Sunday, January 29, 2006

Blockbuster Rewards Program

I have been off blogging for a week so I don't know if this has been posted already but if not, this is a pretty cool deal. Blockbuster has a new rewards program that you can sign up for at $9.95/year. It offers you several ways to get free rentals. Now it doesn't completely beat Netflix as I will explain in a second but it does come close depending on your rental habits. Here are the highlights of the program:

1. When you sign up (which you can do at any Blockbuster store) you get one free rental.

2. Every month you get 1 free rental whether you have been actively renting or not. So if you only watch 1 movie a month you essentially get free rentals all year. Of course, since most people rent more than 1 movie read on for how you can get more free rentals.

3. If you reach 5 movie or game rentals in one month you get another free rental. Actually, you get 1 free rental for every 5 items you rent so if you rent a lot this is pretty neat. But it gets better.

3. If you rent between Monday - Wednesday you get 1 free movie for every movie or game you rent. Now I wasn't crazy about the program just from 1 or two above but this changes everything. If I rent 5 movies a month but only on those days I get 5 + 5 free (from the rent 1, get 1) + 1 free (for reaching the 5 rental limit) + 1 free (the 1 free per month) .. or 12 rentals per month for the price of 5 movies, or $21.80 total.

Netflix is still a better value if you crunch the numbers for heavy renters but I like the convenience of not having to know ahead of time what I would like to watch this weekend. Plus I don't watch that many movies a month. Maybe 4-6 tops. I am thinking I would probably rent 2 remebering to go only Mon-Wed, get the 2 free + the 1 free per month which will give me 5 movies for the cost of two. $8.72/month. Works for me.

There are a few restrictions: some of the free rentals apply only to non-New releases so if you have already watched everything previously released this may not be that great a deal for you. But if you are like me and looking to cut costs check it out.

Monday, January 23, 2006

Brief Hiatus

Well, I finally got my funds to show up in Roth and made the distributions (FCNTX, DOD and SBUX). Which is good because I probably wouldn't have had time in the next few weeks to do anything if they hadn't shown up now.

I will be taking a break from blogging till the end of the month because of work related activities. I am busy interviewing, hiring and training replacements (they decided they needed 3 people to replace me. How's that for validation?) And then there's other staff going on. My spending habit has gone completely downhill in the last few weeks. Ok, not spending habit overall just food expenses. But I think I will have to suspend beating myself up over that until after the end of the month as well.

Wednesday, January 18, 2006

AWOL Funds

The funds are still conspicuously missing from my Roth account. After 4 phone calls and 4 assurances that the transaction is there, it just hasn't "settled" yet, I am beginning to bristle. I came this close to yelling, "Just give me my fucking money!" to the Fidelity rep on the phone. Thankfully, years of breeding kicked in just in time and I bit down on my tongue before the words could irrevocably escape into the world. Like Harry said to Sally, "You can't take it back. Once you say it, it's out there." But I figured out what I am going to do:

40% DODFX
40% FCNTX
20% SBUX

This is probably irrational but I just don't like index funds. I regard them with narrowed eyes. What, computers do all this you say? Yeah, right.

Tuesday, January 17, 2006

Bling


At the cost of alienating a lot of frugal minded people everwhere, I'd totally buy this. The $20 per bottle pricetag doesn't faze me at all. You can't put a price on something this adorable. It's like a piece of art all ready to be displayed in some pop culture museum! It even has its own necktie! Besides, isn't it time we rescued water, that precious life-giving fluid, from its ignominious existence in cheap plastic bottles.

Now if I can only find 11 other likeminded people to go in on this with me. What? I said I can justify $20, not $240.

