Sunday, January 27, 2013

Does More Money Make Us Fat?

One thing I never expected to miss when I moved from my 4th floor walkup was the stairs. Or the weekly trip to the laundromat. Or hauling heavy things up the stairs. Or all the stairs I had to walk in my old commute.  Or not having a dishwasher. I joke that moving to my condo was akin to the industrial revolution, my own personal industrial revolution. But now that I've left the pre-modern world behind and have all the "mod cons" of a dishwasher, a washer dryer in my house and a short flight of stairs to climb, I find I miss the old "inconveniences" because I get a lot less exercise. I thought when I moved I would use the time I gained to work out more, but that hasn't happened. I don't know where the time went. But I have definitely gained a few pounds since moving and I really miss having to work as hard physically to do my daily tasks. I was reminded of that when reading this special report on obesity in the Economist. A really interesting read:

Saturday, January 19, 2013

New Way of Looking at a Goal

So over the last week or so I've gotten really excited about a new strategy that I can use to reach my ultimate financial goal: to payoff the mortgage. When I first got my mortgage I thought I would pre-pay in order to shave years and interest off the mortgage. So I set up auto pre-pay of $500 a month, which essentially doubles my principal payment to about $1,000 a month. However, I also thought I would pre-pay a big lump sum each January post-bonus/end of year. The more I read and talked to my Learnvest adviser, the more I realized that pre-paying the mortgage is not actually the best strategy.  Instead, I should invest the money. I like this idea because it gives me liquidity in case of an emergency. That said, I hadn't found a way to track how much I would need to save over how long a time period to reach this goal. Then this week on I was like "wow, what if I just create a mortgage-payoff goal" which I did. I input my mortgage balance as the amount of $ I want to save for the goal and then I linked all of my non-retirement savings accounts to the goal. I have a balance of about $200K in those accounts. I've got about $329K to payoff on the mortgage. Hence I need to save about $129 to pay this off. 

Then today I started thinking about the power of compounding, because this money is invested. Some in CDs, but some in my brokerage account. Sooooo this Mint goal isn't taking into account investment gains/interest. So with my planned monthly contributions and any investment gains/interest, I should be able to reach my goal a lot more quickly. I have a goal of 10 years right now, but when I play with savings calculators, I can possibly reach this goal in 5 years if I earn returns of 5%. Which is a little aggressive because some of this money is in CDs paying 2%.
Anyway, I just feel much more energized about my savings outside of retirement now, because I am saving for a purpose and each month I'll be able to see, thanks to, exactly how much closer I am to reaching my goal.

Saturday, January 5, 2013

Networth Milestone: 500K!

I'm excited because today I updated my net worth entry on NetworthIQ for Q4 2012 and I've crossed the 500K threshold!!! I also checked back over the last 4 years of net worth entries and realized that I tend to jump by about 100K a year. Which is insane. And only possible because of the generous bonuses I have been receiving. So I'd like to be around 600K this time next year. That would be sweet. Ultimately, I think I'll feel a lot more secure once my net worth hits 1 million (of course it won't all be liquid). Hopefully that will be in about 5 years. That's a great long term goal. Then maybe I'll feel like I can chill out a bit more about life and not have to have such a stressful (but for the most part manageable and sometimes even fun) job.