligence.

Breach of contract solicitors in the UK advise clients on all sorts of issues, with the aim of obtaining justice on their behalf. The remedies made available by the legal system of England and Wales can be broadly defined in categories of restoration, revocation, and remedy.

More often than not, mediation services will attempt to resolve a dispute before legal action is taken. If negotiations fail, the court will assess what, if any, breach has occurred before ruling on the matter. Damages are often awarded, but the contract may also be terminated or annulled. If possible, the court might also decide to restore the positions of the parties prior to the breach. In a contract of service, the remedy is likely to involve ensuring that specific performance is completed.

Families need to act for the overall benefit of the family finances. While the interest of each family is specific and personal to individual needs, goals and aims, there are common issues affecting all of us. Shrewd planning and making the right choices on key issues can make a big difference to the family budget when times are tough.

One of the most important decisions in family life is choosing accommodation. What is negotiable? What size and nature of home is vital? If you must live near grandparents, other relatives or friends who can offer free childcare, close to school, near the workplace or vital amenities, can this still be achieved by moving a to a wider geographical radius at a cheaper price or in downsized accommodation?

How many people in the family must have a car, taking into account the combined costs of insurance, fuel and parking? Would relocating enable you to make use of public transport to get to work, college and school at a much reduced cost. Car pooling and sharing the load with friends, neighbors and relatives might be an option.

There’s no getting away from it, education costs money, whether you’re in the fee paying market or not. Careful planning is essential to take account of all those essential extras for each child and adult, including books, school, sports and work equipment, trips, clubs and computer equipment, certification and training. As your child gets older, apprenticeships, colleges and university fees require essential budgeting from the outset. That early investment will ultimately help the family achieve future financial stability.

Keep school uniform non-negotiable. School and work wear can be purchased second hand to achieve significant savings. Having a network of parents and friends to recycle and hand down school uniforms from older to younger kids is a wise choice. Work wear can be vital to maintain the best impression and enhance job prospects, but it can be sourced cheaply from sales. Sign up to e-mail list alerts for quality clothes at the best prices available. You may need to buy a year or a few years ahead, if you are certain they will be worn.

Check that all Child Tax Credits, Nursery Vouchers and other benefits are claimed. Ensure that advice from a company that does contracting for accountants is sought to ensure that your home business stays tax efficient. Regularly check supermarket deals online carefully before visiting the store for the best multi-buys on essentials for packed lunches.

Children particularly love a fuss being made on their birthdays, but it need not cost the earth and the moon. Remember the days before you had to outdo every other child in the class by hiring One Direction to perform a personalized gig? Make your child feel special by talking about their birthday in the lead up to the event and afterwards. Make cards, get cheap balloons, make the birthday cake, offer homemade mini sandwiches, multi-buy crisps, fresh fruit and treats, and the retro party becomes cool again.

Encourage children to choose a single mid-price present in lieu of lots of treats bought in the weeks and months before. Deferred gratification is a valuable lesson forgotten in times of economic boom. Spending time fully engaging with your child on their special day and their memories will be just as fond, without the need to re-mortgage.