Starbucks

Around lunch time I made a quick jaunt to the nearest Starbucks to pick up a bracing cup of coffee. As I seem to have graduated from erratic sleep patterns to not sleeping at all at nights a strong cup of mid-day coffee to bolster me is a must to get me through the day. While I was waiting my turn at the counter I suddenly noticed something. Could it be? Yes, there they were. Lovely glowy pale pink coffee cups. I picked them up. There were little pink hearts on the bottom. Although I realize that the proximity to Valentine's Day may have something to do with the appearance of candy colored hearts everywhere I think this is a solid financial move on the part of the company. Now this may seem silly to some people but to the millions of women all around the world who paint their bedrooms pink and buy matching towels this softens the stern, black-coffee image of Starbucks and makes it a little more approachable, which one hopes can only result in more sales. They are no longer the purveyors of just that bitter nectar of life that helps so many of us get through but they now provide color therapy.

I am seriously considering buying some stock in Starbucks. It may not be such a financially bad move. Acc to my Morningstar premium report, the future for Starbucks looks bright provided investors can temper their expectations with a realistic look at the future of coffee. The current selling price is lower than the fair value estimate, and at $30.01 a lot more affordable than BRKB which has still to earn its keep, at least in my portfolio. I may just go for it.

Monday, January 16, 2006

2005 & 2006 Roth

Ok, so I set up the funds transfer yesterday. I know it takes a while but I am transferring from my cash core account to my Roth account so it's not like it's coming from another bank. Checked this morning and the money still isn't there. Given that I have recently developed the sleeping patterns of a nocturnal animal and am still required to stay up all day, compounded with general professional and personal stress, this is not good. Hopefully, it will show up soon. In the meantime, here are the 3 funds I am considering:

DODFX - My brokerage is 75% US stocks & bonds so even if I keep all my Roth in a foreign stocks fund I am still diversified overall. Plus, I have had this for a while and it's one of the few that turns in a consistently solid performance.

FCNTX - Another fund I like although for slightly different reasons is FCNTX. If I were to pick individual stocks to build my own mutual fund I would use the same strategy that this fund employs, namely that of buying stocks of companies that are either going unnoticed but has the potential to hit it big or that of companies that have fallen out of favor with investors but are positioned for a comeback. Of course, that's what also makes it risky. Plus, because of the fund's penchant for going for the underdogs it is very possible to end up with a mix of growth and value stocks at any time. Since I am neither a value nor growth-oriented investor though that doesn't really bother me.

VDEQX - Or I can just play it safe and put everything on Vanguard's new DiverSified Equity fund. The asset allocation for this fund is about 80% large cap and 20% small to mid cap and it's a collection of other Vanguard funds so it's a nice way to buy into a fund family.

Update: 1-something pm. - "Yeah, hi. I did a money transfer yesterday from individual to Roth. And, it's not showing up. I was hoping you could help me with that." Brokerage a/c rep: "Yeah, sure. Let's take a look. ...Hmm, that's odd."

"Hmm, that's odd" now tops my list of things you do not want your brokerage rep to say.

Sunday, January 15, 2006

One step closer

Summer is around the corner and a reader offered to submit my resume with her very well known company (thanks N!) If that isn't reason enough to celebrate this has to be: I finally signed up for magazine subscriptions.

Vogue - 2 year - $12.95
Money - 1 year - $19.95
Kiplinger's - 1 year - $12
Budget Living - 2 year - $8.99

Acc. to MS Money I have spent $94.62 since mid-Aug on magazines. Extrapolating for the duration of the year that works out to ~ $252.32. So I just saved $198 with less than a 1/2 hr's work. Another good news: Thanks to my hermetically sealed existence of late and strong portfolio performance my net worth hit 198k today, my mid-Feb goal. I realize that various factors can change that by the end of the month but I feel jubilant.

My next order of business is to fully fund both 2005 & 2006 Roths and convert my regular Citi master card to Citi Dividend Platinum with 5% cashback on supermarket, drugstore and gas station purchases.

Friday, January 13, 2006

The first money talk

J & I had our first money talk today. He wants us to go to Lake Tahoe in February. Possible sticky Valentine’s Day expectations and subsequent ramifications aside, I am girlishly excited about this. Sure I am an emancipated woman and I don’t need a man to take care of me but that doesn’t mean I don’t want one who likes me, a lot. What can be better than a romantic gateaway with someone who fits that bill? Not to mention someone who will carry my luggage, hold a door open and smile tolerantly when I use up all the hot water. But, just because I want my boyfriend to be sweet and caring and occasionally emulate a cheerful bellhop doesn’t mean I expect him to pay for everything (or even carry my luggage all the time for that matter) which is where the money talk comes in. I have edited this down somewhat.

