Monday, April 26, 2010

Monday Morning Articles

Here are some good articles I read recently... good in the sense, it was either funny and entertaining, educational, and/or just plain good advice...

Friend discovers Hubby's High Credit Card Debt and Screams "I want a Divorce" @ Wealth Pilgrim.
Wow, read this article and thought how fortunate we have been in being able to deal with finances and being reasonable with it...

Saying No to Fitting In by Simple in France @ Early Retirement Extreme. This one was a little bit like how I feel a lot of the time. I think my wife and I are living a lifestyle that is far different than what our extended family's standards/expectations are. But I also find myself at odds and sometimes in heated debates with those that are different. (like this weekend with my dad). But in any case, saying no to fitting is a very good philosophy to have. Wise in some instances, foolish in others.

Gold and Real Estate seems like two great investments... Steadfast Finances does a comparison between Median Home Price Measured in Gold from this perspective, it look likes housing prices might continue to fall a little bit and gold prices might continue to go up. We'll see about that. On a side note, my in-laws want us to sell some of our gold jewelry. I'm hesitant...

For more value investing tips, The Digerati Life describes the Dogs of the Dow Investing Strategy or Brilliant Marketing?. Digerati examines whether buying highest paying dividend payers in the Dow will produce above average returns.

And lastly, with some tongue in cheek humor Betting Against the American Dream from Alexander Hotz posted by CalculatedRisk

Wednesday, April 21, 2010

Eating out!

I love eating out. My wife loves eating out. My wife loves Korean food. But eating out is expensive and eating Korean food out is expensive. Fortunately for us, my wife discovered a cheaper alternative. Buying the food at the local grocery and making it at home. I know not the same, but I think she did a pretty good job last Friday.

We had a group of people over, old friends from a different era. Nine in all, had we each gotten a dish + drinks + tip it would have been well over $15 per person... For nine people thats about $135.

Instead, my wife bought the meat raw/frozen, fresh veggies, kimchi, and other side dishes for around $60. And because we bought so much, we even had plenty left over for additionatl meals. So we saved almost $80 by staying home, grilling Korean BBQ (kalbi and bulgogi) and enjoyed the company of old friends. Plus our kids had a place to run around when they were done. Usually at a restaurant, they're cooped up in their chairs that they become very restless.

So with a little bit of planning, I think we're going to host more dinners at our place in the near future. We've been doing about 2-3 times a month for the previous few months and have enjoyed the company (although a lot of stress in planning) but I think the steep learning curve is slowly flattening down.

Let's see what we're going to have next...

What can a budget (and a bit of planning) do for you?

Tuesday, April 20, 2010

Three Questions (Part 3)

Ken Fisher's book "The Only Three Questions that Count" he asks the following three questions:

1. What do you believe that is actually false?
2. What can you fathom that others find unfathomable?
3. What the heck is my brain doing to blindside me now?

Another thing he asked us to consider is why sometimes having a deficit, debt, interest rate changes, stronger/weaker U.S. dollar etc. by themselves doesn't correlate with a stronger or weaker stock market. This was a paradigm shift for me.

He looked at overall GDP of the U.S. compared to the amount of debt we actually have. And more fully he looked at world GDP compared to debt and global interest rate vs. U.S. interest rates. A lot of times we look at the FEDs and how they change the interest rates.

Lower interest rates mean people aren't as willing to put money in bank, banks aren't making as much money off loans, and if they do make loans, they would loan to large, safe corporations so during times of lower interest rates or yield curves with a positive slope, banks are more willing to lend to value companies or companies with low P/E. Whereas during times of flat or inverted yield curves, short term interest rates are equal or greater than long term interest rate (something we had a couple years back) banks are more willing to take risks and invest in growth companies or companies with high P/E.

