Monday, December 10, 2007

Preparing For Payoff

Things are going really well. In addition to a slow, but sure increase in net worth, things are becoming easier in terms of bills. After some recent calculations, I've determined that there will be enough money in this coming month to completely payoff my car loan. It seems a little premature, but the idea of getting completely out of debt on the car is so exciting I cannot wait to do it.

Last week, I was able to call up and get the payoff amount and I ran the numbers for the checking account and found that I had just about enough in there to cover it. Originally I thought I had more than enough, but it turns out the amount was just right. So now I am in a situation where I need to be able to wait a couple more days, but in about 2 weeks, the loan will be paid off.

But the Real Payoff comes in 2008. For me, the real payoff will be the extra several hundred dollars that I save each month by not having to deal with that bill. The real payoff will be knowing that there is that much less for me to worry about earning. For me, the real payoff is knowing that I will not have to write that check, sending that money to pay interest and principal for an asset that has long been used and continues to depreciate.

I've come to realize that there is a principal that is not talked about much in personal finance. I first noticed this principal in a book by Suze Orman. The idea is that money and energy are related. By putting energy into your finance, you can make your wealth grow. I've noticed this first hand in the past two years. I pour over my statements, I contrive ways to save money, and I focus my energy on paying down debts. The payoff has definitely been worth it. This loan being paid off is just another milestone. Putting time and energy into money in many ways for me, seems like one of the best ways to spend time and energy.

Friday, December 07, 2007

Finding My Way Into Vanguard

So, recently, my situation has changed and due to some restrictions related to employment, I have to get rid of some of my retirement holdings which are currently invested in ETFs. ETFs are nice alternatives, in my opinion, for people like me who really cannot afford the minimum requirements for investing into more standard mutual funds. So, rather than deal with the minimums, it is easy to open up an account at a brokerage firm and then purchase individual ETF shares which trade like stocks.

Personally, I bought VTI and VNQ. I've always liked Vanguard, and I think that these are nice solid index funds with low expense ratios that I was comfortable with. However, now that I am not allowed to own ETFs, I need to get my money into mutual funds, but I still don't have the minimum required. What to do? Using Vanguard's website I was able to do a screen that captured my major requirement: minimum investment. Fortunately, there IS a fund by Vanguard that has only a 1000 dollar requirement for minimum investment: VGSTX

So, that is my plan. It may not be my favorite of the Vanguard funds, but it beats the other loaded and expensive funds that are out there. I probably should look at T Rowe Price and some others too, but I feel like this is good enough. And it is likely that soon I will have enough so that the minimums won't be an issue.

Monday, December 03, 2007

E-Statements from banks are great. 4 Reasons you should use them

Not long ago I switched to electronic statements for my bank accounts. I chose not to have them sent to me directly, instead, I will go to the website and download them in pdf format. I think this is a great idea for a few reasons:

1. It saves time because I don't have to open them up each month.
2. It saves paper.
3. It prevents me from having to file them away and hang on to them for years on end.
4. It means there is less mail with my personal information floating around out there.

Have you switched yet? You should consider it. I think you'll be as pleased as I am.