"Hey."
"Hey."
"So about Lake Tahoe..."
"What about Lake Tahoe?" Lake Tahoe has never come up before.
"What do you think of it?"
"I like it!"
"Yeah? Really?" Sounding surprised for some reason, probably at the sudden exclamation point in my voice.
"Oh yeah..."
"So you have been there before?" Sounding disappointed.
"No. Why?"
"You said you liked it.
"Well, yes, from what I have heard. Why?" I am beginning to think that maybe he wants us to go to Lake Tahoe.
"Er,... look, I’ll have to call you back." And just like that he's gone.
Yes, men aren’t exasperating at all. Almost an hour later he calls back. "Do you want to go?"
"Go where?"
"Lake Tahoe."
"Oh so that’s what that was all about. I get it now! The subtle clues, the cleverness of it all! You are a true master! A genius!" Partly payback for leaving me hanging and partly avoidance because now that he’s asked, I don’t know what my answer is. I continue evading the question for a few more minutes while I think fast. It's a bit tricky, being V-day and all but then I decide I want to go. "Yes, of course."
"I’ll make the arrangements."
"Um, ok. When are we going?"
"February." This is a new side to my otherwise charming boyfriend. All the decisions seem to have been made for me.
"Um, ok. Were you going to ask me if I am available in February?"
"You are available in February."
I can’t argue with that. He knows I resigned my job and he knows the end date. I am available in February. But he should still ask. "Ok." Sounds like he’s smiling. "Would you like to come to Lake Tahoe with me in February?"
"Yes, I’d love to!"
"Ok. See you later."
"Wait!"
"What?"
"Um. We should talk about expenses."
"Why?"
"I thought I could chip in."
"You don’t have to do that." I should mention that so far J has always been the one spending. It makes me feel uncomfortable so I offer but he turns me down. "No, I want to."
"It’s no big deal. I got it covered."
"I know you got it covered but I want to."
"We can talk about it later."
"Or we can talk about it now." I am smiling.
"What is with you? Any other woman would be happy to be taken care of."
"What? Where did that come from? I am not any other woman."
No response.
"Why are you so resistant to this?"
"Why are you so adamant about this?"
My turn to be silent.
"L____ wouldn’t have ... " L____, being his ex.
"L? You are comparing me to your ex?" The iciness is apparent in my voice.
"No, wait!" The panic is apparent in his.
*Click* And that is me hanging up.

So that’s how we had our first money talk. And our first fight.

Thursday, January 12, 2006

When Bad Things Happen to Good Messages

I attended a Barbara Stanny seminar yesterday called Overcoming Underearning (which incidentally happens to also be the title of her new book--smart). The event mostly centered around her own experiences with anecdotal references to her climb up from the bottomless pit that is creditors-knocking-on-the-door kind of money worries to the kind of financially secure future that many people dream about. Then today I came across this article at Bankrate.com about something called Bag-lady Syndrome. Both had good messages to convey, namely that women should take a more active role in managing their finances, but before you can get to them you get distracted by rampant gender stereotypes gambolling about like playful puppies.

Women everwhere, apparently, according to both Ms Stanny and the author of the Bankrate article, grow up with the expectation that there will always be a man to take care of them. As a result most of their life is spent trying to be decorative in order to attract their Prince Charming and that is why women often find themselves in their twilight years alone and destitute. In the words of the Bankrate.com article:

Women typically depend on the males in their life (father, then husbands) to perform the earning and saving roles, while they typically manage the household and raise the kids, largely a spending role. Women are often left out of big-picture financial planning and investing and typically don't have friends who work in these fields to advise them. And it's hardly news that women on average don't earn as much, or advance as far, in their careers compared to their male counterparts.

and that:

Women are raised to be competitive, to look a certain way, to dress a certain way, in order to marry Prince Charming, and the prince is going to be our savior.

and that as a result:

Women tend to be unprepared and overwhelmed when widowhood or divorce suddenly plops their financial security in their hands. If they've long feared they will wind up a bag lady, these transitions can feel like the nightmare is about to play out in real life.