But Fisher also points out that we are not just working with the Federal Reserve of the U.S. The stock market is a global market and the U.S. makes up only a percentage of world money supply. So even if the U.S. have low interest rates doesn't mean other countries like Canada can't raise theirs. In the case that other countries have higher interest rates they would save more there, People would put money into their banks rather than put money in other things. And the opposite is true as well. If another countries' interest rate is lower than the U.S. there is nothing stopping them from taking a loan from that country and investing it in another country with a higher yield. This is just simple economics.

Anyways, investing involves a lot of variables and unfortunately we believe a lot of "myths" and these myths are being expounded by the media, CNBC, Fox, etc. One of the things that Fisher encourages is to ask ourselves these three questions:

1. What do you believe that is actually false?
2. What can you fathom that others find unfathomable?
3. What the heck is my brain doing to blindside me now?

Evaluate our own understanding and see where other people are wrong... When we know something that others don't know, though the truth might be unpopular, it is exactly then that we test out that hypothesis (like a science experiment) and discover if we are truly right.

So think GLOBALLY not just nationally. Find correlations, find new technologies in helping you discover something others don't know.

The last thing he is most positive about is that after every bear market, huge losses is accompanied by several years of large gains. This is historically true. After all major bear markets, there has always been a V shaped recovery, meaning the market hit some point and gained double digits several years in a roll. You can check it out from historical data. So you get a sense from Fisher that he is very bullish, almost too bullish. I think that's a good attitude especially in the middle of the worst recessions and depressions. Most people have gloom and doom at the bottom of a stock market. If you are the only person who believes that stocks will go back up based on historical data, you will most definitely ride it back up... just as it did in 2009-2010 (so far). But like most people, they pulled everything out of the market, sat with it in cash while the market rebounded 60-70 percent and in some cases stocks rebounded 100-200% while the majority sat back on a pile of cash making less than 1% interest.

So that's it. Examine your own thinking. You could be wrong. Look at other people, they could be wrong. Create new ways of thinking.

Monday, April 19, 2010

Three Questions (Part 2)

Ken Fisher's book "The Only Three Questions that Count" he asks the following three questions:

1. What do you believe that is actually false?
2. What can you fathom that others find unfathomable?
3. What the heck is my brain doing to blindside me now?

After learning these three questions, what are Fisher's advice in investing?

He has four rules that count:

Rule 1: Select an appropriate benchmark
Rule 2: Analyze the benchmark's components and assign expected risk and return.
Rule 3: Blend noncorrelated or negatively correlated securities to moderate risk relative to expected returns.
Rule 4: Always remember you can be wrong so don't stray from the first three rules.

Fisher has a very systematic approach to investing. He looks at the past 80 years of S&P returns (Table 8.1)
Return Occurrence Frequency
Greater 20% 31 times 38.75%
0 to 20% 26 times 32.50%
-20% to 0 18 times 22.50%
less -20% 5 times 6.25%

When looking at the past returns, you can have one of four results: big gains, small gains, small loss, large loss. From the past 80 years, positive years outnumber negative years almost 2 to 1. Keep this in mind when you do your investing. On average 2 out of every 3 years are positive. Use this knowledge with your benchmarking. Almost like playing roulettes, your odds in the market are much better than if you stay out of it or selecting single stocks.

By benchmarking, Fisher teaches using something like MSCI, S&P, Russell, etc. something large that you can track and has a large enough pool of stocks so you can compare your portfolio. Fisher advises looking at your relative return to a benchmark instead of an absolute return. That way you limit your risk as well as providing a large enough way to maximize your return. You want to be better than the market.

So he breaks down each benchmark: 70% of what you do should be asset allocation (stocks, bonds, cash); 20% is sub-asset allocation for example international, sector, capitalization (big vs small cap), valuation (value vs. growth); and the last 10% should be actual individual stocks. Figure 9-4 has a good illustration of a portfolio engineering funnel.

And of course you could be always wrong, so also hedge your investments.

