Saturday, September 29, 2007

The End Is In Sight

After a very long journey of about 7 years, I will soon be paying off
my second student loan. This loan is a private loan which
unfortunately did not have any tax-deductible interest so it was in my
plan to move this to a zero-percent credit card. I've done that and it
has made a huge difference.

Making progress wasn't super easy, but I took most of my extra income
and tried to put it toward this debt. For me, one of the biggest
benefits to paying off this bill would be the increased monthly cash
flow. Now it looks like there will be fewer than 6 payments left,
depending on how much I can pay toward it each month, since there is a
balance of 1290 dollars left.

The amazing thing about paying off debt for me is the feeling. The
debt actually feels like a weight. And as it is paid off, I feel more
and more confident and in control. I think that this just comes from
knowing that as time goes by, more and more of my money is actually
mine and not going to other people.

Wednesday, September 26, 2007

The Next Victim is You?

Check out this article about the war in Iraq.

http://www.examiner.com/a-953145~Bush_quietly_advising_Hillary_Clinton__top_Democrats.html

I'm interested in how this goes because there are a ton of factors to
consider in terms of the economic ramifications with regard to how the
war goes. This morning I learned that the president will be seeking an
additional 50 Billion on top of the 150 Billion already slated for
Iraq for this fiscal year alone.

From a mutual fund perspective, this is quite interesting. I know that
many of the mutual funds that invest heavily in Aerospace and Defense
have done quite well as a result of the Iraq expenditures. In fact, I
know someone who has seen gains of close to 30%. This is amazing stuff
really. But if you are addicted to those gains, its best to keep an
eye on the ball in terms of what is going to happen in Iraq.

It appears that Bush is trying to advise the candidates that there
simply might not be an easy way to flip a switch and be out of Iraq in
2008. If the war continues, it will continue to bloat our national
debt figure. This was just recently increased.

http://money.cnn.tv/2007/09/12/news/economy/federal_debt_limit.ap/index.htm

In reality, it is worth considering whether or not this can continue.
As more and more money is spent on these types of programs, the cost
to simply service the debt (that is, the interest) is out of control.
While the economy grows, the hope is that there is more and more money
made so that there is more production to generate tax revenues to pay
the debts incurred by our nation. However, the other hope may be that
we have inflation, since inflation will mean that those dollars that
we owe are actually much cheaper in terms of real goods and services.

Interest rates were just dropped, so this in theory is supposed to
help the economy. However, we've already had a long period of steady
growth. And with the increased inflation that comes with a rate
decrease, the real question is, how much longer can the economy grow?
And if rates aren't increased, will we end up in a hyper-inflationary
period?

And with the likely successor to the presidency being a democrat,
possibly Hillary Clinton and a universal healthcare plan which will
also carry a cost, my impression is that none of these big trends
seem good for anyone's wallet.

Friday, September 21, 2007

The Importance Of Resources

I've never been more aware of how precious your precious resources can be until very recently. For me, my most precious resources are my health and my time. Thankfully, I am in good health overall. My time, however, has become extremely scarce and that has had a direct impact on my financial situation, for the good and the bad.

The Good

The reason I am so short on time is that my full-time job has become hectic. I've had the opportunity to prove my worth and I've been subsequently rewarded and recognized for that work. The nice rewards come at a price though. And when your already-scarce resources are depleted even further, you start to wonder what the true value of those resources are.

The Bad

This brings me to the bad part of being so busy. The lack of time has really forced me to divert the focus that I had on my other side projects which were devoted toward passive and multiple income streams and get back into all-in-one bucketing in terms of income. This doesn't provide enough diversification for me. In some ways, I'd trade 60$ from one large income source for $50 at another in some cases. The trade off for more diverse sources of income is worth it to me. I feel more comfortable that way.

The Not-So-Ugly

For me at the moment, this is a problem. I have too much work to do. For many people, this is a "high class" problem. Its much like having too much money or a house that is too big that you don't have time to clean it. I can complain, but it starts to seem somewhat pale in comparison to people who are starving.

Conserving your resources, especially scarce ones, is key, however. Personally, I am managing this by taking time off and resetting expectations. If there are commitments that I cannot escape, I will commit and do them. If there are things that can be re prioritized or altered, I will do that. All of this is done with excellent communication. In that vein, I would like to thank people for continuing to check this blog. And although the posts will be rather sparse in the upcoming months through Christmas, I would like to thank you for visiting.

There's lots more for us to learn and it should be an exciting ride.

Friday, September 07, 2007

401k Changes

I just got word from my company that they are changing my 401k options again.

I am a little excited because there is finally an option that is an
S&P 500 fund. This is the first time that we have had any fund that is
designed to track one of the major indexes. I like this idea because
it really makes it a bit simpler to keep track of.

Thankfully, the options that they are removing is one that I didn't
particularly care for anyway due to my age: a dividend-focused fund.

In the end, I checked my retirement outlook today and things are
looking quite good. Currently, I am planning to work part-time into
retirement and that helps quite a bit with defraying the costs of the
first few years of retirement until later on when it may no longer be
feasible anymore.

my current allocation for my retirement account according to fidelity
is 91% stocks and considering my age of late twenties, I think that
this is quite reasonable.