According to the article men don't have these fears. They do have money fears, but those are the rational kind like being injured, dying young or being laid off as opposed to the irrational female fear of simply running out of savings before the angel of death comes calling. Now I realize my personal experiences and the fact that I have always fancied myself more in the role of the savior than the saved may have something to do with it but I find that a little hard to swallow. Women are not new to the world of personal finance or entrepreneurship. Columbus may have discovered America but it was a woman who financed his trip. Nor are they weaklings. Even in Fairy Tales very few of the heroines are completely and utterly passive. Rupenzel helped the prince climb the tower, the Little Mermaid rescued her prince from drowning, the Queen outwitted Rumpelstiltskin and Gretel was the one who pushed the witch into the stove.

This isn't a rant against men. I like them. They are sweet, they put their arms around you when you cry and are very handy with tools. I also think men do have a certain edge in money matters because they have a level of emotional detachment that women often lack. What bothers me about the article is that any article geared towards any segment of population, not just women, that starts with negative stereotypes rather than with positive role models not only dilutes the accomplishments of that segment but reinforces the same insecurities and myths it claims to be attempting to dispel. At one point the article says:

Women are in denial about it, but when you name it and you make them feel like they're not alone, then very few women remain in denial about it.

Women (and even men) who are naturally vulnerable and therefore more suggestible can easily become convinced that they have all these fears when the suggestion comes from an authoritative source. This can have the exact opposite effect than desired. Instead of becoming emancipated they can very well get trapped in this so called bag-lady syndrome twilight zone. Isn't there a better way to get the message across?

So if you are someone, woman or man, just starting out or simply unsure of how to go about managing your finances, here's my advice:

  1. Get comfortable with money. Get comfortable saying it. Don't be afraid. We fear what we do not understand. Learn about how money works. If you like history, read up on the barter system and how that evolved into the modern currency system. The more you know the better you will feel.

  2. Know how much you will need. Fear of not having enough is often really a fear of not being in control of one's life. You can have millions and millions of dollars and still feel that way if you don't know exactly how much (or how little) you need to be ok. Use this retirement calculator.

  3. Learn the basics of personal finance. Stop reading fluff articles that tell you how this is the age of empowerment and start reading books that tell you how to calculate your personal rate of return. Or find a good finance planner. Or do both.
I didn't feel like I learned a lot from the Bankrate article but I did enjoy the end of the Barbara Stanny seminar, the last 15 minutes when she stopped assuming that we are all helpless little things waiting for a man in a suit to come give us a pretty, pretty ring and told us to take charge of our finances, ask for that raise and embrace our inner bitch. I like anyone who can turn the word bitch into something positive.

Tuesday, January 10, 2006

Next steps

Microsoft's annual women's conference started today. It's a 3 day event where women from all over the company come to share experiences and ideas, network and generally marvel at the fact that for a company this big there are so very few women in high places. Of course, when I said I resigned I didn't mean effective today. After I made my decision the first thing I did was to talk to my boss, communicate my decision in a professional manner and ask how much time he would like for transition. The good news is that I am still getting paid for a few more weeks. Plus, I made some new contacts today and set up some informationals. At this point I have no intention of coming back to work here but there is always the possibility that I am just in the wrong place and another opening may be a better fit.
For the next few weeks I will be wrapped up in finalizing my deliverables and training a replacement. After that I plan to take some time to straighten out my investments and make sure I have sufficient cash available to cover several months of living expenses. And then to figure out what I really want to do with the rest of my life. When I was 4 years old my uncle had asked me what I wanted to do when I grew up. He says I didn't skip a bit. I said I wanted to run my own company. It's true. I have always wanted to do that. But I have financial responsibilities towards my family and that sometimes makes it a little harder to take risks. I have also always wanted to take a year off and travel around the world but responsibilities got in the way of that too. My immediate goal now is to try to increase my net worth to 198k by February. Out of that I plan to keep 140k combined in investments and retirement funds, allocate 40k to supporting my parents & towards emergencies and 18k for basic living expenses for myself. Once that's done I can start thinking about the future...