Three Questions

We have spent ZERO dollars for magazines due to websites like moneysavingmom.com and others. We also have a bunch of airline miles from our days of traveling to China and back so instead of cashing in on it for plane tickets, we've been getting a bunch of magazines. I guess it's kinda like an even trade? Maybe not.

Anyways, for the past year I've been getting Forbes magazine (last issue ending in April) but my wife got me The Economist in its place... I just got my first issue today.

Forbes has a column called "Portfolio Strategy" by Ken Fisher.

In each article he suggests a few stock tips as well as evaluation of past picks and other current events. Recently I read one of his books.

As a money manager, his job is to find the best investment for people's money. His book "The Only Three Questions that Count" he asks the following three questions:

1. What do you believe that is actually false?
2. What can you fathom that others find unfathomable?
3. What the heck is my brain doing to blindside me now?

In looking at investing as a science and not a craft, one is able to test a hypothesis and avoid the trap of doing things that may or may not be adequate for evaluating stocks.

What do you believe that is actually false?

In the Intelligent Investor we saw how Ben Graham used P/E to help determine valuation for stocks. That teaching was made over 50 years ago so Fisher points out that P/E has already been valued in the current price of a stock. All news that comes changes the value of the stock, all information that is public is valued.

He goes through stuff that we believe is actually false including correlation without causation, P/E, what we believe concerning deficit and debt, etc.

What can we fathom what others find unfathomable?

The example he used in finding different correlations with causations, like inverting P/E into E/P and looking at yield curves affecting value vs growth stocks (Fig 2.6, page 67), and presidential term cycle (Table 2.3 and 2.4, page 73).

From 1925 to the present, the stock market had largely positive returns during the president's 3rd year and has largely been positive during a president's second term. The rationale goes something like this: the stock market is volatile because of unknowns. New presidents always have different agendas which causes unknowns and volatility. By the third year, congress, legislation and new initiatives have already been accounted for built into the price and market risk is decreased with increased information.

What the heck is my brain doing to blindside me?

Fisher points out how our brain likes to follow a trend. if stocks are going up, we think it's safe and we buy into things... trends leads to bubbles. On the other hand, when stocks fall, our natural instincts are to get out and be safe, but ideally, we would buy when stocks are cheaper. This section talks a lot about psychology and how the human brain works or how it deceives us, very similar to how Ben Graham discussed in the Investor.

So what does Ken Fisher advise in selecting stocks?

We'll look at it in part 2 of this series.

Thursday, April 8, 2010

Net Income (Cash flow) and Reflections

Mint.Com does an incredible job keeping record of all our income and expenses. We've been using it since September 2007 which means we have a good idea how much money we are bringing in and how much money is going out.

It generally helps us to see what areas need cut or cut back on and what areas we are strong in.

In any case, here's our Net Income report. It even tells us our good months and bad months. Overall, God has been very gracious to us, we have a steady income with some bonuses here and there.


Our Best month came in April 2009 (i.e. taxes in which we got the First Time Homeowners Tax Credit). Of course we'll have to pay it back ($500 over 15 years) but I included it there for a reminder that you never know when a bonus will hit you. For the past 4 years around the Aug/Sept times you'll see another spike. That is from the "Retention Bonus" I got for being an electrical engineer at my current work. I got in at just the right time after being let go as a Middle School (public school) Math Teacher in 2006. That was probably one of the best decisions I made financially speaking, though I still wonder what kind of teacher I would be if I stuck with it as a career.

Our so-called "Worst Month" happened in December 2007. I bet most people have their worst month at the end of the year. Mostly year end donations and gifts, so I feel better about it. If it was all personal electronics or gadgets or eating out or food expense, I'd be a little bit more worried about our habits. But for the past three years, our average has been a surplus of $1,892/month. Over the span of 32 months that equates to a savings of $60,569.