Monday, January 09, 2006

I resigned from my job today

It's like that guy everyone says you should be with. Your mom & dad think he's great, your brother looks up to him. All your friends say, "What are you doing? You should be with him." And you start thinking, maybe they're right. How can so many people be wrong? So you give it a try and then another and then another. And then one day you realize it's not going to work out.

Microsoft isn't the worst company I worked for or the best. The worst thing that happened to me in 4 months was that a couple of people ripped off a couple of my ideas, a mentor failed to acknowledge an accomplishment, things were a little disorganized and slow and my boss was a bit abrupt on occasions.

I have been through worse but I didn't hate it half as much.

Sunday, January 08, 2006

Monthly Review & Net Worth Report - November & December 2005

Net Worth from 12/31/2005


October report: click here.

Highlights:

Since I was away on my vacation at the end of November and never got around to posting a review this is a consolidated report for the last 2 months.

The changes in savings and brokerage are mainly due to a CD maturing which I transferred to my brokerage account. Right now it's lying in the core account not earning a lot of interest because I want to keep the funds liquid for upcoming condo expenses. I will be looking into some short term investment options for this soon.

Of the $5400+ positive change in my 401k approx $3600 was due to increased year end contributions (I realized a little late in the year that my current deductions were only going to add up to $11k total and wanted to take advantage of the 14k allowable max). The rest was employer match and dividend gains or change in market value.

Overall my investments gained almost $2300 across all accounts in the last two months. 2005 personal rate of return for 401k was 10.5%, Roth was 10.05% since July or 20.05% annualized and brokerage was 5.5%.

Income v Expense:

While the news on the investments front was good, the news on savings front was not due to holiday shopping ($1389.9 by the end), vacation ($947.49 + $200 in Chicago--I spent a few days with family on my way to India. The tickets were booked over summer with miles so it's not included/ the $200 was for groceries and such) and car insurance prepayment ($1000 for 6 months) all hitting my credit card in the same month. Total expenses for Nov & Dec were roughly $10,100 out of which $6,300 was in Dec.

I did get almost $300 in cash for Christmas in addition to 2 $25 Bath & Body Works gift cards, 1 $25 Borders gift card, 1 $30 Amazon.com gift certificate, 2 $10 Starbucks gift cards (my favorite--I can get caramel frappuccinos now!) and 2 $25 Sephora gift cards. I had told everyone not to get me anything for Christmas this year (didn't make sense to add more things when I am trying to get rid of stuff) which kind of backfired. Guess they thought I was hard up for money or something. The only one who got me a gift was J. I can't tell if that's a good thing though. What's better, a boyfriend thoughtful enough to buy you the perfect gift or one who obeys you unconditionally?

December Score: C for going over budget on shopping.

Thursday, January 05, 2006

Tying Up Loose Ends

I am a little behind on my net worth update. I have all the information in my spreadsheet but due to a number of reasons haven't been able to sit down to do a full analysis yet. So, in the meantime, I thought I would tie up all the loose ends from last year. Over the last six months, since the inception of this blog, I have started and sometimes abandoned, sometimes finished, several new projects. I call them projects. Some people may call them rules or money saving strategies. It's the same. The goal is to mimize spending and maximize assets.

1. Max out 401k - I started contributing to a 401k in 2004 and even then I was contributing the minimum required to get the employer match. My first decision after starting this blog was to max out my 401k and take advantage of the tax benefits. I had to make up some lost time because for the first 6 months I didn't contribute much but I was able to catch up and end close to the 14k max allowed for last year. For this year I set my 401k at a sufficient % so I can hit the 15k allowable contribution for this year by mid-Dec. This would also leave me extra cash in my last paycheck of the year to accomodate holiday expenses.