That extra money has been put into our:
- Retirement accounts: IRA, TSP
- Extra Principal Mortgage payments
- House Renovations
- College Savings

We have been very fortunate in having a relatively low mortgage payment in our area as well as regular promotions and cost of living adjustments (COLA). My wife has been very good in keeping expenses to a minimum, we are okay driving clunker cars (for now) and living in a less then ideal townhouse community (weird neighbors, little extra parking, random towings, squirrels).

But we are content, with two growing girls, family nearby, as well as getting to know our neighbors better, good friends nearby, a church community, a good job, growing savings/investments, a solid plan... we are content. God has provided more than we could ever want or imagine.

So for now, we'll continue on this Family Financial Path we have laid down.

What can a budget do for you?

Friday, April 2, 2010

2010 First Quarter Expense Report

Just as stocks have quarterly earnings, here is an update of our first quarter expense report.


43% Home expense (mortgage, furnishings, HOA)
23% gifts and donations (Tithes, offerings, missions, etc)
8% automobile expense (gasoline, repairs, insurance)
8% travel expense (airplane tickets, rental car)
6% utilities (water, gas, electric, phone, internet)
6% food (eating out, groceries)
6% other

1st Quarter Income: $12.8k
1st Quarter Expense: $14.1k
1st Quarter Net Income: -1.3k (DEFICIT)

$2250 was extra principal payments towards our mortgage
$400 was due to vehicle repair
$1350 was spent on our vacation
$2200 on extra giving (special offerings)
$450 on auto insurance

We were on track in most areas:
Mortgage (2%)
Food (2%)
Utilities (1%)
Retirement (even)

We were over in these areas:
Giving (-8%)
Automobile (-2%) due to insurance and repairs

Overall, for Quarter 1, we spent a lot, but we also made a lot. I was hoping our savings would increase, but due to extra expenditures we weren't able to save as planned. Along with our normal salary, we received many gifts from relatives as well as our tax refund plus some extra savings boost through our investments.

So Even Steven for First Quarter of 2010.



Okay, this is an updated chart of our First Quarter Expenses.


Mint has this feature where you can split expenses. So instead of counting my mortgage + extra principal payments as home expense, I decided to count regular mortgage payment as home expense and then extra principal as investment: Real estate since this really where it is going. I am essentially investing that extra principal money into the house reducing interest and increasing equity.

Total Expenditures: 14,067.45 (like I said, even Steven)

The Intelligent Investor (Part 5): Margin of Safety and Conclusion

As noted in the previous post, the Intelligent Investors have these traits:

- They see stocks as businesses - when you buy a stock you become an owner of that company
- They recognize two basic patterns the market has in unsustainable optimism and unjustified pessimism - both extremes are wrong so maintain a level head during bubbles and crashes
- They understand future value is a function of present price - the higher price you pay, the lower the return you will be
- They maximize margin of safety - never overpaying for a stock and reducing risks
- They develop discipline and courage - recognizing that your biggest enemy is yourself and not to be swayed by the market or other people's moods. You decide your fate.

Margin of safety is never overpaying for a stock. When you buy a bargain stock, you have a level of safety built in. This is similar to buying real estate. By buying something below assessed price, you have equity already built in. This gives you a margin of safety.

Margin of safety also recognizes the need to diversify investments. Graham says to have 10-30 good stocks that you follow at a minimum.

Margin of safety also recognizes you are investing and not speculating. Speculating is betting a company will up or down on a certain day, week, month. Gambling is a form of speculating whereas investing is buying a business that is on sale at a bargain or discount based on definite reasoning and statistical data.

Graham concludes his book with the following principles for the Intelligent Investor who treats his investments like a business:

1. Know what you are doing, know your business

2. Do not let anyone else run your business unless you can supervise his performance with adequate care and comprehension or you have unusually strong reasons for placing implicit confidence in his integrity and ability

3. Do not enter upon an operation that is, manufacturing or trading in an item unless a reliable calculation shows that it has a fair chance to yield a reasonable profit. In particular, keep away from ventures in which you have little to gain and much to lose.

4. Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it-- even though others may hesitate or differ.

The Intelligent Investor (Part 4): Security Analysis

As noted in the previous post, the Intelligent Investors have these traits:

- They see stocks as businesses - when you buy a stock you become an owner of that company
- They recognize two basic patterns the market has in unsustainable optimism and unjustified pessimism - both extremes are wrong so maintain a level head during bubbles and crashes
- They understand future value is a function of present price - the higher price you pay, the lower the return you will be
- They maximize margin of safety - never overpaying for a stock and reducing risks
- They develop discipline and courage - recognizing that your biggest enemy is yourself and not to be swayed by the market or other people's moods. You decide your fate.

Page 288 outlines a valuation technique for lay investors.

The ideal form of common-stock analysis leads to a valuation of the issue which can be compared with the current price to determine whether or not the security is an attractive purchase. This valuation, in turn, would ordinarily be found by estimating the average earnings over a period of years in the future and then multiplying that estimate by an appropriate "capitalization factor".

Factors Affecting Capitalization Rate:
- Long Term Prospects - we can't predict the future, but we can have educated guesses. we can expect our population to grow, we can expect need for more resources, continued use of automobiles, gasoline, etc. we can expect a certain amount of computers being used, mp3 players, ipads, etc. Use some of these data to see how your company will grow
- Management - By looking at who is in charge allows you to see what direction a certain company is headed
- Financial Strength and Capital Structures - look at cash on hand, debt, etc. how is the company using it's resources.
- Dividend Record - whether or not company is giving a consistent dividend over time
- Current Dividend Rate - whether or not the dividend is increasing over time.

Graham uses this formula to estimate value (p.295):

Value = Current Earnings * (8.5 + 2 * expected annual growth rate)

So is your company a value compared to its current price and market cap? Buying companies at a discount means knowing you are getting a deal. By knowing it's earnings you can figure out when your company is growing as expected or out of hand.

The Intelligent Investor (Part 3): Mr. Market

As noted in the previous post, the Intelligent Investors have these traits:

- They see stocks as businesses - when you buy a stock you become an owner of that company
- They recognize two basic patterns the market has in unsustainable optimism and unjustified pessimism - both extremes are wrong so maintain a level head during bubbles and crashes
- They understand future value is a function of present price - the higher price you pay, the lower the return you will be
- They maximize margin of safety - never overpaying for a stock and reducing risks
- They develop discipline and courage - recognizing that your biggest enemy is yourself and not to be swayed by the market or other people's moods. You decide your fate.

Graham describes a character named Mr. Market throughout the book. See if you recognize him in yourself (p.204-205):

Imagine that in some private business you own a small share that cost you $1000. One of your partners named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly.

If you are a prudent investor or a sensible businessman, will you let Mr. Market's daily communication determine your view of the value of a $1,000 interest in the enterprise? Only in case you agree with him, or in case you want to trade with him. You may be happy to sell out to him when he quotes you a ridiculously high price, and equally happy to buy from him when his price is low. But the rest of the time you will be wiser to form your own ideas of the value of your holdings, based on full reports from the company about its operations and financial position.

The true investor is in that very position when he owns a listed common stock. He can take advantage of the daily market price or leave it alone, as dictated by his own judgment and inclination. He must take cognizance of important price movements, for otherwise his judgment will have nothing to work on. Conceivably they may give him a warning signal which he will do well to heed-- this in plain English means that he is to sell his shares because the price has gone down foreboding worse things to come. In our view such signals are misleading at least as often as they are helpful. Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.

I fall into this trap a lot when the market crashes, I sell and when it goes high, I buy. Graham says our mentality should be the very opposite. When a good company goes out of favor with the market, it is time to purchase more when it is at a DISCOUNT and a BARGAIN. So next time you see the stock market crash. The Intelligent Investor's FIRST response would be: Great! Everything is on clearance!

Buy quality and buy value.