2. Enroll in ESPP - At the same time when I upped my 401k contribution, I also enrolled for my company's ESPP. Probably the smartest decision I have made this year because my company stock, both the old and the new, have been the best performers in my portfolio. For 2006 I am enrolled at 15% which is the max allowed.

3. Brownbag it - Food is my biggest expense after rent. I spend more on food than on my car, my utilities, even my wardrobe, thanks to my takeout happy dialing fingers. My second big decision, after 401k and ESPP, was to start brownbagging. Since starting this I have brought my monthly food cost down from $600-700/month to about $400-450/month. That's good but there's still room for improvement. My problem is that I don't feel like cooking after an already long day of work and commute. So this year I bought a 2 quart slow cooker (on sale at Target for $9.99) and rented the Betty Crocker slow cooker cookbook from the library. If I come home to freshly cooked dinner I may be less tempted to order in.

4. Spending rules - After a week of keeping track of every little expense and realizing how fast the $2, $10 purchases add up I came up with a set of rules to help keep my spending in line. This has been my most abysmal failure to date and I don't plan on continuing it. Not that knowing exactly how much you can spend is not a good thing but watching every little penny every single day gets a little tiresome. And when that happens I lose interest. I do intend to continue some of the discipline and insight I have acuired though, just not all these rules precisely.

5. Plan ahead - Planning ahead saved me big both on my India trip and on my holiday shopping (although in the case of shopping it was savings over retail rather than the budget). You can't plan everything in life but I do intend to continue to plan ahead for big events and purchases this year.

6. Pay with cash - This was a good experiment but for me paying with credit card is a better option if for no other reason than the record keeping advantages. With credit cards, I can easily download the transactions into Money and categorize them in appropriate buckets. Less manual entry. There is a downside to paying with credit cards as I tend to be less conscious of how much I am spending so I have to be more careful. I also have too many credit cards and a little too much in available credit -- $110,000 to be exact. Since I tend to use only a small percentage of that I am planning to close all but my oldest cards and lower that ridiculous credit limit. So far I haven't been tempted to spend more just because I have a higher limit but why risk it.

7. Use the library - The best thing I did last year was to start going to the library again. I can get movies, cds, books and what's more most libraries these days offer an online access where you can do anything from check your account to pay your fines or renew your items (to avoid paying fines) to request interlibrary loans and put them on hold. Mine even phones me when my item is ready for pickup and tells me exactly when the hold expires so I can get to the library in time. Ever since renewing my library card my book expense has gone down. I have even lately started renting movies. This year I have decided to suspend my Netflix for 3 months and see if I can get by with the rentals from library.

8. Shop at home - This primarily applies to skincare and bath products. I cannot resist a scented shower gel. There, I said it. I have been doing better on this although I slipped up after receiving two Bath & Body Works gift cards for Christmas. So, I pretty much get to start again on this. Good news is I am not expecting any gift cards for a while which should give me time to finish up my existing smorgasbord of products.

9. Simplify - Probably my favorite project and one that will continue this year because I still have work left. My goal is to reduce clutter and reduce possesions until I can fit in most of my belongings (except furniture, the stove and maybe the bathtub) in 2 suitcases and a cabin bag.

Some day I would like to go back to traveling more. Maybe even go live and work from another city or another country for a while. Maybe Australia. And if none of that, we can all do with less. I read an article once that said most people already have everything they need for the rest of their lives right in their home.

Monday, January 02, 2006

2006 Goals

1. Average a 10% annualized return on investments. My 401k personal rate of return last year was 10.5% which isn't bad but my brokerage account returned only 5.5% pulling the average down. I would like to do better.

2. Increase net worth to 250k by end of year. My current net worth is just around 192k. This would mean a savings goal of almost 58K which is ambitious given my current standard of living but if I can meet the investment return goal, reduce spending some more and get a decent bonus it's attainable.

3. Relax more and spend less. This encompasses all areas of my life from going out to staying in to work. This year I would like to slow down. It seems like I am always in a rush. To do more, buy more, spend more. And although I am getting better I am not quite where I would like to be. I have a good start with my project to cull my possessions. I have to commit to finishing it.