The Intelligent Investor (Part 2): The Enterprising Investment

As noted in the previous post, the Intelligent Investors have these traits:

- They see stocks as businesses - when you buy a stock you become an owner of that company
- They recognize two basic patterns the market has in unsustainable optimism and unjustified pessimism - both extremes are wrong so maintain a level head during bubbles and crashes
- They understand future value is a function of present price - the higher price you pay, the lower the return you will be
- They maximize margin of safety - never overpaying for a stock and reducing risks
- They develop discipline and courage - recognizing that your biggest enemy is yourself and not to be swayed by the market or other people's moods. You decide your fate.

By looking at stocks as businesses, there is more of a tendency to know the management styles of the CEO and others within the company, the owner will know what the company's products and services are that they provide, the owner will know more about the company than just it's day to day movements on the stock market. So buy what you know.

The Intelligent investor moves from speculator to investor and that is a very important distinction to be made. Speculator cares more for ups and downs of the stock market and the moods it generates. The investor looks for solid companies that are cheap and a bargain. Investors look for value and undervalued companies.

Another is the two very different moods of the stock market. The unsustainable optimism as can be seen during the dot com bubble and the real estate bubble and the unjustified pessimism as seen with the dot com bubble bursting and the housing market bust. Both times we saw extreme attitudes during the flight upwards and the free fall downwards. The Intelligent Investor would look at the valuations of the companies and buy when the value of the company is greater than the price of the stock.

Graham has three tests for the Enterprising Investment:
- Relatively Unpopular Large Company (p.163) - not highly followed, over sold due to earnings or not very exciting company
- Bargains stocks - looking at future earnings and appraising if there is growth (p.166) and by looking at net current assets or working capital and comparing to valuations of company (p169)Graham gives a good formula to value whether a stock is undervalued: assets - liabilities > price x number of shares.

Graham likes using price to earning ratio (P/E) as well. It helps to see how companies are priced in relation to its earnings. For example: If a company is priced at $20 and it's earnings is 2.0, then its P/E is 10. Usually you can tell if a company is over valued by comparing its P/E with other P/Es in similar industries.

So by buying unpopular stocks and undervalue stocks you don't need to time the market or watch every millisecond. You know how much a company is worth and you develop courage and discipline to be patient in the midst of market fluctuations. This requires you to do research!

The Intelligent Investor (Part 1): Intro and Defensive Investor

Warren Buffett calls Benjamin Graham's "The Intelligent Investor" by far the best book on investing ever written. So who am I as a lay investor to not take the advice of an investor master or the master's teacher. As always, I went to the local library and found the book I was looking for. Of course, I wasn't looking for it at all, but just wanted to update myself on the latest trends, strategies, philosophies, thoughts on the market. I ran across Old Ben's book and since it has withstood the test of time, I had no choice but to borrow it and break it open. I hope the next few posts would be enlightening, educational, and bring about a greater awareness of some of the things that Ben Graham and his disciples emphasize.

The Intelligent Investor can be broken down to two different types of investors: a passive type and a more active type. Graham calls the passive type the Defensive Investor and the more active type the Enterprising Investor.

In any case, Intelligent Investors have these traits:

- They see stocks as business - when you buy a stock you become an owner of that company
- They recognize two basic patterns the market has in unsustainable optimism and unjustified pessimism - both extremes are wrong so maintain a level head during bubbles and crashes
- They understand future value is a function of present price - the higher price you pay, the lower the return you will be
- They maximize margin of safety - never overpaying for a stock and reducing risks
- They develop discipline and courage - recognizing that your biggest enemy is yourself and not to be swayed by the market or other people's moods. You decide your fate.

For the Defensive Investor, after pouring through years and years of financial data, Graham suggests a 50/50 rule. 50% in bonds and 50% stocks. Putting the stocks in an index fund or a group of value stocks with a constant investment over a long period of time will get you better than average results. This is the lazy, boring, passive way. By using dollar cost averaging, you ride through both bubbles and crashes. You buy on the way up and on the way down. You are constant in the midst of the crazy waves of the market.

Table 3-2 (p71) Graham looked at S&P (a cross section of the stock market) at a decade by decade performance from 1871-1970. The table showed tremendous growth along with a few decades of decline (1930-1940), but overall this showed that even a passive investor can make a good return on investment by having a disciplined savings plan over a long period of time.

But to the more active investor, what can he/she do to beat the market?

We'll continue in the next post.

Thursday, April 1, 2010

10 richest counties in the US

Why is it that 6 of the 10 richest counties in the U.S. are located near the Washington DC Metropolitan Area?

According to loans and credit, the 10 richest counties include:

Loudon County, VA
Fairfax County, VA
Howard County, MD
Fairfax City, VA
Arlington County, VA
Montgomery County, MD

Anyways, the others were in NJ, my guess is that the NJ people made their money in NY and moved out.

My wife and I and some friends were playing Monopoly a few weeks back and wanted to make a Monopoly of Northern Virginia. We'll finish that later, but it was fun playing the board game and associating real estate there with stuff we were familiar with.

BTW: At the library the other day and ran into this book. If any of you get a chance to read Alan Axelrod's "Everything I know about Business I Learned from Monopoly" it's a fast and fun read AND you might learn something.

Finding that second job

I've also been evaluating my cash flow/work habits recently. Many sites also have been talking about it or have talked about it.

earning more niche skills @ Iwillteachyoutoberich

Is it time to get a second job? @ bible money matters

You're self employed even if you work for somebody else @ fiscalgeek

I work a typical 40 hour work week. I also work from home at least once a week, but usually there are a lot of distractions at home, so I prefer to be in the office. The office however is a good 30-60 minutes commute depending on traffic or 90 minutes if I take the metro. And that's only going one way. I am currently getting paid around $77k/year. My next promotion is coming up pushing that up to $83k/year (a 7.8% increase or about $160/bi-week).

But all those people talking about getting second jobs got me thinking. What if I worked an extra 10 hours/week, that would be an extra $370 a week or $19k/year pushing my income to $96k (pre-tax).

What if I continued doing that after my promotion?

Working an extra 10 hours/week would mean an extra $400/week or $21k/year, pushing my income to $104k/year.

That's a commitment of 20 hours a bi-week. Instead of getting a side job, I could just work harder at my current job and get the promotions and work 10 hour overtime each week (like working another work day or 2 hours extra a day).

A co-worker friend encouraged me to push harder and get those promotions. I agreed with him. There was no point to waste my time here and thinking about some dream second/side job. I actually enjoy working at my company and enjoy the work I'm doing. So here's to my goal of getting the promotion and pushing towards increasing my productivity.

No Overtime - Current (77k) Promotion (83k)
10 hr/bi-wk - Current (86.5k) Promotion (93k)
20 hr/bi-wk - Current (96k) Promotion (103.5k)

So what can you do by working an extra hour a day? Extra 2 hours a day?

Net worth is Rubbish (April Fools)

Been posting recently how our net worth nearly doubled in 2009-2010. To put us back into better perspective are a few articles I ran across.

Your net worth is rubbish and Your net worth is an illusion @ Financial Samurai.

Net worth is a joke, cash flow is better @ Moneymonk

Since most of our money is tied up in retirement accounts and our home, our net worth isn't as much as we think it is. Since your house is only as much as someone will pay for it and you will get hit with a penalty if you tried withdrawing from your 401k, TSP, IRA, retirement accounts.

In any case, here are the latest updates March 2010 Networth (+5.42%):


Investments grew at a disproportionate rate. We are continuing to pay down the mortgage trying to reach the ever elusive 80% LTV. Savings are at a regular amount and despite our two major spending binges (vacation and birthday party) we are trudging along as expected.

Here's a look at our ride up from the pits in 2009: